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THE 


LAW  OF  CONTRACTS. 


BY 


THEOPHILUS    PARSONS,  LL.D., 

DANE   PROFESSOR   OF   LAW   IN   HARVARD   UNIVERSITY,   AT   CAMBRIDGE. 


VOLUME   II. 


FOURTH      EDITION 


BOSTON: 
LITTLE,    BROWN    AND     COMPANY. 

18  60. 


<l.% 


T 


Entered  according  to  Act  of  Congress,  in  tlie  year  1855,  by 

THEOPHILUS   PARSONS, 

In  the  Clerk's  OfBoe  of  the  District  Court  of  the  District  of  Massachusetts. 


Entered  according  to  Act  of  Congress,  in  the  year  1857,  by 

THEOPHILUS   PARSONS, 

In  the  Clerk's  Office  of  the  District  Court  of  the  District  of  Massachusetts. 


Entered  according  to  Act  of  Congress,  in  the  year  1857,  by 

THEOPHILUS  PARSONS, 

In  the  Clerk's  Office  of  the  District  Court  of  the  District  of  Massachusetts. 


Entered  according  to  Act  of  Congress,  in  the  year  1860,  by 

THEOPHILUS   PARSONS, 

In  the  Clerk's  Office  of  the  District  Court  of  the  District  of  Massachusetts. 


C  A  M  H  R  I  D  O  K : 

Allen  and  Fanilumi,  Printers. 


P  E  E  F  A  C  E 


TO  THE  SECOND  EDITION  OF  THE  SECOND  VOLUME  OF  THE 
LAW  OF  CONTRACTS. 


There  are  sundry  additions  to  this  volume,  two  of  which 
are  of  sufficient  magnitude  to  be  noticed  particularly. 
One  of  these  is  a  chapter  on  the  Law  of  Bankruptcy  and 
Insolvency.  The  other  is  a  chapter  on  Remedy  in 
Equity,  or  Specific  Performance. 

In  originally  preparing  this  work,  the  subject  of  Insol- 
vency was  frequently  suggested.  In  the  first  volume, 
under  the  head  of  Parties,  some  consideration  is  given  to 
insolvents  and  bankrupts ;  and  in  other  places,  in  both 
volumes,  other  references  to  them  occur.  But  the  law 
on  this  subject  was  not  presented  with  any  fulness,  in 
part  from  the  fact  that  this  had  not  been  done  in  any  pre- 
ceding work  on  the  Law  of  Contracts ;  but  much  more 
from  believing  that  the  statutes  of  insolvency  in  the 
several  States,  upon  which  the  law  of  insolvency  in  this 
country  must  depend,  were  so  diverse  that  no  general 
statement  of  this  law  could  be  made  which  would  be  of 
any  general  utility.     But  a  further  examination  has  con- 


671519 


IV  PREFACE. 

viiiced  me  that  it  is  not  altogether  so.  The  diversities 
between  our  statutes  are  much  more  in  form  than  in 
substance.  On  many  points,  and  those  the  most  material, 
they  do,  for  the  most  part,  harmonize.  And  in  deciding 
the  questions  which  arise  under  these  statutes,  all  the 
courts  make  much  use  of  the  long  series  of  adjudications 
which  in  England,  and  in  this  country  also,  although 
here  during  a  shorter  period  and  in  a  less  number,  have 
settled  the  principles  applicable  to  a  great  variety  of 
questions  which  belong,  and  always  must  belong,  to 
exery  rational  law  of  bankruptcy.  In  the  chapter  on 
this  subject  which  I  have  added  to  this  edition,  I  have 
endeavored  to  exhibit  and  to  illustrate  all  these  princi- 
ples, without  pausing  much  upon  the  particular  details 
which  fall  within  exact  statutory  provisions,  and  may  be 
regarded  rather  as  local  than  general  law. 

In  regard  to  the  other  chapter,  that  on  Remedy  in 
Equity,  or  Specific  Performance,  I  had  much  more  diffi- 
culty. It  is  an  altogether  new  thing  to  include  a  topic 
of  this  kind  amonii;  those  which  belono;  to  the  common 
law  jurisdiction.  And  there  are  other  modes  and  means 
of  equity  relief,  which  might  seem  to  be  almost  as  well 
entitled  to  a  place  in  a  work  on  the  Law  of  Contracts  as 
this,  liut  I  was  led  to  the  conclusion  that  such  a  chapter 
was  needed,  and  almost  as  much  needed  as  a  chapter  on 
Damages  (which  is  practically  the  only  remedy  for  breach 
of  contract  at  common  law),  by  considerations  which 
cover  almost  the  wliole  ground  of  the  relation  of  Equity 
to  Law  in  this  country. 


PREFACE.  V 

It  is  very  difficult  for  a  lawyer  trained  by  the  study  of 
the  books,  and  accustomed  to  the  processes  and  practice 
now  in  use,  to  avoid  the  conclusion,  or  at  least  the  ha- 
bitual opinion,  that  equity  jurisprudence  and  law  juris- 
prudence are  divided  by  an  actual  difference,  and  by  an 
hiatus  which  cannot  be  filled.  But  an  examination  of 
the  history  of  this  difference  on  the  one  hand,  and  of  its 
actual  condition  on  the  other,  will  show  us  that  it  is 
wholly  artificial,  and,  if  we  may  ever  use  the  word,  acci- 
dental. We  derive  our  system  of  law  from  England, 
including  therein  all  our  arrangements  of  courts  and  all 
their  jurisprudence.  Practically  this  is  *an  excellent 
system,  working  out  as  good  results,  probably,  as  were 
ever  reached  in  any  country  in  the  world.  But  the. 
question  still  exists,  whether  the  present  system  has  not 
faults  which  may  be  corrected,  and  wants  which  may  be 
supplied ;  in  other  words,  whether,  good  as  it  certainly 
is,  it  may  not  be  made  better. 

In  England  there  are  four  quite  distinct  and  almost 
independent  jurisdictions.  Equity,  Law,  Admiralty,  and 
the  Consistory  Courts  which  are  governed  substantially 
by  the  canon  law.  As  we  have  not  and  never  could 
have  had  Ecclesiastical  courts  in  this  country,  the  business 
transacted  in  these  courts  in  England  is  here  divided 
among  other  courts.  That  part  which  relates  to  the 
probate  of  wills  and  settlement  of  estates  is  given  to 
special  Courts  of  Probate,  with  appeal  either  to  the  Su- 
preme Court  of  Equity  or  to  that  of  Law;  and  so  much 
as  relates  to  marriage  and  divorce  has  passed  over  to  the 

A* 


VI  PREFACE. 

courts  of  equity  or  law.  But  the  other  three  remain 
distinct  in  this  country  for  many  purposes,  although  less 
so  than  in  England. 

There,  as  is  well  knowai,  the  system  of  Admiralty  was 
curtailed  and  oppressed  until  more  than  half  of  its. proper 
efficiency  and  utility  was  lost.  Here  the  difficult  question 
arose  some  years  since,  whether  Admiralty  should  be  held 
to  mean  in  America  what  it  meant  in  England  when 
most  useful,  and  still  means  out  of  England,  or  only  what 
it  meant  there  after  other  courts  had  succeeded  in  sup- 
pressing the  larger  half  of  it.  Fortunately,  the  wise 
effiDrts  of  a  few  strong  men  decided  this  question  aright, 
although  against  violent  and  stubborn  opposition.  And 
•we  have  now  an  Admiralty  which  has  vindicated  its  own 
claims  to  respect  and  support  most  successfully. 

The  Supreme  Equity  Court  of  England  stands  there 
almost  entirely  separated  from,  and,  under  some  aspects, 
antagonistic  to  the  courts  of  law.  In  a  few  of  our  States, 
equally  distinct  courts  were  established,  and  in  some  of 
them  these  courts  remain  to  this  day,  on  almost  the  same 
footing  as  in  England.  In  other  States,  the  legislatures 
have  intrusted  to  the  highest  common  law  courts  what- 
ever equity  process  could,  in  their  judgment,  be  safely 
and  usefully  exercised  by  any  courts. 

Ill  ui.'iny  of  our  States  these  powers  are  much  circum- 
scril)e(l.  and  liave  been  given  slowly  and  reluctantly.  It 
was  supposed  that  Equity  differed  from  Law  in  being 
arbitrary,  and  deciding  questions,  not  literally  by  "  the 
lengtli  of  the  Chancellor's  foot,"  as  has  been  said,  but 


PREFACE.  vii 

by  the  view  which  he  might  take,  on  the  whole,  of  the' 
merits  of  each  case.  And  when  legislators  were  told 
that  equity  is  not  more  arbitrary  than  law,  and  is  admin- 
istered according  to  certain  definite  and  established  rules, 
which  it  applies  with  the  same  caution  and  accuracy 
with  which  common  law  courts  apply  their  rules,  then 
legislators  do  not  comprehend  why  these  rules  should 
be  called  equitable  in  distinction  from  legal. 

And  the  truth  is,  there  is  no  reason  whatever  for  it. 
If  justice  can  be  done  in  any  case  according  to  law,  law 
should  do  it.  If  it  cannot  be  done  without  violation  of 
law,  it  should  not  be  done.  It  is  quite  unreasonable  to 
maintain  in  this  country,  and  in  this  age,  a  system  which 
had  no  other  origin  than  the  necessity  that  arose  from 
the  jealousies  of  independent  courts  centuries  ago,  in 
another  land  and  under  a  different  policy.  Common  law, 
long  since,  adopted  the  principal  rules  of  equity  in  rela- 
tion to  mortgages  and  to  bonds.  Partially  it  has  adopted 
them  as  to  assignments  of  choses  in  action,  contribution, 
and  a  variety  of  other  tojDics.  And  there  is  no  reason 
whatever  why  it  may  not  adopt  and  exercise  fully  and 
frankly,  all  the  principles  and  all  the  powers  of  equity. 
The  law  merchant  has  been  so  adopted,  and  the  law  of 
negotiable  paper  is  almost  as  much  opposed  to  the  prin- 
ciples of  common  law,  as  equity  law  generally. 

The  absence  of  a  jury  in  equity  proceedings  causes 
much  of  the  jealousy  and  fear  with  which  they  have 
been  and  still  are  regarded.  This  it  would  be  easy  to 
remedy.     The  same  objection  was  felt  against  the  en- 


viii  PREFACE. 

largement  of  the  admiralty  jurisdiction.  And  in  the 
United  States  Statute  of  1845  (drafted  by  Judge  Story), 
for  extending  the  Admiralty  jurisdiction  to  the  great 
lakes  and  the  navigable  waters  connecting  the  same,  a 
provision  was  introduced,  that  any  question  of  fact 
should  be  determined  by  a  jury  whenever  either  party 
wished  it.  This  Statute  has  been  declared,  to  some 
extent,  unnecessary,  by  the  Supreme  Court  of  the 
United  States,  on  the  ground  that  the  Admiralty  jurisdic- 
tion, ex  vi  termini,  extended  in  this  country  over  all  our 
navigable  waters,  whether  fresh  or  salt.  But  the  clause 
respecting  a  jury  remains  in  force. 

The  great  change  we  suggest  cannot  be  made  by 
courts  alone.  They  must  have  Statute  authority»for  it. 
But,  with  the  clause  above  intimated  for  a  jury,  we  know 
not  why  every  court  of  common  law  may  not  be  permit- 
ted to  possess  without  mischief  or  inconvenience,  all  the 
powers  possessed  now  by  Courts  of  Equity,  and  have  and 
use  all  their  useful  machinery  and  all  their  processes. 

We  mean,  however,  to  include  only  those  powers  and 
principles  which  belong  properly  to  Courts  of  Equity. 
So  far  as  these  courts  are  arbitrarj'-,  or  neglect  or  violate 
the  rules  which  rightfully  apply  to  the  cases  which  come 
before  them,  they  justify  the  unwillingness  of  many  per- 
sons, in  and  (jut  of  the  profession,  to  confer  or  to  enlarge 
equity  powers.  And  in  the  exposition  we  offer  of  one  of 
the  most  important  branches  of  equity  jurisprudence,  we 
arc  compelled  to  refer  to  instances,  in  which  the  cases 
exhibit  a  iluctuation  and  uncertainty  incompatible  with 


PREFACE.  IX 

any  just  idea  of  Imv  of  any  kind.  There  are  indeed 
instances  which  can  hardly  fail  to  suggest  to  the  reader 
that  courts  of  equity  must  have  sometimes  forgotten 
their  own  maxim,  that  equity  should  follow  law ;  and 
have  supposed  that  it  was  their  function,  not  to  com- 
plete the  law  and  do  what  it  intended  but  failed  to 
accomplish,  but  the  very  thing  it  forbade. 

This  is  one  of  the  mischiefs  which  spring  "from  that 
very  distinction  or  rather  division  between  law  and 
eqiiity  which  it  tends  to  perpetuate.  The  true  remedy, 
v/e  think,  is  to  follow  out  the  present  tendency  to  a 
complete  union  of  law  and  equity.  In  the  great  State  of 
New  York,  this  experiment  is  tried  on  a  larger  scale, 
and  with  more  completeness  than  elsewhere.  And  while 
all  acknowledge  great  benefits  resulting  from  it,  we  have 
never  heard  that  experience  has  developed  any  objec- 
tion or  ill  result,  sufficient  to  prevent  the  hope  that  this 
new  system  will  be — -always  with  due  precaution  and 
sufficient  delay  —  and  all  necessary  improvement  — 
carried  out  fully  there,  and  universally  adopted  else- 
where. 


coi(te:p^ts. 


[Throughout  the  volume  in  this  edition,  the  original  paging  is  referred  to,  except  -where 
new  matter  has  been  added.] 


PART  II. 


THE    LAW    OF    CONTRACTS    CONSIDERED    IN    REFERENCE    TO 
THE   OPERATION   OF  LAW   UPON   THEM. 


CHAPTER    I. 

CONSTRUCTION  AND  INTERPRETATION  OF  CONTRACTS. 

SECTION  I. 

Page 

General  purpose  and  principles  of  construction 3 

SECTION  11. 
Of  the  effect  of  intention 6 

SECTION  III. 
Some  of  the  general  rules  of  construction 11 

SECTION  IV. 
Entirety  of  contracts 29 

SECTION  V. 
Apportionment  of  contracts 32 


XU  CONTENTS. 

SECTION  VI. 
Of  conditional  contracts 36 

SECTION   VII. 
Of  mutual  contracts 40 

SECTION   VIII. 
Of  tbe  presumptions  of  law 42 

SECTION  IX. 
Of  the  effect  of  custom  or  usage 48 

SECTION  X. 

Of  the  admissibility  of  extrinsic  evidence  in  the  interpretation  of 

written  contracts 59 


CHAPTER   II. 

* 

THE    LAW    OF    PLACE. 

SECTION  I. 
Preliminary  remarks 79 

SECTION  II. 
General  principles 80 

SECTION  III. 
Capacity  of  parties 84 

SECTION  IV. 
Domicil 90 

SECTION  V. 

Tin;  |)l:ic(;  iif  the  contract 94 

SECTION  VI. 

Of  the  law  oCtln:  funiin  in  respect  to  process  and  remedy     .     .     .     100 


CONTENTS.  XIU 

SECTION   VII. 

Of  foreign  marriages 104 

SECTION   VIII. 

Of  foreign  divorces 113 

SECTION   IX. 

Foreign  judgments 117 

CHAPTER     III. 

DEFENCES. 

SECTION   I. 

Payment  of  money 126 

And  herein, 

1.  Of  the  party  to  whom  payment  should  be  made 126 

2.  Of  part  payment 129 

3.  Of  payment  by  letter 132 

4.  Of  payment  in  bank-bills 133 

5.  Of  payment  by  check 135 

6.  Of  payment  by  note      .      .      . 136 

7.  Of  payment  by  delegation 137 

8.  Of  stake-holders  and  wagers 138 

9.  Of  appropriation  of  pa^'ments 140 

SECTION   IT. 

Of  performance 147 

And  herein, 

1.  Of  tender 148 

2.  Of  the  tender  of  chattels 157 

3.  Of  the  kind  of  performance 168 

4.  Of  phrt  performance 170 

5.  Of  the  time  of  performance 173 

6.  Of  notice 180 

7.  Of  impossibility  of  performance 184 

8.  Of  illegahty  of  the  contract 186 

VOL.  II.  B 


xiv  CONTENTS. 

SECTION  III. 

Of  defences  resting  upon  the  acts  or  omissions  of  the  plaintiff    .     .     187 

SECTION  IV. 
Accord  and  satisfaction 193 

SECTION  V. 
Of  arbitrament  and  award 200 

And  herein, 

2.  Of  an  agreement  to  submit  questions  to  arbitration    ....     219  a 

3.  Of  the  revocation  of  a  submission  to  arbitrators 219  d 

SECTION   VI. 
Of  a  release 219/ 

SECTION    VII. 
Of  alteration 223 

SECTION  VIII. 
Of  the  pendency  of  another  suit 231 

SECTION    IX. 
Of  former  judgment 234 

SECTION  X. 
Ofset-off 239 

SECTION   XL 
Of  some  illegal  contracts 252 

And  herein, 

1.  Of  contracts  in  restraint  of  trade 253 

2.  Of  contracts  opposed  to  the  revenue  laws  of  otlier  countries      .      259 

3.  r)f  conlracts  which  tend  to  corrii[)t  legislation 260 

4.  i)^  wa^fcring  contracts 261 

5.  Of  the  Sunday  law .262 

G.  Of  maintenance  and  champerty ,     263 

SECTION   XII. 
Of  fraud 264 


CONTENTS.  XV 

CHAPTER    IV. 

STATUTE    OF    FRAUDS.  284 

CHAPTER    V. 

OF   ESTOPPELS. 

SECTION  I. 
Of  estoppels  in  general 340  a 

SECTION   II. 
Estoppel  by  record 340  b 

SECTION  III. 
Estoppel  by  deed 340  c 

SECTION  IV. 
Estoppel  in  pais    ....'.....' 340  e 

CHAPTER    VI. 

THE    STATUTE    OF    LIMITATIONS. 

SECTION   I. 
The  general  purpose  of  the  statute 341 

SECTION   II. 
Of  a  new  promise 347 

SECTION   III. 
Of  part  payment 353 

SECTION   IV. 

Of  new   promises   and    part  payments   by  one  of  several  joint 

debtors 359 


xvi  CONTENTS. 

SECTION    V. 

Of  accounts  between  mercliants 36G 

SECTION   VI. 

"When  the  period  of  limitation  begins  to  run 370 

SECTION  VII. 
Of  the  statute  exceptions  and  disabilities 373 

SECTION   VIII. 

That  the  statute  affects  the  remedy  only,  and  not  the  debt    .     .     .     379 

CHAPTER    VII. 

OF   INTEREST   AND    USURY. 

SECTION  I. 

Of  interest,  and  when  it  is  recoverable 380 

SECTION   II. 
"W^hat  constitutes  usury 383 

SECTION   III. 
Immateriality  of  the  form  of  the  contract 385 

SECTION   lY. 
The  contract  itself  must  be  tainted  with  the  usury 392 

SECTION   V. 
Substituted  securities  are  void 394 

SECTION   VI. 
Distinction  between  the  invalidity  of  the  contract  and  the  penalty 

imposed 400 

SECTION   VII. 

Of  contracts  accifhiitally  u-iiiioiis 405 


CONTENTS.  XVn 

SECTION   VIII. 
Of  discount  of  notes  and  bills 408 

SECTION    IX. 
Of  a  charge  for  a  compensation  for  service .     410 

SECTION   X. 

Of  a  charge  for  compensation  for  risk  incurred 414 

SECTION   XL 

Contracts  in  which  a  lender  becomes  partner 419 

SECTION  XII. 

Of  sales  of  notes  and  other  choses  in  action 421 

SECTION  XIII. 
Of  compound  interest 427 

CHAPTER    VIII. 

DAMAGES. 

SECTION  I. 
Of  the  general  ground  and  measure  of  damages 432 

SECTION  II. 
Of  liquidated  damages 433 

SECTION  III. 
Of  circumstances  which  increase  or  lessen  damages 441 

SECTION   IV. 

Of  exemplary  and  vindictive  damages 446 

SECTION   V. 
Of  direct  or  remote  consequences 454 

SECTION  VI. 

Of  the  breach  of  a  contract  that  is  severable  into  parts    ....     463 


XVm  CONTENTS, 

SECTION  VII. 

Of  the  legal  limit  to  damages 405 

And  herein, 

1.  In  an  action  against  an  attorney  or  agent 4G5 

2.  In  an  action  against  a  common  carrier 4G8 

3.  In  the  action  of  trover 470 

4.  In  the  action  of  replevin 477 

0.  "Where  a  vendee  sues  a  vendor 479 

6.  Where  a  vendor  sues  a  vendee 483 

7.  Whether  expenses  may  be  included  in  damages 487 

8.  When  interest  is  included 489 

SECTION   VIII. 

Of  the  breach  of  contract  to  pay  money  or  goods 490 

SECTION   IX. 
Of  nominal  damages 492 

SECTION  X. 
Of  damages  in  real  actions 494 

CHAPTER   IX. 

ox   REMEDY   IN    EQUITY,    OR    SPECIFIC    TERFORMANCE. 

SECTION  I. 
Of  the  origin  and  purpose  of  this  remedy 509 

SECTION  11. 
Of  consideration 517 

SECTION    III. 
Of  contracts  relating  to  personalty 522 

SECTION  lA^ 

Of  contracts  relating  lo  the  conveyance  of  land 535 

SECTION    V. 

Of  the  Statute  of  Frauds 54G 


• 


CONTENTS.  XIX 

SECTION  VI. 
Of  compensation 558 

SECTION  VII. 

Of  impossibility  and  other  defences 562 

CHAPTER    X. 

ON   BANKRUPTCY   AND    INSOLVENCY. 

SECTION  I.    , 

The  general  purpose  of  bankrupt  laws 579 

SECTION  II. 

The  history  of  American  bankrupt  law 587 

SECTION  III. 

Of  insolvency  or  bankruptcy  luider  foreign  laws 605 

SECTION  IV. 
Of  the  tribunal  and  jurisdiction 612 

SECTION  V. 
Who  may  be  bankrupts  or  insolvents 614 

SECTION  VI. 
Of  the  assignees 618 

SECTION  VII. 
What  real  property  insolvency  transfers  to  the  assignee  ....     628 

SECTION   VIII. 

What  personal  property  insolvency  transfers  to  the  assignee     .     .     634 

SECTION    IX. 

What  interests  or  property  of  the  bankrupt  do  not  pass  to  the  as- 
signee   652 


XX  CONTENTS. 

SECTION  X. 
Of  the  question  of  time 656 

SECTION  XI. 

What  debts  are  provable  against  the  estate 660 

SECTION  xn. 

Of  the  proofs  of  debts,  and  of  dividends 672 

SECTION  XIII. 
Of  the  discharge 677 

SECTION  XIV. 
Of  privileged  or  preferred  debts 681 


CHAPTER    XI. 

THE    CONSTITUTION    OF   THE   UNITED    STATES. 

SECTION  I. 

What  are  contracts,  within  the  clause  respecting  the  obligation  of 

them 683 

SECTION   11. 
What  rights  are  implied  by  a  grant 689 

SECTION  III. 
Of  an  express  grant  of  exclusive  privileges 691 

SECTION   IV. 

Of  the  relation  of  this  clause  to  marriage  and  divorce 701 

SECTION   V. 

Of  the  relation  of  tliis  clause  to  l);uikruplcy  and  insolvency  .     .     .     704 

SECTION   VI. 

Of  the  meaning  of  the  woi'd  "obliguli(jii  "  in  (his  clause  ....     710 


PART   II. 


THE    LAW   OF    CONTRACTS 


CONSIDERED   IN   REFERENCE  TO   THE 


OPERATION    OF    LAW    UPON    THEM. 


VOL.  II.  1  [  1  ] 


THE  LAW  OF  CONTRACTS- 


CHAPTER   I. 


CONSTRUCTION  AND  INTERPRETATION  OF  CONTRACTS,  (a) 

Sect  I.  —  General  Purpose  and  Principles  of  Conslriiction. 

The  importance  of  a  just  and  rational  construction  of  every 
contract  and  every  instrument,  is  obvious.  But  the  importance 
of  having  this  construction  regulated  by  law,  guided  always  by 
distinct  principles,  and  in  this  way  made  uniform  in  practice. 


(a)  The  terms  "interpretation"  and 
"  construction  "  are  used  interchangeably 
by  writers  upon  the  law.  A  distinction 
has  been  taken  between  them  by  Dr.  Lie- 
ber,  in  his  work  upon  "  Legal  and  Politi- 
cal Hermeneutics."  Interpretation  as  de- 
fined by  him  is  "  the  art  of  finding  out  the 
true  sense  of  any  form  of  words  ;  that  is, 
the  sense  which  their  author  intended ; 
and  of  enabling  others  to  derive  from 
them  the  same  idea  which  the  author  in- 
tended to  convey."  On  the  other  hand, 
"  construction  is  the  drawing  of  conclu- 
sions respecting  subjects  that  lie  beyond 
the  direct  expression  of  the  text  —  conclu- 
sions ^•hicli  are  in  the  spirit,  though  not 
within  the  letter  of  the  text."  See  Legal 
and  Political  Hermeneutics,  ch.  1,  sec.  8; 
eh.  3,  sec.  2  ;  ch.  4  and  ch.  5.  Interpreta- 
tion properly  precedes  construction,  but  it 
does  not  go  beyond  the  written  text.  Con- 
struction takes  place  where  texts  to  be  in- 
terpreted and  construed,  are  to  be  recon- 
ciled with  the  rules  of  law,  or  with  com- 


pacts or  constitutions  of  superior  authority, 
or  where  we  reason  from  the  aim  or  object 
of  an  instrument,  or  determine  its  applica- 
tion to  cases  unforeseen  and  unprovided 
for.  The  doctrine  of  qj  pres  belongs  to 
construction.  Rules  of  interpretation  and 
construction  should  also  be  carefully  dis- 
tinguished from  rules  of  law.  See  the 
able  note  of  Mr.  Preston,  in  his  edition  of 
Shepherd's  Touchstone,  p.  88 ;  also  per 
Parke  and  liolfe,  BB.,  in  Keightley  v. 
Watson,  3  Exch.  716,  quoted  ante,  vol.  1, 
pp.  18,  19.  It  is  to  be  observed,  also, 
"  that  when  a  general  principle  for  the 
construction  of  an  instrument  is  laid  down, 
the  Court  will  not  be  restrained  from  mak- 
ing their  own  application  of  that  principle, 
because  there  are  cases  in  which  it  may 
have  been  applied  in  a  different  manner." 
Per  Lord  Eldon,  C.  J.,  in  Browning  v. 
Wright,  2  B.  &  P.  24.  And  see,  to  the 
same  effect,  the  remarks  of  Lord  Kcnyon, 
in  Walpole  v.  Cholmondeley,  7  T.  R.  148. 

[3] 


4*  THE   LAAV   OF    CONTRACTS.  [PART  11. 

may  not  be  so  obvious,  although  we  think  it  as  certain  and  as 
*great.  If  any  one  contract  is  properly  construed,  justice  is 
done  to  the  parties  directly  interested  therein.  But  the  recti- 
tude, consistency,  and  uniformity  of  all  construction  enables  all 
parties  to  do  justice  to  themselves.  For  then  all  parties,  before 
they  enter  into  contracts,  or  make  or  accept  instruments,  may 
know  the  force  and  effect  of  the  words  they  employ,  of  the 
precaution*  they  use,  and  of  the  provisions  which  they  make  in 
their  own  behalf,  or  permit  to  be  made  by  other  parties. 

It  is  obvious  that  this  consistency  and  uniformity  of  con- 
struction can  exist  only  so  far  as  construction  is  governed  by 
fixed  principles,  or,  in  other  words,  is  matter  of  law.  And 
hence  arises  the  very  first  rule ;  which  is,  that  what  a  contract 
means  is  a  question  of  law.  It  is  the  court,  therefore,  that  de- 
termines the  construction  of  a  contract.  They  do  not  state  the 
rules  and  principles  of  law  by  which  the  jury  are  to  be  bound 
in  construing  the  language  which  the  parties  have  used,  and 
then  direct  the  jury  to  apply  them  at  their  discretion  to  the 
question  of  construction ;  nor  do  they  refer  to  these  rules  unless 
they  think  proper  to  do  so  for  the  purpose  of  illustrating  and 
explaining  their  own  decision.  But  they  give  to  the  jury,  as 
matter  of  law,  what  the  legal  construction  of  the  contract  is, 
and  this  the  jury  are  bound  absolutely  to  take,  (b) 

{b)  "  The  construction  of  all  written  Bowker,  5  M.  &  W.  535,  an  offer  liad 

instruments  l)elongs  to  the  court  alone,  been  matlc.  by  letter  to  sell  a  quantity  of 

whose  duty  it  is  to  construe  all  such  in-  "  good  barley."     The  letter  in  re]5ly,  after 

struments,  as  soon  as  tlic  true  meaning  of  stating  tlie  offer,  contained  the  following : 

the  words  \n  wiiich  they  are  couciicd,  and  —  "  of  wliicli  offer  we  accc])t,  expecting 

the    surrounding   circumstances,   if    any,  you   will  give  us  ^-fine   barley  and   good 

have  Iiccn  ascertained  as  facts  by  the  jury;  weight."     It  was  held  \\\nt  altliough  the 

and  it  is  the  duty  of  tlie  jury  to  tal<c  tiic  jury  might  find  tlie  mercantile  meanings 

construction  from   the  court  eitlicr  abso-  of  "good  "  and  "  fine,"  as  ap]died  to  bai'- 

lutcly,  if  there  be  no  words  to  Ijc  con-  ley,  yet  they  could  not  go   further,  and 

Ktrued  as  words  of  art,  or  ])hrascs  used  in  find  tliat  the  parties  did  not  understand 

conimcn-c,  ami    no  surrounding   circum-  each  other.     The  (jucstion  whetlier  tlicrc 

stances  to  lie  ascertained  ;  or  conditionally,  was  a  suflicient  acceptance  was  a  (juestion 

when  tliose  words  or  circumstances  are  to    be  determined  by  the   court,  upon  a 

ncccHSiirily  ref(Trcd  to  tliem.     Unless  tiiis  proper  construction  of  the  letters.     i\nd 

were  fio,  there  would  i)C  Jio  certainty  in  Parke,  B.,  said  :  "  The  law  I  take  to  bo 

the   law;    for  a  misconstruction   iiy  tlio  this,  —  that  it  is  the  duty  of  the  court  to 

court  is  tlic  [troper  Kulijcct,  by  means  of  a  construe  all  written  instruments ;  if  there 

liill   of  cx<'('ptioiis,  of  redress  in  a  Coint  are  jjcculiar  expressions  used  in  it,  which 


of   ICrror,  but   a   niiMoiisirurtion    by   the     liavc,    in    ]iarticiihir   ))1mccs    or   trades,    a 
not  lie 
rkr,  I J 
\V.   80 

[J] 


jury  cannot  Ik;  sit  right  at  all  cH'cctually."  known  nuaning  attacJicil  to  them,  it  is  for 
J'tT  I'drkr,  IJ.,  in  Neiison  r.  IliufonI,  8  the  jm-y  to  say  what  the  meaning  of  these 
M.   &   W.    t<(iG,   823.     lu   llutcliisou   v.     expressions  was,  but  for  the  court  to  dc- 


CII.  I.]      CONSTRUCTION   AND    INTERPRETATION   OF   CONTRACTS.      5-*6 

An  apparent  exception  occurs  not  unfrequently,  where  un- 
usual, or  technical,  or  official  words  are  used,  and  their  mean- 
ing is  to  be  gathered  from  experts,  or  from  those  acquainted 
with  the  particular  art  to  which  these  words  refer,  or  from  au- 
thoritative definitions.  The  evidence  on  this  point  may  be 
conflicting;  and  then  it  presents  a  question  for  the  jury.  But 
the  question  is  rather  analogous  to  that  presented  by  words  ob- 
scurely written  or  half  erased,  and  which  may  be  read  in  more 
than  one  way.  In  all  such  cases,  it  is  a  question  of  fact  for 
the  jury,  what  is  the  word  used,  or  what  is  its  specific  meaning 
in  this  contract ;  and  it  is  matter  of  law  what  effect  this  word 
used  with  this  meaning,  has  upon  the  construction  of  the  con- 
tract, (c) 

*The  principles  of  construction  are  much  the  same  at  law 


cidc  what  the  meaning  of  the  contract 
was.  It  was  right,  therefore,  to  leave  it  to 
the  jury  to  say  whether  there  was  a  pecul- 
iar meaning  attached  to  the  word  'Jine' 
in  the  corn  market;  and  the  jury  having 
found  what  it  was,  the  question,  whether 
there  was  a  complete  acceptance  by  the 
written  documents,  is  a  question  for  the 
judge."  See  Perth  Amboy  Man.  Co.  r. 
"Condit,  I  N.  J.  659  ;  Rogers  v.  Colt,  id. 
704  ;  Brown  v.  Hatton,  9  Ired.  319  ;  Wa- 
son  V.  Kowe,  16  Vt.  525  ;  Eaton  i'.  Smith, 
20  Pick.  151';  Ilitchen  v.  Groom,  5  C.  B. 
515;  Morrell  v.  Frith,  3  M.  &  W.  402; 
Brown  v.  Orland,  36  Me.  376  ;  Begg  v. 
Forbes,  C.  B.  1855,  30  Eng.  L.  &  Eq. 
508  ;  Rapp  v.  Rapp,  6  Penn.  St.  45.  The 
case  of  Lloyd  v.  Maund,  2  T.  R.  760, 
seems  contra,  but  that  case  was  substan- 
tially overruled  in  Morrell  i\  Frith,  3  M. 
&  W.  402.  "  If  I  am  called  on  to  give  an 
opinion,"  said  Parke,  B.,  "  I  think  the 
case  of  Lloyd  i\  IMaund  is  not  law."  — 
Where  the  evidence  of  a  contract  consists 
in  part  of  written  evidence,  and  in  part  of 
oral  communications,  or  other  unwritten 
evidence,  it  is  left  to  the  jury  to  deter- 
mine upon  the  whole  evidence  what  the 
contract  is.  Edwards  v.  Goldsmith,  16 
Penn.  St.  43  ;  Bomeisler  v.  Dobson,  5 
Whart.  398  ;  Morrell  v.  Frith,  3  M.  &  W. 
404,  per  Lord  Ahinr/er.  —  In  the  case  of 
libel,  the  meaning  of  the  document  forms 
part  of  the  intention  of  the  parties,  and  as 
such  intention  is  a  question  for  the  jury, 
the  document  is  submitted  to  them,  the 
judge  giving  the  legal  detiaition  of  the 

1* 


offence.  Parmiter  v.  Coupland,  6  M.  & 
W.  108;  Yier  Parker,  C.  J.,  in  Pierce  t). 
The  State,  13  N.  II.  536,  562;  per  Lord 
Abingcr,  in  Morrell  v.  Frith,  3  M.  &  W. 
402.  —  So  on  a  prosecution  for  sending  a 
threatening  letter,  the  jury  will,  upon  ex- 
amination of  the  paper,  decide  whether 
it  contains  a  menace.  Rex  v.  Girdvvood, 
2  East,  P.  C.  1120,  1  Leach's  Crowa 
Cases,  169. 

(c)  "  When  a  new  and  unusual  word  is 
used  in  a  contract,  or  when  a  word  is 
used  in  a  technical  or  peculiar  sense,  as 
applicable  to  any  trade  or  branch  of  busi- 
ness, or  to  any  particular  class  of  people, 
it  is  proper  to  receive  evidence  of  usage, 
to  explain  and  illustrate  it,  and  that  evi- 
dence is  to  be  considered  by  the  jui-y  ;  and 
the  province  of  the  court  will  then  be,  to 
instruct  the  jury  what  will  be  the  legal 
effect  of  the  contract  or  instrument,  as 
they  shall  find  the  meaning  of  the  word, 
modified  or  explained  by  the  usage.  But 
when  no  new  word  is  used,  or  when  an 
old  word,  having  an  established  place  in 
the  language,  is  not  apparently  used  in 
any  new,  technical,  or  peculiar  sense,  it  is 
the  province  of  tiie  court  to  put  a  con- 
struction upon  the  written  contracts  and 
agreements  of  parlies,  according  to  the 
established  use  of  language,  as  applied  to 
the  subject-matter,  and  modified  by  the 
whole  instrument,  or  by  existing  circum- 
stimces."  VcrShaw,  C.  J.,  in  Eaton  v. 
Smith,  20  Pick.  1.50;  Brown  v.  Orland, 
36  Me.  376  ;  Burnham  i'.  Allen,  1  Gray, 
496.     And  sec  preceding  note. 

[5] 


THE   LAW   OF   CONTRACTS. 


[part  II. 


and  in  equity,  (d)  Indeed  these  principles  are  of  necessity 
very  similar,  whether  applied  to  simple  contracts,  to  deeds,  or 
to  statutes.  There  are  differences,  but  in  all  these  cases  the 
end  is  the  same  ;  and  that  is  the  discovery  of  the  true  meaning 
of  the  words  used.  So  too,  whether  the  instrument  to  be 
construed  has  a  seal  or  not,  the  same  rules  and  principles  of 
construction  will  be  applied  to  it.  (e) 


SECTION    II. 

OF   THE   EFFECT   OF   INTENTION". 

The  first  point  is,  to  ascertain  what  the  parties  themselves 
meant  and  understood.  But  however  important  this  inquiry 
may  be,  it  is  often  insufficient  to  decide  the  whole  question. 
The  rule  of  law  is  not  that  the  court  will  always  construe  a 
contract  to  mean  that  which  the  parties  to  it  meant ;  but  rather 
that  the  court  will  give  to  the  contract  the  construction  which 
will  bring  it  as  near  to  the  actual  meaning  of  the  parties  as  the 
words  they  saw  fit  to  employ,  when  properly  construed,  and  the 
rules  of  law,  will  permit.  In  other  words,  courts  cannot  adopt 
a  construction  of  any  legal  instrument  which  shall  do  violence 
to  the  rules  of  language,  or  to  the  rules  of  law.  (/)  Words 
must  not  be  *forced  away  from  their  proper  signification  to  one 


ill)  3  BI.  Com.  434;  1  Fonb.  on  Eq. 
147,  n.  (/')  ;  Iloiliam  v.  East  India  Co.  1 
Doiif,'.  277  ;  Doe  (/.  Lonj,'  v.  Laniinp:,  2 
Burr.  1108;  Eaton  v.  Lyon,  3  Vcs.  G'J2  ; 
Ball  V.  Htoric,  I  Simons  &  S.  210. 

(e)  "  Tlic  same  intention  must  lie  col- 
lected from  I  lie  same  words  of  si  contract 
in  writin;^.  whetlicr  wiili  or  without  ii 
BCal."  I'cr  Lord  KlItiihoroiKili,  in  .Scd- 
don  I.'.  Sctniitc,  13  ICast,  74;  ItoKcrtson  r. 
Ercncli,  4  Last,  130,  13.'>  ;  ])(;r  Tindall,  V.. 
J.,  in  Ilalizrave  ?'.  Smue,  3  Moore  &  I'. 
581  ;  per  SIkuv,  C.  J.,  in  Kane  i'.  Hood, 
13  ri(  k.  2H2. 

(/■)  "  Wiiencvor,"  says  Willrs,  C.  J., 
in  I'arklmrst  v.  Smith,  'Wilics,  332,  "  it 
is  necessary  to  (^ive  an  opinion  upnii  the 
doubtful  words  of  a  deed,  the  lirsl  thing 


we  ouf!;ht  to  inquire  into  is,  what  was  the 
intention  of  the  parties.  If  the  intent  be 
as  (loiilitful  as  tlie  words,  it  will  he  of  no 
assistance  at  all.  But  if  the  intent  of  the 
])arties  he  plain  and  clear,  we  ouglit  if 
])ossihle  to  put  such  a  construction  on  the 
doul)tfuI  words  of  a  deed  as  will  best  an- 
swer the  intention  of  tlic  ])arties,  and  re- 
ject that  construction  wliich  manifestly 
lends  to  overtiUMi  and  destroy  it.  I  admit 
tliat  thou^Hi  tlie  intent  of  the  parties  be 
never  so  clear,  it  cannot  take  place  con- 
trary to  tiie  rules  of  law,  nor  can  we  put 
words  in  a  deed  whii'h  are  not  there,  nor 
put  a  construction  on  tlie  words  of  a  deed 
directly  contrary  to  the  plain  sense  of 
them." 


CH.  I.]       CONSTRUCTION   AND   INTERPRETATION    OF   CONTRACTS.  *8 


entirely  different,  although  it  might  be  obvious  that  the  words 
used  either  through  ignorance  or  inadvertence,  expressed  a  very 
different  meaning  from  that  intended.  Thus,  if  a  contract 
spoke  of  "  horses,"  it  would  not  be  possible  for  a  court  to  read 
this  word  "  oxen,"  although  it  might  be  made  certain  by  extrin- 
sic evidence  that  it  was  so  intended,  (g-)     So  if  *parties  used  in 


(g)  This  is  a  rule  which  should  be  con- 
stantly borne  in  mind  in  patting  a  con- 
struction upon  any  lcn;al  instrument.  It 
is  admirably  expounded  by  Lord  Chief 
Baron  Eyre,  in  the  opinion  delivered  by 
him  before  the  House  of  Lords  in  the 
great  case  of  Gibson  v.  Miuet,  1  H.  Bl. 
569,  614.  One  of  the  questions  agitated 
in  that  case  was,  whether  a  bill  of  ex- 
change drawn,  payable  to  a  fictitious 
payee,  and  purporting  to  be  by  him  in- 
dorsed, could  be  construed  as  a  bill  paya- 
ble to  bearer.  A  majority  of  the  judges 
who  delivered  opinions  argued  in  favor  of 
such  a  construction,  and  urged,  among 
other  arguments,  the  case  of  deeds  of  con- 
veyance, which  are  frequently  made  to 
operate  in  a  manner  different  from  what 
the  parties  intended.  But  the  learned 
Chief  Baron  delivered  a  very  powerful 
opinion  ngainst  adopting  the  construction 
in  question.  After  noticing  the  argument 
derived  from  deeds  of  conveyance,  and 
urging  that  there  was  no  analogy  between 
them  and  bills  of  exchange,  he  con- 
tiinied  :  "  But  let  it  be  supposed,  for  the 
sake  of  the  argument,  that  there  may  be 
some  analogy  between  deeds  and  bills  of 
exchange  ;  I  ask  what  are  the  instances  in 
which  construction  and  interpretation  have 
taken  so  great  a  liberty  with  deeds,  as  to 
afford  an  argument  by  analogy  for  con- 
struing in  this  case  a  bill  drawn  payable 
to  order  to  be  a  bill  drawn  payable  to 
bearer.  The  instances  which  had  oc- 
curred to  ine,  as  likely  to  lie  insisted  upon, 
do  in  my  apprehension  afford  no  argument 
in  favor  of  this  position.  A  deed  of  feoff- 
ment upon  consideration  without  livery 
may  enure  as  a  covenant  to  stand  seised 
to  the  use  of  the  intended  feoffee.  A 
deed  importing  to  be  a  grant  by  two,  one 
having  a  present,  the  other  a  future  inter- 
est, may  enure  as  the  grant  of  the  former, 
and  the  confirmation  of  the  latter.  A 
feoffment  without  livery  operates  nothing 
as  a  feoffment,  is  in  truth  no  feoffment, 
but  is  a  deed  which  under  circnmstauces 
may  operate  as  a  covenant  to  stand  seised 
to  uses  ;  why  1  The  feoffor  has  by  the 
deed  agreed  to  transfer  the  seisin  and  his 


right  in  the  subject  to  the  feoffee.  If  the 
consideration  is  a  money  consideration,  or 
a  consideration  of  blood,  which  is  more 
valuable  than  money,  the  law  raises  out 
of  the  contract  an  use  in  favor  of  the  in- 
tended feoffee.  The  seisin  which  remains 
in  the  feoffor,  because  the  deed  is  insuffi- 
cient to  pass  it,  must  remain  in  him, 
bound  by  the  use.  This  is  the  effect  of 
the  feoffor's  own  agreement  plainly  ex- 
pressed upon  the  face  of  this  deed.  His 
agreement  by  his  died  is  in  law  a  cove- 
nant, and  by  this  simple  process  does  his 
intended  feoffment  become,  in  construction 
of  law,  his  covenant  to  stand  seised  to 
uses.  It  is  a  construction  put  upon  the 
words  of  his  deed,  which  his  ivords  iciH 
bear.  So  a  deed  importing  a  grant  of  an 
interest  by  two,  one  entitled  in  possession, 
the  other  in  reversion,  is,  in  consideration 
of  law,  the  grant  of  the  first  and  the  con- 
firmation of  the  second  ;  why  ?  The  deed 
imports  to  be  the  grant  of  a  present  estate 
by  both,  and  it  is  the  apparent  intent  of 
both  that  the  grantee  shall  have  the  estate 
so  granted  ;  but  the  deed  of  the  latter 
having  no  present  interest  to  operate  upon 
as  a  grant,  nothing  can  pass  by  it  as  a 
grant.  But  this  party  has  a  future  inter- 
est in  the  subject,  out  of  which  he  may 
make  good  to  the  grantee  the  estate 
granted  to  him  by  the  first  grantor.  This 
is  to  be  done  by  a  particular  species  of 
conveyance,  called  a  confirmation.  The 
words  which  are  used  in  this  deed,  in  their 
strict  technical  sense,  are  words  of  con- 
firmation as  much  as  they  are  words  of 
grant.  In  the  mouth  of  this  party'  the 
law  says,  that  they  are  words  of  confirma- 
tion, and  shall  enure  as  words  of  confirma- 
tion, in  order  to  give  effect  to  his  deed,  ut 
res  magis  valeat  quam  pereat.  Here  again 
the  construction  which  the  law  puts  upon 
the  words  of  the  deed  is  a  construction 
ivhich  the  xcords  will  bear.  The  words  have 
several  technical  senses,  of  which  this  is 
one,  and  the  law  prefers  this,  because  it 
carries  into  execution  the  clear  intent  of 
the  parties,  that  the  estate  and  interest 
conveyed  b}"-  that  deed  shall  pass.  In 
both  those  cases  we  find  words  interpreted, 

[7] 


9*  THE   LAW   OF   CONTRACTS.  [PART  II. 

a  contract  technical  words  of  the  law  merchant,  such  as  av- 
erage, or  agio,  or  grace  ;  these  words  could  not  be  wrested  from 
their  customary  and  established  meaning,  on  the  ground  that 
the  parties  used  them  in  a  sense  which  had  never  before  been 
given  to  them.  (//)  But  words  will  be  interpreted  with  unusual 
extent  of  meaning,  and  held  to  be  generic  rather  than  specific^ 
and  thus  made  to  cover  things  which  are  collateral  rather  than 
identical,  if  the  certain  meaning  of  the  parties,  and  the  obvious 
justice  of  the  case  require  this  extent  of  signification.  Thus 
the  word  "men"  will  be  interpreted  to  mean  "mankind,"  and 
to  include  women ;  (i)  and  the  word  "  bucks "  has  been  con- 
strued to  include  "  does;"  and  the  w^ord  "  horse"  construed  to 
mean  "  mares,"  {j) 

A  distinction  is  to  be  observed  between  the  construction  of  a 
contract  and  the  correction  of  a  mistake.  For  if  it  were  in 
proof  that  the  parties  had  intended  to  use  one  word,  and  that 
another  was  in  fact  used  by  a  mere  verbal  error  in  copying  or 
writing,  such  error  might  be  corrected  by  a  court  of  equity, 
upon  a  bill  filed  for  that  purpose,  and  the  instrument  so  cor- 
rected would  be  looked  upon  as  the  contract  which  *the  parties 
had  made,  and  be  interpreted  accordingly,  {k)  But  this  juris- 
diction is  confined  strictly  to  those  cases  where  different  lan- 
guage has  been  used  from  that  which  the  parties  intended.  For 
if  the  words  employed  were  those  intended  to  be  used,  but  their 
actual  meaning  was  totally  different  from  that  which  the  parties 
supposed  and  intended  them  to  bear,  still  this  actual  meaning 
would,  generally  if  not  always,  be  held  to  be  their  legal  mean- 


not  in  tlip'ir  most  {rcncral  and  obvious  construction  is  put  upon  tlicm.  If  we 
scnsi  it  is  true  ;  hut  if  tlicy  are  interpreted  step  l)eyond  this  line,  wc  no  longer  con- 
in  a  manner  which  the /hs  f<  Ho/v/fa /wy»£?i-  strue  men's  deeds,  but  make  deeds  for 
di  in  conveyances  will  warrant,  there  is  them."  And  sec  Stratton  ?•.  Pettit,  16  C. 
nothintj  of  violi-ncc  in  sucii  construction.  B.  420,  30  Eng.  L.  &  Eq.  479;  The  Lou- 
Indccd,  I  do  not  know  how  it  wduld  be  phor  Coal  and  liailway  Co.  v.  Williams, 
possible, to  read  a  >iti^dc  pa;:e  of  iiistory  in  C.  15.  18.55,  .30  Eng.  L.  &  Eq.  496. 
any  lan;;unK^'i  ^^''''out  \\<\n<^  the  same  lati-  (/<)  Sec  Hutchison  v.  Bowkcr,  5  M.  & 
tude  of  construction  and  interpretation  of  W.  .').'l."). 

wordft.     To  ^o  one  step  beyond  these  in-  (/)  IJro.  Abr.  Exposition  del  Terms,  .39. 

stances:   I  veiiiurc  to  lay  it  down  as  a  t,a'n-  (/)  State    r.    Dunnavant,    3    Brev.    9. 

era!   rule  rcspcriin^'  the  interpretation  of  And  see  Packard  v.  Hill,  7  Cowcn,  434,  5 

deeds,    that    all    iaiilude    of   constnietifju  Wend.  37.'). 

must  Kuiunit  to  this  restriction,   minidy,  (/,)  Ailains's    Doctrine   of  Ecpiity,    p. 

thai  ilie  voalu  111(11/  hmr  the  sense  which  by  109,  tt  scj. 

[8] 


CII.  I.]   CONSTRUCTION  AND  INTERPRETATION  OF  CONTRACTS.    *10 

ing.  (/)  Upon  sufficient  proof  that  the  contract  did  not  express 
the  meaning  of  the  parties,  it  might  be  set  aside  ;  but  a  con- 
tract which  the  parties  intended  to  make,  but  did  not  make, 
cannot  be  set  up  in  the  place  of  one  which  they  did  make,  but 
did  not  intend  to  make. 

So  the  rules  of  law,  as  well  as  the  rules  of  language,  may- 
interfere  to  prevent  a  construction  in  accordance  with  the  in- 
tent of  the  parties.  Thus,  if  parties  agreed  that  one  should  pay 
the  other,  for  a  certain  consideration,  sums  of  money  at  various 
times,  "  with  interest,"  and  it  was  clear,  either  f^jpm  the  whole 
contract  or  from  independent  evidence,  that  the  parties  meant 
by  this  "  compound  interest,"  it  may  be  presumed  (assuming 
that  a  contract  for  compound  interest  is  unlawful),  that  no  court 
would  admit  this  interpretation,  because  if  the  bargain  were 
expressly  for  compound  interest,  it  would  be  invalid.  Nor 
would  a  contract  to  pay  interest  be  avoided  by  evidence  that 
the  parties  understood  compound  interest,  if  it  were  made  in 
good  faith,  and  for  a  valid  consideration.  The  law  would  con- 
sider the  contract  as  defining  the  principal  sums  due,  and  then 
would  put  upon  the  word  interest  its  own  legal  interpretation. 

So  too,  if  a  manufacturer  agrees  to  make  and  finish  certain 
goods,  "  as  soon  as  possible,"  this  means  within  a  reasonable 
time,  due  regard  being  had  to  the  manufacturer's  means,  his 
engagements,  and  the  nature  of  the  articles,  (la) 

It  may  be  true  ethically,  that  a  party  is  bound  by  the  mean- 
ing which  he  knew  the  other  party  to  intend,  or  to  believe  that 
he  himself  intended  ;  (m)  but  certainly  this  is  not  *always  legally 

(/)  Ibid.  ston  Mut.  Ins.  Co.  5  Hill,  147,  per  Bwn- 
(/a)  Atwood  w.  Emeiy,  1  C.  B.  n.  s.  .son,  J.  In  this  case,  one  of  the  conditions 
110.  of  a  fire  policy  was,  that  in  case  the  as- 
(m)  "Where  the  terms  of  the  promise  surcd  should  make  any  other  insurance  on 
admit  of  more  senses  than  one,  the  prom-  the  same  property,  and  should  not  with 
ise  is  to  be  performed  in  that  sense  in  all  reasonable  diligence  give  notice  thereof 
which  the  promisor  apprehended,  at  tlie  to  the  company,  and  liave  the  same  in- 
time  the  promisee  received  it."  Palcy's  dorsed  on  the  policy,  or  otherwise  achiowl- 
Mor.  and  Pol.  Philosoph}',  104.  Where  edged  or  approved  bij  them  in  ivritiii(j,  the 
the  terms  of  an  instrument  are  fairly  sus-  policy  should  cease,  and  be  of  no  further 
ceptible  of  the  meaning  in  which  the  prom-  effect;  A  further  insurance  was  effected, 
isor  believed  they  were  understood  by  the  and  notice  given  to  the  company.  It  was 
promisee,  and  in  which  they  were  actually  answered  by  the  secretary  of  the  company 
understood,  the  rule  of  Paley  is  as  good  in  these  words:  "I  have  received  your 
in  law  as  in  ethics.  See  an  application  of  notice  of  additional  insurance."  Bronson, 
the  rule  in  Potter  v.  Ontario  and  Living-  J.,  after  stating   Palev's   rule,  as  above 

[  'J  ] 


10-  THE   LAW   OF   CONTKACTS.  [PART  II. 

true.  Thus,  in  the  cases  ah'eady  supposed,  he  who  was  to  give 
might  know  that  the  party  who  was  to  receive  (a  foreigner  per- 
haps, unacquainted  with  our  language),  believed  that  the  prom- 
ise was  for  "  oxen,"  when  the  word  "  horses "  was  used ;  but 
nevertheless  an  action  on  this  contract  could  not  be  sustained  for 
"  oxen."  So  if  he  who  was  to  pay  money  knew  that  the  payee 
expected  compound  interest,  this  would  not  make  him  liable  for 
compound  interest  as  such,  although  the  specific  sums  payable 
were  made  less,  because  they  were  to  bear  compound  interest. 
In  all  these  cases,  it  is  one  question  whether  an  action  may  be 
maintained  on  the  contract  so  explained,  and  another  very  differ- 
ent question,  whether  the  contract  may  not  be  entirely  set  aside, 
because  it  fails  to  express  the  meaning  of  the  parties,  or  is 
tainted  with  fraud;  and  being  so  avoided,  the  parties  will  then 
fall  back  upon  the  rights  and  remedies  that  may  belong  to  their 
mutual  relations  and  responsibilities.  These  must  be  deter- 
mined by  the  evidence  in  the  case ;  and  the  very  contract, 
which,  as  a  contract,  could  not  be  enforced,  may  perhaps  be  evi- 
dence of  great  importance  as  to  the  rights  and  liabihties  of  the 
parties. 

It  is  therefore  obvious  that  it  is  not  enough  in  every  instance 
to  ascertain  the  meaning  of  the  parties.  It  is  however  always 
true  that  this  is  of  the  utmost  importance,  and  often  sufficient 
to  determine  the  construction.  And  courts  of  law  have  estab- 
lished various  rules  to  enable  them  to  ascertain  this  meaning, 
or  to  choose  between  possible  meanings. 

given,  says  :  "Now  how  did  the  defend-  plaintiff  shouki  understand  from  the  an- 

ants  apprehend  at  the  time  that  the  plain-  swer   that    every   tiling    had   been   done 

tiff  would  receive  tiieir  answer?     If  they  which  was  necessary  to  a  continuance  of 

secretly  reserved  the  right  of  approval  or  the   policy,  and   consequently  that  they 

disapproval  at  a  future  ))criod,  could  they  approved,  as  well  as  acknowledged,  the 

luive   hciieved  that  their  written   answer  furtlicr  insurance."     See  also  1  Duer  on 

would  l)c  so  received  liy  the  ])laintitV?     I  Ins.  159. 
think  not.     They  must  have  intended  the 

[10] 


CH.  I.]     CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.  11 


SECTION    III. 

SOME   OF   THE   GENERAL   RULES    OF   CONSTRUCTION. 

The  subject-matter  of  the  contract  is  to  be  fully  considered,  (n) 
There  are  very  many  words  and  phrases  which  have  one  mean- 
ing in  ordinary  narration  or  composition,  and  quite  another 
when  they  are  used  as  technical  words  in  relation  to  some  spe- 
cial subject ;  and  it  is  obvious  that  if  this  be  the  subject-matter 
of  the  contract,  it  must  be  supposed  that  the  words  are  used  in 
this  specific  and  technical  sense. 

So,  too,  the  situation  of  the  parties  at  the  time,  and  of  the 
property  which  is  the  subject-matter  of  the  contract,  and  the 
intention  and  purpose  of  the  parties  in  making  the  contract,  will 
often  be  of  great  service  in  guiding  the  construction ;  because 
as  has  been  said,  this  intention  will  be  carried  into  effect  so  far 
as  the  rules  of  language  and  the  rules  of  law  will  permit.  So 
the  moral  rule  above  referred  to  may  be  applicable ;  because  a 
party  will  be  held  to  that  meaning  which  he  knew  the  other 
party  supposed  the  words  to  bear,  if  this  can  be  done  without 
making  a  new  contract  for  the  parties. 

Indeed,  the  very  idea  and  purpose  of  construction  imply  a 
previous  uncertainty  as  to  the  meaning  of  the  contract ;  for 
where  this  is  clear  and  unambiguous,  there  is  no  room  for  con- 
struction, and  nothing  for  construction  to  do.  A  court  would 
not,  by  construction  of  a  contract,  defeat  the  express  stipulations 

(n)  The  King  v.  Mashiter,  1  Nev.  &  P.  was  meant.     Unwin  v.  Wolseley,  1  T.  R. 

326,  327.     Where  an  executrix  promised  674.     If  an  annuity  be  granted  to  one, 

to  pay  a  simple  contract  debt,  "  when  suf-  "pro  concilio  impenso  et  impendendo"  (for 

ficient  effects  were  received"  from  the  estate  past  and  future  counsel),  if  the  grantee  be 

of  the  testator,  it  was  held,  that  this  must  a  physician,  this  shall  be  understood  of 

be  understood  to  mean  effects  legally  ap-  his  advice  as  a  physician,  and  if  he  be  a 

plicable  to  the  debt  in  question,  and  that  lawyer,  of  his   advice  in   legal  matters, 

the  executrix  might  first  pay  a  bond  debt.  Shcp.  Touch,  p.  86.     See  Littlefield  v, 

Bowerbank  v.  Monteiro,  4  Taunt.   844.  Winslow,  19   Me.  394,  398;   Sumner  v. 

So,  where  it  was  agreed  in  a  charter-party  Williams,  8  Mass.  162,  214;  Robinson  v. 

to  employ  a  captured  ship,  "  as  soon  as  Fiske,  25   Me.   401  ;   Philbrook   v.   New 

sentence   of   condemnation   should   have  England  Mut.  Fire  Ins.  Co.  37  id.  137. 
passed,"  it  was  held  that  a  legal  sentence 

[11] 


12*  THE   LAW   OF   CONTRACTS.  [PART  11. 

of  the  parties.  And  if  a  contract  is  false  to  the  *actual  meaning 
and  purpose  of  the  parties,  or  of  either  party,  the  remedy  does 
not  lie  in  construction,  but,  if  the  plaintiff  be  the  injured  party, 
in  assuming  the  contract  to  be  void,  and  establishing  his  rights 
by  other  and  appropriate  means;  or,  if  the  defendant  be  injured, 
by  defending  against  the  contract  on  the  ground  of  fraud  or 
mistake,  if  the  facts  support  such  a  defence. 

A  construction  which  would  make  the  contract  legal  is  pre- 
ferred to  one  which  would  have  an  opposite  effect ;  (o)  and  by 
an  extension  of  the  same  principle,  where  certain  things  are  to 
be  done  by  the  contract  which  the  law  has  regulated  in  whole 
or  in  part,  the  contract  will  be  held  to  mean  that  they  should  be 
so  done  as  would  be  either  required  or  indicated  by  the  law.  (p) 

The  question  may  be  whether  the  words  used  should  be  taken 
in  a  comprehensive  or  a  restricted  sense ;  in  a  general  or  a  par- 
ticular sense ;  in  the  popular  and  common  or  in  some  unusual 
and  peculiar  sense.  In  all  these  cases  the  court  will  endeavor 
to  give  to  the  contract  a  rational  and  just  construction ;  but  the 
presumption  —  of  greater  or  less  strength,  according  to  the  lan- 
guage used,  or  the  circumstances  of  the  case  —  is  in  favor  of  the 
comprehensive  over  the  restricted,  the  general  over  the  particu- 
lar, the  common  over  the  unusual  sense,  (q) 

(o)  "It  is  a  general  rule,"  saith  Lord  Enj:?.  L.  &  Eq.  142;  Moss  v.  Bainbrigge, 

Coke,  "that  whensoever  the  words  of  a  18  Beav.  478,  31  Eng.  L.  &  Eq.  565. 

deed,  or  of  the  parties  without  deed,  may  (p)  A  condition  to  assign  all  offices  is 

have  a  douhle  intendment,  and  the  one  valid,  and  will  he  talcen  to  apply  to  such 

standetli  with  law  and  riglit,  and  tlie  other  otKces  as  are  by  law  assignable.     Ilarring- 

is  wrongful  and  against  law,  the  intend-  ton  v.  Kloprogge,  4  Doug.   5.     And  see 

ment   that   standeth   with    law   shall    be  Clark  v.  Pinncy,  7  Cowen,  681.     In  this 

taken."      Co.   Litt.   42,    183.      And  see  case  there  was  a  contract  to  deliver  Salina 

Churchwardens  of  St.  Saviour,  10  Rep.  salt  in  barrels  ;  held,  that  such  barrels  as 

67  b ;    Archibald   v.  Thomas,  3   Cowen,  were  directed  by  statute  were  to  be  under- 

284  ;    Kiley's    A<liu'rs   i'.    Vanhouten,   4  stood  as  intended. 

How.    Miss.    428;    Many    v.    Beekman  (7)  What  Lord  ^//e?i?)oro(//7/i  says  with 

Iron  Co.  9  Paige,  188.     The  same  doc-  regard  to  the  construction  of  the  policy  of 

trine  was  declared  by  Lord  Lijndliiirst.,  in  insurance,  is  ccjually  true  as  to  all  other 

Shore   V.    Wilson,    'J    Clark    &   F.   397.  instruments,  namely,  that  it  must  be  con- 

"  The  rule,"  says  he,  "  is  this,  and  it  is  a  strued  according  to  its  sense  and  meaning 

fair  and   proper  rule,  that  where  a  con-  as  collected  in  the  lirst   place  from  the 

Btruction,  consistent  with  lawful  conduct  terms  used  in  it,  which  terms  are  tliem- 

and  lawful  intention  can  be  placed  upon  selves  to  be   understood    in    their  jilain, 

the  words  and  acts  of  i)arties,  you  are  to  ordinary,  and  popular  sense,  uidess  they 

do  80,  and  not  umjecessarily  to  put  upon  have  generally,  in  respect  to  the  subject- 

these  words  Hnd  nct.s  u  construction  direct-  matter,  as  by  the  known  usage  of  trade, 

ly  at  variance  with  what  the  law  proiiibits  or  the  like,  ac(piircd  a  peculiar  sense  dis- 

or  enjoins."     And  see  Attorney-General  tinct  from  the  popular  sense  of  the  samo 

i;.  Ciapham,  4  I^c  C,  M.  &  G.  591,  31  words,  or  unless   the  context  evidently 

[12] 


en.  I.]   CONSTRUCTION  AND  INTERPRETATION  OP  CONTRACTS.    13 

It  is  a  rule  that  the  whole  contract  should  be  considered  in 
determining  the  meaning  of  any  or  of  all  its  parts,  (r)     The 


points  out  that  they  must,  in  the  particu- 
lar instance,  and  in  order  to  effectuate  the 
immediate  intention  of  the  parties  to  that 
contract,  be  understood  in  some  other 
s]-)ccial  and  peculiar  sense.  Robertson  v. 
French,  4  East,  135.  "The  best  con- 
struction," says  Gibson,  C.  J.,  "is  that 
which  is  made  by  viewing  the  subject  of 
the  contract  as  the  mass  of  mankind 
would  view  it ;  for  it  may  be  safely  as- 
sumed tliat  such  was  the  aspect  in  which 
the  parties  themselves  viewed  it.  A  result 
thus  obtained  is  exactly  what  is  obtained 
from  the  cardinal  rule  of  intention." 
Schuylkill  Nav.  Co.  v.  Moore,  2  Whart. 
491 .  —  "  Becoming  insolvent,"  means  ,a 
general  inability  to  pay  one's  debts,  not  a 
taking  the  benefit  of  the  Insolvent  Debt- 
ors' Act,  unless  the  context  so  restrains 
it.  Biddlecombe  v.  Bond,  4  A.  &  E.  322 ; 
Parker  v.  Gossage,  2  Cromp.  M.  &  R.  617. 
See  also.  Lord  Dormer  v.  Knight,  1  Taunt. 
417  ;  The  King  v.  Mainwaring,  10  B.  & 
C.  66  ;  Rawlins  v.  Jenkins,  4  Q.  B.  419  ; 
Caine  v.  Horsfall,  1  Exch.  519;  Lowber 
V.  Lc  Roy,  2  Sandf.  202 ;  Denny  v.  Man- 
hattan Co.  2  Hill,  220 ;  Metcalf  v.  Tay- 
lor, 36  Me.  28  ;  Chapman  v.  Seccomb,  id. 
102.  The  first  proposition  of  Mr.  TT7- 
gram,  in  his  treatise  upon  the  admission 
of  extrinsic  evidence  in  aid  of  the  inter- 
pretation of  wills,  is  that,  "A  testator  is 
always  presumed  to  use  the  words  in 
which  he  expresses  himself,  according  to 
their  strict  and  primarii  acceptation,  unless 
from  the  substance  of  the  will  it  appears 
that  he  used  them  in  agdifferent  sense,  in 
which  case  the  sense  in  which  he  thus 
appears  to  have  used  them  will  be  the 
sense  in  which  they  are  to  be  construed." 
If  by  strict  and  primai-y  meaning  is  meant 
ordinary  meaning,  the  rule  needs  no  qual- 
ification. The  object  of  interpretation  and 
construction  is  to  find  the  intention  of  the 
parties,  and  surely  that  intention  is  best 
sought  by  affixing  to  the  words  of  an 
instrument  such  meanings  as  are  common 
or  ordinary.  Where,  however,  the  law 
has  defined  the  meaning  of  words,  they 
must  be  understood  to  be  used  in  the 
sense  which  the  law  attaches  to  them, 
unless  the  context  or  the  circumstances  of 
the  case  indicate  that  another  meaning  is 
the  one  in  which  they  are  used.  Thus, 
the  word  "  child  "  is  understood  to  mean 
legitimate  child,  unless  a  different  mean- 
ing is  pointed  out  by  the  context,  or  ex- 

VOL.  II.  2 


trinsic  facts.  Eraser  v.  Pigot,  Younge, 
354;  Wilkinson  r.  Adam,  1  Vcs.  &  B. 
422 ;  Gill  v.  Shelley,  2  Rns.  &  M.  336. 

(r)  Ex  antccedentihus  et  consequentihus 
fit  optima  interpretatio.  "Every  deed," 
says  Lord  Hobart,  "  ought  to  be  con- 
strued according  to  the  intention  of  the 
parties,  and  the  intents  ought  to  be  ad- 
judged of  the  several  parts  of  the  deed,  as 
a  general  issue  out  of  the  evidence  and 
intent  ought  to  be  picked  out  of  every 
part,  and  not  out  of  one  word  only." 
Trenchard  v.  Hoskins,  Winch,  93.  And 
see  Sicklemore  v.  Thistleton,  6  M.  &  S. 
9;  Washburn  v.  Gould,  3  Story,  122; 
Chase  v.  Bradley,  26  Me.  531  ;  Merrill  v. 
Gore,  29  id.  346 ;  Heywood  v.  Perrin,  10 
Pick.  228;  Gray  v.  Clark,  11  Vt.  583; 
Warren  v.  Merrifield,  8  Met.  96 ;  Mc- 
Nairy  v.  Thompson,  1  Sneed,  141.  "It  is 
a  true  rule  of  construction  that  the  sense 
and  meaning  of  the  parties,  in  any  partic- 
ular part  of  an  instrument,  may  be  col- 
lected ex  antecedentibus  et  consequentibus ; 
every  part  of  it  may  be  brought  into  action, 
in  order  to  collect  from  the  whole  one  uni- 
form and  consistent  sense,  if  that  may  be 
done."  Per  Lord  Elknborough,  in  Barton 
V.  Eitzgerald,  15  East,  541.  In  the  Duke 
of  Northumberland  v.  Errington,  5  T.  R. 
522,  there  was  a  string  of  covenants  upon 
the  part  of  the  lessees  of  certain  mines,  in 
wliich  they  bound  themselves,  "jointly  and 
severally ; "  after  which  followed  a  cove- 
nant of  the  lessor.  There  was  then  a  fur- 
ther covenant  on  the  part  of  the  lessees  to 
render  an  account,  which  of  itself  would 
have  bound  them  only  jointly.  Held,  that 
the  words  "jointly  and  severally,"  at  the 
beginning  of  the  covenants  by  the  lessees, 
extended  to  all  their  subsequent  covenants. 
Buller,  J.,  said :  "  It  is  immaterial  in 
what  part  of  a  deed  any  particular  cove- 
nant is  inserted  ;  for  in  construing  it  we 
must  take  the  whole  deed  into  considera- 
tion, in  order  to  discover  the  meaning  of 
the  parties."  —  Where  there  are  recitals  of 
particular  claims  or  considerations  fol- 
lowed by  general  words  of  release,  the 
general  words  shall  be  restrained  by  the 
particular  recital.  Thus,  if  a  man  should 
receive  ten  pounds,  and  give  a  receipt  for 
this  sum,  and  thereby  acquit  and  release  the 
person  of  all  actions,  debts,  duties,  etnd  cle- 
memds,  nothing  would  be  released  but  the 
ten  pounds  ;  because  the  last  words  must 
be  limited   by  those  foregoing.     2  Roll. 

[13] 


14-15* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


reason  is  obvious.  The  same  parties  make  all  the  contract, 
and  may  be  supposed  to  have  had  the  same  purpose  and  object 
in  view  in  all  of  it,  and  if  this  purpose  is  more  clear  and  cer- 
tain in  some  parts  than  in  others,  those  which  are  obscure  may 
be  illustrated  by  the  light  of  others.  Thus,  the  condition  of  a 
bond  may  be  considered  to  explain  the  obligatory  part,  (s) 
And  the  recital  in  a  deed  or  agreement  has  sometimes  great 
influence  in  the  interpretation  of  other  parts  of  the  instru- 
ment, {t)  The  contract  may  be  contained  in  several  instru- 
ments, which,  if  made  at  the  same  time,  between  *the  same  par- 
ties, and  in  relation  to  the  same  subject,  will  be  held  to  consti- 
tute but  one  contract,  (m)  and  the  court  will  read  them  in  such 


Abr.  409.  Tliis  case,  though  said  to  be 
denied  by  Lord  Eolt,  in  Knight  v.  Cole,  1 
Show.  150,  155,  was  confirmed  by  Lord 
Ellenhorouqh,  in  Pavlor  t'.  Homersham,  4 
M.  &  S.  426.  See"also,  Ramsden  v.  Hyl- 
ton,  2  Ves.  310  ;  Lampon  v.  Corke,  5  B. 
&  Aid.  606 ;  Simons  v.  Johnson,  3  B.  & 
Ad.  175  ;  Lyman  v.  Clark,  9  Mass.  235  ; 
Rich  V.  Lord,  18  Pick.  325  ;  Jackson  v. 
Stackhouse,  1  Cowen,  122;  Mclntyre  v. 
Williamson,  1  Edw.  Ch.  34.  For  the  con- 
struction of  sweeping  clauses  see  Moore  v. 
Magrath,  Cowp.  9.  —  For  the  effect  of  re- 
citals upon  the  construction  of  mercantile 
instruments,  see  Bell  v.  Bruen,  1  How. 
169,  184  ;  Lawrence  v.  McCalmont,  2  id. 
426,  449. —  In  Browning  v.  Wright,  2 
B.  &  P.  13,  A,  after  granting  certain 
premises  in  fee  to  B,  and  after  warranting 
the  same  against  himself  and  his  heirs, 
covenanted  that  notwithstanding  any  act 
by  liim  done  to  the  contrary,  he  was  seised 
of  the  premises  in  fee,  and  that  he  had  full 
power,  ^-c,  to  convey  the  same ;  he  then 
covenanted  for  himself,  his  heirs,  execu- 
tors, and  administrators,  to  make  a  cart- 
way, and  tiiiit  B  slioidd  quietly  enjoy 
witliout  interruption  from  himself  or  any 
person  claiming  utidcr  him,  and  lastly, 
tluit  he,  iiis  iicirs  and  assigns,  and  all  per- 
sons claiming  under  him,  sliouid  make 
further  assurance,  lldd,  that  tiie  inter- 
vening general  words,  "  full  jiowcr,  &c., 
to  convey,"  were  cither  pait  of  the  ])rcced- 
ing  special  covenant ;  or,  if  not,  that  they 
were  (|ualili(><I  bv  all  the  other  special  cov- 
enants against  the  acts  of  himself  ami  his 
h(!irs.  See  the  admirable  opinion  of  l^ord 
Eldon.  Sec  also,  Hesse  v.  Stevenson,  3  B. 
&  P.  0C5  ;  Nind  v.  MurHliall,  3  J.  B.  Moore, 

[H] 


703  ;  Broughton  v.  Conway,  Dyer,  240 
a ;  Cole  v.  Hawes,  2  Jolms.  Cas.  203  ; 
Whallon  v.  Kauftman,  19  Johns.  97  ;  Bar- 
ton V.  Fitzgerald,  15  East,  530 ;  Saward  v. 
Anstey,  10  J.  B.  Moore,  55  ;  Chapin  v.  Cle- 
mitson,  1  Barb.  311 ;  Mills  ?;.  Catlin,  22 
Vt.  98.  —  Where,  in  a  statute,  general 
words  follow  particular  ones,  the  rule  is  to 
construe  them,  as  applicable  to  subjects 
ejusdem  rjeneris.  Thus,  in  Sandiman  v. 
Breach,  7  B.  &  C.  96,  a. question  arose 
upon  the  statute  29  Car.  2,  c.  7,  which 
enacts,  "  that  no  tradesman,  artificer, 
workman,  laborer,  or  other  person  or  per- 
sons, shall  do  or  exercise  any  worldly  la- 
bor, business,  or  work  of  their  ordinary 
callings,  upon  the  Lord's  day."  It  was 
contended  that  under  the  words  "  other 
person  or  persons  "  the  drivers  of  stage- 
coaches were  incjpded.  Held  otherwise 
for  the  above  reasons.  See  the  Queen  v. 
Nevill,  8  Q.  B.  452.  —  For  the  application 
of  this  rule  to  deeds  of  conveyance  where 
there  are  particular  enumerations  or  de- 
scriptions, sec  Doe  v.  Meyrick,  2  Cromp. 
&  J.  223;  Jackson  v.  Stevens,  16  Johns. 
110.  —  Parts  struck  out  of  an  instrument 
may,  it  seems,  be  regarded  in  its  <fionstruc- 
tion.  Strickland  v.  Maxwell,  2  Cromp. 
&  M.  539. 

(s)  Coles  V.  Hulme,  8  B.  &  C.  568. 

(/)  Moore  v.  Magrath,  Cowp.  9  ;  Chol- 
mondeley  r.  Clinton,  2  B.  &  Aid.  625. 

((()  Coldham  v.  Showier,  3  C.  B.  312; 
Makepeace  v.  Harvard  College,  10  Pick. 
298  ;  Sibley  v.  Iloldcn,  id.  249  ;  Odiorno 
V.  Sargent,  6  N.  II.  401  ;  Kaymond  v. 
Roberts,  2  Aikens,  204  ;  Strong  v.  Barnes, 
11  Vt.  221  ;  Taylor  (/.  Atkins  v.  Horde, 
1  Burr.  60,  117  ;  Jacksou  v.  Dunsbagb,  1 


en.  I.]       CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.       -15 

order  of  time  and  priority  as  will  carry  into  effect  the  intention 
of  the  parties,  as  the  same  may  be  gathered  from  all  the  instru- 
ments taken  together,  (v)  And  the  recitals  in  each  may  be  ex- 
plained or  corrected  by  a  reference  to  any  other,  in  the  same 
way  as  if  they  were  only  several  parts  of  one  instrument,  (tv) 

Another  rule  requires  that  the  contract  should  be  supported 
rather  than  defeated,  {x)  Thus,  a  deed  which  cannot  operate 
in  the  precise  way  in  which  it  is  intended  to  take  effect,  shall 
yet  be  construed  in  another,  if  in  this  other  it  can  be  made 
effectual,  (y)      For   example,   a   deed   intended   for   a   release. 


Johns.  Cas.  91 ;  Hills  v.  Miller,  3  Paige, 
254  ;  Sewall  v.  Henry,  9  Ala.  24  ;  Ap^- 
gate  V.  Jacoby,  9  Dana,  209  ;  CornelW. 
Todd,  2  Denio,  130  ;  Craig  v.  Wells,  1 
Kern.  315  ;  Rutland  &  Burlington  R.  Co. 
V.  Crocker,  U.  S.  C.  C,  Vt.  1858,  21  Law 
Reporter,  201.  So  also,  though  the  in- 
struments are  not  made  at  the  same  time, 
if  they  can  be  connected  together  by  a  ref- 
erence from  one  to  the  other.  Van  Hagen 
V.  Van  Rensselaer,  18  Johns.  420  ;  Saw- 
yer V.  Hammatt,  15  Me.  40;  Adams  v. 
Hill,  16  id.  215. 

(v)  Whitehurst  v.  Boyd,  8  Ala.  375 ; 
Newhall  v.  Wright,  3  Mass.  138. 

{w)  Sawyer  v.  Hammatt,  15  Me.  40. 

(.r)  Smith  v.  Packhurst,  3  Atk.  135  ; 
Pollock  V.  Stacy,  9  Q.  B.  1033.  In  Pugh 
V.  Leeds,  Cowp.  714,  there  was  a  power  to 
make  leases  in  possession,  but  not  in  re- 
Tersion.  A  lease  was  granted  for  twenty- 
one  years,  to  commence  from  the  day  of 
the  date.  Held,  that  "  from  the  day,  &c.," 
was  to  be  regarded  as  inclusive,  and  not 
exclusive  of  the  day  of  the  date.  Lord 
Mansfield  said :  "  The  ground  of  the 
opinion  and  judgment  which  I  now  de- 
liver is  that  '  from  '  may,  in  the  vulgar  use, 
and  even  in  the  strictest  propriety  of  lan- 
guage, mean  either  inclusive  or  exclusive; 
that  the  parties  necessarily  understood  and 
used  it  in  that  sense  which  made  their  deed 
effectual ;  that  the  courts  of  justice  are  to 
construe  the  words  of  parties  so  as  to 
effectuate  their  deeds,  and  not  to  destroy 
them ;  more  especially  where  the  words 
themselves  abstractedly  may  admit  of 
either  meaning."  In  Brown  v.  Slater,  16 
Conn.  192,  the  following  agreement  was 
entered  into:  "  Farmington,  Oct.  15th, 
1825.  In  consideration  of  Mrs.  Nancy 
Hart's  becoming  my  wife,  I  promise  to 
give  her  at  the  rate  of  one  dollar  per  week. 


from  the  date  of  our  marriage,  so  long  as 
she  remains  my  wife.  Elias  Brown." 
This  contract  was  put  in  suit  after  the 
death  of  the  husband,  and  the  defence 
was,  that  it  was  extinguished  by  the  mar- 
riage of  the  parties.  Held,  however,  that 
the  contract,  being  made  in  contemplation 
of  marriage,  and  purporting  to  hold  forth 
a  benefit  to  the  promisee,  a  court  of  law 
would  construe  it  as  providing  for  the  pay- 
ment of  a  sum  of  money  to  her  after  the 
termination  of  the  coverture,  the  amount 
to  be  ascertained  by  its  duration.  Wil- 
liams, C.  J.,  snid  :  "  If  a  contract  admits 
of  more  than  one  construction,  one  of 
which  will  render  it  inefficacious  or  nullify 
it,  that  construction  should  be  adopted 
which  will  carry  it  into  effect.  For  there 
is  no  presumption  against  the  validity  of 
contracts.  Nor  can  we  suppose  that  the 
parties  sit  down  to  make  a  contract  pro- 
viding for  a  particular  event,  when  that 
very  event  would  make  it  void."  See,  in 
illustration  of  this  principle,  Broom  v 
Batchelor,  1  H.  &  N.  255. 

(y)  Goodtitle  v.  Bailey,  Cowp.  600 ; 
Doe  V.  Salkeld,  Willes,  673  ;  Haggerston 
V.  Hanbury,  5  B.  &  C.  101  ;  Wallis  v. 
Wallis,  4  Mass.  135  ;  Parker  v.  Nichols, 
7  Pick.  Ill  ;  Russell  v.  Coffin,  8  id.  143 ; 
Brewer  v.  Hardy,  22  id.  376  ;  Jackson  v. 
Blodget,  16  Johns.  172;  Rogers  v.  Eagle 
Fire  Ins.  Co.  9  Wend.  611;  Barrett  v. 
French,  1  Conn.  354  ;  Bryan  v.  Bradley, 
16  id.  474.  "The  judges  in  these  latter 
times  (and  I  think  very  rightly)  have  gone 
further  than  formerly,  and  have  had  more 
consideration  for  the  substance,  namely, — 
the  passing  of  the  estate  according  to  the 
intent  of  the  parties,  than  the  shadow, 
namely, — the  manner  of  passing  it."  Per 
Willes,  C.  J.,  in  Roe  v.  Tranmarr,  Willes, 
684.     See  also,  Mite,  p.  7,  note  (g). 

[15] 


16-17*  THE   LAW   OF   CONTRACTS.  [PART  H. 

which  cannot  operate  as  such,  may  still  take  effect  as  a  grant 
of  the  reversion,  as  a  surrender,  or  an  attornment ;  or  even  as  a 
covenant  to  stand  seised,  (z)  So  a  deed  of  bargain  and  sale, 
void  for  want  of  enrolment,  has  been  held  to  take  effect  as  a 
grant  of  the  reversion,  {a)  K  several  grantors  join  in  a  deed, 
some  of  whom  are  able  to  convey  and  others  not,  it  is  the  deed 
of  him  or  them  alone^vho  are  able,  (b)  And  if  there  be  several 
grantees,  one  of  whom  is  capable  of  taking  and  the  others  not, 
it  shall  enure  to  him  alone  who  can  take,  (c)  So  if  a  mortga- 
gor and  mortgagee  join,  it  is  the  grant  of  the  mortgagee  and 
the  confirmation  of  the  mortgagor,  (d)  And  if  a  charter  will 
bear  a  double  construction,  and  in  one  sense  it  can  effect  its 
purposes,  and  in  the  other  not,  ^will  receive  the  construction 
which  will  make  it  efficacious,  (e)  The  court  cannot,  however, 
through  a  desire  that  there  should  be  a  valid  contract  between 
the  parties,  undertake  to  reconcile  conflicting  and  antagonistic 
expressions,  of  which  the  inconsistency  is  so  great  that  the 
meaning  of  the  parties  is  necessarily  uncertain.  Nor  where 
the  language  distinctly  imports  illegality,  should  they  construe 
it  in  a  different  and  a  legal  sense,  for  this  would  be  to  make  a 
contract  for  the  parties  which  they  have  not  made  themselves. 
But  where  there  is  room  for  it,  the  court  will  give  a  rational 
and  equitable  interpretation,  which,  though  neither  necessary 
nor  obvious,  has  the  advantage  of  being  just  and  legal,  and 
supposes  a  lawful  contract  which  the  parties  may  fairly  be  re- 
garded as  having  made.  So,  for  the  same  reason,  all  the  parts 
of  the  contract  will  be  construed  in  such  a  way  as  to  *give  force 
and  validity  to  all  of  them,  and  to  all  of  the  language  used, 
where  that  is  possible.  (/)     And  even  parts  or  provisions  which 

(z)  SIicp.  Touch.  82  ;  Roc  v.  Tranmarr,  (/)  Thus  iu  Evans  v.  Sanders,  8  Port. 

Willes,  G82.  497,  there  was  a  promise  to  pay  a  sum  of 

(«)   Smith  V.  Frederick,  1  liiiss.  174,  money  Jan.  1,  18.'36,  "with  interest  from 

209;    Adams   v.   Steer,    Cro.   Jac.    210;  1833.'''     Ilild  thiit  the  expression  "from 

Lynch  I'.  Livin(,'ston,  8  Barb.  4G.1,  2  Seld.  18.'35,"  in  order  that  it  mijilit  have  some 

422.  operation,  imist  be  construed  as  meaning 

{(>)  Slicp.  Touch.  81,  82.  from    tiie    first   of  January,    18.'3.5.     Tiiis 

(c)  Ii)i<l.  82.  rule  is  well   illustrated  also  hy  a  case  put 

(d)  Doe  V.  Adams,  2  Cromp.  &  .T.  2.32  ;  iiy  liutherforth  in  his  Institutes  of  Natural 
Doc  V.  fioldsmitii,  id.  674  ;  Treport's  Law,  B.  2,  eh.  7.  "  If  a  testator,"  says 
ca.se,  C  Uep.  15.  he,  "  befjiicathcs  all  his  plate  to  his  elder 

(e)  Molyn'rt  case,  C  Rep.  C  n  ;  Churcli-  son,  except  one  thousand  ounces,  which 
wardcn.s  of  St.'fiaviour,  10  id.  C7  b.  he  bcciucathcs  to  his  younger  son,  and  di- 

[IG] 


en.  I.]   CONSTRUCTION  AND  INTERPRETATION  OF  CONTRACTS.    *18 

are  comparatively  unimportant,  and  may  be  severed  from  the 
contract  without  impairing  its  effect  or  changing  its  character, 
will  be  suppressed  as  it  were,  if  in  that  way,  and  only  in  that 
w^ay,  the  contract  can  be  sustained  and  enforced. 

This  desire  of  the  law  to  effectuate  rather  than  defeat  a  con- 
tract, is  wise,  just,  and  beneficial.  But  it  may  be  too  strong. 
And  in  some  instances  language  is  used  in  reference  to  this 
subject  which  itself  needs  construction,  and  a  construction 
which  shall  greatly  qualify  its  meaning.  Thus,  Lord  C.  J. 
Hobart  said  :  "  I  do  exceedingly  commend  the  judges  that  are 
curious  and  almost  subtle,  astute  (which  is  the  word  used  in  the 
Proverbs  of  Solomon  in  a  good  sense  when  it  is  to  a  good  end), 
to  invent  reasons  and  means  to  make  acts  according  to  the  just 
intent  of  the  parties,  and  to  avoid  wrong  and  injury,  which  by 
rigid  rules  might  be  wrought  out  of  the  act."  [g)  Lord  Hale 
quotes  and  approves  these  words,  [h)  and  Willes,  C.  J.,  quoting 
HaWs  approbation,  adds  his  own.  [i)  And  yet  this  cannot  be 
sound  doctrine  ;  it  cannot  be  the  duty  of  a  court  that  sits  to 
administer  the  law,  and  for  no  other  purpose,  to  be  curious  and 
subtle,  or  astute,  or  to  invent  reasons  and  make  acts,  in  order  to 
escape  from  rigid  rules.  All  that  can  be  true  or  *wise  in  this 
doctrine  is,  that  courts  should  make,  not  rigid,  but  wise  and 
just  rules,  and  should  then,  by  their  help,  effectuate  a  contract 
or  an  instrument  wherever  this  can  be  done  by  a  perfectly  fair 
and  entirely  rational  construction  of  the  language  actually  used. 
To  do  more  than  this  would  be  to  sacrifice  to  the  apparent  right 
of  one  party  in  one  case,  that  steadfast  adherence  to  law  and 
principle,  which  constitutes  the  only  protection  and  defence  of 
all  rights,  and  all  parties. 

rects  that  the  elder  shall,  at  a  certain  time,  words.    For  by  leaving  all  his  plate  to  the 

deliver  to  the  younger  one  thousand  ounces  elder,  except  one  thousand  ounces  of  it, 

of  the  said  plate,  of  such  sort  and  such  -which  the  elder  within  a  certain  time  is  to 

pieces  as  he  pleases  ;  this  rule  would  de-  deliver  to  the  younger,  the  sort  and  pieces 

terraine  the  intention   of  the  testator  to  to  be  delivered  would  of  course  have  been 

have  been,  that  his  younger  son  should  at  the  option  of   the   elder;    since    the 

have  the  choice  of  the  sort  and  the  pieces,  younger  would  by  the  will  have  had  no 

The  ambiguous  words-*- of  such  sort  and  claim  but  to  a  certain  weight  of  plate." 

such  pieces  as  he  pleases  —  would  in   the  See  also,  Stratton  v.  Pettit,  16  C.  B.  420. 
contrary  construction   be    needless,   and         (g)  Clanrickard  v.  Sidney,  Hob.  277. 
produce  no  effect.     If  the  choice  had  been         [h)  Crossings.  Scudamore,  1  Vent.  141. 
intended  for  the   elder  son,  the  testator        (i)  Doe  v.  Salkeld,  Willes,  676;  Roe  v. 

would  have  bad  no  occasion  to  add  these  Tranmarr,  id.  684. 

2*  [17] 


19* 


THE   LAW    OF   CONTRACTS. 


[PAET  II. 


Another  rule  requires  that  all  instruments  should  be  con- 
strued "  contra  proferentem.^^  That  is,  against  him  who  gives 
or  undertakes,  or  enters  into  an  obligation,  {j)  This  rule  of 
construction  is  reversed  in  its  application  to  the  grants  of  the 
sovereign ;  for  these  are  construed  favorably  to  the  sovereign, 
although  he  is  grantor,  {k)     The  reason  of  the  *  rule  "  contra 


(j)  Windham's  case,  5  Kcp.  7  b. ;  Chap- 
man I'.  Dalton,  Plowd.  289;  The  Ada, 
Daveis,  407;  Thrall  v.  Newell,  19  Vt. 
202  ;  per  Aldcrson,  B.,  in  Meyer  v.  Isaac, 
6  M.  &  W.  612.  This  rule  of  construc- 
tion—  verba  chartarum  fortius  accipiuntur 
contra  proferentem  —  is  well  illustrated  by 
the  case  of  Dana  v.  Spurrier,  3  B.  &  P. 
399,  in  which  it  was  held  that  a  lease  to 
one,  "  to  hold  for  seven,  fourteen,  or  twen- 
ty-one years,"  gave  to  the  lessee,  and  him 
alone,  the  option  at  which  of  the  periods 
named  the  lease  should  determine.  See 
also  Doe  v.  Dixon,  9  East,  15. — The 
construction  of  grants  should  be  favorable 
to  tlie  grantee.  Throckmorton  v.  Tracv, 
Plowd.  154,  161  ;  Doe  v.  Williams,  1  H. 
Bl.  25  ;  Charles  River  Bridge  v.  Warren 
Bridge,  11  Pet.  420,  589;  Jackson  v. 
Blodget,  16  Johns.  172;  Melvin  u.  Pro- 
prietors, &c.,  on  Mer.  River,  5  Met.  15, 
27  ;  Cocheco  Man.  Co.  v.  Whittier,  10  N. 
H.  305;  Lincoln  i-.  Wilder,  29  Me.  169; 
Mills  V.  Catlin,  22  Vt.  98;  Winslow  v. 
Patten,  34  Me.  25 ;  Pike  v.  Munroe,  36 
id.  309.  This  construction,  however, 
must  be  a  fair  and  just  one,  for  "thcrS  is 
a  kind  of  equity  in  grants,  so  that  they 
shall  not  be  taken  unreasonably  against 
the  grantor,  and  yet  shall  with  reason  be 
extended  most  liberally  for  the  grantee." 
Per  Saunders,  J.,  in  Throckmorton  v. 
Tracv,  Plowd.  161. 

(/c)  Willion  V.  Berkley,  Plowd.  243 ; 
Jackson  i-.  Reeves,  3  Caines,  293.  They 
shall,  however,  "have  no  strict  or  narrow  in- 
terpretation for  the  overthrowing  of  them," 
but  "a  lil)cral  and  favorable  construction 
for  the  making  of  them  available  in  law, 
usrjuf  ltd  pleniludinim,  for  the  honor  of  the 
king."  2  Inst.  496.  "  And  so  note," 
sailh  Lord  (.'oLc,  "the  gravity  of  the  an- 
cient sages  of  the  law  to  construe  ihc  king's 
grunt  licnch'ialiy  for  his  honor,  and  the 
relief  of  the  siilijcct,  and  not  t<j  iw.iki;  any 
Strict  or  literal  construction  in  snl)version 
of  Huch  grants."  Molyn's  ca.se,  6  Kcp.  0  a. 
See  idso.  Churchwardens  of  St.  Saviour, 
10  id.  67  I).  Accordingly,  the  rule  in  ((iics- 
tion  id  of  less  weight  tliuu  the  rule  that  an 

[18] 


instrument  should  be  supported  rather  than 
defeated ;  and  is  not  applied  to  defeat  a  con- 
tract entirely,  but  only  to  limit  the  extent 
of  the  grant ;  for  a  grantor,  whether  king 
or  subject,  is  always  held  to  have  intended 
something  by  his  grant.  "  It  is  a  well- 
known  rule,  in  the  construction  of  private 
grants,  if  the  meaning  of  the  words  be 
doubtful,  to  construe  them  most  strongly 
against  the  grantor.  But  it  is  said  that  an 
opposite  rule  prevails,  in  cases  of  grants 
by  the  king  ;  for  where  there  is  any  doubt, 
the  construction  is  made  most  favorably 
for  the  king  and  against  the  grantee.  The 
rule  is  not  disputed.  But  it  is  of  very 
limited  application.  To  what  cases  does 
it  apply  ?  To  such  cases  only  where  there 
is  a  real  doubt,  where  the  grant  admits  of 
two  interpretations,  one  of  which  is  more 
extensive  and  the  other  more  restricted; 
so  that  a  choice  is  fairly  open,  and  either 
may  be  adopted  without  any  violation  of 
the  apparent  objects  of  the  grant.  If  the 
king's  grant  admits  of  two  interpretations, 
one  of  which  will  make  it  utterly  void  and 
worthless,  and  the  other  will  give  it  a  rea- 
sonable effect,  then  the  latter  is  to  prevail ; 
for  the  reason  (says  the  common  law) 
'  that  it  will  be  more  for  the  benefit  of  the 
subject  and  the  honor  of  the  king,  which  is 
more  to  be  regarded  than  his  profit.'  10 
Co.  67  b.  And  in  ever}'  cas^  the  rule  is 
made  to  bend  to  the  real  justice  and  integ- 
rity of  the  case.  No  strained  or  extrava- 
gant construction  is  to  be  made  in  favor  of 
the  king.  And  if  the  intention  of  the 
grant  is  obvious,  a  fair  and  liberal  inter- 
pretation of  its  terms  is  cntbrced."  Per 
iStori/,  J.,  Ciiarles  River  Bridge  v.  AVarrcn 
Bridge,  11  Pet.  591,  597.  It  is  laid  down 
by  Mr.  Justice  Slori/,  that  the  grants  of  the 
sovereign  are  construed  against  the  grantee 
only  in  cases  of  mere  donation,  and  not 
where  there  is  a  valuable  consideration ; 
that  the  rule  has  no  application  in  cases  of 
legislative  grants.  11  Pet.  597,  598.  It 
is  just  and  reasonable  that  the  construction 
should  bo  favorable  to  the  grantee,  in  tho 
case  of  a  conveyance  of  lands  by  the  sov- 
ereign for  a  valuable  consideraiion ;  but 


en.  I.]      CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS. 


*20 


proferentem "  is,  that  men  may  be  supposed  to  take  care  of 
themselves,  and  that  he  who  gives,  and  chooses  the  words  by 
which  he  gives,  ought  to  be  held  to  a  strict  interpretation  of 
them  rather  than  he  who  only  accepts.  (/)  But  the  reason  is 
not  a  very  strong  one,  nor  is  the  rule  of  special  value.  It  is 
indeed  often  spoken  of  as  one  not  to  be  favored  or  applied  un- 
less other  principles  of  interpretation  fail  to  decide  a  ques- 
tion, {m)     It  is  of  course  most  applicable  *  to  deeds  poll,  («)  as, 


where  exclusive  privileges  are  given  to  an 
individual  or  to  a  company,  and  rights 
conferred  restrictive  of  those  of  the  public, 
or  of  private  persons,  the  construction,  in 
cases  of  doubt  or  ambiguity,  is  against  the 
grantee,  especially  where  burdens  are  im- 
posed upon  the  public,  as  in  the  case  of 
rates  of  toll  imposed  for  the  benefit  of  a 
company.  In  Stourbridge  Can.  Co.  v. 
Wheeley,  2  B.  &  Ad.  792,  where  a  right 
of  taking  toll  was  given  to  a  company, 
Lord  Tenterden  used  the  following  lan- 
guage :  "  This,  like  many  other  cases,  is  a 
bargain  between  a  company  of  adventurers 
and  the  public,  the  terms  of  which  are  ex- 
pressed in  the  statute ;  and  the  rule  of  con- 
struction in  all  such  cases  is  now  fully  es- 
tablished to  be  this ;  that  any  ambiguity  in 
the  terms  of  the  contract  must  operate 
against  the  adventurers,  and  in  favor  of 
the  public ;  and  the  plaintiffs  can  claim 
nothing  which  is  not  clearly  given  to  them 
by  the  act."  Blakemore  v.  Glamorgan- 
shire Can.  Nav.  1  Mylne  &  K.  154,  162, 
per  Lord  Eklon;  Gildart  v.  Gladstone,  11 
East,  675,  685  ;  Leeds  and  Liverpool  Can. 
Co.  V.  Hustler,  1  B.  &  C.  424;  Barrett  i'. 
Stockton,  &c.  Railway  Co.  2  Man.  &  G. 
134;  Parker  v.  Great  Western  Railway 
Co.  7  id.  253;  Mohawk  Bridge  Co.  v. 
Utica  &  Sch.  R.  R.  Co.  6  Paige,  554.  In 
Priestley  v.  Foulds,  2  Man.  &  G.  194,  in 
the  case  of  a  legislative  grant  to  a  com- 
pany such  as  those  above  mentioned,  Colt- 
man,  J.,  said  :  "  The  words  of  the  act  must 
be  considered  as  the  language  of  the  com- 
pany, which  ought  to  be  construed  fortius 
contra  proferentem."  —  This  rule  of  con- 
struction, "contra  proferentem,"  is  applied 
in  pleading.  Bac.  Max.  Reg.  3  ;  but  is 
not  applied  to  wills  ;  nor  to  statutes,  ver- 
dicts, judgments,  &c.,  which  are  not  words 
of  parties.     lb. 

(/)  Per  Alderson,  B.,  in  Meyer  v.  Isaac, 
6  M.  &  W.  612. 

(m)  "It  is  to  be  noted,"  saith  Lord 
Bacon,  "  that  this  rule  is  the  last  to  be  re- 


sorted to,  and  is  never  to  be  relied  upon 
but  where  all  other  rules  of  exposition  of 
words  fail ;  and  if  any  other  come  in 
place,  this  giveth  place.  And  that  is  a 
point  worthy  to  be  observed  generally  in 
the  rules  of  the  law,  that  when  they  en- 
counter and  cross  one  another  in  any  case, 
it  be  understood  whicii  the  law  holdeth 
worthier,  and  to  be  preferred ;  and  it  is  in 
this  particular  very  notable  to  consider, 
that  this  being  a  rule  of  some  strictness 
and  rigor,  doth  not  as  it  were  its  office, 
but  in  absence  of  other  rules  which  are  of 
more  equity  and  humanity."  Bac.  Max. 
Reg.  3.  See  also,  Love  v.  Pares,  13  East, 
80.  So  in  Adams  v.  Warner,  23  Vt. 
411,412,  Mr.  Justice  Redjield  said :  "  This 
rule  of  construction  is  not  properly  appli- 
cable to  any  case,  but  one  of  strict  equivo- 
cation, where  the  words  used  will  bear 
either  one  of  two  or  more  interpretations 
equally  well.  In  such  a  case,  if  there  be 
no  other  legitimate  mode  of  determining 
the  equipoise,  this  rule  might  well  enough 
decide  the  case.  In  all  other  cases,  where 
this  rule  of  construction  is  dragged  in  by 
way  of  argument  —  and  that  is  almost 
always  where  it  happens  to  fall  on  the  side 
which  we  desire  to  support —  it  is  used  as 
a  mere  make-weight,  and  is  rather  an  ar- 
gument than  a  reason."  See  also,  Doe  v. 
Dodd,  5  B.  &  Ad.  689. 

[n)  The  reason  given  in  the  books  for 
the  application  of  this  rule  to  deeds  poll, 
and  not  to  indentures,  is  that  in  deeds  poll 
the  Avords  are  the  words  of  the  grantor 
alone,  while  in  indentures  they  are  the 
words  of  both  parties.  2  Bl.  Com.  380 ; 
Browning  v.  Bcston,  Plowd.  134.  The 
distinction  seems,  however,  to  be  in  a 
good  degree  without  foundation.  It  is 
true  that  the  words  of  a  deed  poll  are  the 
words  of  the  grantor  alone,  but  it  is  not 
true  that  the  words  of  an  indenture  are  the 
words  of  both  parties  in  any  such  sense  as 
to  make  the  rule  in  question  inapplicable. 
See  Gawdy,  arguendo,  in  Browning  v.  Bes- 

[19] 


21' 


THE   LAW   OF  CONTRACTS. 


[part  II. 


if  tenant  in  fee-simple  grants  an  estate  "  for  life,"  it  is  held  to 
be  for  the  life  of  the  grantee,  (o)  Where  there  is  an  indenture, 
the  words  may  be  taken  as  the  words  of  both  parties.  But  if 
in  fact  one  gives  and  the  other  receives,  the  same  rule  applies 
as  in  case  of  deeds  poll,  (jo)  As  if  two  tenants  in  common 
grant  a  rent  of  twenty  shillings  the  grantee  takes  forty,  or 
twenty  from  each ;  but  if  they  reserve  in  a  lease  twenty  shil- 
lings, they  take  only  the  twenty,  or  ten  each,  (q)  And  in  gen- 
eral, if  a  deed  may  enure  to  several  different  purposes,  he,  to 
whom  it  is  made,  may  elect  in  what  way  to  take  it.  (r)  Thus, 
if  an  instrument  may  be  *either  a  bill  or  promissory  note,  the 
holder  may  elect  which  to  consider  it.  (s)  So  if  a  carrier  gives 
two  notices  limiting  his  responsibility,  he  is  bound  by  that  which 
is  the  least  favorable  to  himself.  (/)  So  a  notice  under  which 
one  claims  a  general  lien  is  to  be  construed  against  the  claim- 
ant. The  same  rule,  we  think,  applies  to  the  case  of  an 
accepted  guaranty,  though  upon  this  point  the  authorities  are 
somewhat  conflicting,  (u) 


ton,  Plowd.  136.  Words  of  exception  or 
reservation  in  any  instrument  are  regarded 
as  the  words  of  tlic  party  in  wliose  favor 
the  exception  or  reservation  is  made.  Lo- 
field's  case,  10  Rep.  106  h  ;  Hill  v.  Grange, 
Plowd.  171  ;  BUickett  v.  Koval  Exch.  Ass. 
Co.2  Cromp.&J.244,251  ;"Donnelli'.  Co- 
lumbian Ins.  Co.  2  Sumner,  3G6, 3S1 ;  Pal- 
mer V.  Warren  Ins.  Co.  1  IStory,  360. 
And  they  would  be  construed  against  such 
party.  Id.  ;  Cardigan  v.  Armitagc,  2  B. 
&  C.  197  ;  Bulien  v.  Denning,  5  id.  842  ; 
Jackson  r.  Hudson,  3  Johns.  387  ;  House 
V.  Palmer,  9  Ga.  497 ;  Jackson  v.  Law- 
rence, 11  Johns.  191.  Separate  covenants 
in  an  indenture  on  the  part  of  the  lessor 
and  lessee,  and  indeed  any  stipulation  on 
the  part  of  either  party  to  an  agreement, 
would  be  rc;,Mrdeil  as  the  covenants  and 
stipulations  of  the  party  bound  to  do  tiic 
thing  agn-ed  upon,  and  the  rule  of  con- 
struction "  amt/u  jmifcrciilcin  "  would  ap- 
ply to  such  cases,  subj(;ct  to  all  the  limita- 
tions which  properly  belong  to  it.  "It  is 
certainly  true,"  says  Lord  Kldon,  "  that 
the  words  of  ii  covenant  are  to  be  taken 
most  strongly  against  the  covenantor  ;  but 
that  must  be  (piMJilicd  by  the  observation 
that  a  due  ngard  must  be  \m'H\  to  the  in- 
tention of  the  piirticH,  as  coUccteil  from  the 
whole  context  of  the  instrument."  Brown- 
[20] 


ing  V.  Wright,  2  B.  &  P.  22 ;  Earl  of 
Shrewsbury  v.  Gould,  2  B.  &  Aid.  487, 
494;  Barton  v.  Fitzgerald,  15  East,  530, 
546. 

(o)  Co.  Litt.  42  a. 

(/))  See  siipi-a,  n.  (n). 

(q)  Browning  v.  Beston,  Plowd.  140; 
Throckmorton  r.  Tracy,  id.  161  ;  Hill  v. 
Grange,  id.  171  ;  Chapman  r.  Dalton,  id. 
289  ;  Shep.  Touch.  98  ;  Co.  Litt.  197  a. 

(r)  Shep.  Touch.  83;  Heyward's  case, 
2  Kep.  35  b ;  Jackson  i'.  Hudson,  3  Johns. 
387  ;  Jackson  v.  Blodgett,  16  id.  172, 178. 

(s)  Edis  V.  Bury,  6  B.  &  C.  433  ;  Block 
V.  Bell,  1  Moody  &  R.  149;  Miller  v. 
Thompson,  4  Scott,  N.  R.  204. 

(t)  Munn  V.  Baker,  2  Stark.  255.  Seo 
also,  ante,  vol.  1,  p.  719,  n.  (;). 

(«)  Some  judges  have  been  of  opinion 
that  the  contract  of  guaranty  is  a  contract 
strictissimi  juris,  and  to  be  construed  ia 
favor  of  the  guarantor.  Thus,  in  Nichol- 
son V.  Paget,  1  Cromp.  &M.  48,  where  tho 
words  were  :  "  I  hereby  agree  to  be  an- 
swerable for  the  payment  of  .C50  for  B,  in 
case  B  docs  not  ]>ay  fi)r  the  gin,  &c.,  which 
he  receives  from  you,  and  I  will  jiay  tho 
amount,"  the  Court  of  Excliccpier  held 
that  this  was  not  a  continuing  guaranty. 
And  JJaijIci/,  B.,  said  :  "  This  is  a  con- 
tract of  guaranty,  which  is  a  contract  of  a 


en.  I.]      CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.  22 

In  cases  of  mutual  gift  or  mutual  promise,  where  neither  party 
is  more  the  giver  or  undertaker  than  the  other,  this  rule  would 
have  no  application,  (v)  Nor  does  it  seem  that  it  is  permitted 
to  afiect  the  construction  when  a  third  party  would  be  thereby 


peculiar  description ;  for  it  is  not  a  con- 
tract which  a  party  is  entering  into  for  the 
payment  of  his  own  debt,  or  on  his  own 
behalf;  but  it  is  a  contract  which  he  is  en- 
tering into  for  a  third  person ;  and  we 
think  that  it  is  the  duty  of  the  party  who 
takes  such  a  security  to  see  that  it  is 
couched  in  such  words  as  that  the  party 
so  giving  it  may  distinctly  understand  to 
what  extent  he  is  binding  himself.  .... 
It  is  not  unreasonable  to  expect,  from  a 
party  who  is  furnishing  goods  on  the  faith 
of  a  guaranty,  that  he  will  take  the  guar- 
anty in  terms  which  shall  plainly  and  in- 
telligibly point  out  to  the  party  giving  the 
guaranty  the  extent  to  which  he  expects 
that  the  liability  is  to  be  carried."  And 
sec,  to  the  same  effect,  Melville  v.  Hayden, 
3  B.  &  Aid.  593.  On  the  other  hand,  in 
the  later  case  of  Meyer  v.  Isaac,  6  M.  & 
W.  605,  4  Jur.  437,  the  counsel  for  the 
defendant  having  cited  Nicholson  v.  Paget, 
Parke,  B.,  said :  "  Can  you  find  any 
other  authority  in  favor  of  that  rule  of  con- 
struction 1  It  certainly  is  at  vai-iance  with 
the  general  principles  of  the  common  law, 
that  words  are  always  to  be  taken  most 
strongly  against  the  party  using  them. 
Here  is  a  guaranty  in  the  shape  of  a  letter 
written  by  the  defendant,  with  a  view  of 
inducing  the  plaintiff  to  give  credit  to  a 
particular  person.  Now,  a  guaranty  is 
one  of  that  class  of  obligations  which  is 
only  binding  on  one  of  the  parties  when 
tlie  other  chooses  by  his  own  act  to  make 
it  binding  on  him  also.  This  instrument 
only  contains  the  words  of  one  of  the 
parties  to  it,  namely,  of  the  defendant ; 
and  does  not  affect  the  plaintiff  until  he 
acts  upon  it  by  supplying  the  goods." 
And  Alderson,  B.,  in  delivering  the  judg- 
ment of  the  court,  said  :  "  There  is  con- 
siderable difficulty  in  reconciling  all  the 
cases  on  this  subject ;  which  principally 
arises  from  the  fact  that  they  are  not  quite 
at  one  on  the  principle  to  be  followed  in 
deciding  questions  of  this  sort ;  some  lay- 
ing it  down  that  a  liberal  construction 
ought  to  be  made  in  favor  of  the  person 
giving  the  guaranty;  and  others  that  it 
ought  to  be  in  fiivor  of  the  party  to  whom 
it  is  given,  which  was  the  rule  adopted  by 
the  Court  of  Queen's  Bench  in  Mason  v. 


Pritchard.  Now,  the  generally  received 
principle  of  law  is,  that  the  party  making 
any  instrument  should  take  care  so  to  ex- 
press the  nature  of  his  own  liability,  as 
that  he  may  not  be  bound  beyond  what  it 
was  his  intention  he  should  be,  and,  on  the 
other  hand,  that  the  party  who  receives  the 
•instrument,  and  on  the  faith  of  it  parts 
with  his  goods,  which  he  would  not,  per- 
haps, have  parted  with  otherwise,  and  is, 
moreover,  not  the  person  by  whom  the 
words  of  the  instrument  constituting  the 
liability  are  used  at  all,  should  have  that 
instrument  construed  in  his  favor.  If, 
therefore,  I  were  obliged  to  choose  be- 
tween the  two  conflicting  principles  which 
have  been  laid  down  on  this  subject,  I 
should  rather  be  disposed  to  agree  with 
that  given  in  Mason  v.  Pritchard,  than 
with  the  opinion  of  Baijletj,  B.,  in  Nichol- 
son V.  Paget."  See  also,'Mason  v.  Pritch- 
ard, 12  East,  227 ;  Hargrc^ive  v.  Smee,  6 
Bing.  244.  And  see  ante,  vol.  1,  p.  508, 
and  notes. 

{v)  Co.  Litt.  42  a,  183  a.  The  f-abdition 
of  an  obligation  is  considered  as  the  lan- 
guage of  the  obligee,  and  so  is  construed 
in  favor  of  the  obligor.  In  the  language 
of  Baldwin,  C.  J.,  and  Fitzherbert,  J.,  in 
Bold  V.  Molineux,  Dyer,  14  b,  17  a,  "  every 
condition  of  an  obligation  is  as  a  defea- 
sance of  the  obligation,  as  well  as  if  the 
obligation  were  single,  and  after  the  obligee 
made  indentures  of  defeasance,  and  it  is  all 
one,  for  the  condition  is  the  assent  and 
agreement  of  the  obligee,  and  made  for 
the  benefit  of  the  obligor ;  and  for  that 
reason  it  shall  always  be  taken  most  favor- 
ably for  the  obligor  :  as  if  a  man  be  bound 
in  an  obligation  to  p.ay  ten  pounds  before 
such  a  [feast]  day,  the  obligor  is  not  bound 
to  pay  it  till  the  last  instant  of  the  next 
day  preceding  the  feast,  for  he  hath  all 
that  time  for  his  liberty  of  payment.  So 
is  the  law,  if  I  be  bound  to  you  on  condi- 
tion to  pay  ten  pounds  before  the  feast  of 
St.  Thomas,  and  there  are  two  feasts  of 
St.  Thomas,  the  latest  feast  is  that  before 
which  I  am  bound  to  pay,  and  not  sooner, 
for  that  is  most  for  my  advantage."  See 
also,  Shep.  Touch.  375,  376  ;  Powell  on 
Contracts,  396,  397  ;  Laughter's  case,  5 
Kep.  22  a. 

[211 


23* 


THE   LAW  OF   CONTRACTS. 


[part  n. 


injured.  As  if  tenant  in  tail  make  a  lease  "  for  life  "  generally, 
this  shall  be  construed  to  be  a  lease  for  the  life  of  the  lessor, 
that  the  reversioner  may  not  suffer,  (iv)  Another  reason  is,  that 
a  tenant  in  tail  cannot  legally  grant  a  lease  for  another's  life, 
and  the  rule  of  Lord  Coke  is  applied  ;  namely,  that  an  intend- 
ment which  stands  with  the  law  shall  be  preferred  to  one  which 
is  wrongful  and  against  the  law.  (x)  This  rule,  that  words 
shall  be  construed  "  contra  prof ereiitem,''^  was,  says  Lord  Bacon, 
"  drawn  out  of  the  depth  of  reason  ; "  (y)  but  we  have  already 
intimated  that  it  is  among  those  principles  of  interpretation 
which  have  the  least  influence  or  value. 

No  precise  form  of  words  is  necessary  even  in  a  specialty,  (z) 
Thus,  words  of  recital  in  a  deed  will  constitute  an  *agreement 
between  the  parties  on  which  an  action  of  covenant  may  be 
maintained,  (a)  And  the  recital  in  a  deed  of  a  previous  agree- 
ment is  equivalent  to  a  confirmation  and  renewal  of  the  agree- 
ment, (b)  And  words  of  proviso  and  condition  will  be  con- 
strued into  words  of  covenant,  when  such  is  the  apparent  in- 
tention and  meaning  of  the  parties,  (c)  And  even  words  of 
reservation  and  exception  in  a  lease  have  been  held  to  operate 


{w)  Co.  Litt.  42  a. 

(x)   Sec  ante,  p.  12,  note  (o). 

(y)  Bac.  Max.  Reg.  3. 

{z)  "  In  our  law,"  says  CatUne,  Serp^cant, 
arguendo,  in  Browning  v.  Bcston,  Plowd. 
140,  "  if  any  persons  arc  agreed  upon  a 
thing,  and  words  arc  expressed  or  written 
to  make  the  agreement,  although  they  are 
not  apt  and  usual  words,  yet  if  they  have 
substance  in  theni  tending  to  the  effect 
proposed,  the  law  will  take  them  to  he  of 
the  same  effect  as  usual  words ;  for  the  law 
always  regards  the  intention  of  tlic  parties, 
and  will  apply  tlie  words  to  that  whicli, 
in  common  presumption,  may  he  taken  to 
be  their  intent.  And  such  laws  arc  very 
commendaljlc.  For  if  the  law  should  he 
BO  precise,  as  always  to  insist  upon  a  pecul- 
iar f(jrm  and  order  of  words  in  agree- 
ments, and  would  n(jt  regard  the  intention 
of  the  parties  when  it  was  expressed  in 
other  words  of  substance,  but  would  ratlicr 
ai>ply  tb(!  intention  of  the  i>arties  to  the 
order  ami  f»rm  of  words  than  the  worils 
to  the  intetitioti  of  the;  par  ies,  such  law 
would  be  more  full  of  form  than  of  sub- 

[22] 


stance.  But  our  law,  which  is  the  most 
reasonable  law  upon  earth,  regards  the 
effect  and  substance  of  words  more  than 
the  form  of  them,  and  takes  the  substance 
of  words  to  imply  the  form  thereof,  rather 
than  that  the  intent  of  the  parties  should 
be  void."  And  see  Tench  v.  Cheese,  6 
De  G.,  M.  &  G.  453,  31  Eng.  L.  &  Eq. 
392,  397,  per  Cranworth,  L.  C. 

(a)  Severn  v.  Clerks,  2  Leon.  122. 

(6)  Barfoot  v.  FrcswcU,  3  Kcble,  465 ; 
Saltourn  )-'.  Iloustoun,  1  Bing.  433;  Samp- 
son V.  Eastcrby,  9  B.  &  C.  505. 

(c)  Clapham  v.  Moyle,  1  Lev.  155,  1 
Kcble,  842  ;  Shep.  Touch.  122;  Huff  v. 
Niekerson,  27  Me.  lOG.  "  Where  the 
language  of  an  agreement  can  be  resolved 
into  a  covenant,  the  judicial  inclination  is 
so  to  construe  it ;  and  hence  it  has  result- 
ed that  certain  features  have  ever  been 
held  essential  to  the  constitution  of  a  con- 
dition. In  the  absence  of  any  of  these  it 
is  not  permitted  to  work  the  destructive 
effect  tlie  law  otherwise  attributes  to  it." 
I'cr  licll,  J.,  in  Paschall  v.  Passmorc,  15 
Tcnn.  St.  295,  307. 


en.  I.]      CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.  *24 

as  a  grant  of  a  right,  (d)  So  a  license  may  have  effect  as  a 
grant  of  an  incorporeal  hereditament,  if  it  be  sealed  and  de- 
livered, and  authorizes  the  party  to  whom  it  is  made  to  go  on 
the  licensor's  land,  and  make  some  use  of  the  land  to  his  own 
profit.  Not  so  if  it  be  only  a  license  to  do  some  particular  act, 
as  to  hunt  in  a  man's  park.  The  distinction  between  these  is 
not  always  obvious  ;  and  the  same  license  may  operate  as  a 
grant  as  to  some  things,  and  as  a  mere  license  as  to  other 
things,  (e) 

*Even  a  bond  may  be  made  without  the  words  "  held  and 
firmly  obliged,"  although  they  are  technical  and  usual.  Any 
writing  under  seal  which  acknowledges  a  debt,  or  indicates  that 
the  maker  intends  to  be  bound  to  the  payment  of  a  definite  sum 
of  money,  would  be  construed  as  a  bond.  (/) 

A  question,  to  which  we  have  already  alluded,  whether  parties 
have  by  a  certain  instrument  made  a  lease,  or  only  an  agree- 
ment for  a  future  lease,  sometimes  presents  very  considerable 
difficulty.  There  do  not  seem  to  be  any  fixed  and  precise  rules 
which  will  always  suffice  to  decide  this  question.  Indeed,  each 
case  must  be  determined  upon  its  own  merits  ;  and  little  more 
can  be  said  by  way  of  rule,  than  that  wherever  the  obvious  and 


(d)  Thus,  in  "Wickham  v.  Hawker,  7  M.  action  lawful,  which  without  it  has  been 
&  W.  63,  A  and  B  conveyed  to  D  and  unlawful ;  as  a  license  to  go  bej-ond  the 
his  heirs  certain  lands,  excepting  and  reserv-  seas,  to  hunt  in  a  man's  park,  to  come  into 
iiig  to  A  B  and  C,  their  heirs  and  as-  his  house,  are  only  actions  which,  without 
signs,  liberty  to  come  into  and  upon  the  license,  had  been  unlawful.  But  a  license 
lands,  and  there  to  hawk,  hunt,  fisli,  and  to  hunt  in  a  man's  park,  and  carry  away 
fowl :  Held,  that  this  was  not  in  law  a  res-  the  deer  killed  to  his  own  use  ;  to  cut  down 
ervation  properly  so  called,  but  a  neio grant  a  tree  in  a  man's  ground,  and  to  carry  it 
by  D  (who  executed  the  deed)  of  the  lib-  away  the  next  day  after  to  his  own  use, 
erty  therein  mentioned,  and  therefore  that  are  licenses  as  to  the  acts  of  hunting  and 
it  might  inure  in  favor  of  C  and  his  heirs,  cutting  down  the  tree ;  but  as  to  the  carry- 
although  he  was  not  a  party  to  the  deed,  ing  away  of  the  deer  killed,  and  tree  cut 
See  also,  Doe  d,  Douglas  v.  Lock,  2  A.  down,  they  are  grants.  So  to  license  a 
&  E.  70.5,  743.  man  to  eat  my  meat,  or  to  fire  the  wood 

(e)  Wood  V.  Leadbitter,  13  ]\I.  &  W.  in  my  chimney  to  warm  him  by,  as  to  the 
845;  Woodward  v.  Seely,  11  111.  157;  actions  of  eating,  firing  my  wood,  and 
Cook  V.  Stearns,  1 1  Mass.  533.  The  dis-  warming  him,  they  are  licenses  ;  but  it  is 
tinction  between  a  license  which  is  coupled  consequent  necessarily  to  those  actions 
with  a  grant,  and  a  license  which  operates  that  my  property  be  destroyed  in  the  meat 
merely  as  a  license,  is  admirably  stated  by  eaten,  and  in  the  wood  burnt,  so  as  in 
Lord  "Chief  Justice  Vauqhan,  in  Thomas  some  cases  by  consequent  and  not  directly, 
V.  Sorrell,  Vaugh.  330,  351.  "A  dispen-  and  as  its  effect,  a  dispensation  or  license 
sation  or  license,"  says  he,  "properly  may  destroy  and  alter  property." 
passeth  no  interest,  nor  alters  or  transfers  ■  (/)  Dodson  v.  Kayes,  Yelv.  193;  Core's 
property  in  any  thing,  but  only  makes  an  case,  Dyer,  20  a. 

[23] 


25*  THE   LAW    OF    CONTRACTS.  [PART  II. 

natural  interpretation  of  the  words  used  would  indicate  the  in- 
tention of  the  party  actually  in  possession  to  divest  himself 
thereof  forthwith,  in  favor  of  the  other  who  is  to  come  into  pos- 
session under  him  for  a  definite  time,  these  words  will  constitute 
an  actual  lease  for  years,  although  the  words  used  may  be  more 
proper  to  a  release  or  covenant,  or  to  an  agreement  for  a  subse- 
quent lease.  But  if  the  whole  instrument,  fairly  considered, 
indicates  that  it  is  only  the  purpose  and  agreement  of  the  par- 
ties hereafter  to  make  such  a  lease,  then  it  must  be  construed 
as  only  such  agreement,  although  some  of  the  language  might 
indicate  a  present  lease,  (g-) 

*A11  legal  instruments  should  be  grammatically  written,  and 
should  be  construed  according  to  the  rules  of  grammar.  But 
this  is  not  an  absolute  rule  of  law.  On  the  contrary,  it  is  so  far 
immaterial  in  what  part  of  an  instrument  any  clause  is  written, 
that  it  will  be  read  as  of  any  place  and  with  any  context,  and  if 
necessary,  transposed,  in  order  to  give  effect  to  the  certain  mean- 
ing and  purpose  of  the  parties.  (//)  Still  this  will  be  done  only 
when  their  certain  and  evident  intent  requires  it.  Inaccuracy 
or  confusion  in  the  arrangement  of  the  parts  and  clauses  of  an 
instrument  is  therefore  always  dangerous,  because  the  intent 

(</)  "It  may  be  laid  down  for  a  rule,"  sufficient  to  prove  such  a  contract,  in  what 
says  Lord  Chief  Baron  Gilbert,  "  tliat  form  soever  tlicy  are  introduced,  or  how- 
whatever  words  are  sufficient  to  explain  ever  variously  applicable,  the  law  calls  in 
the  intent  of  the  parties,  that  the  one  shall  the  intent  of  the  parties,  and  models  and 
divest  himself  of  the  possession,  and  the  governs  tlie  words  accordingly."  Bac. 
other  come  into  it  for  such  a  determinate  Abr.  Tit.  Leases,  (K).  See  also,  for  a 
time,  such  words,  whether  they  run  in  the  full  discussion  of  this  subject  and  an  anal- 
form  of  a  license,  covenant,  or  agreement,  ysis  of  the  cases,  Piatt  on  Leases,  Pt.  3, 
are  of  themselves  sufficient,  and  will  in  ch.  4,  sec.  3;  Taylor's  Landlord  and 
constructifju  of  law  amount  to  a  lease  for  Tenant,  §  37,  et  seq. ;  and  the  late  case  of 
years  as  efl'ectualiy  as  if  the  most  proper  Stratton  v.  Pettit,  16  C.  B.  420,  30  Eng. 
and  pertinent  words  Iiad  been  made  use  L.  &  Eq.  479. 

of  for  tiiat  ])ur[)OHC  ;  and  on  the  contrary,  (/()  Fcv  Jiidler,  J.,  in  Duke  of  Northum- 
if  the  most  proper  and  authentic  form  of  berland  v.  Errington,  5  T.  R.  .526.  Thus, 
words,  whereby  to  describe  and  pass  a  if  a  man  in  the  month  of  February  make 
present  lease  for  years,  are  made  use  of,  a  lease  for  years,  reserving  a  yearly  rent 
yet  if  upon  tlie  wliole  (I('(mI  there  ajipears  payable  at  the  feasts  of  St.  IMicbael  the 
no  sucii  intent,  but  tbat  tliey  are  only  pre-  Archangel  [Sept.  29],  and  the  Annuneia- 
paratory  and  ndative  to  a  i'uturc  lease  to  tion  of  our  Lady  [Marcli  2.')],  during  tho 
be  made,  tlie  law  will  ratber  do  violence  term,  tlio  law  shall  make  trans])Osition  of 
to  tlic  words  than  break  through  the  intent  the  feasts,  namely,  at  the  feasts  of  the 
of  tbe  parties  :  for  a  lease  for  years  l)eing  Annunciation  anil  St.  RiieliacI  tlie  Arch- 
no  otluT  tban  a  contract  for  tbe  jiosscssion  angel,  that  tlie  rent  may  be  jiaid  yearly 
and  ])|■(llil■^  <)(  the  lands  on  llic  one  side,  during  tlie  term.  Cn.  Lift.  217  b.  Sec 
and  a  recompense  of  rent  or  otlicr  incoino  also,  1  Jarman  on  AVills,  437,  ct  scq. 
on  the  oilier,  if  the  words  made  use  of  arc 

[24] 


en.  I.]   CONSTRUCTION  AND  INTERPRETATION  OF  CONTRACTS.    *26 

may  in  this  way  be  made  so  uncertain  as  not  to  admit  of  a 
remedy  by  construction,  (i)  Generally  all  relative  words  are 
read  as  referring  to  the  nearest  antecedent,  (j)  But  this  rule 
of  grammar  is  not  a  rule  of  law,  where  the  whole  instrument 
shows  plainly  that  a  reference  was  intended  to  an  earlier  ante- 
cedent, (k) 

*So,  it  is  a  general  proposition,  that  where  clauses  are  repug- 
nant and  incompatible,  the  earlier  prevails  in  deeds  and  other 
instruments  inter  vivos,  if  the  inconsistency  be  not  so  great  as 
to  avoid, the  instrument  for  uncertainty.  (/)     But  in  the  con- 


(/)  "Note  reader,"  saith  Lord  Coke, 
"  although  mala  grammatica  non  vitiat  in- 
strumeiita,  yet  in  exposilione  instrumenforum 
mala  grammatica,  quod  fieri  possit,  vitanda 
est."    Finch's  case,  G  Rep.  39. 

(j)' Com.  Di.!?.  Tit.  Parols  (A.  14); 
Jenk.  Cent.  180;  Bold  v.  Molincux, 
Dyer,  14  b;  Barinp;  v.  Christie,  .5  East, 
398 ;  Rex  v.  Inliabitants  of  St.  Mary's,  1 
B.  &  Aid.  327. 

(k)  Giiier's  case,  Dj'er,  46  h  ;  Carhonel 
V.  Davies,  1  Stra.  394;  Staniland  v. 
Hopkins,  9  M.  &  W.  178,  192;  Gray  i-. 
Clark,  11  Vt.  583.  Where  A  demises  to 
B,  for  the  term  of  his  natural  life,  the 
demise  is,  prima  facie,  for  the  life  of  B. 
But  where  A  demised  to  B  his  executors 
and  administrators,  for  the  term  of  his  nat- 
ural life,  and  the  lease  contained  a  cove- 
nant by  A  for  the  quiet  enjoyment  of  the 
premises  by  B,  his  executors,  &c.,  during 
the  natural  life  of  A,  it  was  held  that  the 
word  "  his  "  in  the  demising  clause  must 
be  referred  to  A,  the  grantor,  and  not  to 
B,  though  his  name  was  the  last  antece- 
dent. i)oe  V.  Dodd,  5  B.  &  Ad.  689.  In 
scire  facias  against  bail,  the  notice  to  the 
defendant  was  dated  on  the  3d  day  of  Oc- 
tober, 1842,  and  stated  that  the  execution 
was  returnable  on  the  3d  Tuesday  of  Oc- 
tober next.  Held,  that  the  word  "  next " 
referred  to  the  3d  Tuesday  of  the  month, 
and  not  to  the  month,  and  that  it  was  suf- 
ficient. Ncttleton  v.  Billings,  13  N.  H. 
446.     See  Osgood  v.  Hutchins,  6  id.  374 ; 

Prescot  V. ,  Cro.  Jac.  646  ;  Buckley 

V.  Guildbank,  id.  678;  Bunn  v.  Thomas, 
2  Johns.  190;  Tompkins  v.  Corwin,  9 
Cowen,  25.5.  The  rule  is,  ad  proximum 
antecedens  fiat  relatio,  si  sententia  non  impe- 
diat.     Bold  v.  Molincux,  Dyer,  14  b. 

(I)  Shcp.  Touch.  88 ;  Cother  v.  Mer- 
rick, Hardw.  94;  Carter  v.  Kungstead, 
Owen,  84 ;  Doe  v.  Biggs,  2  Taunt.  109. 

VOL.  II.  3 


In  the  body  of  a  deed  of  settlement  were 
these  words:  —  ".£1,000  sterling,  lawful 
money  of  Ireland."  The  Vicc-Chancellor 
in  giving  judgment  in  the  case,  said:  — 
"  It  being  then  impossible  to  affix  a  mean- 
ing to  the  words,  '  sterling  lawful  money 
of  Ireland,'  taken  altogether,  I  must  deal 
with  them  according  to  the  rule  of  law  as 
to  construing  a  deed,  which  is,  that  if  yoa 
find  the  first  words  have  a  clear  mean- 
ing, but  those  tliat  follow  are  inconsistent 
with  them,  to  reject  the  latter."  Cope  v. 
Cope,  15  Sim.  118.  See  White  v.  Han- 
cock, 2  C.  B.  830 ;  Ilardman  v.  Hardman, 
Cro.  Eliz.  886 ;  Youde  v.  Jones,  13  M.  & 
W.  534.  If  any  thing  be  granted  gener- 
ally, and  there  follow  restrictive  words, 
which  go  to  destroy  the  grant,  they  are 
rejected  as  being  repugnant  to  that  which 
is  first  granted.  See  Stukeley  v.  Butler, 
Hob.  1 68, 1 72, 1 73,  F.  Moore,  880.  Not  so, 
however,  where  the  words  that  follow  are 
only  explanatory,  and  are  not  repugnant 
to  the  grant ;  as  in  case  of  a  feoffment  of 
two  acres,  habendum  the  one  in  fee,  and 
the  other  in  tail,  tlie  haJxndum  only  ex- 
plains the  manner  of  taking,  and  does  not 
restrain  the  gift.  Jackson  v.  Ireland,  3 
Wend.  99  ;  23  Am.  Jur.  277,  278.  Where 
the  condition  of  a  bond  for  the  pa3-ment 
of  money  is,  that  the  bond  shall  be  void 
if  the  money  is  not  paid,  it  is  held  that  the 
condition  is  void  for  repugnancy.  Mills 
V.  Wright,  1  Freem.  247,  nom.  'Wells  v. 
Wright,  2  Mod.  285;  Wells  v.  Trcgusan, 
2  Salk.  463,  11  Mod.  191 ;  Vernon^-.  Al- 
sop,  1  Lev.  77,  Sid.  105;  Gully  v.  Gully, 
1  Hawks,  20;  Stockton  v.  Turner,  7  J.  J. 
Mansh.  192.  In  39  H.  6,  10  a,  pi.  15,  it 
is  said  by  Littleton  to  have  been  adjudged 
that  such  a  condition  was  good,  and  that 
a  plea  to  an  action  on  the  bond,  that  the 
defendant  had  not  paid  the  money,  was  a 
good  bar.     And  Prisot  affirmed  the  case, 

[25] 


27*  THE  LAW   OF   CONTRACTS.  [PART  II. 

struction  of  wills,  it  has  been  said  that  the  latter  clause  prevails, 
on  the  ground  that  it  is  presumed  to  be  a  subsequent  thought 
or  purpose  of  the  testator,  and  therefore  to  express  his  last 
will.  (?n) 

An  inaccurate  description,  and  even  a  wrong  name  of  a  *per- 
son,  will  not  necessarily  defeat  an  instrument.  But  it  is  said 
that  an  error  like  this  cannot  be  corrected  by  construction,  un- 
less there  is  enough  beside  in  the  instrument  to  identify  the 
person,  and  thus  to  supply  the  means  of  making  the  correction. 
That  is,  taking  the  whole  instrument  together,  there  must  be  a 
reasonable  certainty  as  to  the  person.  It  is  also  said,  that  only 
those  cases  fall  within  the  rule  in  which  the  description  so  far 
as  it  is  false  applies  to  no  person,  and  so  far  as  it  is  true  applies 
only  to  one.  But  even  if  the  name  or  description,  where  erro- 
neous, apply  to  a  wrong  person,  we  think  the  law  would  per- 
mit correction  of  the  error  by  construction,  where  the  instru- 
ment, as  a  whole,  showed  certainly  that  it  was  an  error,  and 
also  showed  with  equal  certainty  how  the  error  might  and 
should  be  corrected,  (n) 

The  law,  as  we  have  already  had  occasion  to  say  in  reference 
to  various  topics,  frequently  supplies  by  its  implications  the 
wants  of  express  agreements  between  the  parties.  But  it  never 
overcomes  by  its  implications  the  express  provisions  of  par- 
ties, (o)     If  these  are  illegal,  the  law  avoids  them.     If  they  are 

and  said  that  lie  was  of  counsel  in  the  be    void.       Doe  v.  rieming,   5    Tyrw. 

matter  when  ho  was  serj^eant.     But  that  1013. 

decision  cannot  now  be  considered  as  law.  (m)  Sliep.  Touch.  88  ;  Co.  Litt.  112  b; 
Wlicre,  however,  the  payee  of  a  note,  at  Paramour  v.  Yardley,  Plovvd.  .'341  ;  Doe 
the  time  it  was  sij^ned  by  tlic  maker.s,  and  v.  Bi<:gs,  2  Taunt.  109  ;  Constantino  v. 
as  a  part  of  tiie  same  transaction,  indorsed  Constantino,  6  Vcs.  100 ;  Sherratt  v.  Bcnt- 
thcreon  a  promise  "not  to  compel  pay-  ley,  2  Mylne  &  K.  149;  1  Jarman  on 
nicnt  thereof,  but  to  reecivo  the  amount  Wills,  411.  "If  I  devise  my  land  to  J. 
when  convenient  fur  the  promisors  to  pay  S.,  and  afterwards  by  tlie  same  will  I  de- 
it,"  it  was  liiJd  that  the  indorsement  must  vise  it  to  J.  1).,  now  J.  S.  shall  have  notli- 
bc  taken  as  part  of  tlic  instrument,  and  ing,  because  it  was  my  last  will  that  J.  D. 
that  the  payee  never  could  maintain  an  should  have  it."  Per  Anderson,  C.  J.,  in 
action  tliercon.  Barnard  v.  Gushing,  4  Carter  v.  Kungstead,  Owen,  84.  But  see, 
Met.  2.30.  It  has  been  laid  down,  that  as  to  this  doctrine,  Paramour  v.  Yardley, 
where  A  jrrants  land  to  B,  and  afterwards  Plowd.  541,  note  (f/)  ;  Co.  Litt.  112  b, 
in  tlie  same  deetl  he  grants  the  same  land  note  (1)  ;  23  Am.  Jur.  277,  278. 
to  (',  the  grantee  fnst  named  takes  the  (n)  Sec  Bloom's  Legal  Maxims,  2d  cd. 
whole  land.  Jeiik.  Cent.  2.'j(>.  If  tiio  in-  ]>.  4^M,  etspq.  Wo  shall  consider  this  sub- 
consistency  between  parts  of  an  instru-  jcct  more  fully  hereafter. 
mcnt  is  buch  as  to  render  its  meaning  (o)  J'Jxprcssiim  ficil  cpssnre  tnritnm.  Co. 
wholly   uncertain  and  insensible,  it  will  Litt.  210  a;  Uoodall's  Case,  5  Hep.  97. 

[20] 


en.  I.]      CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.         *28 

legal,  it  yields  to  them,  and  does  not  put  in  their  stead  what  it 
would  have  put  by  implication  if  the  parties  had  been  silent. 
The  general  ground  of  a  legal  implication  is,  that  the  parties 
to  the  contract  would  have  expressed  that  which  the  law  im- 
plies, had  they  thought  of  it,  or  had  they  not  supposed  it  was 
unnecessary  to  speak  of  it  because  the  law  provided  for  it. 
But  where  the  parties  do  themselves  make  express  provision, 
the  reason  of  the  implication  fails. 

If  the  parties  expressly  provided  not  any  thing  different,  but 
the  very  same  thing  which  the  law  would  have  implied,  now 
this  provision  may  be  regarded  as  made  twice ;  by  the  parties 
and  by  the  law.  And  as  one  of  these  is  surplusage,  that  made 
by  the  parties  is  deemed  to  be  so ;  and  hence  is  derived  another 
rule  of  construction,  namely,  that  the  expression  of  those  things 
which  the  law  implies  works  nothing,  (p) 

*If,  however,  there  be  many  things  of  the  same  class  or  kind, 
the  expression  of  one  or  more  of  them  implies  the  exclusion  of 
all  not  expressed;  and  this  even  if  the  law  would  have  implied 
all,  if  none  had  been  enumerated,  (q)  It  follows,  therefore,  that 
implied  covenants  are  controlled  and  restrained  within  the 
limits  of  express  covenants.  Thus,  in  a  lease,  the  word 
"  demise  "  raises  by  legal  implication  a  covenant  both  of  title 
in  the  lessor  and  of  quiet  enjoyment  by  the  lessee.  But  if  with 
the  word  "demise"  there  is  an  express  covenant  for  quiet  en- 
joyment, there  is  then  no  implied  covenant  for  title,  (r)  So  a 
mortgage  by  law  passes  all  the  fixtures  of  shops,  foundries,  and 
the  like,  on  the  land  mortgaged;  but  if  the  instrument  enumer- 
ates a  part,  without  words  distinctly  referring  to  the  residue,  or 
requiring  a  construction  which  shall  embrace  the  residue,  no 
fixtures  pass  but  those  enumerated,  {s)     So  where  in  a  charter- 

(p)  Therefore,  if  the  king  make  a  lease  also,  Co.  Litt.  191a;  Ives's  case,  5  Rep. 

for  years,  rendering  a  rent  payable  at  his  11. 

receipt  at  Westminster,  and  grant  the  re-  (g)    This  is   in   accordance    with    the 

version  to  another,  the  grantee  shall  de-  maxim,  exp)-essio  imiiis  est  excJusio  alterius. 

mand  the  rent  upon  the  land,  for  the  law,  Co.  Litt.  210  a.     See  also,  Ilare  v.  Ilor- 

without  express   words  implies   that  the  ton,  5  B.  &  Ad.  715  ;  The  King  v.  Inhab- 

lessee  in  the  king's  case  must  pay  the  rent  itants  of  Sedgley,  2  id.  65. 

at  the  king's  receipt ;  and  expressio  eorum  (r)  Noke's  case,  4  Kep.  80  b  ;  Merrill  v. 

qucE  taciteinxuntniliiloperatur.  Boroughes's  Frame,  4  Taunt.  329  ;  Line  o.  Stephenson, 

case,  4  Ilep.  72  b ;  Co.  Litt.  201  b.     See  4  Bing.  N.  C.  678,  5  id.  183. 

(s)  Hare  v.  Horton,  5  B.  &  Ad.  715. 

[27] 


29*  THE  LAW   OF   CONTRACTS.  [PART  II. 

party  the  shipper  covenanted  to  pay  freight  for  goods  "  delivered 
at  A,"  and  the  ship  was  wrecked  at  B,  and  the  defendant  there 
accepted  his  goods,  he  was  still  held  not  bound  to  pay  freight 
pro  rata  itineris ;  (t)  although  he  would,  under  a  common  char- 
ter-party or  bill  of  lading,  be  bound  to  pay  freight  for  any  part 
of  the  transit  performed,  if  at  the  end  of  that  part  he  volun- 
tarily accepted  the  goods,  (w) 

Listruments  are  often  used  which  are  in  part  printed  and  in 
part  written ;  that  is,  they  are  printed  with  blanks,  which  are 
afterwards  filled  up ;  and  the  question  may  occur,  to  which  a 
preference  should  be  given.  The  general  answer  is,  to  the  writ- 
ten part.  What  is  printed  is  intended  to  apply  to  large  classes 
of  contracts,  and  not  to  any  one  exclusively ;  the  blanks  are 
left  purposely,  that  the  special  statements  or  provisions  should 
be  inserted,  which  belong  to  this  contract  and  *not  to  others,  and 
thus  discriminate  this  from  others.  And  it  is  reasonable  to 
suppose  that  the  attention  of  the  parties  was  more  closely  given 
to  those  phrases  which  they  themselves  selected,  and  which-  ex- 
press the  especial  particulars  of  their  own  contract,  than  to 
those  more  general  expressions  which  belong  to  all  contracts  of 
this  class,  (v)  But  if  the  whole  contract  can  be  construed 
together  so  that  the  written  words  and  those  printed  make  an 
intelligible  contract,  this  construction  should  be  adopted,  (va) 
Because  the  intention  of  the  parties  is  presumed  to  be  "  alive 
and  active  throughout  the  whole  instrument,  and  that  no  aver- 
ments are  anywhere  inserted  without  meaning  and  without 
use."  (vb) 

(0  Cook  f.  Jcnnlnfcs,  7  T.  R.  381.  Ins.    Co.    Antlion,    N.   T.  2G  ;    Harper 

(h)  Luke  V.  Lvdc,  2  Buit.  882  ;  Mitchell  v.  Albany  Mntnal  Ins.  Co.  17  N.  Y.  394  ; 

V.  Dartliez,  2  I5in<,^  N.  C.  5,').').  Cusliman  r.  North  Western  Ins.  Co.  34 

{>■)  ]{ol)crtson  v.  Freneh,  4  East,  130,  Mc.  487  ;  Wallace  v.  Ins.  Co.  4  La.  289; 

136  ;  ])cr  OnLIn/,  C.  J.,  in  AVeisscr  v.  Mait-  Goicocchea  v.  La.  State  Ins.  Co.  18  Mart, 

knd,  .'J  San(If.'318.  La.  .51,   .5.5;    Hunter  v.   General  Mutual 

(rf/)AlsM-,Mri\  St.Katherine'sDockCo.  Ins.  of  N.  Y.  11  La.  Ann.  139. 
14  M.  &  W.  794,  799 ;  Howland  v.  Conim.         (vb)  Goix  v.  Low,  1  Johns.  Ctvs.  341. 

[28] 


CH.  I.]      CONSTRUCTION  AND  INTERPRETATION   OF   CONTRACTS. 


*30 


SECTION    IV. 


ENTIRETY   OF   CONTRACTS. 


The  question  whether  a  contract  is  entire  or  separable  is  often 
of  great  importance.  Any  contract  may  consist  of  many  parts; 
and  these  may  be  considered  as  parts  of  one  whole,  or  as  so 
many  distinct  contracts,  entered  into  at  one  time,  and  expressed 
in  the  same  instrument,  but  not  thereby  made  one  contract. 
No  precise  rule  can  be  given  by  which  this  question  in  a  given 
case  may  be  settled.  Like  most  other  questions  of  construc- 
tion, it  depends  upon  the  intention  of  the  parties,  and  this  must 
be  discovered  in  each  case  by  considering  the  language  em- 
ployed and  the  subject-matter  of  the  contract. 

If  the  part  to  be  performed  by  one  party  consists  of  several 
distinct  and  separate  items,  and  the  price  to  be  paid  by  the 
other  is  apportioned  to  each  item  to  be  performed,  or  is  left  to 
be  implied  by  law,  such  a  contract  will  generally  be  held  to  be 
severable,  (iv)     And  the  same  rule  holds  where  *the  price  to  be 


(w)  This  point  is  well  illustrated  by  the 
case  of  Johnson  v.  Johnson,  3  B.  &  P. 
162.  In  that  case  the  plaintiff"  had  pur- 
chased from  the  same  persons  two  parcels 
of  real  estate,  the  one  for  £700,  the  other 
for  £300,  and  had  taken  one  conveyance 
for  both.  After  having  paid  the  purchase- 
money  and  taken  possession,  he  was  evict- 
ed from  the  smaller  parcel,  in  consequence 
of  -a  defect  in  the  title  derived  under  the 
pui'chase,  and  thereupon  brought  an  action 
for  money  had  and  received  to  recover 
back  the  £300,  at  the  same  time  refusing 
to  give  up  the  parcel  of  land  for  which 
£700  had  been  paid.  And  the  court  held 
that  he  was  entitled  to  recover.  Lord 
Alvanley,  in  delivering  the  judgment  of  the 
court,  said:  "My  difficulty  has  been, 
how  far  the  agreement  is  to  be  considered 
as  one  contract  for  the  purchase  of  both 
sets  of  premises,  and  how  far  the  party 
can  recover  so  much  as  he  has  paid  by 
way  of  consideration  for  the  part  of  which 
the  title  has  failed,  and  retain  the  other 

3* 


part  of  the  bargain.  This  for  a  time 
occasioned  doubts  in  my  mind  ;  for  if  the 
latter  question  were  involved  in  this  case 
it  would  be  a  question  for  a  court  of  equity. 
If  the  question  were  how  far  the  particu- 
lar part  of  which  the  title  has  failed  formed 
an  essential  ingredient  of  the  bargain,  the 
grossest  injustice  would  ensue  if  a  party 
were  suff'ered  in  a  court  of  law  to  say  that 
he  would  retain  all  of  which  the  title  was 
good,  and  recover  a  proportionable  part 
of  the  purchase-money  for  the  rest.  Pos- 
sibly the  part  which  he  retains  might  not 
have  been  sold,  unless  the  other  part  had 
been  taken  at  the  same  time  ;  and  ought 
not  to  be  valued  in  proportion  to  its  ex- 
tent, but  according  to  the  various  circum- 
stances connected  witli  it.  But  a  court  of 
equity  may  inquire  into  all  the  circum- 
stances, and  may  ascertain  how  far  one 
part  of  the  bargain  formed  a  material 
ground  for  the  rest,  and  may  award  a 
compensation  according  to  the  real  state 
of  the  transaction.    lu  this  case,   how- 

[29] 


31* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


paid  is  clearly  and  distinctly  apportioned  to  different  parts  of 
what  is  to  be  performed,  although  the  latter  is  in  its  nature 
single  and  entire,  [x)  But  the  mere  fact  that  *the  subject  of  the 
contract  is  sold  by  weight  or  measure,  and  the  value  is  ascer- 
tained by  the  price  affixed  to  each  pound,  or  yard,  or  bushel,  of 
the  quantity  contracted  for,  will  not  be  sufficient  to  render  the 


ever,  no  such  question  arises ;  for  it  ap- 
pears to  me  that  althougli  both  pieces  of 
ground  were  bargained  for  at  the  same 
time,  we  must  consider  the  bargain  as 
consisting  of  two  distinct  contracts ;  and 
that  the  one  part  was  sold  for  £300,  and 
the  otlicr  for  £700."  And  see  to  the 
same  point,  Mayfield  v.  Wadsley,  3  B.  & 
C  357.  The  statement  in  the  text,  that, 
where  the  subject  of  the  contract  consists 
of  several  distinct  and  independent  items, 
and  no  express  agreement  is  made  as  to 
the  consideration  to  be  paid,  the  contract 
may  be  considered  as  severable,  is  well 
illustrated  by  the  case  of  Eobinson  v. 
Green,  3  Met.  159.  That  was  an  action 
of  assumpsit  to  recover  compensation  for 
services  rendered  by  the  plaintiff  to  the 
defendant  as  an  auctioneer,  in  selling 
sevent3--six  lots  of  wood.  The  plaintiff 
was  a  licensed  auctioneer  for  the  county 
of  ]\Iiddlesex.  Two  of  the  lots  of  wood 
sold  were  in  the  county  of  Middlesex,  and 
the  rest  were  iu  the  county  of  Suffolk. 
The  defendant  contended  that  the  claim 
of  the  plaintiff  was  entire  ;  that  part  of  it 
was  a  claim  for  services  which  were  ille- 
gal, in  selling  jiroperty  out  of  his  county  ; 
and  that  the  contract  being  entire,  aiul  the 
consideration,  as  to  part  at  least,  illegal, 
the  action  could  not  be  maintained.  Scd 
non  allonitiir,  for,  per  Shatu,  C.  J.  :  "  The 
plaintiff  does  not  claim  on  an  entire  con- 
tract. The  sale  of  each  lot  is  a  distinct 
contract.  Tlie  plaintiffs  claim  for  a  com- 
pensation arises  upon  eacli  several  sale, 
and  is  comijlctc  on  such  sale.  If  there 
were  an  express  promise  to  pay  him  a 
fixed  sum,  ;is  a  compensation  for  the 
entire  sale,  it  would  have  jjresented  a  dif- 
ferent (juestion.  Wiiere  an  entire  promise 
is  maile  on  one  entire  consideration,  and 
I»art  (jf  that  consideration  is  illegal,  it  may 
avoid  tlic  entire  contract.  I5ut  here  is  no 
evidence  of  a  promise  of  one  entire  sum 
for  the  wliok',  service.  It  is  the  ordinary 
case  rtf  an  auctioneer's  commission,  wliidi 
accrues  upon  each  entire  and  com|)ietc 
8ulc.  We  do  not  sec  liow  the  question 
can  be  answci'cd,  wliicli  was  put  in  the, 
argument,  namely,  supposing  the  plaintilf 

[30] 


had  stopped  after  selling  the  two  lots  lying 
in  South  Reading,  which  it  was  lawful  for 
him  to  sell,  would  he  not  have  been  enti- 
tled to  his  commission  ?  If  he  would,  we 
do  not  perceive  how  his  claim  can  be 
avoided,  by  showing  that  he  did  some- 
thing else  on  the  same  day,  which  was  not 
malum  in  se,  but  an  act  prohibited  by  law, 
on  considerations  of  public  policy.  The 
court  are  of  opinion  that  the  plaintiffs 
claim  for  a  quantum  meruit  may  be  appor- 
tioned, and  that  he  is  entitled  to  recover 
for  his  services  in  the  sale  of  the  two  lots." 
And  see  Mavor  v.  Pyne,  3  Bing.  285 ; 
Perkins  v.  Hart,  11  Wheat.  237,  251; 
Withers  v.  Eeynolds,  2  B.  &  Ad.  882  ; 
Sickels  V.  Patterson,  14  Wend.  257  ;  Mc- 
Knight  V.  Dunlop,  4  Barb.  36,  47  ;  Snook 
V.  Fries,  19  id.  313  ;  Carleton  v.  Woods, 
8  Foster,  290  ;  Robinson  v.  Snyder,  25 
Penn.  St.  203.  For  the  law  applicable  to 
cases  where  property  is  purchased  in  lots 
at  auction  at  separate  biddings,  see  ante, 
vol.  1,  p.  417. 

(,r)  Thus,  if  a  ship  be  built  upon  a 
special  contract,  and  it  is  part  of  the  terms 
of  that  contract  that  given  portions  of  the 
price  shall  be  paid  according  to  the  pro- 
gress of  the  work,  namely,  part  when  the 
keel  is  laid  ;  part  when  at  tlie  light  plank ; 
and  the  remainder  when  the  ship  is 
launched,  there  arises  a  separate  contract 
for  each  instalment ;  and  therefore  when 
the  keel  is  laid,  or  any  other  part  of  the 
shij)  for  which  an  instalment  is  to  be  paid 
is  comi)leted,  it  has  been  liM  in  England, 
and  to  some  extent  here,  that  an  action 
lies  immediately  for  the  one  jiarty  to  re- 
cover the  instalment,  and  that  part  of  the 
shij)  becomes  by  the  payment  the  jn'operty 
of  the  other  party.  Woods  v.  Russell,  5 
B.  iSb  Aid.  942.  See  also,  Clarke  v. 
Spencc,  4  A.  &  E.  448;  Laidlcr  r.  Bur- 
linson,  2  M.  &  W.  G02  ;  Cunningham  v. 
Morrell,  10  Johns.  203.  But  tliis  doctrine 
is  altogether  denied  in  Andrews  (;.  Durant, 
1  Kern.  35.  See  also.  Wood  v.  Bell,  5 
Ellis  &  B.  772,  .34  Eng.  L.  &  Eq.  178,  6 
Ellis  &  ]}.  355  ;  Moody  v.  Brown,  34  Me. 
107  ;  1  I'arsous,  Mar.  Law,  75,  n.  I. 


en.  I.]       CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.  *32 

contract  severable,  {y)  And  if  the  consideration  to  be  paid  is 
single  and  entire,  the  contract  *must  be  held  to  be  entire,  al- 
though the  subject  of  the  contract  may  consist  of  several  dis- 
tinct and  wholly  independent  items,  [z) 


iy)  Clark  v.  Baker,  5  Met.  452.  The 
plaintiff  in  this  case  purchased  of  the  de- 
fendant a  cargo  of  corn  on  board  a 
schooner  lying  in  Boston,  agreeing  to  pay 
7Gk  cents  per  bushel  for  the  yellow  corn, 
and  TSg-  cents  for  the  white  corn  ;  the  de- 
fendant warranting  it  to  be  of  a  certain 
quality.  The  quantity  of  corn  was  not 
known  at  the  time  of  the  purchase,  but  it 
afterwards  appeared  that  there  were  be- 
tween 2,000  and  3,000  bushels.  The 
plaintiff  paid  the  defendant  $1,200  in 
advance,  and  after  having  received  enough 
of  the  corn  to  amount,  at  the  agreed 
price,  to  $1,067.02,  refused  to  receive  any 
more,  on  the  ground  that  the  remainder 
was  not  such  as  the  cargo  was  warranted 
to  be.  This  action  was  brought  to  recover 
the  difference  between  tiie  aforesaid  sums 
of  $1,200  and  $1,067.02.  The  defend- 
ant objected  that  tlie  contract  was  entire, 
and  that  the  present  action  could  not  be 
maintained,  without  proof  that  the  plain- 
tiff offered  to  return  the  corn  which  he 
had  accepted  ;  and  this  objection  was  sus- 
tained. Hubbard,  J.,  said  :  "  The  ques- 
tion in  the  present  case  resolves  itself  into 
this  :  Was  there  one  bargain  for  the  whole 
cargo,  or  were  there  two  distinct  contracts 
for  the  yellow  and  white  corn,  or  was 
there  a  separate  and  independent  bargain 
for  each  bushel  of  corn  contracted  for,  in 
consequence  of  which  the  receipt  of  one 
or  more  bushels  of  the  warranted  quality 
imposed  no  duty  upon  the  plaintiff  to  re- 
tain the  residue  ?  And  we  are  of  opinion 
that  the  contract  was  an  entire  one.  The 
bargain  was  not  for  2,000  or  3,000  bushels 
of  corn,  but  it  was  for  the  cargo  of  the 
schooner  Shylock,  be  the  quantity  more 
or  less ;  a  cargo  known  to  consist  of  two 
different  kinds  of  corn ;  and  the  means 
taken  to  ascertain  the  amount  to  be  paid 
were  in  the  usual  mode,  by  agreeing  on 
the  rate  per  bushel  for  the  two  kinds,  and 
take  the  whole.  .  .  .  There  is  no  ground, 
on  the  evidence  as  reported,  to  maintain 
that  there  were  two  contracts  for  the  dis- 
tinct kinds  of  corn  ;  for  it  does  not  appear 
but  that  the  1,400  bushels  that  were  re- 
tained consisted  of  a  part  of  each.  So 
that  the  plaintiff,  to  support  his  position, 
must  contend  as  he  has  contended,  that 
the  bargains  in  this   case  were   separate 


bargains  for  each  several  bushel  of  a  given 
quality,  and  for  a  distinct  i)rice.  But  this 
separation  into  parts  so  minute,  of  a  con- 
tract of  this  nature,  can  never  be  admit- 
ted ;  for  it  might  lead  to  the  multiplica- 
tion of  suits  indefinitely,  in  giving  a  dis- 
tinct right  of  action  for  every  distinct 
portion.  As  well  might  a  man  who  sold  a 
chest  of  tea  by  the  pound,  or  a  piece  of  cloth 
by  the  yard,  or  a  piece  of  land  by  the  foot 
or  by  the  acre,  contend  that  each  pound, 
yard,  foot,  or  acre,  was  the  subject  of  a 
distinct  contract,  and  each  the  subject  of 
a  separate  action."  So  in  Davis  i'.  Max- 
well, 12  Met.  286,  where  the  plaintiff 
agreed  with  the  defendant  to  work  on  the 
farm  of  the  latter  for  the  period  of  "  seven 
months,  at  twelve  dollars  per  month,"  it 
was  held  that  the  contract  was  entire  ;  that 
eighty-four  dollars  were  to  be  paid  at  the 
end  of  seven  months,  and  not  twelve  dol- 
lars at  the  end  of  each  month ;  and  that 
the  plaintiff,  on  leaving  the  clefendant's 
service  without  good  cause  before  the 
seven  months  expired,  was  not  entitled  to 
recover  any  thing  of  the  defendant. 

(c)  Miner  v.  Bradley,  22  Pick.  457.  In 
this  case  the  defendant  put  up  at  auction  a 
certain  cow  and  400  pounds  of  hay,  both 
of  which  the  plaintiff  bid  off  for  $17, 
which  he  paid  at  the  time.  He  then  re- 
ceived the  cow,  and  afterwards  demanded 
the  hay,  which  was  refused  by  the  defend- 
ant, who  had  used  it.  This  action  was 
brought  to  recover  back  the  value  of  the 
hay.  The  defendant  objected  that  the 
contract  was  entire  ;  that  the  plaintiff 
could  not  recover  back  the  price  paid,  or 
any  portion  of  it,  without  rescinding  the 
whole  contract,  and  that  this  could  not  be 
done  without  returning  the  cow.  And 
this  oI)jection  was  sustained  by  the  court. 
Morton,  J.,  said :  "  There  may  be  cases, 
where  a  legal  contract  of  sale  covering 
several  articles  may  be  severed,  so  that  the 
purchaser  may  hold  some  of  the  articles 
purchased,  and,  not  receiving  others,  may 
recover  back  the  price  paid  for  them. 
AVhere  a  number  of  articles  are  bought  at 
the  same  time,  and  a  separate  price  agreed 
upon  for  each,  although  they  are  all  in- 
cluded in  one  instrument  of  conveyance, 
yet  the  contract,  for  sufficient  cause,  may 
be  rescinded  as  to  part,  and  the  price  paid 

[31] 


33*  THE  LAW   OF   CONTRACTS.  [PART  II. 


SECTION    V. 


APPORTIONMENT   OF   CONTRACTS. 

A  contract  is  said  to  be  apportionable  when  the  amount  of 
consideration  to  be  paid  by  the  one  party  depends  upon  the  ex- 
tent of  performance  by  the  other.  The  question  of  apportion- 
ment must  be  carefully  distinguished  from  that  of  entirety, 
considered  in  the  last  section.  The  latter  must  always  be  de- 
termined before  the  former  can  properly  arise.  For  the  question 
of  apportionment  always  addresses  itself  to  a  contract  which 
has  already  been  ascertained  to  be  single  and  entire. 

When  parties  enter  into  a  contract  by  which  the  amount  to 
be  performed  by  the  one,  and  the  consideration  to  be  paid  by 
the  other,  are  made  certain  and  fixed,  such  a  contract  *cannot 
be  apportioned.  Thus,  if  A  and  B  agi'ee  together  that  A  shall 
enter  into  the  service  of  B,  and  continue  for  one  year,  and  that 
B  shall  pay  him  therefor  the  sum  of  one  hundred  dollars ;  and 
A  enters  the  service  accordingly,  and  continues  half  of  the  year, 
and  then  leaves,  he  will  not  be  entitled  to  recover  any  thing  on 
the  contract,  [a)  This  is  an  old  and  deep-rooted  principle  of  the 
common  law,  and  though  it  sometimes  has  the  appearance  of 
harshness,  it  would  be  difficult  to  contend  against  it  upon  prin- 
ciple. We  have  frequently  had  occasion  to  state  that  courts  of 
justice  can  only  carry  into  effect  such  contracts  as  parties  have 

recovered  back,  and  may  be  enforced  as  that  it  was  incapable  of  severance,  that  it 

to  the  residue.     I>ut  tliis  cannot  projierly  could  not  be  enforced  in  part  and  reseind- 

bc  said  to  lie  an  exception  to  the  rule ;  lie-  ed  in  part ;  and  that  it  could  not  be  rc- 

cause  in  eUVct  there  is  a  separate  contract  sciiuled    without   placinj^   tlie   jiarties   in 

for  each  separate  article.     This  subject  is  statu  quo."     See  further  on  the  subject  of 

well  exidaiiied,  and   tlic  law  well  stated,  entirety,  Jones  v.   Dunn,  3  Watts  &  S. 

in  Johnson   v.  Johnson,  H  J{.  &  ]'.  102."  109  ;  Bigps  v.  Wiskiiifr,  14  C.  B.  lO.'J,  25 

The   learned  jud^e  then  stated  that  case,  Eii}^.  L.  «&  E(j.  257  ;    White  v.  Brown,  2 

and    coTitiiiucd  :    "Had   llu!   jiiaiiitin'    Iiid  Jones  (N.  C),  403;    Duhi  v.  Cowles,  id. 

oir  the  cow  at  f)ne  jnii'c,  and  the  hay  at  454. 

another,  aithoii^di  he  had  taken  one  biil  of         [a)  Ex  parte    Smyth,    1    Swanst.   337, 

sale  for  both,  it  woidd  have  come  within  and  n.  (n).     AVe  have  already  considered 

the  principles  of    the   above   ciisc.     But  this  point  ia  our  lirst  volume,  B.  3,  ch.  9, 

such  was  not  the  fact.     And  it  seems  to  sec.  1. 


us  very  clear  that  the  contract  was  entire ; 
[  -^  ] 


CII.  I.]   CONSTRUCTION  AND  INTERPRETATION  OF  CONTRACTS.    *34 

made.  They  cannot  make  contracts  for  them,  or  alter  or  vary 
those  made  by  them.  And  it  would  seem  difficult  for  a  court, 
without  travelling  out  of  its  true  sphere,  to  say  that  because  B 
has  agreed  to  pay  one  hundred  dollars  for  one  year's  service,  he 
has  therefore  agreed  to  pay  at  that  rate,  or  any  particular  sura, 
for  a  shorter  period.  In  other  words,  it  cannot  reasonably  be 
presumed  that  the  parties  intended  that  the  amount  of  consider- 
ation to  be  paid  by  B  should  depend  upon  the  amount  of  service 
rendered  by  A,  when  both  of  these  were  definitely  fixed  by  the 
parties.  The  only  agreement  entered  into  by  B  was  to  pay  A 
the  sum  of  one  hundred  dollars,  when  the  latter  should  have 
served  him  one  year.  Therefore,  until  the  full  year's  service  has 
been  rendered,  the  casus  foederis  does  not  arise. 

It  is  to  be  borne  in  mind,  however,  that  this  is  only  a  rule  of 
construction,  founded  upon  the  intention  of  the  parties,  and  not 
a  rule  of  law  which  controls  intention.  Therefore,  if  the  parties 
wish  to  make  a  contract  which  shall  be  apportionable,  there  is 
nothing  to  hinder  their  doing  so,  provided  they  make  their  inten- 
tion sufficiently  manifest.  Thus,  if  A  and  B  make  a  contract, 
by  virtue  of  which  A  is  to  enter  into  the  service  of  B,  at  the  rate 
of  ten  dollars  per  month,  and  continue  so  long  as  it  shall  be 
agreeable  to  both  parties,  such  contract  is  clearly  apportionable  ; 
for  neither  the  extent  of  service  nor  the  amount  of  consideration 
is  fixed  by  the  *contract,  but  only  a  certain  relation  and  propor- 
tion between  them.  And  contracts  have  been  held  apportiona- 
ble in  which  the  service  to  be  performed  was  specified  and  fixed, 
but  the  consideration  to  be  paid  was  left  to  be  implied  by  law. 
But  this  cannot  be  laid  down  as  a  general  rule,  (h) 

(b)  Roberts  v.  Havelock,  3  B.  &  Ad.  had  been  required.  And  the  case  of  Sin- 
404.  In  this  case  a  ship  belonging  to  the  chiir  v.  Bowles,  9  B.  &  C.  92,  in  which  A, 
defendant  having  come  into  port  in  a  having  undertaken  for  a  specific  sum  of 
damaged  state,  the  plaintiff  was  employed  money  to  repair  and  make  perfect  a  given 
and  undertook  to  put  her  into  thoroiu/h  article,  and  having  repaired  it  in  part,  but 
repair.  Before  the  work  was  completed,  not  made  it  perfect,  it  was  held  that  he  was 
a  dispute  arose  between  the  parties,  and  not  entitled  to  recover  for  what  he  had 
the  plaintiff  refused  to  proceed  until  he  done,  was  cited  as  in  point.  But  Lord 
was  paid  for  the  work  already  done,  and  Tenterden  said  :  "  I  have  no  doubt  that 
for  which  this  action  was  brought.  The  the  plaintiff  in  this  case  was  entitled  to 
defendant  objected,  that  the  action  did  not  recover.  In  Sinclair  v.  Bowles  the  con- 
lie,  inasmuch  as  the  plaintiff  had  not  com-  tract  was  to  do  a  specific  work  for  a  specific 
pleted  his  contract,  and  as  long  as  that  sum.  There  is  nothing  in  the  present  caso 
was  the  case,  the  work  already  done  was  amounting  to  a  contract  to  do  the  wholo 
unavailable  for  the  purpose  for  which  it  repairs  and  make  no  demand  till  they  are 

[33] 


35* 


THE   LAW   OF   CONTRACTS. 


[part  ir. 


We  have  seen  that  when  parties  make  a  contract  which  is  not 
apportionable,  no  part  of  the  consideration  can  be  'recovered  in 
an  action  on  a  contract,  until  the  whole  of  that  for  which  the 
consideration  was  to  be  paid  is  performed.  But  it  must  not 
be  inferred  from  this  that  a  party  who  has  performed  a  part 
of  his  side  of  a  contract,  and  has  failed  to  perform  the  residue, 
is  in  all  cases  without  remedy.  For  though  he  can  have  no 
remedy  on  the  contract  as  originally  made,  the  circumstances 
may  be  such  that  the  law  will  raise  a  new  contract,  and  give 
him  a  remedy  on  a  quantum  meruit. 

Thus,  if  one  party  is  prevented  from  fully  performing  his 
contract  by  the  fault  of  the  other  party,  it  is  clear  that  the  party 
thus  in  fault  cannot  be  allowed  to  take  advantage  of  his  own 
wrong,  and  screen  himself  from  payment  for  what  has  been 
done  under  the  contract.  The  law,  therefore,  will  imply  a 
promise  on  his  part  to  remunerate  the  other  party  for  what  he 
has  done  at  his  request;  and  upon  this  promise  an  action  may 
be  brought,  {c) 


completed.  The  plaintiff  was  entitled  to 
say  tliat  he  would  proceed  no  further  with 
the  repairs  till  he  was  paid  what  was 
already  due."  Mr.  Smith,  in  his  learned 
note  to  Cutter  v.  Powell,  2  Smith's  Lead. 
Cas.  12,  liaving  stated  this  case,  and 
quoted  the  langua<;e  of  Lord  Teaterden, 
says :  "  From  these  words  it  may  be 
thought  that  his  lordship's  judj;nicnt  pro- 
ceeded on  tiie  {ground  tiiat  the  perform- 
ance of  <Ae  whale  latrk  is  not  to  be  consid- 
ered a  condition  precedent  to  the  payment 
of  anij  p(trt  of  the  price,  excepting  when 
the  sum  to  be  paid  and  the  work  to  be 
done  are  Ixjlh  specified  (unless,  of  course, 
in  case  of  si)ecial  terms  in  the  agreement 
expressly  imposing  such  a  condition)  ; 
and  certainly  good  reasons  may  be  alleged 
in  favor  of  such  a  doctrine,  for  when  the 
price  to  be  paid  is  a  specific  sum,  as  in 
Sinclair  v.  IJowles,  it  is  clear  that  the 
court  and  jury  can  have  no  right  to  appor- 
ti(m  that  which  the  parties  themselves 
liavc,  treated  as  entire,  and  to  say  that  it 
shall  be  ])aid  in  instalments,  contrary  to 
the  agreement,  instead  of  in  a  round  sum 
as  prcjvidcd  by  the  agreement ;  but,  where 
no  price  is  specified,  this  dillieulty  does 
not  arise,  and  |)erliaps  the  true  and  right 
presumption  is,  that  the  |)arlies  intended 
the  payment  to  keep  pace  with  the  accrual 

[34] 


of  the  benefit  for  which  payment  is  to  be 
made.  But  this,  of  course,  can  only  be 
when  the  consideration  is  itself  of  an  ap- 
portionable nature,  for  it  is  easy  to  put  a 
case  in  which,  though  no  price  has  been 
specified,  yet  the  consideration  is  of  so  in- 
divisible a  nature,  that  it  would  be  absurd 
to  say  that  one  ])art  should  be  paid  for 
before  the  remainder;  as  where  a  jjainter 
agrees  to  draw  A's  likeness,  it  would  be 
absurd  to  recpiire  A  to  pay  a  ratable  sum 
on  account  when  half  the  face  only  had 
been  finished ;  it  is  obvious  that  he  has 
then  received  no  benefit,  and  never  will 
receive  any,  unless  the  likeness  should  be 
]ierfected.  There  are,  however,  cases,  that 
for  instance  of  Hoi)erts  v.  Ilavcloek,  in 
which  the  consideration  is  in  its  nature 
apportionable,  and  there,  if  no  entire  sum 
have  been  agreed  on  as  the  price  of  the 
entire  benefit,  it  would  not  be  unjust  to 
presume  that  the  intention  of  the  contrac- 
tors was  that  the  remuneration  should 
keep  pace  with  the  consideration,  and  be 
recoverable  totlcs  (juolies  by  action  on  a 
(/iianttun  meruit."  See  also,  Withers  v. 
Ileynolds,  2  B.  &  Ad.  882;  Sickcis  v. 
J'attison,  14  Wend.  2.')7  ;  Wade  v.  Hay- 
cock, 25  Penn.  St.  .382. 

(r)  I'lanche  v.    Colburn,  8  Bing.   14; 
Goodman  v.  Pocock,  15  Q.  B.  57G;  Ilall 


cii.  l]     construction  and  interpretation  of  contracts.      -35 

So  too  if  one  party,  without  the  fault  of  the  other,  fails  to 
perform  his  side  of  the  contract  in  such  a  manner  as  to  enable 
him  to  sue  upon  it,  still  if  the  other  party  have  derived  a  benefit 
from  the  part  performed,  it  would  be  unjust  to  allow  him  to  re- 
tain that  without  paying  any  thing.  The  law,  therefore,  gener- 
ally implies  a  promise  on  his  part  to  pay  such  a  remuneration 
as  the  benefit  conferred  upon  him  is  reasonably  worth,  and  to 
recover  that  quantum  of  remuneration  an  action  of  indebitatus 
assumpsit  is  maintainable,  [d) 


V.  Eupley,  10  Barr,  231  ;  Moulton  v. 
Trask,  9  Met.  577  ;  Hoagland  v.  Moore, 
2  Blaikf.  167;  Bannister  v.  Read,  1  Gil- 
man,  92  ;  Sclhv  V.  Hutciiinson,  4  id.  319  ; 
Wci)ster  V.  Enfield,  5  id.  298  ;  Derby  v. 
Johnson,  21  Vt.  17.  So  too  if  a  special 
action  on  tiie  case  is  brousht  aj^ainst  the 
party  in  fault  to  recover  damaj^es  for  not 
being  permitted  to  perform  the  contract,  a 
reasonable  compensation  for  what  has  been 
performed  may  be  included  in  the  dam- 
ages. Goodman  v.  Focock,  15  Q.  B.  576  ; 
Derby  v.  Johnson,  21  Vt.  18;  Clark  v. 
Marsiglia,  1  Denio,  317. 

(d)  The  cases  bearing  upon  the  last 
proposition  are,  it  must  be  confessed,  very 
conflicting.  They  may  be  conveniently 
arranged  in  three  classes; — those  aris- 
ing on  contract  of  sale  ;  those  arising  on 
contracts  to  do  some  specific  labor  upon 
the  land  of  another,  as  to  erect  buildings, 
or  to  build  roads  and  bridges  ;  and  those 
arising  upon  ordinary  contracts  for  ser- 
vice. The  leading  case  of  the  tirst  class 
is  that  of  Oxendale  v.  Wetherell,  9  B.  & 
C.  386.  That  was  an  action  of  indebita- 
tus assumpsit  to  i-ecover  the  price  of  130 
bushels  of  wheat  sold  and  delivered  by 
the  plaintiff  to  the  defendant,  at  8s.  per 
bushel.  The  defendant  gave  evidence  to 
show  that  he  made  an  absolute  contract 
for  250  bushels,  and  contended  that  as  the 
plaintiff  had  not  fully  performed  his  con- 
tract he  was  not  entitled  to  recover  any 
thing.  But  Bayky,  J.,  before  whom  the 
cause  was  tried,  was  of  opinion  that,  as 
the  defendant  had  not  returned  the  130 
bushels,  and  the  time  for  com])leting  the 
contract  bad  expired  before  the  action  was 
brought,  the  plaintiff  was  entitled  to  re- 
cover the  value  of  the  130  bushels  which 
had  been  delivered  to  and  accepted  by  the 
defendant.  A  verdict  was  accordingly 
found  for  the  plaintiff,  with  liberty  to  tiic 
defendant  to  move  to  enter  a  nonsuit. 


But  upon  a  motion  to  that  effect  being 
made,  Lord  Tenterdm  said  :  "  If  the  rule 
contended  for  were  to  prevail,  it  would 
follow,  that  if  there  had  been  a  contract 
for  250  bushels  of  wheat,  and  249  had 
been  delivered  to  and  retained  by  the  de- 
fendant, the  vendor  could  never  recover 
for  the  249,  because  he  had  not  delivered 
the  whole."  Baylei/,  J.  :  "  The  defend- 
ant having  retained  the  130  bushels,  after 
the  time  for  completing  the  contract  had 
expired,  was  bound  by  law  to  pay  for  the 
same."  Parke,  J.:  '"'Where  there  is  an 
entire  contract  to  deliver  a  large  quantity 
of  goods  consisting  of  distinct  parcels, 
within  a  specified  time,  and  the  seller  de- 
livers part,  he  cannot,  before  the  expira- 
tion of  that  time,  bring  an  action  to  re- 
cover the  price  of  that  part  delivered, 
because  the  purchaser  may,  if  the  vendor 
fail  to  complete  his  contract,  return  the 
part  delivered.  But  if  he  retain  the  part 
delivered,  after  tlie  seller  has  failed  in  per- 
forming his  contract,  the  latter  may  re- 
cover the  value  of  the  goods  which  he  has 
so  delivered."  So  also  in  Read  v.  Rann, 
10  B.  &  C.4i],Parke,J.,  said  :  "In  some 
cases,  a  special  contract  not  executed  may 
give  rise  to  a  claim  in  the  nature  of  a 
qiKinlum  meruit,  ex.  tp:,  where  a  special 
contract  has  been  made  for  goods,  and 
goods  sent  not  according  to  the  contract 
are  retained  by  the  party,  there  a  claim  for 
the  value  on  a  quantum  vaUbnnt  may  be 
supported.  But  then  from  the  circum- 
stances a  new  contract  may  be  implied." 
And  see,  to  the  same  effect,  Shipton  v. 
Casson,  5  B.  &  C.  378.  So  too,  in  Mas- 
sachusetts it  has  been  held,  that  if  the 
vendee  of  a  specific  quantity  of  goods 
sold  under  an  entire  contract,  receives  a 
part  thereof,  and  retains  it  after  the  vendor 
has  refused  to  deliver  the  residue,  this  is  a 
severance  of  the  entirety  of  the  contract, 
and  he  becomes  liable  to  the  vendor  for 

[35] 


35- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


The  particular  subject  of  apportionment  of  rent  has  been 
considered  in  the  first  volume,  Book  II.  ch.  3,  sect.  8. 


the  price  of  such  part.  Bowker  v.  Hoyt, 
18  ]?ick.  555.  And  we  apprehend  that  a 
similar  rule  would  be  adopted  by  a  major- 
ity of  the  courts  in  this  country.  But  in 
New  York,  the  case  of  Oxendale  v.  Weth- 
erell  has  been  entirely  repudiated,  and  it 
is  there  held  that  the  vendor  in  such  a  case 
is  not  entitled  to  any  remedy.  Champlain 
V.  Rowlev,  13  Wend.  258,  18  id.  187; 
Mead  y.  "Degolyer,  16  Wend.  632 ;  Mc- 
Knight  I'.  Dunlop,  4  Barb.  36  ;  Paige  v. 
Ott,  5  Denio,  406;  Oakley  u.  Morton,  1 
Kern.  25.  And  so  also  in  Ohio.  With- 
erow  V.  Witherow,  16  Ohio,  238,  Rend,  J., 
dissenting.  —  One  of  the  most  important 
cases  in  the  second  class  is  Hayward  v. 
Leonard,  7  Pick.  181.  In  that  case  the 
plaintiff  contracted  in  writing  to  build  a 
house  for  the  defendant,  at  a  certain  time, 
and  in  a  certain  manner,  on  defendant's 
land,  and  afterwardsbuilt  the  house  within 
the  time,  and  of  the  dimensions  agreed  on, 
but  in  workmansliip  and  materials  vary- 
ing from  tlie  contract.  The  defendant 
was  present  almost  every  day  during  the 
building,  and  had  an  opportunity  of  see- 
ing all  the  materials  and  labor,  and  ob- 
jected at  times  to  parts  of  the  materials 
and  work,  but  continued  to  give  directions 
about  the  house,  and  ordered  some  varia- 
tions from  the  contract.  He  expressed 
himself  satisfied  witli  a  part  of  the  work 
from  time  to  time,  though  ))rofessing  to  be 
no  judge  of  it.  Soon  after  the  house  was 
done  he  refused  to  accept  it,  but  the  plain- 
tiff had  no  knowledge  that  lie  intended  to 
refuse  it  till  after  it  was  finished.  It  was 
lie/d,  that  the  plaintiff  might  maintain  an 
action  against  tiie  defendant  on  a  tjiKiiittim 
meruit  for  his  labor,  and  on  a  (juantuiii  val- 
ebant for  the  materials.  It  may  be  gath- 
ered, liowever,  from  the  judgment  of 
Parker,  C.  J.,  that  he  considered  that  one 
of  two  tilings  must  lie  jiroved  in  order  to 
entitle  the  plaiiitilf  to  recover;  —  either 
that  there  was  an  honest  intention  to  go 
by  tlie  contract,  and  a  substantive  execu- 
tion of  it,  with  only  some  comparatively 
sliglit  deviations  as  to  some  particulars 
provided  for;  or  that  tlierc  was  an  assent 
or  accc|itancc,  express  or  implied,  by  tiio 
jiarty  wiib  ubom  tbc  ])]aiiitiil'  contracted. 
'J'hat  sucii  is  now  the  received  jaw,  see 
.Smith  V.  First  (long.  Mecting-liousc  in 
Lowell,  8  Pick.  178  ;  Taft  v.  Montague,  14 
Mass.  2H2;  Ohiistead  v.  Beale,  I'J  Pick. 
028;  Snow  v.  Wuic,  13  Met.  42  ;  Lord  v. 

[.3G]  / 


Wheeler,  1  Gray,  282  ;  Hayden  v.  Madi- 
son, 7  Greenl.  76  ;  Jennings  v.  Camp,  13 
Johns.  94  ;  Kettle  v.  Harvey,  21  Vt.  301 ; 
Burn  V.  Miller,  4  Taunt.  745  ;  Chapel  v. 
Hickes,  2  Cromp.  &  M.  214  ;  Thornton  v. 
Place,  1  Moody  &  R.  218.  But  see  Ellis 
V.  Hamlen,  3  Taunt.  .52 ;  Sinclair  v. 
Bowles,  9  B.  &  C.  92 ;  Wooten  v.  Bead, 
2  Smedes  &  M.  585  ;  Helm  v.  Wilson,  4 
Mo.  41  ;  White  v.  Oliver,  36  Me.  93.— We 
arc  not  aware  that  there  are  any  cases 
upon  contracts  for  service  fully  sustaining 
the  proposition  in  the  text,  except  the 
celebrated  one  of  Britton  v.  Turner,  6  N. 
H.  481,  already  cited  by  us,  vol.  1,  p.  524, 
note  (  p).  That  was  an  action  of  indebi- 
tatus assumpsit  for  work  and  labor  per- 
foriTicd  by  the  plaintiff  for  the  defendant, 
from  March  9,  1831,  to  December  27,  of 
the  same  year.  The  defendant  offered 
evidence  to  prove  that  the  work  was  done 
under  a  contract  to  work  for  one  year  for 
the  sum  of  one  hundred  dollars,  and  that 
the  plaintiff  left  his  service  without  his 
consent,  and  without  good  cause.  The 
learned  judge  instructed  the  jury,  that 
although  all  these  points  should  be  made 
out,  yet  the  plaintiff  was  entitled  to  re- 
cover, under  his  quantum  meruit  count,  as 
much  as  the  labor  performed  was  reason- 
alily  worth.  And  this  instruction  was 
held  to  be  correct.  Parker,  C.  J.,  in  de- 
livering the  judgment  of  the  court,  after 
noticing  several  of  the  cases  cited  above 
in  the  second  class,  said  :  "  Those  cases 
are  not  to  be  distinguished,  in  jirinciple, 
from  the  present,  unless  it  be  in  the  cir- 
cumstance, that  where  the  party  has  con- 
tracted to  furnish  materials,  and  do  certain 
labor,  as  to  build  a  house  in  a  specified 
manner,  if  it  is  not  done  according  to  the 
contract,  the  party  for  whom  it  is  built 
may  refuse  to  receive  it  —  elect  to  take  no 
benefit  from  what  has  been  performed  — 
and  therefore  if  he  does  receive  he  shall  bo 
bound  to  pay  the  value;  whereas  in  a  con- 
tract for  labor,  merely,  from  day  to  day, 
the  party  is  continually  receiving  the  bene- 
fit of  the  contract,  under  an  expectation 
that  it  will  be  fulfilled,  and  cannot,  uiion 
the  breach  of  it,  have  an  election  to  refuse 
to  receive  what  has  been  done,  and  tiius 
discharge  himself  from  payment.  But  wo 
think  this  diH'erenec  in  the  nature  of  the 
contracts  docs  not  justify  the  ajiplieation 
of  a  different  rule  in  relation  to  tliern. 
The  party  who  contracts  for  labor  merely, 


CH.  I.]     CONSTRUCTION  AND  INTERPRETATION   OF   CONTRACTS. 


86 


SECTION    VI, 


OF   CONDITIONAL   CONTRACTS. 


It  is  sometimes  of  great  importance  to  determine  whether 
there  be  a  condition  in  a  contract  or  an  instrument.     If,  for 


for  a  certain  period,  does  so  with  full 
knowledge  that  he  must,  from  the  nature 
of  the  case,  be  accepting  part  performance 
from  day  to  day,  if  the  other  party  com- 
mences the  performance,  and  with  knowl- 
edge also  that  the  other  party  may  eventu- 
ally fail  of  com])lcting  the  entire  term.  If 
under  such  circumstances  he  actually  re- 
ceives a  benefit  from  the  labor  performed, 
oven  and  above  the  damage  occasioned  by 
the  failure  to  complete,  there  is  as  much 
reason  why  he  should  pay  the  reasonable 
worth  of  what  has  thus  been  done  for  his 
benefit,  as  there  is  when  he  enters  and 
occupies  the  house  wliieh  has  been  built 
for  him,  but  not  according  to  the  stipula- 
tions of  the  contract,  and  which  he  per- 
haps enters,  not  because  he  is  satisfied 
with  what  has  been  done,  but  because 
circumstances  compel  him  to  accept  it 
sucli  as  it  is,  that  he  should  pay  for  the 

value  of  the  house If  the  j^sirty 

who  has  contracted  to  receive  merchandise 
takes  a  part  and  uses  it,  in  expectation 
that  the  whole  will  be  delivered,  which  is 
never  done,  there  seems  to  be  no  greater 
reason  that  he  should  pay  for  what  he  has 
received,  than  there  is  that  the  party  who 
has  received  labor  in  part,  under  similar  cir- 
cumstances, should  pay  the  value  of  what 
has  been  done  for  his  benefit.  It  is  said, 
that  in  those  cases  where  the  plaintiff 
has  been  permitted  to  recover,  there  was 
an  acceptance  of  what  had  been  done. 
The  answer  is,  tliat  where  the  contract  is 
to  labor  from  day  to  day  for  a  certain 
period,  the  party  for  whom  the  labor  is 
done  in  truth  stipulates  to  receive  it  from 
day  to  day,  as  it  is  performed,  and  al- 
though the  other  may  not  eventually  do 
all  he  has  contracted  to  do,  there  has  been, 
necessarily,  an  acceptance  of  what  has  been 
done  in  pursuance  of  the  contract,  and  the 
party  must  have  understood  when  he 
made  the  contract  that  there  was  to  be 
such  acceptance.     If,  then,  the  party  stipu- 

VOL.  II.  4 


lates  in  the  outset  to  receive  part  perform- 
ance from  time  to  time,  with  a  knowledge 
that  the  whole  may  not  be  completed,  we 
see  no  reason  why  he  should  not  equally 
be  holden  to  pay  for  the  amount  of  value 
received,  as  where  he  afterwards  takes  the 
benefit  of  what  has  been  done,  with  a 
knowledge  that  the  whole  which  was  con- 
tracted for  has  not  been  performed.  In 
neither  case  has  the  contract  been  per- 
formed. In  neither  can  an  action  be  sus- 
tained on  the  original  contract.  In  both 
the  party  has  assented  to  receive  what  is 
done.  The  only  difference  is,  that  in  the 
one  case  the  assent  is  prior,  with  a  knowl- 
edge that  all  may  not  be  performed,  in 
the  other  it  is  subsequent,  with  a  knowl- 
edge that  the  whole  has  not  been  accom- 
plished. We  have  no  hesitation  in  hold- 
ing that  the  same  rule  should  be  applied 
to  both  classes  of  cases,  especially  as  the 
operation  of  the  rule  will  be  to  make  the 
party  who  has  foiled  to  fulfil  his  contract, 
liable  to  such  amount  of  damages  as  the 
other  party  has  sustained,  instead  of  sub- 
jecting him  to  an  entire  loss  for  a  partial 
failure,  and  thus  making  the  amount  re- 
ceived in  many  cases  wholly  dispropor- 
tionate to  the  injury We  hold, 

then,  that  where  a  party  undertakes  to 
pay  upon  a  special  contract  for  the  per- 
formance of  labor,  or  the  furnishing  of 
materials,  he  is  not  to  be  charged  upon 
such  special  agreement  until  the  money  is 
earned  according  to  the  terms  of  it,  and 
where  the  parties  liave  made  an  express 
contract,  the  law  will  not  imply  and  raise 
a  contract  different  from  that  which  the 
parties  have  entered  into,  except  upon 
some  further  transaction  between  the  par- 
ties. But  if,  wiiere  a  contract  is  made  of 
such  a  character,  a  party  actually  receives 
labor,  or  materials,  and  thereby  derives 
a  benefit  and  advantage,  over  and  above 
the  damage  which  has  resulted  from  tlie 
breach  of  the  contract  by  the  other  party, 

[37] 


37-38*-39* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


instance,  a  deed  contain  a  grant  on  condition,  then  if  there  be 
a  breach  of  condition,  the  grant  is  void,  and  the  estate  *may 
never  vest,  or  may  be  forfeited.  A  condition  of  this  sort  is  not 
favored,  and  would  not  be  readily  implied,  (e)  But  stipulations 
or  agreements  may  be  implied,  upon  the  breach  of  which  an 
action  may  be  brought.  Mutual  *contracts  sometimes  contain  a 
condition,  the  breach  of  which  by  one  party  permits  the  other  to 
throw  the  contract  up,  and  consider  it  as  altogether  null. 
Whether  a  provision  shall  have  this  effect,  for  which  purpose  it 
must  be  construed  as  an  absolute  condition,  is  sometimes  a 
question  of  extreme  difficulty.  It  is  quite  certain,  however,  that 
no  precise  words  are  now  requisite  to  constitute  a  condition ; 
and  perhaps  that  no  formal  words  will  constitute  a  condition,  if 
it  be  obvious  from  the  whole  instrument,  that  this  was  not  the 
intention  or  understanding  of  the  parties. 

It  would  be  difficult,  and  perhaps  impossible,  to  lay  down  rujes 
which  would  have  decisive  influence  in  determining  this  vexed 
question.  Indeed,  courts  seem  to  agree  of  late  that  the  decision 
must  always  "  depend  upon  the  intention  of  the  parties,  to  be 
collected  in  each  particular  case  from  the  terms  of  the  agree- 
ment itself,  and  from  the  subject-matter  to  which  it  relates."  (/) 
"  It  cannot  depend  on  any  formal  arrrangement  of  the  words, 
but  on  the  reason  and  feense  of  the  thing  as  it  is  to  be  collected 


the  labor  actually  done,  and  the  value  re- 
ceived, funiish  a  new  consideration,  and 
the  law  thereupon  raises  a  promise  to  pay 
to  the  extent  of  the  reasonable  worth  of 
Buch  excess.  This  may  be  considered  as 
making  a  new  case,  one  not  within  the 
original  af;reement,  and  tlic  party  is  en- 
titled to  '  recover  on  his  new  case  for  the 
work  done,  not  as  agreed,  but  yet  accepted 
by  the  defentlant.'  1  Dane's  Abr.  224." 
But  the  courts  of  other  States  have  thus 
far  shown  Mttle  disjiosition  to  adopt  the 
views  of  tlie  learned  judge.  Thus,  in 
Eldridgc  v.  liowe,  2  Gihiian,  91,  tlic  coint 
fifild  upon  a  simibir  state  of  facts  tliat  the 
plainlilf  was  not  entitled  to  recover.  And 
Youtifj,  J.,  saifl  :  "  It  is  no  objection  to 
say  that  tli(!  dc-fcndant  lins  received  the 
bcnelit  rjf  bis  labor,  tills  being  a  ca,sc, 
wlierc,  from  its  nature,  tiie  defendant  coulil 
not  BCjiarate  the  products  of  his  labor  from 

[38] 


the  general  concerns  of  his  farm,  and  ought 
not,  therefore,  to  be  responsible  to  any  ex- 
tent wiiatever  for  not  doing  that  which 
was  impossible."  See  also.  Miller  v.  God- 
dard,  34  Me.  102 ;  Olmstead  v.  Beale, 
19  Pick.  .'J29  ;  Davis  v.  MaxAvcll,  12  Met. 
286.  Sec  also,  anfe,  vol.  1,  p.  522,  n.  (/), 
and  p.  .526,  n.  (q). — Dillicult  questions 
frequently  arise  in  the  classes  of  cases  con- 
sidered in  the  present  note,  as  to  the  meas- 
ure of  damages,  and  tlic  riglit  of  the  de- 
fendant to  have  deducted  from  the  amount 
otlicrwisc  recoverable  the  damage  sus- 
tained by  him  in  consequence  of  the 
breacli  of  tlic  contract.  These  questions 
will  be  considered  under  their  appropriate 
heads  in  the  subsequent  part  of  tiie  present 
volume. 

(f)  Sec  anfe,  n.  22,  n.  (v). 

(/■)  Per  Tinaal,  C.  J.,  in  Glaholm  r. 
Hays,  2  Man.  &  G.  266. 


CII.  I.]     CONSTRUCTION   AND   INTERPRETATION   OP   CONTRACTS.  *40 

from  the  whole  contract."  (g-)  It  is  said  that  where  the  clause 
in  question  goes  to  the  whole  of  the  consideration,  it  shall  be 
read  as  a  condition,  (h)  The  meaning  of  this  must  be,  that  if 
the  supposed  condition  covers  the  whole  ground  of  the  con- 
tract, and  cannot  be  severed  from  it,  or  from  any  part  of  it,  a 
breach  of  the  condition  is  a  breach  of  the  whole  contract,  which 
gives  to  the  other  party  the  right  of  avoiding  or  rescinding  it 
altogether.  But  where  the  supposed  condition  is  distinctly  sep- 
arable, so  that  much  of  the  contract  may  be  performed  on  both 
sides  as  though  the  condition  were  not  there ;  it  will  be  read  as 
a  stipulation,  the  breach  of  which  only  gives  an  action  to  the 
injured  party,  (ha)  But  it  is  not  safe  to  assert  that  which  is 
sometimes  said  to  be  law,  (i)  that  where  in  case  of  a  breach  the 
party  cannot  have  his  action  for  damages,  there  the  doubtful 
clause  must  be  read  as  a  condition,  because  otherwise  the  party 
injured  would  be  without  remedy.  For  if  "  the  reason  and 
sense  of  the  thing,"  or  the  rational  and  fair  construction  of  the 
contract  leads  to  the  conclusion  that  the  parties  did  not  agree 
nor  intend  that  there  should  be  this  *condition,  then  there  is 
none ;  and  if  a  party  be  in  this  way  injured  and  remediless,  it  is 
his  own  fault,  in  that  he  neither  inserted  in  his  contract  a  con- 
dition, the  breach  of  which  would  discharge  him  from  all  obli- 
gation, nor  a  stipulation,  for  the  breach  of  which  he  might  have 
his  action,  (j) 


SECTION    VII. 

OF  MUTUAL   CONTRACTS. 

It  is  a  similar  question  —  sometimes  indeed  the  very  same 
question  —  whether  covenants  are  mutual,  in  such  sense  that 
each  is  as  a  condition  precedent  to  the  other.  And  also  whether 
covenants  or  agreements  be  dependent  or  independent,  (k)     By 

{(/)  Per  Lord  EUenhorough,  in  Ritchie  v.  {ha)  See  Heraans  v.  Picciotto,  1  C.  B. 

Atiiinson,  10  East,  295.     And  see  North-  n.  s.  646. 

ampton  Gas  Light  Co.  v.  Parncll,  15  C.  (i)  SeePordager.  Cole,  1  Wms.  Saund. 

B.  6.30.  29  Eng.  L.  &  Eq.  231.  319. 

(/i)  Boone  v.  Eyre,  1  H.  Bl.  273,  note  ( /)  See  infra,  note  (I). 

(a).  (k)  In  Kingston  v.   Preston,   cited  in 

[39] 


41* 


THE  LAAV   OF   CONTRACTS. 


[part  II. 


the  very  definition  of  them,  if  they  are  dependent,  that  is,  if 
each  depends  on  the  other,  the  failure  of  one  destroys  and  an- 
nuls the  other.  Or,  if  this  dependence  is  not  mutual,  but  one 
of  them  rests  upon  the  other  by  a  dependence  which  is  not 
equally  shared  by  the  other,  if  that  contract  upon  which  this 
dependence  rests  is  broken  and  defeated,  the  other  by  reason  of 
its  dependence  is  annulled  and  destroyed  also.  But  they  may 
be  wholly  independent,  although  relating  to  the  same  subject, 
and  made  by  the  same  parties,  and  included  in  the  same  instru- 
ment. In  that  case  they  are  two  separate  contracts.  Each 
party  must  then  perform  what  he  undertakes,  without  reference 
to  the  discharge  of  his  obligation  by  the  other  party.  And  each 
party  may  have  his  action  *against  the  other  for  the  non-per-  • 
formance  of  his  agreement,  whether  he  has  performed  his  own 
or  not.  Now  the  law  has  no  preference  for  one  kind  of  contract 
over  another ;  nor  does  it  by  its  own  implication  and  intend- 
ment make  one  rather  than  the  other,  and  still  less  does  it  re- 
quire one  rather  than  the  other.  It  may  indeed  be  safely  said, 
that  this  question  in  each  particular  case  will  be  determined  by 
inferring  with  as  much  certainty  as  the  case  permits,  the  mean- 
ing and  purpose  of  the  parties,  from  a  rational  interpretation  of 
the  whole  contract,  (l) 


Jones  V.  Barcley,  Doug.  690,  Lord  Mans- 
field said  :  "  There  arc  three  kinds  of 
covenants:  1.  Sucli  as  are  called  muii/a/ 
and  indcjiendcnt,  where  either  party  may 
recover  damaffes  from  the  other,  for  the 
injury  he  may  have  received  by  a  breach 
of  the  covenants  in  his  favor,  and  where  it 
is  no  excuse  for  the  defendant  to  allege  a 
breach  of  the  covenants  on  the  part  of  the 
plaintiff.  2.  There  are  covenants  which 
arc  conditions  and  dependent,  in  which  the 
performance  of  one  depends  upon  the 
prior  performance  of  another,  and  there- 
fore, until  this  prior  condition  is  per- 
formed, the  other  party  is  not  liable  to  an 
avium  on  his  covenant.  3.  There  is  also 
a  third  sort  of  covenants,  which  are  mu- 
tual conditions  to  be  performed  at  the  same 
time  ;  and  in  these,  if  one  party  was  ready, 
and  ollcrcd  to  jicrform  his  ])art,  and  the 
other  nc;.'lectc<l  or  refused  to  perform  his, 
lie  who  WHS  ready  and  ollered  has  fnl- 
fdlcd  his  en;;n;,'ement,  and  may  maintain 
an  action  for   the  default  of  the  other; 

[40] 


though  it  is  not  certain  that  either  is 
obliged  to  do  the  first  act."  See  also, 
Mason  v.  Chambers,  4  Litt.  25.3  ;  and  Mr. 
Durnford's  note  to  Acherley  v.  Vernon, 
Willes,  157. 

(/)  In  ancient  times  the  decision  of 
questions  of  this  kind  depended  rather 
upon  nice  and  subtle  constructions  put 
upon  the  language  of  a  contract,  than 
upon  the  evident  sense  and  intention  of 
the  parties,  as  gathered  from  a  rational 
consideration  of  the  whole  instrument, 
and  the  subject-matter  of  tlie  agreement. 
Thus,  in  15  II.  7,  10,  pi.  17,  it  was  ruled 
by  Fineux,  C.  J.,  that  if  one  covenant 
with  me  to  serve  me  for  a  year,  and  I 
covenant  with  him  to  give  hini  .£20,  if  I 
do  not  say  /?>;•  the  cause  aforesaid,  he  shall 
have  an  action  for  the  .£20,  although  ho 
never  serves  me  ;  otherwise  it  is  if  I  say 
that  he  shall  have  .£20  /<«■  the  cause  afore- 
said. So  if  I  covenant  with  a  man  tJiat  I 
will  marry  his  daughter,  and  he  covenants 
with  mo  that  Jic  will  make  an  estate  to  mo 


CII.  I.]  CONSTRUCTION  AND  INTERPRETATION  OF  CONTRACTS.  42-*43 


SECTION  VIII. 


OF  THE  PRESUMPTIONS   OF  LAW. 


There  are  some  general  presumptions  of  law,  which  may  be 
considered  as  affecting  the  construction  of  contracts.     *Thus,  it 


and  his  daughter,  and  the  heirs  of  our  two 
bodies  begotten,  if  I  afterwards  marry 
another  woman,  or  his  daughter  marries 
another  man,  yet  I  shall  have  an  action 
of  covenant  against  him  to  compel  him  to 
make  the  estate  ;  but  if  the  covenant  were 
that  he  would  make  the  estate  to  us  two  for 
the  cause  aforesaid,  in  that  case  he  would 
not  make  the  estate  until  we  were  mar- 
ried. And  such  was  the  opinion  of  the 
whole  court.  But  Lord  Holt,  in  the  great 
case  of  Thorp  v.  Thorp,  12  Mod.  455, 
and  Lord  Chief  Justice  \ViUes,'m  Achcrly 
i^.  Vernon,  Willes,  153,  advanced  more 
rational  ideas  upon  the  subject.  And  in 
Kingston  v.  Preston,  already  cited,  Lord 
Mansfield  declared  that  the  dependence  or 
independence  of  covenants  was  to  be  col- 
lected from  the  evident  sense  and  mean- 
ing of  the  parties,  and  that,  however  trans- 
posed they  might  be  in  the  deed,  their 
precedency  must  depend  on  the  order  of 
time  in  which  the  intent  of  the  transaction 
requires  tlieir  performance.  Since  that 
time  the  principle  thus  enunciated  by 
Lord  Mansfield  has  been  steadily  adhered 
to;  and,  as  a  means  of  carrying  it  out, 
and  applying  it  to  the  focts  of  particular 
cases,  Mr.  Sergeant  Williams,  in  his  elab- 
orate note  to  Pordage  v.  Cole,  1  Wms. 
Saund.  319,  has  given  the  five  following 
rules,  collected  with  great  care  and  accu- 
racy from  the  decided  cases.  1.  "If  a  day 
be  appointed  for  payment  of  money,  or 
part  of  it,  or  for  doing  any  other  act,  and 
the  day  is  to  happen,  or  may  happen,  hfore 
the  thing  which  is  the  consideration  of  the 
money,  or  otiier  act  is  to  be  performed ; 
an  action  may  be  brought  for  the  money, 
or  for  not  doing  such  other  act  before  per- 
formance ;  for  it  appears  that  the  party 
relied  upon  his  remedij,  and  did  not  intend 
to  make  the  performance  9.  condition  pre- 
cedent ;  and  so  it  is  where  no  time  is  fixed 
for  performance  of  that  which  is  the  con- 
sideratioa  of  the  money  or  other  act." 

4  * 


See  Pordage  v.  Cole,  1  Wms.  Saund. 
319;  Thorp  v.  Thorp,  12  Mod.  460,  1 
Salk.  171,  per  Holt,  C.  J.;  Peeters  v. 
Opie,  2  Saund.  350,  per  Hale,  C.  J.; 
Campbell  v.  Jones,  6  T.  R.  570 ;  Mattock 
V.  Kinglake,  10  A.  &  E.  50;  Wilks  v. 
Smith,  10  M.  &  W.  355;  Wood  v.  Gov- 
ernor &  Co.  of  Copper  Miners  in  Eng- 
land, 14  C.  B.  428,  26  Eng.  L.  &  Eq. 
343 ;  Eastern  Counties  Railway  Co.  v. 
Philipson,  16  C.  B.  2,  30  Eng.  L.  &  Eq. 
421  ;  Mayor  of  Norwich  v.  Norfolk  Rail- 
way Co.  4  Ellis  &  B.  397,  30  Eng.  L.  & 
Eq.  120;  Northampton  Gas-Light  Co.  v. 
Parnell,  15  C.  B.  630,  29  Eng.  L.  &  Eq. 
229  ;  Underhill  v.  The  Saratoga  &  W.  R, 
R.  Co.  20  Barb.  455 ;  Edgar  v.  Boies,  11 
S.  &  R.  445 ;  Stevenson  v.  Kleppinger,  5 
Watts,  420;  Lowry  v.  Mehaffy,  10  id. 
387  ;  Goldsborough  v.  Orr,  8  Wheat.  217; 
Robb  V.  Montgomery,  20  Johns.  15.  The 
principle  of  this  rule  has  been  misapplied 
in  various  cases,  as  in  Terry  v.  Duntze,  2 
H.  Bl.  389.  In  that  case  A  covenanted 
to  build  a  house  for  B,  and  finish  it  on  or 
before  a  certain  day,  in  consideration  of  a 
sum  of  money,  whicU  B  covenanted  to 
pay  A  by  instalments  as  the  building  pro- 
ceeded. It  was  held  that  the  finishing  of 
the  house  Avas  not  a  condition  precedent 
to  the  payment  of  the  money;  that  A 
might  maintain  an  action  of  debt  against 
B  for  the  whole  sum,  though  the  building 
was  not  finished  at  the  time  appointed,  on 
the  ground  that  part  of  the  money  was  to 
be  paid  before  the  house  could  be  com- 
pleted. This  case  was  followed  in  Seers 
V.  Fowler,  2  Johns.  272,  and  Havens  v. 
Bush,  id.  387.  But  in  Cunningham  v. 
Morrell,  10  Johns.  203,  Seers  v.  Fowler, 
and  Havens  v.  Bush  were  overruled,  and 
the  authority  of  Terry  v.  Duntze  repudia- 
ted. Cunningham  v.  Morrell  was  fol- 
lowed in  McLure  v.  Rush,  9  Dana,  64, 
and  in  Allen  v.  Sanders,  7  B.  Mon.  593, 
overruling  the  earlier  cases  of  Craddock 

[41] 


44* 


THE  LAW   OF   CONTRACTS. 


[part  II. 


is  a  presumption  of  law  that  parties  to  a  simple  contract  intend- 
ed to  bind  not  only  themselves,  but  their  *personal  represent- 


V.  Aldridge,  2  Bibb,  15,  and  Mason  v. 
Chambers,  4  Litt.  253.     And  see  to  the 
same  effect  Kettle  v.  Harvey,  21  Vt.  301  ; 
Lord  V.  Belknap,  1  Cush.  279  ;  Tompkins 
V.  Elliot,  5  Wend.  496.  —  In  the  case  of 
contracts  for  the  purchase  and  sale  of  real 
estate,  where  the  purchaser  covenants  to 
pay  the  purchase-money  by  instalments, 
ani  the  vendor  covenants  to  convey  by 
deed,  either  on  the  last  day  of  payment, 
or  on  some  day  previous,  the  covenants 
to  pay  the  instalments  falling  due  before 
the  day  appointed  for  conveying  by  deed, 
are  independent  of  the  covenant  to  convey, 
and  an  action  may  be  maintained  for  such 
instalments,  without  showing  any  convey- 
ance or  offer  to  convey ;  but  the  convey- 
ance or  offer  to  convey,  is  a  condition  pre- 
cedent to  the  right  to  insist  upon  the  pay- 
ment of  an  instalment  falling  due  either 
on  or  after  the  day  of  conveyance.     Grant 
V.  Johnson,    1    Seld.  247,   reversing  the 
judgment  of  the  Supreme  Court  in  the 
same  case  in  6  Barb.  337.     In  this  case 
the  plaintiff  agreed  to  sell  to  the  defend- 
ant a  piece  of  land,  and  covenanted  to 
give  possession  of  the  land  on  the  first  of 
November,  1845,  and  to  convey  by  deed 
on  the  first  of  May,  1846.     And  the  de- 
fendant covenanted  to  pay  $950,  as  fol- 
lows, namely  :  $200  on  the  first  of  April, 
1846,  $200 'on  the  first  of  April,  1847, 
$275  on  the  first  of  April,  1848,  and  $275 
on  the  first  of  Ajjril,  1 849.    The  plaintiff 
gave  the  defendant  possession  of  the  prem- 
ises, and  the  defendant  paid  the  first  instal- 
ment according  to  the  terms  of  the  agree- 
ment.   The  [)reseni;  action  was  brought  to 
recover  tiie  second  instalment ;   and  the 
court  held,  that  the  conveyance  by  deed 
was  a  condition  precedent  to  the  payment 
of  any   instalment   after   the   first;    and 
therefore  tlic  ])laintiff  was  not  entitled  to 
recover  without  averring  a  performance  or 
tender  of  [terformance  of  such  condition. 
So  in  Bean  v.  Atwatcr,  4  Conn.  3,  A  and 
B  on  the  Cth  of  August,  1816,  entered  into 
articles  of  agreement,  wiiereby  A,  in  con- 
sideration   of   the    covenants    to    be    per- 
formed and  ])ayments  to  be  nuide  by  B, 
{;runted  and  sold  to  B  certain   tracts  of 
and,  and  covenanted  to  confirm  them  to 
him  by  ileed  in  fee-simple,  on  the  first  of 
June,    1817;    and    B   covenanted   to   pay 
therefor  the  sum  J  4,000  dollars,  of  which 
500  dollars  were  to  be  paid  immediately, 
500  dolhns  on  the  first  of  January,  1817, 

[42] 


500  dollars  on  the  first  of  June,  1817,  500 
dollars  on  the  first  of  January,  1818,  1,000 
dollars  on  the  first  of  January,  1819,  and 
the  residue  on  the  first  of  January,  1820. 
For  the  performance  of  these  stipulations 
the  parties  bound  themselves,  respectively, 
in  the  penalty  of  8,000  dollars.     In  an 
action  brought  by  A  against  B  for  the 
money,  it  was  held,  that  the  covenant  of 
the  defendant,  so  far  as  it  related  to  the 
two   first  instalments,  was   independent, 
and  the  plaintiff  was  entitled  to  recover 
the  sum  due  thereon,  without  averring  or 
proving  performance  of  the  covenant  on 
his  part;  but  that,  so  far  as  it  related  to 
the   instalment  payable   on   the    first   of 
June,   1817,   and  the   subsequent   instal- 
ments, performance  by  the  ]>laintiff  was  a 
condition  precedent  to  his  right  of  recov- 
ery.    And  sec  to  the  same  effect  Leonard 
w.  Bates,  1  Blackf.  172;  Kane  v.  Hood, 
13  Pick.  281.     But  see  Weaver  i;.  Child- 
ress, 3  Stew.  361.  —  2.  "When  a  day  is 
appointed  for  the  payment  of  money,  &c., 
and  the  day  is  to  happen  afte)-  the  thing 
which  is  the  consideration  of  the  money, 
&c.,  is  to  be  performed,  no  action  can  be 
maintained  for  the   money,    &c.,   before 
performance."     Thorp  v.  Thorp,  12  Mod. 
460,   1    Salk.   171;    Bean  v.  Atwater,  4 
Conn.   9;    Dey  v.  Dox,  9  Wend.   129; 
Morris  v.  Silter,  1   Denio,  59  ;  Rider  v. 
Pond,  18  Barb.  179.  —  3.  "  Where  a  cove- 
nant goes  only  to  part  of  the  consideration 
on  both  sides,  and  a  breach  of  such  cove- 
nant may  be  paid  for  in  damages,  it  is  an 
independent  covenant  and  an  action  may 
be  maintained  for  a  breach  of  the  cove- 
nant on  the  part  of  the  defendant,  without 
averring  performance  in  the  declaration." 
The  leading  case  upon  this  point  is  Boone 
V.  Eyre,   1    II.  Bl.  273,  note    (a).     The 
]ilaintiff,  in   that   case,  conveyed   to   the 
defendant  the  equity  of  redemption  of  a 
plantation  in  the   West  Indies,  together 
with  the  stock  of  negroes  n])on  it,  in  con- 
sideration  of  .£500,  aiul   an   annuity  of 
.£160    per    annum    for    life;    and    covc- 
n.inted  tliat  he  had  good  title  to  the  i)lan- 
tation,  was  lawfully  possessed  of  the  ne- 
groes, and  that  the  defendant  should  (piict- 
ly  enjoy.     The  defendant  covemnited  that 
the.  pldintijf  mil  and  tridi/  jterfonuitu)  all 
and  creri/  thin;/  on  his  part  to  be  performed, 
he  the  defendant  would  ])ay  the  annuity. 
The  action  was  brought  for  the  non-pay- 
ment of  the  annuity.    Plea,  that  the  plain- 


en.  I.]     CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.  *45 


atives ;  and  such  parties  may  sue  on  a  *contract,  although  not 
named    therein,  (m)      Hence,    as    we    have    seen,    executors. 


tiff  was  not  at  the  time  of  making  the 
deed  legally  possessed  of  the  negroes,  and 
so  had  not  a  good  title  to  convey.  Gen- 
eral demurrer  to  the  pica.  Lord  Mansjield  : 
"  The  distinction  is  very  clear,  where  mu- 
tual covenants  go  to  the  whole  of  the  con- 
sideration on  both  sides,  they  arc  mutual 
conditions,  tlie  one  precedent  to  the  other. 
But  where  they  go  only  to  a  part,  where 
a  breach  may  i>c  paid  for  in  damages, 
there  the  defendant  has  a  remedy  on  his 
covenant,  and  shall  not  plead  it  as  a  con- 
dition precedent.  If  this  plea  be  allowed, 
any  one  negro  not  being  the  property 
of  the  plaintiff",  would  l)ar  the  action." 
Upon  this  case  Sergeant  Williams  remarks 
as  follows  :  "  The  wlwla  consideration  of 
the  covenant  on  the  part  of  B  the  pur- 
chaser to  pay  the  money,  was  the  convey- 
ance by  A  the  seller  to  him  of  the  equitij 
of  redemption  of  the  plantation,  and  also 
the  stock  of  negroes  upon  it.  The  excuse 
for  non-payment  of  the  money  was,  that 
A  had  broke  his  covenant  as  to  part  of 
the  consideration,  namely  the  stock  of 
negroes.  But  as  it  ajipeared  that  A  had 
conveyed  the  equity  of  redemption  to  B, 
and  so  had  in  part  executed  his  covenant, 
it  would  be  unreasonable  that  B  should 
keep  the  plantation,  and  yet  refuse  pay- 
ment, because  A  had  not  a  good  title  to 
the  negroes.  Per  Ashhurst,  J.,  6  T.  11.  573. 
Besides,  the  damages  sustained  by  the 
parties  would  be  unequal,  if  A's  covenant 
were  held  to  be  a  condition  precedent. 
Duke  of  St.  Albans  v.  Shore,  1  H.  Bl. 
279.  For  A  on  the  one  side  would  lose 
the  consideration  money  of  the  sale,  but 
B's  damage  on  the  other  might  consist 
perhaps  in  the  loss  only  of  a  few  negroes. 
So  where  it  was  agreed  between  C  and  D 
that  in  consideration  of  £.500,  C  should 
teach  D  the  art  of  bleaching  materials  for 
making  paper,  and  permit  him,  during  the 
continuance  of  a  patent  which  C  had  ob- 
tained for  that  purpose,  to  bleach  such 
materials  according  to  the  specification ; 
and  C  in  consideration  of  the  sum  of  £250 
paid,  and  of  the  further  sum  of  £250  to 
be  paid  by  D  to  him,  covenanted  that  he 
would  with  all  possible  expedition  teach 
D  the  method  of  bleaching  such  materi- 
als, and  D  covenanted  tliat  he  would,  on 
or  before  the  24lh  of  February,  1794,  or 

(m)  Siboni   v.   Kirkman,   1    M.  &  W. 
418,  423  ;  Quick  v.  Ludborrow,  3  Bulst. 


sooner,  in  case  C  should  before  that  time 
have  taught  him  the  bleaching  of   such 
materials,  pay  to   C  the  further  sum  of 
£250.     In  covenant  by  C  against  D,  the 
breach  assigned  was  the  non-payment  of 
the  £200.   Demurrer,  that  it  was  not  aver- 
red that  C  had  taught  D  the  method  of 
bleaching  such  materials  ;  but  it  was  held 
by  the  court,  that  the  ivhole  consideration 
of  the  agreement  being  that  C  should  per- 
mit  D  to  bleach  materials,  as  well  as  teach 
him  the  metliod  of  doing  it ;  the  covenant 
by  C  to  teach  formed  but  part  of  the  con- 
sideration, for  a  breach  of  which  D  might 
recover  a  recompense  in  damages.     And 
C  having  in  part  executed  his  agreement, 
by  transferring  to  D  a  right  to  exercise 
the  patent,  he  ought  not  to  keep  that  right 
without  paying  the  remainder  of  the  con- 
sideration because  he  may  have  sustained 
some  damage  by  D's  not  having  instruct- 
ed him  ;  and  the  demurrer  was  overruled. 
Campbell  v.  Jones,  6  T.  II.  570.     Hence 
it  appears  that  the  reason  of  the  decision 
in  these  and  other  similar  cases,  besides 
the  inequality  of  the  damages,  seems  to 
be,  that  where  a  person  has  received  a 
part  of  the  consideration  for  which  he  en- 
tered into  the  agreement,  it  would  be  un- 
just that  because  he  has  not  had  the  whole, 
he  should  therefore  be  permitted  to  enjoy 
that  part  without  either  paying  or  doing 
any  thing  for  it.  Therefore  the  law  obliges 
him  to  perform  the  agreement  on  his  part, 
and  leaves  him  to  his  remedy  to  recover 
any  damage  he  may  have  sustained  in  not 
having  received  the  whole  consideration. 
And  hence  too,  it  seems,  it  must  appear 
upon  the  record  that  the  consideration  was 
executed  in  part,  as  in  Boone  v.  Eyre,  above 
mentioned,  the  action  was  on  a  deed,  where- 
by the  plaintiif  had  conveyed  to  the  de- 
fendant the  equity  of  redemption  of  the 
plantation,  for  the  defendant  did  not  deny 
the   plaintiff's  title  to  convey  it ;    so  in 
Campbell  v.  Jones,  the  plaintiff  had  trans- 
ferred to  the  defendant  a  right  to  exercise 
the  patent.      Therefore  if  an  action  be 
brought  on  a  covenant  or  agreement  con- 
tained in  articles  of  agreement,  or  other 
executory  contract  where  the  whole  is  fu- 
ture, it  seems  necessary  to  aver  perform- 
ance in  tlie  declaration  of  the  whole,  or  at 
least  of  part  of  that  which  the  plaintiff  has 

30  ;  Marshall  v.  Broadhurst,  1  Cromp.  & 
J,  403. 

[43] 


45- 


TIIE   LAW   OF   CONTKACTS. 


[part  II. 


though  not  named  in  a  contract,  are  liable,  so  far  as  they  have 
assets,  for  the  breach  of  a  contract  which  was  broken  in  the 


covenanted  to  do ;  or  at  least  it  must  be 
admitted  by  die  plea  tbat  lie  has  performed 
it.  As  where  A,  by  articles  of  agreement, 
in  consideration  of  a  sum  of  money  to  be 
paid  to  him  by  B  on  a  certain  day,  cove- 
nants to  convey  to  B  on  the  same  day  a 
house,  together  with  the  fixtures  and  fur- 
niture therein,  and  that  he  was  lawfully 
seised  of  the  house,  and  possessed  of  the  fix- 
tures and  furniture.  In  an  action  against  B 
for  the  money,  A  must  aver  that  he  con- 
veyed either  the  wiiole  of  the  premises,  or 
at  least  the  house,  to  B,  or  it  must  be  ad- 
mitted by  B,  in  his  plea  that  A  did  con- 
vey the  house,  but  was  not  lawfully  pos- 
sessed of  the  furniture  or  fixtures."  For 
further  illustration  of  this  principle,  see 
Fothergill  r.  AValton,  2  J.  B.  Moore,  630; 
Stavcrs  V.  Curling,  3  Bing.  N.  C.  355; 
Franklin  i'.  Millei%  4  A.  &  E.  599;  Fish- 
mongers' Co.  I'.  Robertson,  5  Man.  &  G. 
131,  198;  Storer  v.  Gordon,  3  M.  &  S. 
308  ;  Ritchie  v.  Atkinson,  10  East,  295  ; 
Havelock  v.  Geddes,  id.  555 ;  Jonassohn  v. 
Great  Northern  Railway  Co.  10  Exch.  434, 
28  Eng.  L.  &  Eq.  481  ;  Gould  v.  Webb, 
4  Ellis  &  B.  933,  30  Eng.  L.  &  Eq.  331  ; 
Mill  Dam  Foundery  v.  Hovey,  21  Pick. 
417;  Tileston  r.  Newell,  13  Mass.  406; 
Bennet  v.  Pixley,  7  Johns.  249 ;  Ober- 
mycr  v.  Nichols,  6  Binn.  159  ;  Morrison  v. 
Galloway,  2  Uuir'is  &.  J.  461 ;  Todd  v. 
Summers,  2  Gratt.  167  ;  Lewis  v.  Weldon, 
3  Rand.  71  ;  McCullough  v.  Cox,  6  Barb. 
386  ;  Payne  v.  Bettisvvorth,  2  A.  K. 
Marsh.  427  ;  Keenan  t*.  Brown,  21  Vt. 
86  ;  Tompkins  v.  Elliot,  5  Wend.  496  ; 
Grant  v.  Johnson,  5  Barb.  IGl,  6  id.  337, 
1  Seld.  247  ;  IVppcr  v.  Ilaight,  20  Barb. 
429.  "  If,"  savs  Shaw,  C.  J.,  in  Knight 
r.  The  Ncfr  England  Worsted  Co.  2 
Cu-;h.  286,  "a  \):\ny  promise  to  build  a 
liouse  u[ion  the  land  of  anotlier,  and  to 
dig  a  well  on  the  premises,  and  to  place  a 
pump  in  it ;  and  the  owner  of  the  land 
covenants  seasonably  to  supply  all  mate- 
rials and  furnisii  a  pump  ;  it  is  very  clear 
that  the  siipidation  to  furnish  materials  is 
depenilent,  and  ronstitutes  a  condition, 
because  the  builder  cannot  perforin  on 
liis  .jiart  unlil  lie  has  the  materials.  So 
to  put  a  |iiimp  into  the  well.  But  the 
Ktipulation  to  dig  a  well  is  not  conditional, 
because  it  foes  lo  a  small  i)a»t  only  of  the 
consideration,  and  does  not  necessarily  de- 
pent!  on  a  [irior  performance,  on  llie  ])art 
of  the  owner,  and  because  a  failure  can  bo 
[4.1] 


compensated  in  damages,  and  the  remedy 
of  the  owner  is  by  action  on  the  contract." 
—  4.  "But  where  ^he  mutual  covenants 
go  to  the  ivJwIe  consideration  on  both  sides, 
they  are  mutual  conditions,  and  perform- 
ance must  be  averred."  Duke  of  St.  Al- 
bans V.  Shore,  1  H.  Bl.  270;  Graves  v. 
Legg,  9  Exch.  709,  25  Eng.  L.  &  Eq. 
552  ;  Grey  v.  Friar,  4  Clark  &  F.  565,  26 
Eng.  L.  &  Eq.  27  ;  Dakin  v.  Williams,  1 1 
Wend.  67. —  5.  "  Where  two  acts  are  to 
be  done  at  the  same  time,  as  where  A  cov- 
enants to  convey  an  estate  to  B  on  such 
a  day,  and  in  consideration  thereof  B 
covenants  to  pay  A  a  sum  of  money  on 
the  same  (kti/,  neither  can  maintain  an  ac- 
tion without  showing  performance  of,  or 
an  offer  to  perform  his  part,  though  it  is 
not  certain  which  of  them  is  obliged  to  do 
the  first  act ;  and  this  particularly  applies 
to  all  cases  of  sale."  See  the  numerous 
cases  cited  by  Serjeant  Williams;  and 
also  Campbell  v.  Gittings,  19  Ohio,  347  ; 
Williams  v.  Healy,  3  Denio,  363;  Gaz- 
ley  V.  Price,  16  Johns.  267;  Dunham  v. 
Pettee,  4  Seld.  508;  Lester  v.  Jewett, 
1  Kern.  453.  —  Where  a  party  agreed  on 
the  payment  by  another  of  certain  sums  of 
money  to  a  third  person,  to  assign  certain 
certificates  of  sale  of  land,  and  it  was 
held  that  the  covenants  were  independent, 
and  that  in  a  suit  by  the  party  bound  to 
assign,  a  general  averment  of  i-eadiness  on 
his  part  to  perform  was  suflicient.  Slo- 
cum  V.  Dcspard,  8  Wend.  615.  See  Nor- 
thrup  I'.  Northrup,  6  Cowen,  296  ;  Cham- 
pion V.  White,  5  Cowen,  509  ;  Robb  v. 
Montgomery,  20  Johns.  15.  But  see  Par- 
ker V.  Parmele,  20  Johns.  130  ;  Adams  v. 
Williams,  2  Watts  &  S.  227  ;  Ilalloway  v. 
Davis,  Wright,  129.  Justice  would  seem 
to  require  that  such  stipulations  should  be 
considered  as  dependent.  Leonard  v. 
Bates,  1  Blackf  172,  note;  per  Shaw,  C 
J.,  in  Kane  r.  Hood,  13  Pick.  281.— rj) 
It  may  also  be  laid  down  as  a  rule,  that 
stipulations  or  promises  may  be  dependent 
from  the  nature  of  the  acts  to  be  perform- 
ed, and  the  order  in  which  they  must  nec- 
essarily ])recede  and  follow  each  other. 
"  When  the  act  of  one  party  must  neces- 
sarily prceede  any  act  of  the  other,  as 
wliere  one  stii)ulatcs  to  mamifacture  an 
article  from  materials  to  be  furnished  by 
the  other,  and  the  other  stipulates  to  fur- 
nish the  materials,  the  act  of  furnishing 
the  materials  necessarily  precedes  the  act 


en.  I.]     CONSTRUCTION  AND   INTERPRETATION   OF   CONTRACTS.  *46 


lifetime  of  their  testator.  And  if  tlie  contract  was  not  broken 
in  his  lifetime,  they  must  not  break  it,  but  will  be  held  to  its 
performance,  unless  this  presumption  is  overcome  by  the  nature 
of  the  contract ;  as  where  the  thing  to  be  done  required  the  per- 
sonal skill  of  the  testator  himself,  (n)  So,  too,  if  several  per- 
sons stipulate  for  the  performance  of  any  act,  without  words  of 
severalty,  the  presumption  of  law  is  here  that  they  intended  to 
bind  themselves  jointly,  (o)  But  this  presumption  also  might 
be  rebutted  by  the  nature  of  the  work  to  be  doi^e,  if  it  were 
certain  that  separate  things  were  to  be  done  by  separate  parties, 
who  could  not  join  in  the  work,  (p) 

It  is  also  a  legal  presumption  that  every  grant  carries  with  it 
whatever  is  essential  to  the  use  and  enjoyment  of  the  *grant.  (q) 
But  this  rule  applies  perhaps  more  strongly  to  grants  of  real 
estate  than  to  transfers  of  personal  property.  Thus,  if  land  be 
granted  to  another,  a  right  of  way  to  the  land  will  go  with  the 
grant,  (r)  But  it  has  been  held,  where  goods  were  sold  on  exe- 
cution, and  left  on  the  land  of  the  judgment  debtor,  that  the 

of  manufacturing,  and  will  constitute 
a  condition  precedent,  wkhout  express 
words."  Per  Shaw,  C.  J.,  in  Mill  Dam 
Foundery  v.  Hovey,  21  Pick.  439  ;  Thom- 
as V.  Cadwallader,  Willes,  496  ;  Knight  r. 
New  England  Worsted  Co.  2  Cush.  286. 
In  Combe  (;.  Greene,  11  M.  &  W.  480,  the 
plaintiff  demised  a  dwelling-house  and 
premises  to  the  defendant,  and  the  defend- 
ant covenanted  that  he  would  expend 
£100  in  improvements  and  additions  to 
the  dwelling-house,  under  the  direction 
of  some  competent  surveyor  to  be  ap- 
pointed by  the  plaintiff.  Held,  that  the 
appointment  of  a  surveyor  was  a  con- 
dition precedent  to  the  defendant's  lia- 
bility to  expend  the  £100.  But  see  Mac- 
intosh V.  The  M.  C.  Railway  Co.  14  M, 
&  W.  548. 

(n)  See  ante,  vol.  1,  pp.  107,  111. 

(o)  See  ante,  vol.  1,  p.  11,  n.  {h). 

(p)  See  the  case  of  Slater  v.  Magraw, 
12  Gill  &  J.  26.5,  cited  ante,  vol.  1,  p.  H, 
n.  (h)  ;  De  Ridder  v.  Schermerhorn,  10 
Barb.  6.38  ;  Brewsters  v.  Silence,  4  Seld. 
207.  See  also,  Erskine's  Institute,  B.  3, 
tit.  3,  sec.  22. 

(q)  Liford's  case,  11  Rep.  .52  ;  Co.  Lit. 
56  a;  Pomfret  v.  Ricroft,  1  Wms.  Saund. 
323,  n.  (6).  Where  an  act  of  parliament 
empowered  a  railway  company  to  cross 
the  line  of  another  company,  by  means  of 


a  bridge,  it  was  held  that  the  first-men- 
tioned company  had  consequently  the  right 
of  placing  temporary  scaffolding  on  the 
land  belonging  to  the  latter,  if  the  so  plac- 
ing it  were  necessary  for  the  purpose  of 
constructing  the  bridge  ;  for  tibi  aliquid 
conceditur,  conceditnr  et  id  sine  quo  res  ipsa 
esse  non  potest.  Clarence  Railway  Co.  v. 
Great  North  of  England  Railway  Co.  13 
M.  &  W.  706.  See  also,  Hinchliffe  v. 
Earl  of  Kinnoul,  5  Bing.  N.  C.  1  ;  Dand 
I'.  Kinscote,  6  M.  &  W.  174;  Broom's 
Legal  Maxims,  362,  2d  ed. 

()•)  Pomfret  v.  Ricroft,  1  Wms.  Saund. 
323,  n.  (6);  Howton  v.  Frearson,  8  T. 
R.  50;  Collins  r.  Prentice,  15  Conn.  39. 
It  must  be  strictly  a  way  of  necessity, 
and  not  of  mere  convenience.  Nichols 
V.  Luce,  24  Pick.  102  ;  Allen  v.  Kincaid, 
2  Fairf.  155;  Stuyvesant  v.  Woodruff,  1 
N.  J.  1.34;  Trask  v.  Patterson,  29  Me. 
499.  The  right  of  way  is  suspended  or 
destroyed  whenever  the  necessity  ceases. 
Pierce  v.  Selleck,  18  Conn.  321  ;  Holmes 
V.  Goring,  2  Bing.  76.  Where  a  parcel 
of  land  is  sold  for  a  specific  purpose,  and 
conveyed  without  reservation,  the  law  will 
not  imply  in  fovor  of  the  vendor  a  right 
of  way  of  necessity  over  or  through  such 
land,  inconsistent  with  the  object  of  the 
purchase.  Seeley  v.  Bishop,  19  Conn. 
128. 

[45] 


47*  THE   LAW   OF   CONTRACTS.  [PART  II. 

purchaser  acquired  no  absolute  right  to  go  on  the  land  of  the 
seller  for  the  purpose  of  taking  the  goods,  (s)  But  it  has  also 
been  held  that  where  goods  of  the  plaintiff  were  sold  on  distress 
for  rent,  which  were  on  plaintiff's  land,  and  one  of  the  condi- 
tions to  which  he  was  a  party  permitted  defendant  to  enter 
from  time  to  time  and  take  the  goods  away,  this  was  a  license 
by  the  plaintiff,  and  was  irrevocable,  because  coupled  with  an 
interest,  (t)  It  may  perhaps  be  inferred,  from  the  cases  and 
dicta  on  this, subject,  that  as  real  rights  go  with  a  grant  of  real 
property  where  they  are  essential  to  its  proper  use,  so  such  per- 
sonal rights,  or  even  personal  chattels,  would  go  with  the  trans- 
fer of  personal  property,  as  were  absolutely  necessary  for  the 
use  and  enjoyment  of  the  things  sold ;  for  it  might  well  be  pre- 
sumed to  have  been  the  intention  and  understanding  of  the 
parties  that  they  should  pass  together,  {u)  And  we  *should  be 
even  inclined  to  say,  that  if  one  sold  goods  on  his  land,  espec- 
ially under  seal,  and  there  was  nothing  in  the  contract  or  the 
circumstances  to  show  that  the  buyer  was  to  come  into  posses- 
sion otherwise  than  by  entering  upon  the  land  and  taking  them, 
it  would  be  presumed  that  this  was  intendied,  and  that  the  sale 
operated  as  a  license  to  do  this  in  a  reasonable  time  and  a  rea- 
sonable way,  which  the  seller  could  not  revoke,  (v) 

Where  any  thing  is  to  be  done,  as  goods  to  be  delivered,  or 
the  like,  and  no  time  is  specified  in  the  contract,  it  is  then  a 
presumption  of  law  that  the  parties  intended  and  agreed  that 
the  thing  should  be  done  in  a  reasonable  time,  (iv)     But  what 

(s)  Williams  ?'.  Morris,  8  M.  &  TV.  488.  in  its  full   extent,  unless  the  grant  was 

{t)  Wooil  V.  Miinlcy,  11  A.  &  E.  34.  made  by  deed.     It  would  seem  that  such 

(u)  If  one  grant  trees  growing  in  his  a  license,  in  order  to  be  irrevocable,  must 

wood,   the  grantee   may   enter    and    cut  amount  to  a  grant  of  an  interest  in  land, 

down    tlie   trees   and   carry   them   away,  which  can  only  be  by  deed.     "  It  certainly 

Renigcr  ».  Fogossa,  I'luwd.  10  ;  Liford's  strikes  one  as  a  strong  proposition  to  say 

case,  1 1   Kcp.  52  ;  Slicj).  Touch.  89.     By  that   such   a   license   can  be  irrevocable, 

a  grant  of  the  (ish  in  a  pond,  a  right  of  unless  it  amount  to  an  interest  in  land, 

coming  upon   tlie  banks  and  fishing  for  which   must    therefore    be   conveyed    by 

them    is   granted.     Renigcr   v.   Fogossa,  deed."     Per  Parke,   B.,   in   Williams   v. 

riowd.     10;    Shep.    Touch.     8'J ;    Lord  Morris,  8  M.  &  \V.  488.     See  also,  Galo 

Darcy  r.  Askwith,  Hob.  2.'54.     A  rector  and  Whatley  on  Easements,  p.  18,  e^sr^. 

may  enter  into  a  dose  to  carry  away  the  (»>)  Cocker  v.  The  Franklin  II.  &  F. 

tithes  over  tlie  usual  way,  as  incident  to  Man.  Co.  .3  Sumner,  .WO  ;  Ellis  v.  Thomp- 

liis  right  to  the  titlics.     Cobb  v.  Selby,  5  son,  3  M.  &  W.  44.') ;  Greaves  v.  Ashlin, 

B.  &  1'.  400.  3   Camp.  420;  Sawyer   v.  Ilammatt,  15 

(r)    I'crliaps,    however,    it    would     be  Me.  40;   Howe  v.  Iluntington,  id.  350; 

found  dilli'ult  to  Kui)i)orl  this  proposition  Atkinson  v.  Brown,  20  Mc.  07.    And  see 

[4G] 


CH.  I.]    CONSTRUCTION   AND    INTERPRETATION   OP   CONTRACTS.  *48-*49 

is  a  reasonable  time  is  a  question  of  law  for  the  court,  (x)  They 
will  consider  all  the  facts  and  circumstances  of  the  case  in  de- 
termining this,  and  if  any  facts  bearing  upon  this  point  are  in 
question,  it  will  be  the  province  of  the  jury  to  settle  those  facts, 
although  the  influence  of  the  facts  when  they  are  ascertained, 
upon  the  question  of  reasonableness,  remains  to  be  determined 
by  the  court.  In  general,  it  may  be  said  that  questions  of  rea- 
sonableness, other  than  that  of  time,  are  questions  of  fact  for 
the  jury. 


♦SECTION  IX. 


OF   THE   EFFECT   OF   CUSTOM   OR   USAGE. 


A  custom,  which  may  be  regarded  as  appropriate  to  the  con- 
tract and  comprehended  by  it,  has  often  very  great  influence  in 
the  construction  of  its  language,  (y)     The  general  *reason  of 


Atwood  V.  Emery,  cited  ante,  p.  10,  note 
(la). 

(z)  Attwood  V.  Clark,  2  Greeul.  249  ; 
Kingslcy  v.  Wallace,  14  Me.  57  ;  Murry 
V.  Smith,  1  Hawkes,  41.  For  certain  ex- 
ceptions to  this  rule,  see  Howe  v.  Hunt- 
ington, 15  Me.  350.  Sec  also.  Hill  v.  Ho- 
bart,  16  Me.  164. 

(y)  That  evidence  may  be  given  of  a 
custom  or  usage  of  trade  to  aid  in  the 
construction  of  a  contract,  either  by  fixing 
the  meaning  of  woi'ds  where  doubtful,  or 
by  giving  them  a  meaning  wholly  distinct 
from  their  ordinary  and  popular  sense,  is 
a  well-established  doctrine.  Thus,  where 
it  was  represented  to  underwriters  on  a 
policy  of  insurance  that  the  ship  insured 
was  to  sail  "in  the  month  of  October," 
evidence  was  admitted  to  show  that  the 
expression  "  in  the  month  of  October," 
■was  well  understood  amongst  men  used  to 
commercial  affairs  to  signify  some  time 
between  the  25th  of  that  month  and  the 
1st  or  2d  of  the  succeeding  month.  Chau- 
rand  v.  Angerstein,  Peake,  N.  P.  43.  So 
also,  custom  or  usage  may  be  admitted 
to  show  that  a  "  whaling  voyage "  in- 
cludes the  taking  of  sea-elephants,  on  the 
beaches  of  islands  and  coasts,  as  well  as 
whales.  Child  v.  Sun  Mutual  Ins.  Co.  3 
Sandf.  26.  So  also  as  to  the  meanmg  of 
"cotton  ia  bales."     Taylor  v.  Briggs,  2 


C.  &  P.  525,  and  Outwater  v.  Nelson,  20 
Barb.  29,  as  to  the  phrase  "  on  freight." 
Evidence  may  also  be  admitted  tliat  the 
word  "days"  in  a  bill  of  lading  means 
working  days,  and  not  running  days. 
Cochran  v.  Retberg,  3  Esp.  121.  Evi- 
dence may  also  be  given  of  the  mercantile 
meaning  of  the  terms  "good"  and  "fine," 
as  applied  to  barley.  Hutchison  v.  Bow- 
ker,  5  M.  &  "W.  535  ;  Whitmore  v.  Coats, 
14  Mo.  9.  So  also  as  to  the  meaning  of 
the  word  "privilege,"  in  an  agreement 
with  the  master  of  a  ship.  Birch  v.  De- 
peyster,  4  Camp.  385.  In  Evans  v.  Pratt, 
3  Man.  &  G.  759,  evidence  was  admitted 
to  show  that  "across  a  country,"  in  a 
memorandum  respecting  a  race,  means 
that  the  riders  are  to  go  over  all  obstruc- 
tions, and  are  not  at  liberty  to  use  a  gate. 
See  Sleight  v.  Hartshorne,  2  Johns.  531, 
as  to  the  meaning  of  "  sea-letter."  Astor 
V.  Union  Ins.  Co.  7  Cowen,  202,  as  to  the 
meaning  of  "  furs."  See  also,  Haynes  v. 
HoUiday,  7  Bing.  587 ;  Read  v.  Gran- 
berry,  8  Ired.  109  ;  Barton  v.  McKelway, 
2  N.  J.  174;  Robertson  v.  Jackson,  2 
C.  B.  412  ;  Moore  v.  Campbell,  10  Exch. 
323,  26  Eng.  L.  &  Eq.  522  ;  Vail  v.  Rice, 
1  Seld.  155.  So  in  the  case  of  a  contract 
to  sell  "mess  pork  of  Scott  &  Co.,"  evi- 
dence was  admitted  to  show  that  this  lan- 
guage in  the  market  meant  pork  manufac- 

[47] 


50* 


THE  LAW   OF   CONTRACTS. 


[part  II. 


this  is  obvious  enough.  If  parties  enter  into  a  contract,  by 
virtue  whereof  something  is  to  be  done  by  one  or  both,  and  this 
thing  is  often  done  in  their  neighborhood,  or  by  persons  of  like 
occupation  with  themselves,  and  is  always  done  in  a  certain 
way,  it  must  be  supposed  that  they  intended  it  should  be  done 
in  that  way.  The  reason  for  this  supposition  is  nearly  the  same 
as  that  for  supposing  that  the  common  language  which  they 
use  is  to  be  taken  in  its  common  meaning.  And  the  rule  that 
the  meaning  and  intent  of  the  parties  govern,  wherever  this  is 
possible,  comes  in  and  operates.  Hence  an  established  custom 
may  add  to  a  contract  stipulations  not  contained  in  it ;  on  the 
ground  that  the  parties  may  be  supposed  to  have  had  these 
stipulations  in  their  minds  as  a  part  of  their  agreement,  when 
they  put  upon  paper  or  expressed  in  words  the  other  part  of 
it.  [z)      So   *custom    may   control   and   vary   the   meaning   of 


hired  hj/  Scott  &  Co.  Powell  v.  Horton, 
2  Bing.  N.  C.  668.  Where  a  contract 
was  worded  thus  :  "  Sold  18  pockets  Kent 
hops,  at  100s."  it  was  permitted  to  be 
shown  that  by  the  usage  of  the  hop  trade, 
a  contract  so  worded  was  understood  to 
mean  100s.  per  cwt.  and  not  per  pocket. 
Spicer  v.  Cooper,  1  Q.  B.  424.  See  also. 
Bowman  v.  Horsey,  2  INIoody  &  II.  85. 
So  evidence  lias  been  admitted  to  show  that 
"  rice  "  is  not  considered  as  corn  within 
the  memorandum  of  a  policy  of  insurance. 
Scott  V.  Bourdillion,  5  B.  &  P.  213.  Sec 
also,  Chiyton  v.  Gregson,  5  A.  &  E.  302, 
as  to  the  meaning  of  the  word  "  level " 
among  minors.  Also  Cuthbert  v.  Gum- 
ming, 11  Excli.  405,  30  Eng.  L.  &  Eq. 
604,  as  to  the  phrase  "  full  and  complete 
cargo."  And  see  Grant  v.  Maddox,  15 
M.  &  W.  737  ;  Brown  v.  Byrne,  3  Ellis 
&  B.  703,  26  Eng.  L.  &  Eq.  247.  So  as 
to  tlic  meaning  of  "  in  regular  turns  of 
loailing,"  Liedemann  v.  Schultz,  14  C. 
B.  38,  24  Eng.  L.  &  Eci.  305.  (Jwing  to 
the  loose  and  inaccurate  manner  in  which 
policies  of  insurance  arc  drawn,  a  class  of 
ca.scs  has  sprung  up,  almost  peculiar  to 
this  instrument,  in  whicli  evidence  is  ad- 
mitted of  usagi's  Itetwcen  the  underwriters 
ami  tlie  as.-ureil,  aHixing  to  certain  words 
and  cbiuses  a  known  and  dclinite  mean- 
ing. Tims,  in  Brougli  r.  Whitmorc,  4  T. 
li.  200,  on  evidence  of  tlic  practice  of 
merchants  and  underwriters,  it  was  hdil, 
that  jiroviaiom,  sent  out  in  a  ship  for  the 

[48] 


use  of  the  crew,  were  protected  by  a  policy 
on  the  ship  and  furniture.  Lorcl  Kenyan, 
in  giving  judgment  said :  "  I  remember  it 
was  said  many  years  ago,  that  if  Lombard 
street  had  not  given  a  construction  to 
policies  of  insurance,  a  declaration  on  a 
policy  would  have  been  bad  on  general 
demurrer;  but  that  the  uniform  practice 
of  merchants  and  underwriters  had  ren- 
dered them  intelligible."  In  Coit  v.  Com- 
mercial Ins.  Co.  7  Johns.  385,  evidence 
was  received  of  a  usage  among  under- 
writers and  merchants  restricting  the  term 
"  roots  "  in  the  memorandum  of  a  policy 
to  such  articles  as  Avere  in  their  nature 
perisliablc,  and  excluding  sarsaparilla. 
See  also.  Allegro  r.  Maryland  Ins.  Co.  2 
Gill  &  J.  136;  Allegre  v.  Maryland  Ins. 
Co.  6  Harris  &  J.  408  ;  Macy  v.  Whaling 
Ins.  Co.  9  Met.  354  ;  Eyre  ?'.  Marine  Ins. 
Co.  5  Watts  &  S.  116  ;  1  Duer  on  Ins. 
185;  Humphrey  v.  Dale,  7  Ellis  &  B. 
265;  Cntiibcrt  i\  Gumming,  11  Exch. 
405,  30  Eng.  L.  &  Eq.  604. 

(z)  "It  has  long  been  settled,"  says 
Parke,  B.,  in  Hutton  v.  Warren,  1  M. 
&  W.  475,  "that  in  commercial  trans- 
actions, extrinsic  evidence  of  custom  and 
usage  is  admissililo  to  annex  incidents 
to  written  contracts  in  matters  witli  re- 
spect to  wliicii  they  arc  silent.  Tlie  same 
rule  has  also  been  ajiplicd  to  contracts 
in  other  transactions  of  life,  in  which 
known  usages  Iiave  been  established  and 
prevailed,  and  this  has  been  done  upon 


en.  I.]     CONSTRUCTION   AND   INTERPRETATION    OF   CONTRACTS.  *51 


words ;  (a)  giving  even  to  such  words  as  those  of  number   a 
sense  entirely  *different  from  that  which  they  commonly  bear, 


the  principle  of  presumption  that  in  such 
transactions  the  parties  did  not  mean  to 
cxjjress  in  writing  the  whole  of  the  con- 
tract by  which  they  intended  to  be  bound, 
but  a  contract  with  reference  to  those 
known  usages."  Thus,  a  usage  among 
printers  and  booksellers,  that  a  printer, 
contracting  to  print  a  certain  number  of 
copies  of  a  work,  is  not  at  liberty  to  print 
from  the  same  types  while  standing  an 
ext7-a  number  for  his  own  disposal,  is  ad- 
missible. Williams  i'.  Oilman,  3  Greenl. 
276.  So,  where  bought  and  sold  notes 
were  given  on  a  sale  of  tobacco,  in  an  ac- 
tion for  the  price  of  the  tobacco,  it  was 
permitted  to  be  shown,  that  by  the  estab- 
lished usage  of  the  tobacco  trade,  all  sales 
were  by  sample,  though  not  so  expressed 
in  the  bought  and  sold  notes.  Syers  v. 
Jonas,  2  Exch.  111.  See  also,  Hodgson 
V.  Davies,  2  Camp.  530 ;  The  Queen  v. 
Inhabitants  of  Stoke-upon-Trent,  5  Q.  B. 
303  ;  Conner  v.  Eobinson,  2  Hill  S.  C. 
354  ;  Whittaker  v.  Mason,  2  Bing.  N.  C. 
359.  — Where  goods  are  consigned  to  an 
agent  for  sale,  with  general  instructions  to 
remit  the  proceeds,  it  is  a  sufficient  compli- 
ance with  such  instructions  if  the  agent 
remit  by  bill  of  exchange,  without  indors- 
ing or  guaranteeing  it,  provided  such  is 
the  usage  at  the  agent's  place  of  business. 
Potter  V.  Morland,  3  Cush.  384.  See 
Putnam  v.  Tillotson,  13  Met.  517.  But 
see  Gross  r.  Criss,  3  Gratt.  262.  —  The 
influence  of  local  customs  is  particularly 
manifest  in  the  cases  that  arise  between 
landlord  and  tenant.  "  The  common  law 
docs  so  little  to  prescribe  the  relative 
duties  of  landlord  and  tenant,  since  it 
leaves  the  latter  at  lii)ertj'  to  pursue  any 
course  of  management  he  pleases,  provid- 
ed he  is  not  guilty  of  waste,  that  it  is  by 
no  means  surprising  that  the  courts  should 
have  been  favorably  inclined  to  the  intro- 
duction of  those  regulations  in  the  mode 
of  cultivation,  wliich  custom  and  uage 
have  established  in  each  district  to  be  the 
most  beneficial  to  all  parties."  Per  Parke, 
B.,  in  Hutton  v.  Warren,  1  M.  &  W.  476  ; 
Legh  V.  Hewitt,  4  East,  154.     In  Wig- 

(a)  Thus,  in  an  action  on  a  policy  of 
insurance  on  a  voyage  "  to  any  port  in  the 
Baltic,"  evidence  was  admitted  to  prove 
that  in  mercantile  contracts  the  Gulf  of 
Finland  is  considered  as  within  the  Baltic. 
Uhde  V.  Walters,  3  Camp.  16.     So  also 

VOL.  II.  5 


glesworth  v.  Dallison,  Doug.  201,  the 
tenant  was  allowed  an  away-going  crop, 
although  there  was  a  formal  lease  under 
seal.  "  The  custom,"  says  Lord  Mans- 
field, "  does  not  alter  or  contradict  the 
agreement  in  the  lease,  it  only  superadds 
a  right  which  is  consequential  to  the  tak- 
ing, as  a  heriot  may  be  due  by  custom, 
although  not  mentioned  in  the  grant  or 
lease."  So  also  a  custom  to  remove  fix- 
tures may  be  incorporated  into  a  lease. 
Van  Ness  v.  Pacard,  2  Pet.  137.  "  Every 
demise  between  landlord  and  tenant,  in  re- 
spect to  matters  in  which  the  parties  are 
silent,  may  be  fairly  open  to  explanation 
by  the  general  usage  and  custom  of  the 
country,  or  of  the  district  where  the  land 
lies."  Per  Story,  J.,  id.  148.  See  also. 
Senior  v.  Armytage,  Holt,  N.  P.  197; 
Webb  V.  Plummer,  2  B.  &  Aid.  750; 
Holding  V.  Pigott,  7  Bing.  465  ;  Roberts 
V.  Barker,  1  Cromp.  &  M.'SOB  ;  Wilcox  v. 
Wood,  9  Wend.  346.  —  The  common  car- 
rier is  bound  to  deliver  goods  according  to 
the  usage  of  the  business  in  which  lie  is 
engaged.  Hyde  v.  Trent  and  INIersey  Nav. 
Co.  5  T.  R."389.  See  also,  ante,  vol.  1, 
p.  661,  ef  seq.  — Before  an  "  incident  "  can 
be  "annexed"  to  a  contract,  the  contract 
itself,  as  made,  must  be  proved.  Doe  v. 
Eason,  1 1  Ired.  568.  —  The  cases  we  have 
been  noticing  are  those  in  which  the  cus- 
tom or  usage  of  trade  has  been  brought  in 
to  affect  the  construction  of  written  instru- 
ments. There  is  another  class  of  cases  in 
which  the  usage  is  not  brought  in  to  vary 
the  construction  of  the  contract,  but  to 
"  substitute  in  the  particular  instance  a 
rule  resulting  from  the  usage,  in  place  of 
that  which  the  law,  not  the  contract  of  the 
parties,  would  prescribe."  1  Duer  on 
Ins.  200.  Thus,  in  the  case  of  a  policy 
of  insurance,  if  the  risks  and  premium 
are  entire,  and  the  policy  has  once  at- 
tached, so  that  the  insurer  might  in  any 
case  be  liable  for  a  total  loss,  the  law  en- 
titles him  to  retain  the  whole  of  the  premi- 
um. By  particular  usages,  however,  the 
insurer  may  in  such  cases  be  obliged  to 
return  a  part  of  the  premium.     Long  v. 

that  Mauritius  is  considered  as  an  East 
India  Island,  although  treated  by  geog- 
raphers as  an  African  island.  Robertson 
V.  Money,  Ryan  &  M.  75 ;  Robertson  v. 
Clarke,  1  Bing.  445. 

[49] 


51- 


THE   LAW   OF   CONTRACTS. 


[part  it. 


and  which  indeed  by  the  rules  of  language,  and  in  ordinary 
cases,  would  be  expressed  by  another  word,  (b) 


Allan,  4  Doug.  276.  "Where  it  is  a  usage 
of  the  underwriter  to  settle  according  to 
the  adjustment  of  general  average  in  a 
foreign  j)ort,  such  usage  will  be  permitted 
to  affect  the  rights  of  the  parties,  although 
the  adjustment  in  the  foreign  port  is  dif- 
ferent from  what  it  would  have  been  at 
the  home  port.  2  Phillips  on  Ins.  (3ded.), 
p.  163,  et  seq.;  Power  v.  Whitmore,  4  M. 
&  S.  141.     See  also,  Vallance  v.  Dewar, 

I  Camp.  503.  —  In  Halsey  v.  Brown,  3 
Day,  346,  evidence  was  admitted  of  a  cus- 
tom of  merchants  in  Connecticut  and  New 
York,  that  the  freight  of  money  received 
by  the  master  is  his  perquisite,  and  that 
he  is  to  be  personally  liable  on  the  con- 
tract, and  not  the  owners  of  the  vessel. 
This  case  is  cited  and  approved  in  Een-r 
ner  r.  Bank  of  Columbia,  9  Wheat.  591. 
See  also,  The  Paragon,  Ware,  322 ;  Oii- 
gier  V.  Jennings,  1  Gamp.  505,  n. ;  Bar- 
ber V.  Brace,  3  Conn.  9  ;  Stewart  v.  Aber- 
dein,  4  M.  &  W.  211  ;  M'Gregor  v.  Ins. 
Co.  of  Penn.  1  Wash.  C.  C.  39  ;  Trott  v. 
Wood,  1  Gallis.  443;  Cope  v.  Dodd,  13 
Penn.  St.  37 ;  Cutter  v.  Powell,  6  T.  R. 
320;  Raitt  v.  Mitchell,  4  Camp.  146. — 
Where  bills  or  notes  are  made  payable  at 
certain  banks,  it  is  to  be  presumed  that 
the  parties  intend  that  demand  shall  be 
made  and  notice  given  according  to  the 
usages  of  such  banks,  although  the  gen- 
eral rules  of  the  law  mcrclumt  may  be 
superseded  thereby.  Thus,  by  the  usage 
of  the  banks  of  the  city  of  Wasliington, 
four  days  grace  may  be  allowed.  De- 
mand made  and  notice  given  in  accord- 
ance with  such  usage  M'ill  be  binding  on 
the  indorser,  even  when  ignorant  of  the 
usage.     Mills  v.  Bank  of  United  States, 

I I  Wheat.  431 .  See  also,  Renner  v.  Bank 
of  Columbia,  9  Wheat.  581  ;  Bank  of 
Wa.shington  v.  Triplet,  1  Pet.  25;  Adams 
V.  Ottcrback,  1 5  How.  539 ;  Chicopce  Bank 
V.  Eager,  9  Met.  583  ;  Planters  Bank  v. 
Markham,  5  IIow.  Miss.  397;  Lincoln 
and  Kcniicbcck  15ank  r.  Page,  9  Mass. 
155;  Bank  of  Columbia  v.  Fitzhugh,  1 
Harris  &  G.  239  ;  Bhinchard  v.  Ililliard, 
11  Mass.  85.     In  the  case  of  the  Bridgc- 

Eort  P.ank  r.  Dyer,  19  Conn.  136,  the 
iridgi'port  Bank,  on  IMonday,  the  1st  of 
June,  ciishoil  for  \)  a  check  drawn  on  the 
Maiiiialtau  (,'o.  in  New  York  city.  On 
Thursday  the  4th,  in  ac<'or(lan(e  willi  the 
cstalili.slied  usage  of  the  ]'ridgcp(jrt  iJank, 
it  Wiis  sent  by  llic  cajitain  of  a  steamboat 

[50] 


to  New  York.  In  an  action  brought  by 
the  Bridgeport  Bank  against  D.  as  in- 
dorser of  such  check,  it  was  held  that  such 
usage  was  sufficient  evidence  of  an  agree- 
ment between  the  parties  not  to  insist 
upon  the  rule  of  law  regarding  the  trans- 
mission of  checks.  See  also,  Kilgore  v. 
Bulkley,  14  Conn.  363  ;  and  generally  as 
to  the  usages  of  banks,  and  their  binding 
force  upon  parties,  Jones  v.  Tales,  4  Mass. 
245  ;  Pierce  v.  Butler,  14  Mass.  303  ;  'City 
Bank  i'.  Cutter,  3  Pick.  414;  Dorchester 
and  Milton  Bank  v.  New  Eng.  Bank,  1 
Cush.  177  ;  Bank  of  Utica  v.  Smith,  18 
Johns.  230 ;  Cookcndorfer  v.  Preston,  4 
How.  317.  —  In  the  case  of  Pollock  v. 
Stables,  12  Q.  B.  765,  it  was  held  that  if 
a  party  authorizes  a  bi'oker  to  buy  shares 
for  him  in  a  particular  market,  where  the 
usage  is  that,  when  a  purchaser  does  not 
pay  for  his  shares  within  a  given  time,  the 
vendor  giving  the  purchaser  notice,  may 
sell,  and  charge  him  with  the  difference; 
and  the  broker,  acting  under  the  authority, 
buys  at  such  market  in  his  own  name ; 
such  broker,  if  compelled  to  pay  a  differ- 
ence on  the  shares  through  neglect  of  his 
principal  to  supply  funds,  may  sue  the 
principal  for  money  paid  to  his  use.  And 
it  is  not  necessary,  in  such  action,  to  show 
that  the  principal  knew  of  the  custom. 
See  Bayliffe  v.  ButterAvorth,  1  Exch.  425  ; 
Sutton  V.  Tatham,  10  A.  &  E.  27  ; 
Mitchell  V.  Newhall,  15  M.  &  W.  308; 
Moon  V.  Guardians  of  Witney  Union,  3 
Bing.  N.  C.  814 ;  Stewart  v.  Aberdein,  4 
M.  &  AV.  211. 

[b)  Thus,  in  the  case  of  Smith  v.  Wil- 
son, 3  B.  &  Ad.  728,  where  the  lessee  of  a 
rabl)it-warrcn  covenanted  to  leave  on  the 
warren  10,000  rabbits,  the  lessor  paying 
for  them  .£60  per  thousand,  it  was  held 
that  parol  evidence  was  admissible  to 
show  that,  by  the  custom  of  the  country 
where  the  lease  was  made,  the  word  thou- 
sand, as  applied  to  ralibits,  denoted  one 
hundred  dozen,  or  ticelre  liimdrcd.  In  Hin- 
ton  V.  Locke,  5  Hill,  437,  Ihnnson,  J.,  said 
that  ho  should  have  great  difficulty  in  sub- 
scribing to  this  case,  on  the  ground  that 
the  custom  sought  to  be  incorporated  into 
the  contract  was  "  a  plain  contradiction 
of  the  express  contract  of  the  parties." 
But  tiie  usage  admitted  in  Hintou  v.  Locke, 
and  sanctioned  by  linnison,  J.,  seems  to  be 
nearly  in  Cipuil  opposition  to  the  terms  of 
tho  contract  affected  by  it.     The  defend- 


CH.  I.]  CONSTRUCTION  AND  INTERPRETATION  OF  CONTRACTS.     52 


This  inflaence  of  custom  was  first  admitted  in  reference  to 
mercantile  contracts.  Anil  indeed  almost  the. whole  of  the  law 
merchant,  if  it  has  not  grown  out  of  custom  sanctioned  by 
courts  and  thus  made  law,  has  been  very  greatly  modified  in 
that  way.  For  illustration  of  this,  we  may  refer  to  the  law  of 
bills  and  notes,  insurance,  and  contracts  of  shipping  generally. 
And  although  doubts  have  been  expressed  whether  it  was  wise 
or  safe  to  permit  express  contracts  to  be  controlled,  or,  if  not 
controlled,  aifected  by  custom  in  the  degree  in  which  it  seems 
now  to  be  established  that  they  may  be ;  (c)  this  operation  of 
custom  is  now  fixed  by  law,  and  extended  to  a  vast  variety  of 
contracts  ;  and  indeed  to  all  to  which  its  privileges  properly  ap- 
ply. And  qualified  and  guarded  as  it  is,  it  seems  to  be  no 
more  than  reasonable.  In  fact,  it  may  be  doubted  whether  a 
large  portion  of  the  common  law  of  England  and  of  this 
country  rests  upon  any  other  basis  than  that  of  custom.  The 
theory  has  been  held  that  the  actual  foundation  of  most  ancient 


ant,  in  that  case,  had  promised  to  pay  the 
plaintiiT,  who  was  a  carpenter,  twelve  shil- 
lings per  day  for  every  man  employed  hy 
him  in  repairing  the  defendant's  honse. 
Evidence  was  held  admissible  to  show 
that,  by  a  universal  usage  among  carpen- 
ters, ten  hours  labor  constituted  a  day's 
work.  So  that  the  plaintiff  was  entitled 
to  charge  one  and  one  fourth  day  for  every 
twenty-four  hours,  within  which  the  men 
worked  twelve  hours  and  one  half.  Bran- 
son, J.,  said :  "  Usage  can  never  be  set 
up  in  contravention  of  the  contract ;  but 
when  there  is  nothing  in  the  agreement  to 
exclude  the  inference,  the  parties  are 
always  presumed  to  contract  in  reference 
to  the  usage  or  custom  which  prevails  in 
the  particular  trade  or  business  to  which 
the  contract  relates  ;  and  the  usage  is  ad- 
missible for  the  purpose  of  ascertaining 
with  greater  certainty  what  was  intended 
by  the  parties.  The  evidence  often  serves 
to  explain  or  give  the  true  meaning  of 
some  word  or  phrase  of  doubtful  import, 
or  which  may  be  understood  in  more  than 
one  sense,  according  to  the  subject-matter 
to  which  it  is  applied.  Now  here,  the 
plaintiff  was  to  be  paid  for  his  workmen 
at  the  rate  of  twelve  shillings  per  day ; 
but  the  parties  have  not  told  us  by  their 
contract  what  they  meant  by  a  day's  work. 
It  has  not  been  pretended  that  it  necessa- 
rily means  the  labor  of  twenty-four  hours. 


How  much,  then,  does  it  mean  ?  Evi- 
dence of  the  usage  or  custom  was  let  in 
to  answer  that  question." 

(c)  Per  Lord  Eldon,  in  Anderson  v. 
Pitcher,  2  B.  &  P.  168;  per  Lord  Den- 
man,  Trueman  v.  Loder,  11  A.  &  E.  589, 
597 ;  Hutton  v.  Warren,  1  M.  &  W.  466. 
In  Rogers  v.  Mechanics  Ins.  Co.  1  Story, 
60.3,  608,  Mr.  Justice  Story  uses  the  fol- 
lowing language  :  "  I  own  myself  no 
friend  to  the  indiscriminate  admission  of 
evidence  of  supposed  usages  and  customs 
in  a  peculiar  trade  and  business,  and  of 
the  understanding  of  witnesses  relative 
thereto,  which  has  been  in  former  times  so 
freely  resorted  to  ;  but  which  is  now  sub- 
jected by  our  courts  to  more  exact  and 
well-defined  restrictions.  Such  evidence 
is  often,  very  often,  of  a  loose  and  inde- 
terminate nature,  founded  upon  very  vague 
and  imperfect  notions  of  the  subject ;  and 
therefore  it  should,  as  I  think,  be  admitted 
with  a  cautious  reluctance  and  scrupulous 
jealousy,  as  it  may  shift  the  whole  grounds 
of  the  ordinary  interpretation  of  policies 
of  insurance  and  other  contracts."  See 
also,  remarks  of  the  same  learned  judge 
in  the  Schooner  Reeside,  2  Sumner,  567  ; 
Hone  V.  Mutual  Safety  Ins.  Co.  1  Sandf. 
1.37  ;  per  T'dghman,  C.  J.,  in  Stoever  v. 
Whitman,  6  Binn.  419  ;  per  Gibson,  C.  J., 
in  Snowden  v.  Warder,  3  Rawle,  101 ; 
Bolton  V.  Colder,  \  Watts,  363. 

[51] 


53*  THE  LAW   OF   CONTRACTS.  [PART  II. 

usages  was  statute  law,  which  the  lapse  of  time  has  hidden  out 
of  sight.  This  is  not  very  probably  as  a  fact.  The  common 
law  is  every  day  adopting  as  rules  and  principles  the  mere 
usages  of  the  community,  or  of  those  classes  of  the  community 
who  are  most  conversant  with  the  matters  to  which  these  rules 
relate ;  it  is  certain  that  a  large  *proportion  of  the  existing  law 
first  acquired  force  in  this  way.  At  all  events,  even  as  to  all 
law,  whether  common  or  statute,  that  rule  must  be  admitted 
which  is  as  sound  as  it  is  ancient,  and  which  Lord  Coke  em- 
phatically declares ;  oplimus  interpres  legum  consuetudo.  (d) 

It  is  obvious  that  the  word  "  custom  "  is  used  in  many  senses, 
or  rather  that  it  embraces  very  many  different  degrees  of  the 
same  meaning.  By  it  may  be  understood  either  that  ancient 
and  universal,  and  perfectly  established  custom,  which  is  in  fact 
law ;  or  only  a  manner  of  doing  some  particular  thing,  in  a 
small  neighborhood,  or  by  a  small  class  of  men,  for  a  few  years  ; 
or  any  measure  of  the  same  kind  of  meaning  within  these  two 
extremes.  Nor  is  it  material  what  the  custom  is  in  this  respect, 
provided  it  falls  within  the  reason  of  the  rule  which  makes  it  a 
part  of  the  contract.  And  it  comes  within  this  reason  only 
when  it  is  so  far  established,  and  so  far  known  to  the  parties, 
that  it  must  be  supposed  that  their  contract  was  made  in  refer- 
ence to  it.  For  this  purpose,  the  custom  must  be  established 
and  not  casual,  uniform  and  not  varying,  general  and  not  per- 
sonal, and  known  to  the  parties,  (e)     But  the  degree  in  which 

{(1)  2  Inst.  18.  measurement  of  moras  multicaulis  trees 

(e)  Usa{,'e  or  custom  must  be  established,  has  been  incorporated  into  a  contract,  al- 

Those  customs  whicli  can  be  incorporated  tliouf^h  the  trade  in  such  trees  lias  existed 

into  contracts,  on  tlie  ground  that  the  par-  only  for  a  short  time.     Barton  v.  McKel- 

tics  must  liave  contracted  in  reference  to  way,  2  N.  J.  165.     See  also,  Dorchester 

them,  differ  from  the  local  customs  of  the  and  Milton  Bank  ;;.  New  En<,^land  Bank, 

common  law  in  the  length  of  time  they  1  Cush.  177  ;  Taylor  v.  Brings,  2  C.  &  P. 

must  have  existed  to  be  valid.      "  The  525.     But  sec  Ilobertson  v.  Jackson,  2  C. 

true  test  of  a  comtncreial  usage  is  its  hav-  B.  412;    Singleton  r.  Ililliard,  1   Strob. 

ing  existed  a  sufficient  length  of  time  to  203 ;  Lewis  v.  Marshall,  7  Man.  &  G.  729  ; 

have   become   generally   known,   and   to  Hayward  v.  Middleton,  3  ]\[cCord,  121  ; 

warrant  a  presumption  that  contracts  arc  llapp  v.  Palmer,  3  Watts,  178.  —  Usage 

made  in  rcft-rcnce  to  it."     Per  Curiam,  in  must  be  unifurm.     It  must  constantly  bo 

Smith  V.  Wright,  I  (;aines,43.     In  Noble  observed  in'the  same  manner.     In  Wood 

V.    Kennoway,     Doug.    510,    wliere    the  v.  Wood,  1  C.  &  P.  59,  a  usage  was  at- 

usagc  established  by  evideiue  had  existed  tempted  to  be  shown  relative  to  the  return 

for    tlirec    years,    Lord    Afaiisjirld  said:  of  cloths  sent  for  inspection.    Some  of  tho 

"  It  i.s   no  matter  if  the   usage  has  only  witnesses  spoke  of  three  days  as  the  time 

been  for  a  year."      So,  a  usage  us  to  the  within  which  the  buyer  was  to  say  whether 

[52] 


en.  I.]  CONSTRUCTION  AND  INTERPRETATION  OF  CONTRACTS.     *54 

these  *characteristics  must  belong  to  the  custom  will  depend  in 
each  case  upon  its  peculiar  circumstances.  Suppose  a  contract 
to  be  entered  into  for  the  making  of  an  article  which  has  not 
been  made  until  within  a  dozen  years,  and  only  by  a  dozen  per- 
sons. Words  are  used  in  this  contract,  and  their  meaning  is 
uncertain ;  but  it  is  proved  that  these  words  have  been  used  and 
understood  in  reference  to  this  article,  always,  by  all  who  have 
ever  made  it,  in  one  way,  and  that  both  parties  to  the  contract 
knew  this ;  then  this  custom  will  be  permitted  to  explain  and 
interpret  the  words  of  the  parties.  But  if  the  article  had  been 
made  an  hundred  years,  in  many  countries,  and  by  multitudes 
of  persons,  the  same  evidence  of  this  use  of  the  words,  by  a 
dozen  persons  for  a  dozen  years,  might  not  be  sufficient  to  give 
to  this  practice  all  the  force  of  custom.  Other  facts  must  be 
considered ;  as  how  far  the  meaning  sought  to  be  put  on  the 
words  departs  from  their  common  meaning  as  given  by  the  dic- 
tionary, or  by  general  use,  and  whether  other  makers  of  this 
article  used  these  words  in  various  senses,  or  used  other  words 
to  express  the  alleged  meaning.     Because  the  main  question  is 


he  would  buy  them  or  not ;  others  spoke 
of  a  week,  and  one  of  a  month,  as  the 
time.  The  judge  instructed  the  jury,  that 
such  a  usatre,  to  be  binding,  must  be  uni- 
form, and  that  the  usage  proved  was  not 
so.  The  jury  found  accordingly.  The 
usage  must  not  be  fluctuating  and  depend- 
ed upon  price.  Lawrence  v.  M'Gregor, 
Wright,  193.  The  observance  of  the 
usage  must  not  be  occasional.  The  Para- 
gon, Ware,  322;  Rushforth  v.  Hadfield, 
7  East,  224.  See  also,  Trott  v.  Wood,  1 
Gallis.  443 ;  Martin  v.  Delaware  Ins.  Co. 
2  Wash.  C.  C.  254  ;  Rapp  v.  Palmer,  3 
Watts,  178.  Single  isolated  instances, 
unaccompanied  with  proof  of  general 
usage  will  be  insufficient  to  establish  a 
custom.  Cope  v.  Dodd,  13  Penn.  St. 
33 ;  United  States  v.  Buchanan,  8  How. 
83,  102. — Usage  must  be  general.  In 
order  that  a  custom  may  be  incorporated 
into  an  agreement,  by  force  of  its  exist- 
ence, it  must  be  shown  to  be  so  general, 
that  a  presumption  of  knowledge  on  the 
part  of  the  parties  arises.  It  must  be 
general  as  opposed  to  local,  for  local  usages 
cannot  be  brought  in  to  affect  the  con- 
struction of  written  instruments,  unless 
the  knowledge  of  the  parties  is   found. 

5* 


Bartlett  v.  Pentland,  10  B.  &  C.  760,  770; 
Gabay  v.  Lloyd,  3  id.  793;  Scott  v.  Ir- 
ving, I  B.  &  Ad.  60.5 ;  Stevens  v.  Reeves, 
9  Pick.  198  ;  Clayton  v.  Gregson,  5  A. 
&  E.  302.  A  usage,  however,  may  be 
local  in  the  sense  of  being  confined  to  a 
•  particular  port  or  place,  and  yet  general 
in  reference  to  the  persons  engaged  in  the 
trade  in  question.  Baxter  v.  Leland,  1 
Blatchf.  C.  C.  526.  Where  a  usage  be- 
tween insurers  and  insured  is  offered  in 
evidence,  it  must  be  the  usage  of  the  port 
where  the  policy  is  effected.  Rogers  v. 
Mechanics  Ins.  Co.  1  Storv,  607  ;  Child  v. 
Sun  Mutual  Ins.  Co.  3  Sandf.  26.  —  The 
usage  must  be  general  as  opposed  to  par- 
tial, or  personal.  Where  it  has  reference 
to  the  commercial  meaning  of  a  word,  or 
to  a  usage  of  trade  proper,  that  is,  to  a 
particular  manner  of  doing  a  thing,  it 
must  be  general  among  all  those  mer- 
chants, in  the  same  country,  by  whom  the 
word  is  used,  or  who  are  engaged  in  the 
trade  in  qhestion.  Martin  v.  Delaware 
Ins.  Co.  2  Wash.  C.  C.  254  ;  Trott  v. 
Wood,  1  Gallis.  443  ;  Macy  v.  Whaling 
Ins.  Co.  9  Met.  354,  365;  Wood  v. 
Wood,  1  C.  &  P.  59. 

[53] 


55*-56* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


always  this ;  can  it  be  said  that  both  parties  must  have  used 
these  words  in  this  sense,  and  that  each  party  had  good  reason 
to  believe  that  the  other  party  so  understood  them. 

*Nor  is  it  necessary  that  the  word  sought  to  be  interpreted  by 
custom  should  be,  of  itself,  ambiguous.  (/)  For  not  only  will 
custom  explain  an  ambiguity,  but  will  change  the  sense  of  a 
word  from  one  which  it  bears  almost  universally,  to  another 
which  is  entirely  different.  Thus  words  of  number  are  of  all 
others  least  ambiguous ;  but,  as  we  have  seen,  custom  will  inter- 
pret one  thousand  to  mean  one  hundred  dozen,  or  twelve  hun- 
dred, {g-)  And  so  usage  has  been  permitted  to  show  that  the 
word  "bale"  means  in  a  certain  trade,  not  an  ordinary  bale,  but 
a  package  of  a  peculiar  description,  (g-a) 

Custom  and  usage  are  very  often  spoken  of  as  if  they  were 
the  same  thing.  But  this  is  a  mistake.  Custom  is  the  thing 
to  be  proved,  and  usage  is  the  evidence  of  the  custom,  (h) 
Whether  a  custom  exists  is  a  question  of  fact,  {i)     But  in  *the 


(f)  See  ante,  p.  51,  n.  (6).  Where 
words  or  clauses  are  doubtful  in  their 
meaning,  much  slighter  evidence  of  usage 
will  suffice  to  fix  and  determine  their 
meaning.  I  Duer  on  Ins.  254.  Where 
goods  on  board  a  vessel  are  insured  "  until 
discharged  and  safely  landed,"  a  resort  to 
usage  seems  necessary  to  fix  the  meaning 
of  the  clause  "until  discharged  and  safely- 
landed,"  the  mode  of  discliarge  being  de- 
pendent upon  the  usual  course  of  tlie  trade, 
and  hence  slighter  evidence  will  be  re- 
quired. Noble  V.  Kennoway,  Doug.  510. 
Such  is  also  the  case  where  the  usage  of 
the  port  of  departure  is  followed  in  taking 
in  the  cargo  of  a  ship.  Kingston  v.  Knibbs, 
1  C!amp.  508,  n.  See  also,  Barton  v. 
McKelway,  2  N.  J.  165.  This  was  an 
action  on  a  contract  to  deliver  a  number 
of  morus  multicaulis  trees,  of  "  not  less 
than  one  foot  high."  It  was  held,  that  it 
might  be  sliown  that  by  the  universal  usage 
and  custom  of  all  dealers  in  that  article, 
the  length  was  measured  to  the  top  of  the 
ripe  wood,  rejecting  the  green  immature 
top.  Sec  also,  Moxon  v.  Atkins,  3  Camp. 
200. 

(f/)  See  ante,  p.  51,  n.  (h). 

(ga)  Gorrisson  ».  rerriii,  2  C.  li.  n.  s. 
681.  Sec  also  Jones  v.  Clarke,  2  II.  & 
N.  725. 

[54] 


{h)  Per  Bayley,  J.,  in  Kead  v.  Rann, 
10  B.  &  C.  440. 

(i)  The  custom  must  be  established  by 
the  evidence  of  witnesses  who  speak  di- 
rectly to  the  fact  of  the  existence  of  the 
custom.  In  Lewis  v.  Marshall,  7  Man.  & 
G.  729,  evidence  was  offered  to  show  that 
the  terms  "cargo"  and  "freiglit"  would 
be  considered  to  comprise  steerage  pas- 
sengers and  the  net  profit  arising  from 
their  passage-money.  Tindal,  C.  J.,  said: 
"  The  ciiaracter  and  doscrijnion  of  evi- 
dence admissible  for  that  ])ur|)ose  is  the 
fact  of  a  general  usage  and  practice  pre- 
vailing in  the  particular  trade  or  business, 
not  the  judgment  or  opinion  of  the  wit- 
nesses ;  for  the  contract  may  be  safely  and 
correctly  interpreted  with  reference  to  the 
fact  of  usage  ;  as  it  may  be  presumed  that 
such  fact  is  known  to  the  contracting  par- 
ties, and  that  they  contract  in  conformity 
thereto.  But  the  judgment  or  ojjinion  of 
the  witnesses  called,  allbrds  no  safe  guide 
for  interpretation,  as  such  judgment  or 
opinion  is  confined  to  their  own  knowl- 
edge." "  The  custom  of  meri'hants  or 
mercantile  usage  does  not  deitcnd  upon 
the  private  opinions  of  merchants  as  to 
wiiat  the  law  is,  or  even  upon  tlicir  opin- 
ions publicly  expressed —  but  upon  their 
ads."     I'er  Walworlli,  Ch.,   in   Allen   v. 


en.  I.]     CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.  *57 

proof  of  this  fact  questions  of  law  of  two  kinds  may  arise. 
One,  whether  the  evidence  is  admissible,  which  is  to  be  settled 
by  the  common  principles  of  the  law  of  evidence.  The  other, 
whether  the  facts  stated  are  legally  sufficient  to  prove  a  custom. 
If  one  man  testified  that  he  had  done  a  certain  thing  once,  and 
had  heard  that  his  neighbor  had  done  it  once,  this  evidence 
would  not  be  given  to  the  jury  for  them  to  draw  from  it  the 
inference  of  custom  if  they  saw  fit,  because  it  would  be  legally 
insufficient.  But  if  many  men  testified  to  a  uniform  usage 
within  their  knowledge,  and  were  uncontradicted,  the  court 
would  say  whether  this  usage  was  sufficient  in  quantity  and 
quality  to  establish  a  custom,  and  if  they  deemed  it  to  be  so, 
would  instruct  the  jury,  that,  if  they  believed  the  witnesses,  the 
custom  was  proved.  The  cases  on  this  subject  are  numerous. 
But  no  definite  rule  as  to  the  proof  of  custom  can  be  drawn 
from  them,  other  than  that  derivable  from  the  reason  on  which 
the  legal  operation  of  custom  rests ;  namely,  that  the  parties 
must  be  supposed  to  have  contracted  with  reference  to  it. 

As  a  general  rule,  the  knowledge  of  a  custom  must  be  brought 
home  to  a  party  who  is  to  be  afTected  by  it.  But  if  it  be  shown 
that  the  custom  is  ancient,  very  general  and  well  known,  it  will 
often  be  a  presumption  of  law  that  the  party  had  knowledge  of 
it ;  (j))  although  if  the  custom  *appeared  to  be  more  recent,  and 

Merchants  Bank,  22  Wend.  222.  See  requisites  of  a  valid  custom,  it  is  a  con- 
Edie  V.  East  India  Co.  2  Burr.  1228;  elusion  of  law  that  the  parties  must  have 
Syers  v.  Bridge,  Doug.  527,  .5.30 ;  Crofts  contracted  with  reference  to  it,  and  their 
V.  Marshall,  7  C.  &  P.  597  ;  Winthrop  v.  knowledge  is  conclusively  presumed.  In 
Union  Ins.  Co.  2  Wash.  C.  C.  7  ;  Rogers  Clayton  v.  Gregson,  5  A.  &  E.  302,  an 
V.  Mechanics  Ins.  Co.  1  Story,  603,  G07.  arbitrator  found  that  according  to  the  cus- 
Although  a  witness  testifies  generally  to  torn  and  understanding  of  miners  through- 
the  fact  of  the  usage,  yet  if  he  is  unable  to  out  a  certain  district,  the  words  "  level," 
state  a  particular  instance  of  the  observ-  "deeper  than,"  and  "below,"  in  a  lease, 
ance  of  the  usage,  his  evidence  should  be  had  certain  meanings,  which  were  in  favor 
rejected.  Per  Lord  Mansfield,  in  Syers  v.  of  one  of  the  parties  to  the  suit.  Some  of 
Bridge,  Doug.  530;  1  Duer  on  Ins.  183.  the  parties  to  the  lease  did  not  live  within 
See  Vail  v.  Kice,  1  Seld.  155.  On  the  the  district.  Held,  that  the  existence  of 
other  hand,  particular  instances  in  which  the  custom  stated,  within  such  district,  did 
a  certain  meaning  has  been  given  to  cer-  not  raise  a  conclusion  of  law  that  the  cov- 
tain  words,  or  a  certain  course  followed,  enanting  parties  used  the  terms  according 
are  of  no  avail  in  establishing  a  custom,  to  such  custom,  but  was  only  evidence 
when  unaccompanied  by  evidence  direct  from  which  a  jury  might  draw  that  con- 
to  the  fact  of  usage.  Cope  v.  Dodd,  13  elusion.  Littledale,  J.,  said:  "If  the  ar- 
Penn.  St.  33;  Duvall  v.  Farmers  Bank  bitrator  had  followed  the  words  of  the 
of  Maryland,  9  Gill  &  J.  31.  order,  and  found  that  the  word  'level' 
{j)  Where  a  custom  is  found  to  be  gen-  (which  is  capable  of  many  different  mean- 
eral  and  notorious,  and  to  have  the  other  ings),  meant,   '  accordmg  to  the  custom 

[55] 


57-  THE  LAW  OF  CONTRACTS.  [PART  IL 

less  generally  known,  it  might  be  necessary  to  establish  by  in- 
dependent proof  the  knowledge  of  this  custom  by  the  party,  (k) 
And  one  of  the  most  common  grounds  for  inferring  knowledge 
in  the  parties,  is  the  fact  of  their  previous  similar  dealings  with 
each  other.  (/)  The  custom  might  be  so  perfectly  ascertained 
and  universal  that  the  party's  actual  ignorance  could  not  be 
given  in  proof,  nor  assist  him  in  resisting  a  custom.  If  one  sold 
goods,  and  the  buyer  being  sued  for  the  price,  defended  on  the 
ground  of  a  custom  of  three  months'  credit,  the  jury  might  be 
instructed  that  the  defence  was  not  made  out,  unless  they  could 
not  only  infer  from  the  evidence  the  existence  of  the  custom,  but 
a  knowledge  of  it  by  the  plaintiff.  But  if  the  buyer  had  given 
a  negotiable  note  at  three  months,  no  ignorance  of  the  seller 
would  enable  him  to  demand  payment  \vithout  grace,  even 
where  the  days  of  grace  were  not  given  by  statute.  In  such  a 
case,  the  reason  of  the  law  of  custom  —  that  the  parties  con- 
tracted with  reference  to  it  —  seems  to  be  lost  sight  of.  But  in 
fact  the  custom  in  such  a  case  has  the  force  of  law ;  (m)  an 
ignorance  of  which  cannot  be  supposed,  and  if  it  be  proved,  it 
neither  excuses  any  one,  nor  enlarges  his  rights. 


and  understanditif^  of  miners  '  so  and  so  ;  accustomed  to  transact  business  at  a  cer- 
judgment  might  have  been  given  for  the  tain  bank.  Bridgeport  Bank  v.  Dyer,  19 
defendant ;  there  would  have  been  a  re-  Conn.  136.  Or  that  the  parties  reside  at 
suit  in  law  in  his  favor.  But  the  finding  the  place  where  the  usage  exists.  Bart- 
is  limited  to  a  particular  district;  which  lett  v.  Pentland,  10  B.  &  C.  760;  Clay- 
is  as  much  as  to  say  that  the  word  which  ton  v.  Gregson,  5  A.  &E.  303  ;  Stevens  v. 
has  a  particular  signification  in  this  dis-  Eceves,  9  Pick.  198.  Evidence  may  be 
trict  may  mean  diftercntly  in  others  ;  and  given  of  former  transactions  between  the 
if  that  lie  so,  it  cannot  follow  as  an  infer-  same  parties  for  the  purpose  of  explaining 
once  of  hiw  that  in  the  present  contract  it  the  meaning  of  the  terms  used  in  a  written 
was  used  in  the  sense  pointed  out.  It  contract.  Bourne  v.  Gatliif,  1 1  Clark  & 
ought,  therefore,  to  be  shown  as  a  matter  F.  45,  70.  But  see  Ford  v.  Yates,  2  Man. 
of  fact  that  the  parties  so  used  it."  See  &  G.  549,  where  evidence  was  rejected  that 
also,  Stevens  v.  ]{eeves,  9  Pick.  198;  by  the  usual  course  of  dealing  between  the 
Hinlon  V.  I^ockc,  5  Hill,  439  ;  1  Ducr  on  parties,  hops  were  sold  on  a  credit  of  six 
Ins.  277.  But  see  Winsor  v.  Dillaway,  4  montlis.  The  written  contract  was  silent 
Met.  221.  upon  tlic  subject.     Previous  dealings  of 

(/.;)  Clayton  v.  Gregson,  5  A.  &  E.  302  ;  parties  are  admissilde,  to  give  a  more  cx- 

Scott  V.  Irving,  1  B.  &  Ad.  605 ;  Stevens  tended  lien   than  that  given  by  the  com- 

V.  Keevcs,  9  I'ick.  198  ;  Stewart  v.  Abcr-  mon  law.     Rushforth  r.  Iladlield,  7  East, 

dell),  4  M.  &  W.  211.  224.     Sec  Loring  r.  Guniey,  5  Pick.  15. 

(/)  As  that  one  (jf  the  parties  was  accus-         (w/)  It  may,  however,  be  sui)crsedcd  by 

tonied  to  effect  insurance  at  a  certain  jilaco  a    custom     allowing     four    days    grace. 

or   with   n   certain   company.     Gaiiay  v.  Mills  y.  Bank  of  United  States,  il  Wheat. 

Lloyd,  3  B.  &,  C.  793;  Bartlett  v.  Pent-  431  ;  Cookenderfer   v.   Preston,  4   llovv. 

land,  10  H.  &  C.  760;  Palmer  v.  Black-  317. 
burn,  1   Bing.  61.     Or  that  parties  were 

[50] 


en.  I.]     CONSTRUCTION  AND   INTERPRETATION   OF   CONTRACTS.  *58 

No  custom  can  be  proved,  or  permitted  to  influence  the  con- 
struction of  a  contract,  or  vary  the  rights  of  parties,  if  the  cus- 
tom itself  be  illegal.  For  this  would  be  to  permit  parties  to 
break  the  law  because  others  had  broken  it ;  and  then  to  found 
their  rights  upon  their  own  wrong  doing,  (n) 

*Neither  would  courts  sanction  a  custom  by  permitting  its 
operation  upon  the  rights  of  parties,  which  was  in  itself  wholly 
unreasonable,  (o)  In  relation  to  a  law,  properly  enacted,  this 
inquiry  cannot  be  made  in  a  country  where  the  judicial  and  the 
legislative  powers  are  properly  separated.  But  in  reference  to 
custom,  which  is  a  quasi  law,  and  has  often  the  effect  of  law, 
but  has  not  its  obligatory  power  over  the  court,  the  character  of 
the  custom  will  be  considered,  and  if  it  be  altogether  foolish,  or 
mischievous,  the  court  will  not  regard  it ;  and  if  a  contract  exist 
which  only  such  a  custom  can  give  effect  to,  the  contract  itself 
will  be  declared  void. 

Lastly,  it  must  be  remembered  that  no  custom,  however  uni- 
versal, or  old,  or  known,  unless  it  has  actually  passed  into  law, 
has  any  force  over  parties  against  their  will.  Hence,  in  the  in- 
terpretation of  contracts,  it  is  an  established  rule,  that  no  cus- 
tom can  be  admitted  which  the  parties  have  seen  fit  expressly 
to  exclude,  (p)  Thus,  to  refer  again  to  the  custom  of  allowing 
grace  on  bills  and  notes  on  time,  there  is  no  doubt  that  the  par- 


(n)    See   1    Duer  on   Ins.   272.    Also  dith,  3  Yeates,  318.     See  also,  Thomas  r. 

Wallace  v.  Fouche,  27  IMissis.  266.  Graves,  1  Const.  R.  308  ;  Spear  v.  New- 

(o)  A  usage  among  the  owners  of  vcs-  ell,  cited  in  Burton  r.  Blin,  23  Vt.  159; 
sels  at  particular  ports  to  pay  bills  drawn  Bryant  v.  Commonwealth  Ins.  Co.  6  Pick, 
by  ♦lasters  for  supplies  furnished  to  their  131.  For  instances  in  which  usages  have 
vessels  in  foreign  ports,  cannot  bind  them  been  held  reasonable,  see  Clark  v.  Baker, 
as  acceptors  of  such  bills.  "  A  usage,  to  11  Met.  186  ;  Thomas  v.  O'Hara,  1  Const, 
be  legal,  must  be  reasonable  as  well  as  R.  303  ;  Williams  v.  Oilman,  3  Greenl. 
convenient;  and  that  usage  cannot  be  276;  Bridgeport  Bank  f.  Dyer,  1 9  Conn, 
reasonable  which  puts  at  hazard  the  prop-  136;  Conner  v.  Robinson,  2  Hill,  S.  C, 
crty  of  the  owners  at  the  pleasure  of  the  3.54  ;  Cuthbert  v.  Cumming,  11  Exch.  405, 
master,  by  making  them  responsible  as  30  Eng.  L.  &  Eq.  604.  Whether  a  usage 
acceptors  on  bills  drawn  by  him,  and  is  reasonaljle  would  seem  to  be  a  question 
which  have  been  negotiated  on  the  as-  of  law.  1  Duer  on  Ins.  269.  See  remarks 
sumption  that  the  funds  were  needed  for  oi  Tindal,  C.  J.,in  Bottomley  f.  Forbes,  5 
supplies  or  repairs;  and  no  evil  can  flow  Bing.  N.  C.  127.  And  see  Bowen  r.  Stod- 
from  rejecting  such  a  usage."  Per  Hub-  dard,  10  Met.  375.  The  question  of  the 
hard,  J.,  in  Bowen  r.  Stoddard,  10  Met.  reasonableness  of  a  usage  was  left  to  the 
375.  So  a  usage  among  plasterers  to  jury  by  Lord  Eldon,  in  Ougier  v.  Jen- 
charge  half  the  size  of  the  windows  at  the  nings,  1  Camp.  505,  note  (a). 
price  agreed  on  for  work  and  materials  is  (p)  Knox  v.  The  Niuetta,  Crabbe,  534. 
unreasonable  and  void.    Jordan  v.  Mere-  See  infra,  n.  [q). 

[57] 


59* 


THE  LAW   OF   CONTRACTS. 


[part  II. 


ties  may  agree  to  waive  this ;  and  even  the  statutes  which  have 
made  this  custom  law  permit  this  waiver.  And  not  only  is  a 
custom  inadmissible  which  the  parties  have  expressly  excluded, 
but  it  is  equally  so  if  the  parties  have  excluded  it  by  a  necessary 
implication  ;  as  by  providing  *that  the  thing  which  the  custom 
affects  shall  be  done  in  a  different  way.  For  a  custom  can  no 
more  be  set  up  against  the  clear  intention  of  the  parties  than 
against  their  express  agreement ;  and  no  usage  can  be  incorpo- 
rated into  a  contract,  which  is  inconsistent  with  the  terms  of 
the  contract,  {q) 


(7)  In  the  case  of  the  Schooner  Reeside, 
2  Sumner,  567,  it  was  attempted  to  vary 
the  common  bill  of  lading,  by  which 
goods  were  to  be  delivered  in  good  order 
and  condition,  the  danger  of  the  seas  only 
excepted,  by  establishing  a  custom,  that  the 
owners  of  packet  vessels  between  New 
York  and  I3oston  should*be  liable  only 
for  damage  to  goods  occasioned  by  their 
own  neglect.  But,  per  Stori/,  J.,  "  the 
true  and  appropriate  office  of  a  usage  or 
custom  is,  to  interpret  the  otherwise  in- 
determinate intentions  of  parties,  and  to 
ascertain  the  nature  and  extent  of  their 
contracts,  arising  not  from  express  stipu- 
lations, but  from  mere  implications  and 
presumptions,  and  acts  of  a  doubtful  or 
equivocal  character.  It  may  also  be  ad- 
mitted to  ascertain  the  true  meaning  of  a 
particular  word,  or  of  particular  words  in 
a  given  instrument,  when  the  word  or 
words  have  various  senses,  some  common, 
some  qualified,  and  some  technical,  accord- 
ing to  tlie  sul)ject-matter  to  wliich  they 
are  applied.  But  I  apprehend  that  it  can 
never  i)e  proper  to  resort  to  any  usage  or 
custom  to  control  or  vary  tlie  positive 
stipulations  in  a  written  contract,  and  a 
fortiori,  not  in  order  to  contradict  them. 
An  express  contract  of  tlie  parties  is  al- 
ways admissible,  to  supersede,  or  vary,  or 
control,  a  usage  or  custom  ;  for  the  latter 
may  always  be  waived  at  tlie  will  of  the 
parties.  IJiit  a  written  and  express  con- 
tract camiot  be  controlled,  or  varied,  or 
contra<licted,  by  a  usage  or  custom  ;  for 
tliat  would  not  only  be  to  admit  parol  ev- 
idence to  control,  vary,  or  contradict  writ- 
ten contracts,  Imt  it  would  lie  to  allow 
more  prcsumpti(jns  and  implications,  prof)- 
crly  arising  in  the  aliscnce  of  any  positive 
expressions  of  intention,  to  control,  vary, 
or  contradii't  the  most  formal  and  dclib- 
cralc  written  declaration.s  of  the  parties." 


See  Blackett  v.  Eoyal  Exch.  Ass.  Co.  2 
Cromp.  &  J.  244  ;  Hall  v.  Janson,  4  El- 
lis &  B.  500,  29  Eng.  L.  &  Eq.  Ill  ;  Fo- 
ley V.  Mason,  6  Md.  .37 ;  Ilinton  v. 
Locke,  5  Hill,  437  ;  Grant  v.  Maddox,  15 
M.  &  W.  737 ;  Yates  v.  Pym,  6  Tai^nt. 
446 ;  Keener  v.  Bank  of  United  States,  2 
Barr,  237  ;  M'Gregor  v.  Ins.  Co.  of  Penn. 
1  Wash.  C.  C.  39  ;  Sweet  v.  Jenkins,  1 
R.  I.  147  ;  Linsley  v.  Lovely,  26  Vt. 
123.  A  custom,  that  a  tenant  on  quitting 
shall  leave  the  manure  to  be  expended 
upon  the  laud,  he  being  entitled  to  be  paid 
for  the  same,  is  excluded  by  an  express 
stipulation  in  the  lease  that  the  tenant 
"  should  not  sell  or  take  away  any  of  the 
manure."  The  tenant  is  not  entitled  to 
recover  the  value  of  the  manure  so  left. 
"  It  was  altogether  idle,"  said  Lord  Lynd- 
hur^t,  C.  B.,  "  to  provide  for  one  part  of 
that  which  was  sufficiently  provided  for  by 
the  custom,  unless  it  was  intended  to  ex- 
clu(k  the  other  part."  Roberts  v.  Barker,  1 
Cromp.  &  M.  808.  See  also,  Webb  v.  Blum- 
mer,  2  B.  &  Aid.  746.  A  custom  of  the 
country,  by  which  the  tenant  of  a  farm, 
cultivating  it  according  to  the  course  of 
good  husbandry,  is  entitled  on  quitting  to 
receive  from  the  landlord  or  incoming  ten- 
ant a  reasonable  allowance  for  seeds  and 
labor  bestowed  on  the  arable  land  in  the 
last  year  of  tiie  tenancy,  and  is  bound  to 
leave  the  manure  for  the  landlord,  if  ho 
will  ]iurchasc  it, —  is  not  excluded  by  a 
stipulation  in  the  lease  under  which  ho 
holds,  that  he  will  consume  three  fourths 
of  the  hay  and  straw  on  the  farm,  and 
spread  the  manure  arising  tberefiom,  and 
leave  such  of  it  as  shall  not  be  so  sjjfcad 
on  the  land  for  the  use  of  tlie  landlord,  on 
receiving  a  reasonable  price  for  it.  Hut- 
ton  ;•.  Warren,  1  M.  &  W.  466.  See  also, 
Senior  v.  Armytage,  Holt,  N.  V.  197; 
Syers  v.  Jonas,  2  Exch.  111.     If  the  Icgis- 


en.  I.]     CONSTRUCTION   AND    INTERl'IlETATION    OF    COKTEACTS.  *CC 


SECTION  X. 

OF   THE   ADMISSIBILITY   OF   EXTRINSIC   EVIDENCE    IN    THE   INTERPRE- 
TATION  OF   WRITTEN   CONTRACTS. 

It  is  very  common  for  parties  to  offer  evidence  external  to  the 
contract,  in  aid  of  the  interpretation  of  its  language.  *The 
general  rule  is,  that  such  evidence  cannot  be  Sdmitted  to  con- 
tradict or  vary  the  terms  of  a  valid  written  contract ;  or,  as  the 
rule  is  expressed  by  writers  on  the  Scotch  law,  "  writing  cannot 
be  cut  down  or  taken  away  by  the  testimony  of  witnesses."  (r) 
There  are  many  reasons  for  this  rule.  One  is,  the  general  pref- 
erence of  the  law  for  written  evidence  over  unwritten ;  or,  in 
other  words,  for  the  more  definite  and  cJrtain  evidence  over 
that  which  is  less  so ;  a  preference  which  not  only  makes 
written  evidence  better  than  unwritten,  but  classifies  that 
which  is  written.  For  if  a  negotiation  be  conducted  in 
writing,  and  even  if  there  be  a  distinct  proposition  in  a 
letter,  and  a  distinct  assent,  making  a  contract;  and  then 
the  parties  reduce  this  contract  to  writing,  and  both  execute  the 
instrument,  this  instrument  controls  the  letters,  and  they  are  not 
permitted  to  vary  the  force  and  effect  of  the  instrument,  al- 
though they  may  sometimes  be  of  use  in  explaining  its  terms. 
Another  is,  the  same  desire  to  prevent  fraud  which  gave  rise  to 
the  statute  of  frauds  ;  for  as  that  statute  requires  that  certain 
contracts  shall  be  in  writing,  so  this  rule  refuses  to  permit  con- 
tracts which  are  in  writing  to  be  controlled  by  merely  oral  evi- 
dence. But  the  principal  cause  alleged  in  the  books  and  cases 
is,  that  when  parties,  after  whatever  conversation  or  prepara- 
tion, at  last  reduce  their  agreement  to  writing,  this  may  be 
looked  upon  as  the  final  consummation  of  their  negotiation, 

lature  hfis  given  to  a  particular  word  de-  glesworth  v.  Dallison,  1   Smith's   Lead, 

noting  quantity  a   definite  meaning,  no  Cas.  308,  b. 

evidence  of  usage  can  be  given  to  show         (r)  Tait  on  Ev.  326.     See  further,  Her- 

that  it  is  used  in  a  different  sense.     Smith  ring  v.  Boston  Iron  Co.  1  Gray,  134;  Ke- 

V.  Wilson,  3  B.  &  Ad.  728.     See  Helm  v.  nard  v.  Sampson,  2  Kern.  561. 
Bryant,  11  B.  Mon.  64 ;  and  note  to  Wig- 

[59]    . 


61*  THE   LAW   OF   CONTRACTS.  [PART  II. 

and  the  exact  expression  of  their  purpose.  And  all  of  their 
earlier  agreement,  though  apparently  made  while  it  all  lay  in 
conversation,  which  is  not  now  incorporated  into  their  written 
contract^  iTiay  be  considered  as  intentionally  rejected,  (s)  The 
parties  write  the  contract  when  they  *  are  ready  to  do  so,  for 
the  very  purpose  of  including  all  that  they  have  finally  agreed 
upon,  and  excluding  every  thing  else,  and  making  this  certain 
and  permanent.  And  if  every  written  contract  were  held  sub- 
ject to  enlargement,  or  other  alteration,  according  to  the  testi- 
mony which  might  be  offered  on  one  side  or  the  other  as  to 
previous  intention,  or  collateral  facts,  it  would  obviously  be  of 
no  use  to  reduce  a  contract  to  writing,  or  to  atteaipt  to  give  it 
certainty  and  fixedness  in  any  way.  (t) 

It  is  nevertheless  certain  that  some  evidence  from  without 
must  be  admissible  in  the  explanation  or  interpretation  of  every 
contract.  If  the  a^eement  be  that  one  party  shall  convey  to 
the  other,  for  a  certain  price,  a  certain  parcel  of  land,  it  is  only 
by  extrinsic  evidence  that  the  persons  can  be  identified  who 
claim  or  are  alleged  to  be  parties,  and  that  the  parcel  of  land 
can  be  ascertained.  It  may  be  described  by  bounds,  but  the 
question  then  comes,  where  are  the  streets,  or  roads,  or  neigh- 
bors, or  monuments  referred  to  in  the  description ;  and  it  may 
sometimes  happen  that  much  evidence  is  necessary  to  identify 
these  persons  or  things.  Hence  we  may  say,  as  the  general 
rule,  that  as  to  the  parties  or  the  subject-matter  of  a  contract, 
extrinsic  evidence  may  and  must  be  received  and  used  to  make 


(s)  Preston  V.  Mcrccau,  2  W.  Bl.  1249  ;  ered   as   a  part  of  the   contract."      Per 

Ilarnor  v.  Groves,  15  C.  B.  6G7,  29  Eng.  Abboit,  C.  J.,  in  Kain  v.  Old,  2  B.  &  C. 

L.  &  Ef|.   220;    Carter  v.  Hamilton,  11  634.     See  also,  Vandcrvoort  v.  Smith,  2 

Barh.  147;  Troy  Iron  and  Nail  Factory  Caines,  1.55;  Mumford  v.  M'Pherson,  1 

V.  Corninf^,  1   IMatclif.  C.  C.  407 ;  Meres  Johns.    414;    Pickering    v.    Dowson,    4 

V.  Anscll,  ;i  Wilson,  27,')  ;  Hakes  v.  Ilotch-  Taunt.  78G. 

kiss,  2.')  Vt.  2.'M  ;  VcriiiDnt  Central  1{.  li.  {t)  "  It  would  be  inconvenient  that  mat- 
Co.  V.  Estate  of  Hills,  id.  081.  "Where  ters  in  writing,  made  by  advice  and  on 
the  whole  matter  passes  in  parol,  all  that  consideration,  and  which  finally  import 
passes  may  sometimes  be  taken  together  tlic  certain  truth  of  the  agreement  of  the 
as  forming  [)arc(.'l  of  the  contract,  though  parties,  should  be  controlled  by  averment 
not  always,  becau.so  matter  talked  of  at  of  the  parties,  to  be  proved  by  the  uncer- 
thc  fommcnccmcnt  of  a  bargain  may  bo  tain  testimony  of  slippery  memory." 
cx<'liiili'il  by  the  language  used  at  its  ter-  Countess  of  Hutlaud's  case,  .'>  Ivcp.  20  a; 
minatifui.  I5ut  if  tin;  eontract  be  in  the  Carter /•.  llamiilon,  II  Barl).  147  ;  Rogers 
end  reduced  into  writing,  nothing  which  ?».  Atkinson,  1  Ga.  12;  Wynn  r.  Cox,  5 
is  not  found  in  the  writing  can  be  coiisid-  id.  373. 

[GO] 


en.  I.]  CONSTRUCTION  AND  INTERPRETATION  OP  CONTRACTS. 


*62 


them  certain,  if  necessary  for  that  purpose,  (w)  But  as  to  the 
terms,  conditions,  and  *  limitations  of  the  agreement,  the  writ- 
ten contract  must  speak  exclusively  for  itself.  Hence,  too,  a 
false  description  of  person  or  thing  has  no  effect  in  defeating 
a  contract,  if  the  error  can  be  distinctly  shown  and  perfectly 
corrected,  by  other  matter  in  the  instrument,  {v) 


(n)  "  When  tliere  is  a  devise  of  the 
estate  purchased  of  A,  or  of  the  farm  in 
the  occupation  of  B,  nobody  can  tell  what 
is  given  till  it  is  sliown  by  extrinsic  evi- 
dence what  estate  it  wa§  that  was  pur- 
chased of  A,  or  what  form  was  in  the 
occupation  of  B."  Per  Sir  William 
Grant,  in  Sanfbrd  v.  Raikes,  1  Aleriv.  653. 
And  see  Jackson  v..  Parklmrst,  4  Wend. 
369;  Abbot  v.  Massie,  3  Ves.  148;  Mc- 
Cullough  V.  Wainwright,  14  Penn.  St. 
171  ;  Newton  v.  Lucas,  6  Sim.  54  ;  Jack- 
son ik'  Sill,  11  Johns.  201.  "  Speaking 
philosophically,"  says  Eolfe,  B.,  "  you 
must  always  look  beyond  the  instrument 
itself  to  some  extent,  in  order  to  ascertain 
who  is  meant;  forinstance,  you  must  look 
to  names  and  places.  There  may  indeed 
be  no  difficulty  in  ascertaining  who  is 
meant,  when  a  person  who  has  five  or  six 
names,  and  some  of  them  unusual  ones, 
is  described  in  full,  while  on  the  other 
hand,  a  devise  simply  to  John  Smith 
would  necessarily  create  some  uncer- 
tainty." Clavton  V.  Lord  Nugent,  13 
M.  &  W.  207.  See  also,  Owen  v. 
Thomas,  3  Mylne  &  K.  353.  Whether 
parcel  or  not,  or  appurtenant  or  not, 
is  alwavs  matter  of  evidence.  Per  Buller, 
J.,  in  Doe  v.  Burt,  1  T.  R.  704 ;  Doe  v. 
Webster,  12  A.  &  E.  442;  Waterman  v. 
Johnson,  13  Pick.  261  ;  per  Barbour,  J., 
in  Bradley  v.  Wash.  A.  &  G.  Steam 
Packet  Co.  13  Pet.  89,  97 ;  per  Lord 
Ellenboroiigh,  in  Goodtitle  •;;.  Southern,  1 
M.  &  S.  301  ;  Wilson  V.  Robertson,  Harp. 
Eq.  56. 

(r)  Bac.  Max.  Reg.  25.  Falsa  demon- 
stratio  von  nocet.  Thomas  v.  Thomas,  6 
T.  R.  671.  "If  the  thing  descril)ed  is 
sufficiently  ascertained,  it  is  sufficient, 
though  all  the  particulars  are  not  true ; 
as  if  a  man  conveys  his  house  in  D., 
which  was  R.  Cotton's,  when  it  was 
Thomas  Cotton's."  Com.  Dig.  Fait, 
(E  4).  Where  one  devised  all  his  "free- 
hold houses  in  Aldcrsgate  Street,"  he 
having  only  leasehold  houses  there,  the 
leasehold  were  held  to  pass.  Day  v.  Trig, 
1  P.  Wms.  286.  See  also.  Doe";;.  Crans- 
toun,  7  M.  &  W.  1  ;  Nelson  v.  Hopkins, 

VOL.  II.  6 


21  Law  J.  N.  s.  Ch,  410,  11  Eng.  L.  & 
Eq.  66.  Where  premises  are  sutHcicntly 
described  otherwise,  any  reference  to  the 
quantity  of  land  may  be  rejected  as  falsa 
demon  stmt  io.  Llewcllvn  v.  Earl  of  Jersey, 
11  M.  &  W.  183;  Shep.  Touch.  248. 
So  where  there  was  a  bequest  to  "  John 
and  Benedict,  sons  of  J.  S.,"  wlio  had 
two  sons,  James  and  Benedict,  it  was 
Jield  that  James  might  take.  Dowset 
V.  Sweet,  Ambl.  175.  See  Connolly  v. 
Pardon,  i  Paige,  291  ;  Doe  v.  Galloway, 
5  B.  &  Ad.  43  ;  Duke  of  Dorset  v.  Lord 
Hawardcn,  3  Curtcis,  80 ;  Tudor  v.  Ter- 
rel,  2  Dana,  47  ;  Gynes  i'.  Komslcy, 
Frccm.  K.  B.  293  ;  Chambcrlaine  r. 
Turner,  Cro.  Car.  129  ;  Doe  v.  Parry, 
13  M.  &  W.  356 ;  Goodtitle  v.  Southern, 
1  M.  &  S.  299  ;  Beaumont  v.  Fell,  2  P. 
Wms.  140.  —  The  characteristic  of  cases 
falling  under  the  maxim  falsa  dcmonstra- 
tio  nan  nocet,  is  that  the  description,  so  far 
as  it  is  false,  applies  to  no  suliject  at  all, 
and  so  far  as  it  is  true,  to  one  subject 
only.  Per  Alderson,  B.,  in  Morrell  v. 
Fisher,  4  Exch.  591,  604;  Wigram  on 
Wills,  sec.  133.  This  rule  is  considered 
ante,  p.  27.  — The  case  of  Beaumont  v. 
Fell,  2  P.  Wms.  140,  if  it  can  be  sus- 
tained at  all,  must  be  sustained  as  falling 
under  the  maxim  falsa  demonstratio  von 
nocet.  Before  stating  the  case,  it  may  be 
well  to  remark,  that  evidence  may  always 
be  given  that  a  testator  was  accustomed 
to  call  particular  individunls  by  peculiar 
names,  other  than  those  by  which  they 
were  commonly  known,  and  a  devise  or 
bequest  may  take  eft'ect  in  favor  of  such 
person  who  is  designated  in  the  devise  or 
bequest  by  a  nickname,  provided  the  ap- 
plication of  the  nickname  is  sufficiently 
certain.  Baylis  v.  Attorney-general,  2 
Atk.  239 ;  per  Lord  Ahinqer,  in  Doe  v. 
Hiscocks,  5  M.  &  W.  368;  Rishton  v. 
Cobb,  5  Mylne  &  C.  145 ;  Lee  v.  Pain,  4 
Hare,  251,  252;  Parsons  v.  Parsons,  1 
Ves.  266  ;  per  liolfe,  B.,  in  Clavton  v. 
Lord  Nugent,  13  M.  &  AV.  207  ;  White  v. 
Bradshaw,  16  Jur.  738,  13  Eng.  L.  &  Eq. 
296;  Powell  v.  Biddle,  2  Dall.  70.  In 
Beaumont  v.  Fell,  there  was  a  devise  of  a 

[61] 


THE  LAW   OF   CONTRACTS. 


[part  II. 


Where  the  language  of  an  instrument  has  a  settled   legal 
meaning,  its  construction  is   not   open  to  evidence.     Thus  a 


legacy  of  .£500  to  "  Catliarine  Earnlcy." 
No  person  of  that  name  claimed  the  leg- 
acy. It  was  claimed  by  Gertrude  Yard- 
ley.  It  appeared  that  the  testator's  voice, 
M'lien  he  gave  instructions  for  writing  his 
will,  was  very  low,  and  hardly  intelligiltlc; 
that  the  testator  usually  called  Gertrude 
Yardley  by  the  name  of  Gatty,  which  the 
scrivener  might  easily  mistake  for  Kuttj. 
The  scrivener  not  well  understanding  who 
the  legatee  was,  owing  to  the  feebleness 
of  the  voice  of  the  testator,  the  testator 
referred  him  to  J.  S.  and  wife,  who  after- 
wards declared  that  Gertrude  Yardley 
was  the  person  intended.  So  far  as  this 
case  sanctions  the  admission  of  evidence 
of  intention,  it  is  now  of  no  authority. 
See  infra,  note  (s).  The  only  ground, 
perhaps,  upon  which  the  case  can  be  sus- 
tained, is  that  "  Earnlcy  "  might  be  re- 
jected as  falsa  demonstratio,  and  that 
"  Catharine "  was  a  sufficiently  certain 
designation  of  the  individual  called  "  Gat- 
ty" by  the  testjitor.  Per  Lord  Abinger, 
in  Doe  d.  Hiscocks  i\  Hiscoeks,  5  M.  & 
W.  371.  The  case  of  Selwood  v.  Mild- 
may,  3  Vcs.  306,  has  been  regarded  as 
falling  under  the  maxim,  "falsa  demon- 
stratio'." In  this  case  a  testator  gave  to 
his  wife  the  interest  and  proceeds  of 
£1,2.50,  "part  of  my  stock  in  the  4  per 
cent,  annuities  of  the  Bank  of  England, 
for  and  during  the  term  of  her  natural 
life,  together  with  all  such  dividends  as 
shall  be  due  upon  the  said  £1,250  at  the 
time  of  my  decease."  At  the  time  he 
made  his  will  he  had  no  stock  in  the  4 
per  cent,  annuities,  but  he  had  had  some, 
which  he  had  sold  out,  and  had  invested 
in  Long  Annuities.  The  Master  of  the 
liolls.  Sir  K.  P.  Ardm,  said  :  "  It  is  clear 
the  testator  meant  to  give  a  legacy,  but 
mistook  the  fund.  He  acted  upon  the 
idea  that  he  had  sucii  stock.  The  dis- 
tinction is  this  ;  if  he  had  had  the  stock  at 
tlie  time,  it  would  have  been  considered 
sj)ecilic,  and  that  he  meant  tiiat  identical 
Block  ;  and  any  act  of  his  destroying  that 
suliject  would  be  a  proof  of  (iiiiinus  revo- 
ciiudi ;  but  if  it  is  a  denomination,  not  the 
identical  rorjnts,  in  tiiat  case,  if  tlie  thing 
itself  cannot  be  found,  and  there  is  a  mis- 
take as  to  the  subject  out  of  which  it  is  to 
arise,  that  will  be  rectified."  According 
to  the  view  taken  of  this  case  by  'J'iiidid, 
C.  J.,  in  Miller  v.  Travers,  8  liing.  244, 
the  parol  evidence  as  to  the  condition  of 
[G2] 


the  testator's  property  was  received,  for 
the  purpose  of  showing  that  the  testator, 
when  he  used  the  erroneous  description  of 
4  per  cent,  stock,  meant  to  bequeathe  the 
long  annuities,  which  he  had  jmrehased 
with  the  produce  of  the  4  per  cent,  stock; 
and  the  result  of  the  cause  was  to  substi- 
tute another  specilic  subject,  in  the  place 
of  a  specific  legacy  which  the  will  pur- 
ported to  bequeathe;  —  to  substitute  the 
long  annuities  which  the  testator  had  and 
did  not  purport  to  give,  for  the  4  percent, 
bank  annuities,  which  he  had  not,  and  did 
purport  to  give.  But  it  would  seem  dif- 
ficult to  support  the  decree  on  this  ground. 
The  true  view  of  the  case  seems  to  be  that 
taken  by  Lord  Langdale,  in  Lindgren  v. 
Lindgren,-  9  Beav.  358,  namely,  that  the 
parol  evidence  as  to  the  condition  of  the 
testator's  property  showed  that  a  general 
and  not  a  speeitic  legacy  was  intended. 
After  stating,  in  the  language  of  the  de- 
cree, that  the  evidence  was  admitted  "to 
prove,  not  that  there  was  a  mistake,  for 
that  was  clear,  but  to  show  how  it  arose," 
his  lordship  continued  :  "  It  is  very  neces- 
sary to  observe,  that  in  the  case  of  Sel- 
wood V.  Mild  may,  the  evidence  was  re- 
ceived only  for  the  purpose  stated  by  the 
Master  of  "the  Rolls  in  his  judgment,  and 
not,  as  it  has  been  erroneously  supposed, 
for  the  purpose  of  showing  that  the  testa- 
tor, wdien  he  used  the  erroneous  descrip- 
tion of  4  per  cent,  stock,  meant  to  be- 
queathe the  long  annuities,  which  he  had 
purchased  with  the  produce  of  the  4  per 
cent,  stock,  and  that  the  result  of  the 
cause  was,  not  to  substitute  another  spe- 
cific subject  in  the  place  of  a  specific  leg- 
acy which  the  will  purported  to  bequeathe  ; 
—  not  to  substitute  the  long  annuities, 
which  the  testator  had  and  did  not  purport 
to  give,  for  the  4  per  cent,  bunk  annuities, 
which  he  had  not,  and  did  jnirport  to  give. 
The  absence  of  the  fund  purj)orted  to  bo 
given  showing  that  a  specific  legacy  was 
not  intended,  other  evidence  was  admitted 
to  show  how  the  mistake  arose ;  and  this 
being  clearly  shown,  it  was  held  that  the 
legatees  were  entitled  to  payment  out  of 
the  general  personal  estate."  And  see  to 
the  same  effect,  Sawrcy  v.  Rumney,  16 
Jur.  1110,  15  Kng.  L.  &  Eq.  4.  In 
Wioteslcy  v.  Adams,  IMowd.  191,  it  is 
laid  down  that  "  there  is  a  diversity  where 
u  certainty  is  added  to  a  thing  that  is  un- 
certain,  and  where   to   a  thing  certain. 


en.  I.]    CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.   64-*65 

promise   to    pay   money,    no   time    being   expressed,  means    a 
•promise  to  pay  it  on  demand,  and  evidence  that  a  payment  at 


For  if  I  release  all  my  right  in  all  my 
lands  in  Dale,  wiiich  I  have  hy  dcsccnton 
the  part  of  my  father,  and  I  have  lands  in 
Dale  by  descent  on  the  part  of  my  mother, 
but  no  lands  hy  descent  on  the  part  of  my 
father,  there  the  release  is  void,  and  so 
the  words  of  certainty,  namely,  which  I 
have  by  descent  on  the  part  of  my  father, 
being  added  to  the  general  words  which 
were  uncertain,  are  of  effect.  But  if  tlie 
release  had  been  of  Whiteacrc  in  Dale, 
wliich  I  have  hy  descent  on  the  part  of 
my  father,  and  I  had  it  not  by  descent  on 
the  part  of  my  father,  but  otherwise,  yet 
the  release  is  good,  for  the  thing  was  cer- 
tainly expressed  by  tlic  first  words,  in 
which  case  the  addition  of  another  cer- 
tainty is  not  necessary,  but  superfluous." 
In  Doe  I'.  Parkin,  5  Taunt.  321,  there  was 
a  devise  of  "  all  my  messuages,  &c.  in  T., 
and  now  in  my  own  occupation."  The  tes- 
tator had  two  messuages  in  T.,  of  which 
he  occupied  only  one.  ILId,  that  only  that 
one  passed  by  the  devise.  In  this  case 
there  was  certainty  added  to  what  was  un- 
certain. See  per  Parke,  J.,  in  Doe  v. 
Galloway,  5  B.  &  Ad.  51.  Words  of 
ccrtaint)],  however,  as  they  are  called  in 
Plowden,  following  gmr-ral  or  uncertain 
words,  will  not  be  construed  as  restrictive 
where  the  effect  of  doing  so  would  be  to 
render  the  general  or  uncertain  words 
wholly  inoperative,  and  where  the  certain 
words  may  be  rejected  as  falsa  demonstra- 
tio.  A  testator  devised  to  J.  S.  "  all 
those  my  three  messuages,  with  the  gar- 
dens, close  of  land,  and  all  other  wi/  real 
estate,  whatsoever,  situate  at  Little  Heath, 
in  the  parish  of  F.,  now  in  the  occupation 
of  myself,  and  A  and  B."  At  the  date  of 
the  will,  and  at  the  death  of  the  testator, 
he  was  possessed  of  three  messuages,  with 
gardens,  and  a  close  of  land,  at  Little 
Heath,  which  were  in  the  occupation  of 
himself,  and  A  and  B.  He-had  also  the 
reversion  in  a  house  and  garden,  situate 
at  Little  Heath,  which  was  in  the  occupa- 
tion of  C,  who  was  entitled  to  it  for  life. 
He  had  no  other  property  in  the  parish  of 
F.  Held,  that  the  house  and  garden  in 
the  occupation  of  C  passed  under  the 
general  devise  to  J.  S.  Doe  v.  Carpenter, 
16  Q.  B.  181,  1  Eng.  L.  &  Eq.  .307.  See 
also  Nightingall  v.  Smith,  1  Exch.  879. 
In  Morrell  v.  Fisher,  4  Exch.  .591,  there 
was  a  devise  to  the  following  effect :  "  all 
my    leasehold     farm-house,     homestead, 


lands,  and  tenements  at  Headington, 
containing  about  170  acres,  held  under 
Magdalen  College,  Oxford,  and  now  in 
the  occupation  of  B,  as  tenant  to  me." 
B  occupied  a  farm  at  Headington,  which 
was  leased  to  the  testator  by  Magdalen 
College,  and  there  were  two  parcels  of 
land  also  held  by  the  testator  under 
Magdalen  College,  and  situated  at  Head- 
ington, but  not  in  the  occupation  of  B. 
Held,  that  the  description  of  the  lands 
being  in  the  possession  of  B  could  not  be 
rejected  as  /ulsa  demonstratio,  and  conse- 
quently the  two  parcels  did  not  pass 
under  "the  devise.  In  this  case,  Alderson, 
B.,  in  delivering  the  judgment  of  the 
court,  said :  "  The  question  is  not  what 
the  testator  intendecl  to  have  done,  but 
what  the  words  of  the  clause  mean,  after 
applying  to  it  the  established  rules  of  con- 
struction. One  of  these  rules  is,  'Falsa 
demonstratio  nonnocet;'  another  is,  '  JShn 
accipi  debent  verba  in  dewonstiationem  fal- 
sam,  qncB  competunt  in  liifHtationem  veram.' 
The  first  rule  means  that  if  there  be  an 
adequate  and  stifiHcicnt  description,  with 
convenient  certainty  of  what  was  meant  to 
pass,  a  subsequent  erroneous  addition  will 
not  vitiate  it.  The  characteristic  of  cases 
within  the  rule  is  that  the  description,  so 
far  as  it  is  false,  applies  to  no  suljcct  at 
all ;  and  so  fiir  as  it  is  true  applies  to  one 
only.  The  other  rule  means,  that  if  it 
stand  doubtful  upon  the  words  whether 
they  import  a  false  reference  or  demonstra- 
tion, or  whether  they  be  words  of  restraint 
that  limit  the  generality  of  the  former 
words,  the  law  will  never  intend  error  or 
falsehood.  If,  therefore,  there  is  some 
land  wherein  all  the  demonstrations  are 
true,  and  some  wherein  part  are  true  and 
part  false,  they  shall  be  intended  words  of 
true  limitation  to  pass  only  those  lands 
wherein  the  circumstances  are  true.  Whe- 
ther these  maxims,  or  rather  the  first,  has 
been  correctly  acted  upon  in  some  of  the 
decided  cases,  in  which  the  courts  have  pro- 
fessed, or  inteftded  so  to  do,  need  not  now 
be  inquired  into.  They  certainly  are  ac- 
knowledged rules  of  construction.  Is  there 
then,  in  the  present  case,  an  adequate  and 
sufficient  description  ofthe  subject  of  the  de- 
vise, so  as  to  enable  us  to  treat  the  descrip- 
tion ofthe  land  l)eing  in  the  possession  of 
Burrows  as  a  false  demonstration,  and  re- 
ject it  according  to  the  first  rule?  Now  if  we 
read  the  language  of  the  devise  in  its  ordi- 

[G3] 


66' 


THE   LAW   OF   CONTRACTS. 


[part  II. 


a  future  day  was  intended  is  not  admissible,  (iv)  And  in  Mas- 
sachusetts, one  who  puts  his  name  on  the  back  of  a  note  (not 
being  a  payee)  at  the  time  it  was  made,  is  permitted  to  intro- 
duce proof  that  his  contract  was  conditional  only,  [iva) 

There  are  reasons,  although  perhaps  no  direct  authority,  for 
applying  to  the  construction  of  contracts  a  distinction  which  is 
taken  in  respect  of  wills.  If  the  presumption  i^  against  the 
apparent  and  natural  effect  of  an  instrument,  it  may  be  rebutted 
by  parol  evidence ;  but  not  so  if  the  legal  presumption  is  with 
the  instrument.  As  if  a  testator  gives  two  legacies  to  the  same 
party,  in  such  a  way  that  the  presumption  of  law  is  that  they 
are  but  one  legacy,  evidence  is  receivable  to  show  that  the  tes- 
tator said  what  he  meant,  and  that  a  double  gift  was  intended. 
But  if  they  are  so  given  that  the  law  holds  that  what  is  twice 
given  was  meant  to  be  twice  given,  evidence  is  not  receivable 
to  show  that  but  a  single  gift  was  intended,  {x) 

Where  the  agreement  between  the  parties  is  one  and  entire, 
and  only  a  part  of  this  is  reduced  to  writing,  it  would  seem  that 
the  residue  may  be  proved  by  extrinsic  evidence,  [y)     *And  if 


nary  atul  obvious  sense,  it  is  a  gift  first,  of 
'  all  \\\i  leasehold  farm-house,  homestead, 
lands,  and  tenements  at  Ileadington,  held 
under  M.igdalcn  College,  and  oecupied  by- 
Burrows.'  There  is  no  doubt  that  the 
farmhouse  passed,  for  it  was  a  '  leasehold, 
and  in  the  occupatiou  of  Burrows ; '  and 
if  there  was  one  aere,  and  one  only,  of  that 
character,  and  that  was  not  in  the  posses- 
sion of  Burrows,  that  would  have  jiassed, 
and  the  description  would  have  been  re- 
jected as  inapplicable  to  any  such.  The 
will  then  prol'esses  to  give  all  the  testator's 
lands  and  tenements  at  Ileadington,  lease- 
hold under  the  college,  containing  about 
170  acn-'s,  in  the  possession  of  Burrows. 
The  description  by  acreage  defines  noih- 
ing,  for  it  is  inapplicable  to  any  subject, 
[wiietlicr  the  two  parcels  were  added  or 
not,  the  amount  would  li^vo  been  very 
dill'ercnt  from  170  acres],  and  therefore 
that  may  lie  rejected,  and  then  there  is 
notliiiig  to  define  any  lands  in  jjarticidar. 
Tiic  Kccoml  maxim  tiien  applies,  and  all 
the  demonstrations  here  being  true  as  to 
the  rest  of  the  land,  exclusive  of  these  two 
parceN,  and  part  only  being  true  as  to 
these  parcels,  iliev  do  not  pass."  See  also. 
Doc  t;.  Bower,  3  B.   &  Ad.  453 ;  Bac. 

[Gl] 


Max.  Eeg.  13  ;  Doc  v.  Hubbard,  15  Q.  B. 
227  ;  Newton  v.  Lucas,  6  Sim.  54. 

[w)  Warren  v.  Wheeler,  8  Met.  97; 
Atwood  V.  Cobb,  16  Pick.  227  ;  Kyan  v. 
Hall,  13  Met.  520;  Thompson  v.  Ketch- 
am,  8  Johns.  189  ;  Barry  v.  Ransom,  2 
Kern.  462.  But  a  promise  to  do  some- 
thing other  than  to  pay  money,  no  time 
being  expressed,  means  a  promise  to  do  it 
within  a  reasonable  time.  Warren  v. 
Wheeler,  8  Met.  97.  And  in  such  a  case, 
it  seems  that  a  contemporaneous  verbal 
agreement  that  the  matter  stipulated  for  in 
a  written  agreement  sliould  be  done  at  a 
))articular  time,  would  be  admissible  as 
bearing  upon  the  question  of  reasonable 
time.  Per  6'/'««',  C.  J.,  in  Atwood  v. 
Coiib,  16  Pick.  231.  And  see  Barringer 
r.  Sliced,  3  Stew.  201  ;  Simpson  v.  Hen- 
derson, Moody  &  M.  300. 

(u-a)  Wright  v.  Morse,  S.  J.  C.  Mass. 
1858,  20  Law  Rep.  656. 

(.r)  Hall  V.  Hdl,  1  Con.  &  L.  120,  1 
Driiry  &  W.  94.  See  also,  S|)ence  on  the 
lOipiitable  Jurisdiction  of  the  Court  of 
('lianccry,  vol.  1,  j).  5G5,  cl  sat/.,  where 
this  point  is  fully  examined,  and  the  au- 
thorilics  cited. 

(y)  In  Jellery  v.  Walton,  1  Stark.  267, 


CH.  I.]   CONSTRUCTION  AND  INTERPRETATION  OF  CONTRACTS.   -66 

there  are  contemporaneous  writings  between  the  same  parties, 
so  far  in  relation  to  the  same  subject-matter  that  they  may  be 
deemed  part  and  parcel  of  the  contract,  although  not  referred  to 
in  it,  they  may  be  read  in  connection  with  it;  (z)  but  not  so  as 
to  affect  a  third  party  who  relied  upon  the  contract,  and  knew 
nothing  of  these  other  writings. 

Recitals  in  an  instrument  may  be  qualified  or  contradicted  by 
extrinsic  evidence,  if  the  law  of  estoppel  does  not  prevent.  So 
the  date  of  an  instrument,  (a)  or  if  there  be  no  date,  the  time 
when  it  was  to  take  effect,  which  may  be  other  than  the  day  of 
delivery;  (aa)  or  the  amount  of  the  consideration  paid,  (b)  may 
be  varied  by  testimony;  but  if  a  note  given  for  land  is  sued,  the 
promisor  cannot  show  in  defence  that  the  deed  described  a  less 
quantity  of  land  than  had  been  stipulated,  (ba)  And  an  instru- 
ment may  be  shown  to  be  void  and  without  legal  existence  or 


in  an  action  for  not  taking  proper  care  of 
a  horse  hired  by  the  defendant  of  the 
plaintiff,  the  following  memorandnm,n)ade 
at  tlie  time  of  hirinfj:,  was  offered  in  evi- 
dence : —  "Six  weeks  at  two  guineas  — 
Win.  Walton,  jun'r."  Lord  Ellenboroiigh 
regarded  the  memorandum  as  incomplete, 
but  conclusive  as  far  as  it  went.  "  The 
written  agreement," said  lie,  "merely  reg- 
ulates the  time  of  hiring,  and  the  rate  of 
payment,  and  I  shall  not  allow  any  evi- 
dence to  lie  given  by  the  plaintiff  in  con- 
tradiction of  these  terms,  but  I  am  of 
opinion  that  it  is  competent  to  the  plaintiff 
to  give  in  evidence  suppletory  matter  as  a 
part  of  the  agreement."  See  Knapp  v. 
Harden,  6  C.  &  P.  74,5  ;  Deshon  v.  Mer- 
chants Ins.  Co.  11  Met.  199;  Edwards 
t".  Goldsmith,  16  Penn.  St.  43  ;  Coates  v. 
Sangston,  5  Md.  121  ;  Knight  v.  Knotts, 
8  Rich.  Law,  35.  Also,  Heatherley  v. 
Reeord,  12  Texas,  49. 

(z)  In  Colbourn  r.  Dawson,  10  C.B.  76,5, 
4  Eng.  L.  &  Eq.  378,  the  plaintiff's  wrote 
to  the  defendant :  "  We  are  doing  busi- 
ness with  B,  and  require  a  guaranty  to  the 
amount  of  £200,  and  he  refers  us  to  you." 
Defendant  wrote  in  answer  :  "  I  have  no 
objection  to  become  security  for  B,  and 
subjoin  a  memorandum  to  that  effect." 
The  memorandum  subjoined  was  :  "  I 
herel)y  engage  to  guaranty  to  Messrs.  Col- 
bourn, iron-masters,  £200  for  iron  receiv- 
ed from  them  for  B,  as  annexed."  Held, 
that  these  three  documents  should  be  read 

6* 


together,  and  that  the  words,  "  we  are 
doing  business,"  taken  with  the  rest, 
showed  that  the  consideration  for  the 
defendant's  undertaking  was  that  the  plain- 
tiff should  continue  to  supply  B  with 
goods,  and  that  there  was  therefore  a  good 
consideration.  See  also,  Hunt  v.  Frost, 
4  Cush.  54;  Hanford  v.  Rogers,  11  Barb. 
18;  Shaw  v.  Leavitt,  3  Sandf.  Ch^  163; 
Gaminon  ?>.  Freeman,  31  Me.  243;  Ken- 
yon  V.  Nicliols,  1  II.  I.  411. 

(a)  Breck  v.  Cole,  4  Sandf.  79  ;  Abrams 
V.  Pomeroy,  13  111.  133;  Ilalli'.  Cazenove, 
4  East,  477.  Where,  however,  the  date  is 
referred  to  in  the  body  of  the  instrument, 
as  fixing  the  time  of  payment,  as  where 
there  is  a  promise  to  pay  money  or  to  do 
some  act  "  in  sixty  days  from  date,"  the 
date  cannot  be  altered  or  varied  by  parol 
evidence.     Josepli  i'.  Bigelow,  4  Cush.  82. 

{aa)  Davis  v.  Jones,  17  C.  B.  625. 

(b)  Clifford  V.  Tiirrell,  1  Young  &  C. 
Cas.  in  Ch.  138  ;  Rex  v.  Scammonden,  3 
T.  R.  474 ;  Belden  v.  Seymour,  8  Conn. 
304.  As  to  the  effect  of  the  recital  in  a 
deed  of  conveyance  of  the  payment  of  the 
consideration-money,  as  evidence  of  such 
payment,  tiie  English  and  American  au- 
thorities differ,  the  former  holding  such 
recital  to  be  conclusive  evidence,  and  the 
latter  only  prima  facie.  See  the  cases  col- 
lected and  arranged  in  1  Gr.  Ev.  §  26, 
n.  (1). 

(6a)  Bennett  v.  Ryan,  S.  J.  C.  Mass. 
1858,  20  Law  Rep.  652. 

[65] 


67*  THE   LAW   OF    CONTRACTS.  [PART  11. 

efficacy,  as  for  want  of  consideration,  (c)  or  for  fraud,  (d)  or 
duress,  or  any  incajDacity  of  the  parties,  (e)  or  any  illegality  in 
the  agreement.  (/)  In  the  same  way,  *extrinsic  evidence  may 
show  a  total  discharge  of  the  obligations  of  the  contract ;  or  a 
new  agreement  substituted  for  the  former,  which  it  sets  aside  ;  (g) 
or  that  the  time  when,  (A)  or  the  place  where,  (i)  certain  things 
■yyere  to  be  done,  had  been  changed  by  the  parties ;  or  that  a 
new  contract,  which  was  additional  and  supplementary  to  the 
original  contract,  had  been  made;  (j)  or  that  damages  had  been 
waived,  (k)  or  that  a  new  consideration,  in  addition  to  the  one 
mentioned,  has  beei^  given,  if  it  be  not  adverse  to  that  named 
in  the  deed.  (/)  And  if  no  consideration  be  named,  one  may  be 
proved,  (m) 

A  receipt  for  money  is  peculiarly  open  to  evidence.  It  is 
only  prima  facie  evidence  either  that  the  sum  stated  has  been 
paid,  or  that  any  sum  whatever  was  paid,  (n)  It  is  in  fact  not 
regarded  as  a  contract,  and  hardly  as  an  instrument  at  all,  and 
has  but  little  more  force  than  the  oral  admission  of  the  party 
receiving.  But  this  is  true  only  of  a  simple  receipt.  It  often 
happens  that  a  paper  which  contains  a  receipt,  or  recites  the 
receiving  of  money  or  of  goods,  contains  also  terms,  condi- 
tions, and  agreements,  or  assignments.  Such  an  instrument, 
as  t^  every  thing  but  the  receipt,  is  no  more  to  be  affected  by 
extrinsic  evidence  than  if  it  did  not  contain  the  receipt;  but  as 
to  the  receipt  itself,  it  may  be  varied  or  contradicted  by  extrinsic 
testimony,  in  the  same  manner  as  if  it  contained  nothing  else,  (o) 

(c)  Erwin  v.  Saunders,  1  Cowcn,  249  ;         (/)  Roliinson  v.  Batdieklcr,  4  N.  H.  40. 
roster  I.'.  Jollv,  1   Cromp.  M.  &  R.  703.         (j)  Jcffory  v.  Walton,  1  Stark.  267. 
The  case  of  "Bowers  v.  Hurd,   10  Mass.         (k)  Flemmin<^  r.  Gilbert,  3  Johns.  528. 
427,  so  far  as  it  contains  a  contrary  doc-         (/)  Clif5brd  r.  Turrell,  1  Younu;  &  C. 

trine,   lias    been    overruled.     See    Hill   v.  Cas.  in   Cli.  138;  Bedell's   case,   7    Jlep. 

Buckminstcr,  5  Tick.  391  ;  Parish  v.  Stone,  133  a  ;  Shaw  v.  Leavitt,  3  Sandf.  Ch.  163, 

14  id.  198.  173;    Villers  i-.  15eaniont,  Dyer,  146  a; 

(</)  Krwin  v.  Saunders,  1  Cowcn,  249  ;  Doe  d.  Milhiirn  r.  Salkeld,  WUles,  677. 
Van  V':iikcnl)urj,'li  ;•.  Bonn,  12  Johns.  337.         {in)  Bott  r.  Todhunter,  2  Collycr,  76. 

(e)  Miichcli  V.  Kin<;inan,  5  Pick.  431.  (//)  Dutton  v.  Tilden,  13  Benn.  St.  46  ; 

(/)  Collins  c.  Blantini,  2  Wilson,  .347.  Bell  r.  Bell,   12    Benn.    St.    23.5;    Kirk- 

(ij)  .MuMioc   V.  Perkins,   9    Pick.   298^  jiatrick  r.  Smith,  10  lluniidi.   188  ;  Cole 

Goss  V.   i.onl   i\u-cnt,  5   B.   &  Ad.   58;  r.  'J'aylor,  2  N.  J.  59;  Iniller  v.  Critten- 

Davis  V.  Tidlcot,  2  Kern.  184.  den,  9  Conn.  401  ;  Straton  v.  Kastall,  2 

(//)  Keatintr  v.  Price,  1  .Johns.  Cns.  22;  T.  Iv.  366  ;  Byan  i\  Band,  6  Foster,  12. 
Dcnrliorn  v.  Cross,  7  Cowen,  48  ;  Neil  v.         (<>)  Where  i'^n  a  receij)!  money  was  ac- 

Chcvc'H,  1   Bailey,  537;  Cuff  r.  I'eiin,  1  knowlcdj^ed  to  have  been  received  "  for 

M.  &  S.  21 .  safe-keeping,"  it  was  held  that  no  evidence 

[GG] 


Cir.  I.]      CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.  *68 

If  a  contract  refer  to  principles  of  science,  or  art,  or  use  *the 
technical  phraseology  of  some  profession  or  occupation,  or  com- 
mon words  in  a  technical  sense,  or  the  words  of  a  foreign  lan- 
guage, their  exact  meaning  may  be  shown,  as  we  have  already 
remarked,  by  the  testimony  of  "  experts,"  who  are  persons  pos- 
sessing the  peculiar  knowledge  and  skill  requisite  for  the  inter- 
pretation of  the  contract,  (p)  It  may  be  added  that  the  testi- 
mony of  the  experts  is  so  far  a  matter  for  the  jury,  that  if  it  be 
contradictory  and  conflicting,  or  uncertain,  it  is  to  be  weighed 
by  them.  But  the  legal  effect  of  the  words  or  phrases,  when 
their  meaning  is  ascertained  by  experts,  belongs  to  the  construc- 
tion of  the  contract,  and  is  for  the  court,  (q) 

Questions  depending  upon  the  construction  or  interpretation 
of  a  contract  sometimes  arise,  between  third  parties,  who  had 
no  privity  or  participation  in  the  original  contract,  and  nothing 


was  admissible  to  show  that  the  money 
was  not  deposited  for  safe-kecpinsr,  ijut 
was  in  diseliartie  of  a  delit.  Tisloe  v. 
Graeter,  1  Bhic-kf.  353.  See  also,  Euleston 
V.  Kniekeibaiker,  6  Barh.  458;  Smith  v. 
Brown,  3  Hawks,  580 ;  ]May  r.  Balicock, 
4  Ohio,  34G ;  Stone  v.  Vance,  6  Ham. 
Ohio,  24G ;  Wood  v.  l\ny,  Wiij^lit, 
Ohio,  240;  Graves  r.  Harwood,  9  Barb. 
477;  Wayland  v.  Moselv,  5  Ak.  430; 
O'Brien  r."  Gilcinist,  34  Me.  544. 

(77)'Goblet  V.  Beeclicy,  3  Sim.  24  ;  Wig- 
ram  on  Wills,  Appendix,  No.  1  ;  Masters 
V.  Master.s,  1  P.  Wins.  425 ;  Norman  v. 
Morrell,  4  Ves.  7G9  ;  Shore  v.  Wilson,  9 
Clark  &  F.  511  ;  Cabarga  i'.  Seeger,  17 
Penn.  St.  514.  The  court  may  always  in- 
form itself  by  means  of  books  and  treatises 
as  to  the  meaning  of  the  terms  used  in  an 
instrument,  especially  where  that  instru- 
ment is  atieicnt,  or  uses  scientific  terms. 
Per  Tindall,  C.  J.,  in  Shore  v.  Wilson,  9 
Clark  &  F.  568;  per  Eiire,  C.  B.,  in  At- 
torney-General V.  Plate  Glass  Co.  1  Anst. 
39,  44. 

(([)  In  Armstrong  v.  Burrows,  6  Watts, 
26G,  where  the  only  matter  in  dispute  was 
as  to  the  date  of  a  receipt  given  by  the 
plaintiff,  the  date  being  illegible,  the  court 
upon  the  trial  assumed  an  exclusive  right 
to  decipher  the  instrument,  and  to  deter- 
mine the  date,  upon  the  evidence  given. 
Upon  error,  Gibson,  C.  J.,  in  reversing  the 
judgment  of  the  court  below,  said  : 
"  That  the  court  assumed  an  exclusive 
right  to  decipher  the  contested  letters  is 


both  true  and  fatal.  It  doubtless  belongs 
to  it  to  interjirct  the  meaning  of  written 
words  ;  but  this  extends  not. to  the  letters, 
for  to  interpret  and  to  decipher  are  differ- 
ent things.  A  writing  is  read  before  it  is 
expounded,  and  the  ascertainment  of  the 
words  is  finished  before  the  business  of 
exposition  begins.  If  the  reading  of  the 
judge  were  not  matter  of  fact,  witnesses 
would  not  be  heard  in  contradiction  of  it; 
and  though  he  is  supposed  to  have  pecul- 
iar skill  in  the  meaning  and  construction 
of  language,  neither  his  business  nor  learn- 
ing is  supposed  to  give  him  a  superior 
knowledge  of  figures  or  letters.  His  right 
to  interpret  a  paper  written  in  Coptic 
characters  would  be  the  same  that  it  is  to 
interjn'et  an  English  writing ;  yet  the 
words  would  be  approached  only  through 
a  translation.  The  jury  were,  therefore, 
not  only  legallj'-  competent  to  read  the 
disputed  word,  but  bound  to  ascertain 
what  it  was  meant  to  represent."  See 
Cabarga  v.  Sccger,  17  Penn.  St.  514; 
Jackson  v.  Ransom,  18  Johns.  107;  Shel- 
don V.  Benham,  4  Hill,  129;  Dana  v. 
Fiedler,  2  Kern.  440.  In  Rcmon  v.  Hay- 
ward,  2  A.  &  E.  GG6,  it  is  said  that  a 
question  arising  at  Nisi  Prius,  before  Lord 
Denman,  from  the  obscurity  of  the  hand- 
writing, what  the  words  of  a  written  in- 
strument produced  in  evidence  really 
were,  his  lordship  decided  the  question 
himself,  and  refused  to  have  it  put  to  the 

[67] 


69* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


to  do  with  the  language  used  in  it.  In  such  cases  much  of  the 
reason  which  prohibits  the  introduction  of  *  extrinsic  evidence 
fails,  and  with  it  the  prohibition  fails.  It  would  be  obviously- 
unjust  to  hold  these  parties  responsible  for  words  which  neither 
of  them  selected  or  adopted,  or  had  any  power  to  exclude  or  to 
qualify.  They  may  therefore  show  by  extrinsic  evidence  what 
the  agreement  between  the  original  parties,  whi  h  purports  to  be 
expressed  by  the  written  contract,  really  was,  so  far  as  this  is 
necessary  to  establish  their  actual  rights,  and  to  do  full  justice 
between  them,  (r)  A  simple  illustration  of  this  may  be  found 
in  the  rule,  that  if  the  two  promisors  of  a  note  are  sued  neither 
can  defend  by  proving  that  the  one  signed  only  as  surety,  and  that 
the  other  was  the  principal.  But  if  one  of  them  pays  the  note 
and  sues  the  other  for  contribution  the  defendant  may  show  in 
bar  to  the  action  that  he  signed  only  as  surety  for  the  plaintiff. 

The  rule  in  relation  to  extrinsic  evidence  prohibits  the  admis- 
sion of  oral  testimony  "  to  contradict  or  vary  "  the  terms  of  a 
valid  written  contract,  (m)  Therefore,  there  is  nothing  in  this 
rule  to  prevent  the  introduction  of  such  testimony  for  the  pur- 
pose of  explaining  the  contract.  But  here  a  distinction  is  taken, 
which,  if  it  did  not  originate  with  Lord  Bacon,  was  first  clearly 
stated  by  him ;  it  is  the  distinction  between  a  patent  ambiguity 
and  a  latent  ambiguity,  [s) 


(r)  Ilex  V.  Scammondcn,  3  T.  R.  474; 
Rex  V.  Laitulon,  8  T.  \l.  379 ;  Taylor  v. 
Baldwin,  10  Barb.  582;  Krider  v.  Laffer- 
ty,  1  Wliart.  303.  The  parties  to  an  in- 
strument may  show  the  true  character  of 
tlic  transaction  hciween  thcin  in  contro- 
versies with  stran;;crs.  Stradcr  v.  Lam- 
beth, 7  B.  iMon.  .OSl) ;  llcynohls  v.  Majr- 
nes.s,  2  Ind.  20;  Venahic  f.  Tliompson, 
11  Ala.  147. 

(id)  Hudson  V.  Clemcntson,  18  C  B. 
213,  30  Kn;r.  L.  &  Eq.  332. 

(.f)  The  iiiie  as  to  luU'id  and  patent  am- 
lii(/nilits  has  been  rcjrardcd  as  furiiishinf;  a 
decisive  test  l)y  wiiich  to  dcteriniiie  in  all 
cases  whetlicr  extrinsic  evidence  is  admis- 
sililc  to  aid  in  the  interpretation  and  con- 
struction oC  a  written  instrument.  It  lias 
been  lookcii  u)ion  as  covcrin;^  tiic  wiiolo 
f^roimd  ()('  the  admission  of  extrinsic  evi- 
dence, and  the  confusion  which  has  ex- 
isted upon  this  suhjcct  is  allrihutaiile  in  a 
great  decree  to  the  loose  and  uncertain 

[G8] 


meanings  attached  to  the  terms  latent  and 
patent  (unbifjuities.  The  term  ambiguity 
itself,  which  properly  means  the  having 
two  meanings,  is  misapfilied  when  used 
to  comprehend  all  doubts  and  uncertain- 
ties in  respect  to  the  meaning  of  written 
instruments.  As  the  term  y)«<t'»<  has  been 
understood,  it  is  not  true,  that  a  patent 
ambiguity  is  unexplainable  by  extrinsic 
evidence.  Wiiere  words  are,  in  the  truest 
sense  of  the  term,  ambifjuoits,  that  is,  liave 
double  meanings,  not  simply  double  appli- 
cations, as  mere  names,  the  uncertainty  is 
inherent  in  the  word,  and  is  of  course  ne- 
cessarily piilciit.  'I'hus  the  word  "  freight," 
as  it  was  remarked  by  Mv.  Justice  Slori/, 
in  I'eisch  v.  Dickson,  1  Mason,  10,  is  sus- 
fepliiile  of  two  meanings,  and  it  might  bo 
doubtful  on  ihe  face  of  an  instrument 
whether  it  referred  to  goods  on  board  a 
ship,  or  to  an  interest  in  its  earnings, 
'i'here  can  be  no  doubt  that  in  such  a  case 
extrinsic    evidence   of    the    circumstances 


en.  I.]      CONSTRUCTION  AND  INTERPRETATION   OF  CONTRACTS.  70 

"There   be  two  sorts  of  ambiguities  of  words;   the  one  is 
ambiguilas  patens^  and  the  other  latens.     Patens  is  that  which 


under  whicli  the  instrument  was  made 
would  be  admissible  to  remove  the  doubt 
or  uncertainty.  See  also,  as  to  the  mean- 
ing of  the  word  "  port,"  De  Longucmere 
V.  N.  Y.  Tire  Ins.  Co.  10  Johns.  120.  So 
although  a  devise  or  grant  to  "  one  of  tlie 
sons  of  A,"  he  having  several  sons,  would 
be  void  for  uncertainty  (Altham's  case, 
8  Eep.  1.55  a),  yet  there  is  no  reason  why 
a  devise  "  to  one  of  the  sons  of  A,"  he 
being  dead,  and  having  only  one  son, 
would  not  be  good.  Wigrani  on  Wills, 
sec.  79.  Here  a  patent  ambiguity  would 
be  removed  by  evidence  of  extrinsic  facts. 
In  Price  v.  Page,  4  Ves.  679,  there  was  a 

legacy  to Price,  the  son  of 

Price.  The  plaintiff  was  the  only  claim- 
ant. He  was  a  son  of  a  niece  of  the  tes- 
tator, the  only  relation  of  the  name  of 
Price,  and  lived  upon  terms  of  intimacy 
with  the  testator.  He  was  held  entitled. 
—  The  rule  that  no  evidence  is  admissible 
to  remove  a  pater)t  amblyvili/  would  be 
strictly  correct,  if  by  patent  anthirjuitt/  we 
mean  that  state  of  uncertainty  which  ex- 
ists where  it  is  perfectly  clear  from  the 
face  of  the  instrument  to  be  construed, 
cither  that  no  certain  subject  has  been  _ 
selected,  upon  which  the  instrument  can 
operate  or  take  effect,  or  that  no  certain 
person  or  persons  have  been  selected  to 
be  benefited  or  affected  by  the  instrument, 
or  that  no  certain  purpose  has  been  indi- 
cated in  respect  to  the  subjects  or  objects. 
Thus,  a  devise  to  "twenty  of  the  poorest 
of  the  testator's  kindred,"  is  void  for  un- 
certainty. Webb's  case,  1  Rol.  Abr.  609. 
So  a  becjuest  of  "  some  of  my  best  linen." 
Peck  I'.  Halscy,  2  P.  Wms.  387.  So  also, 
a  devise  to  this  effect :  "  I  request  a  hand- 
some gratuity  to  be  given  to  each  of  my 
executors."  Jubber  v.  Jiiltber,  9  Sim. 
503.  So  a  devise  to  the  "  best  men  of 
the  White  Towers."  Ycar-Book,  49  Ed. 
3,  cited  in  Winter  v.  Perratt,  9  Clark  & 
F.  688.  So  a  bequest  of  a  legacy  to  be 
distributed  "among  the  real  distressed 
private  poor  of  Talbot  county,"  there 
being  no  discretion  given  to  the  executors. 
Trippc  V.  Frazicr,  4  Harris  &  J.  446.  The 
same  would  be  true  of  a  bequest,  "to-be 
applied  towards  feeding,  clothing,"  &c., 
the  poor  children  of  C.  county,  which  at- 
tend the  poor  or  charity  school  established 
at  H.,  in  said  county.  Dashiell  v.  Attor- 
ney-General, 6  Hari'is  &  J.  1.  See  also, 
Dashiel  v.  Attorney-General,  5  Harris  & 


J.  392;  Beal  v.  Wyman,  Styles,  240; 
Jackson  v.  Craig,  Knight  Bruce,  V.  C,  3 
Eng.  L.  &  Eq.  173;  Baker  v.  Newton,  2 
Beav.  112;  Eowler  i'.  Garlike,  1  Kuss.  & 
M.  232 ;  Attorney-General  v.  Sibihorp, 
2  Kuss.  &  M.  107;'  Mason  v.  Robinson,  2 
Simons  &  S.  295;  Winter  v.  Perratt,  9 
Clark  &  F.  606  ;  Doe  v.  Carew,  2  Q.  B. 
317  ;  Weatherhead's  lessee  v.  Baskerville, 
11  How.  329.  In  very  few  cases,  how- 
ever, will  it  be  perfectly  clear  upon  the 
face  of  the  instrument  that  the  intent  is  so 
uncertain,  that  no  evidence  of  extrinsic 
fads  can  make  it  certain.  —  The  term 
"  latent  ambiguity  "  is  used  very  loosely 
to  mean  any  doubt  or  uncertainty  raised 
by  extrinsic  evidence,  and  very  frequently 
there  is  a  ftiilure  to  distinguish  between 
cases  where  a  description  is  equally  ap- 
plicable to  either  one  of  two  or  more  per- 
sons, or  of  two  or  more  things,  and  the 
other  cases  in  which  a  doubt  is  raised  by 
extrinsic  facts,  such  as  cases  of  defective 
and  inaccurate  description.  This  distinc- 
tion is  of  great  consequence,  especially  in 
reference  to  the  kind  of  evidence  admis- 
sible to  remove  the  doubt  or  uncertainty, 
for  it  is  only  in  the  case  of  the  double  ap- 
plication of  words  of  description  that  evi- 
dence of  intention  direct  is  admissil)!e  to 
remove  the  uncertainty.  It  may  be  shown 
which  of  two  or  more  persons  or  things 
was  intended  by  a  description  equally  ap- 
plicable to  all.  Altham's  case,  8  Rep. 
155  a;  Jones  v.  Newman,  1  W.  Bl.  60; 
Doe  V.  JVIorgan,  1  Cromp.  &  j\I.  235; 
Doe  V.  Allen,  12  A.  &  E.  451  ;  Oshoru 
V.  Wise,  7  C.  &  P.  761  ;  Blundell  i:  Glad- 
stone, 3  McN.  &  G.  692,  12  Eng.  L.  & 
Eq.  52;  Careless  v.  Careless,  19  Ves. 
601  ;  Carruthcrs  v.  Sbcddon,  G  Taunt. 
14;  Waterman  r.  Johnson,  13  Pick.  2G1. 
But  see  as  to  latent  ambigniiy,  in  case  of 
sheriffs'  sales,  Mason  v.  Wliite,  11  Barb. 
174.  In  Doe  d.  Gord  v.  Needs,  2  M.  & 
W.  129,  the  law  with  respect  to  the  ad- 
mission of  extrinsic  evidence,  in  the  case 
of  latent  ambiguities,  is  laid  down  with 
great  clearness  by  Parke,  B.  Tbe  testii- 
tor  in  that  case  devised  a  house  to  George 
Gord,  the  son  of  George  Gord;  another 
to  Geonje  Gord,  the  son  of  Gord.  He  also 
bequeathed  a  legacy  to  George  Gord, 
the  son  of  John  Gord.  The  question 
was,  whether  evidence  was  admissible  to 
show  that  the  testator  intended  tiiat  the 
house  devised  to  "  George  Gord,  the  son 

[G9] 


71-72* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


appears  to  be  ambiguous  upon  the  deed  or  instrument;  latens 
is  that  which  seemeth  certain,  and  without  ambiguity,  *for  any 


of  Gord,"  should  go  to  George,  the  son  of 
George  Gord.  Parke,  B.,  said,  "  If,  upon 
the  face  of  the  devise,  it  had  been  uncer- 
tain wlicther  the  devisor  had  selected  a 
particular  olijcct  of  Ids  bounty,  no  evi- 
dence would  have  been  admissible  to 
prove  that  he  intended  a  gift  to  a  certain 
individual ;  such  would  have  been  a  case 
of  a»tbi(/uitas  patens,  within  the  meaning 
of  Lord  Bacon's  rule,  which  ambiguity 
could  not  be  holden  by  averment ;  for  to 
allow  such  evidence  would  be,  with  re- 
spect to  that  subject,  to  cause  a  parol  will 
to  operate  as  a  written  one,  or,  adopting 
the  language  of  Lord  Bacon,  '  to  make 
that  pass  without  writing  which  the  law 
appointeth  shall  not  pass  but  by  writ- 
ing.' But  here  on  the  face  of  the  devise 
no  such  doubt  arises.  There  is  no  blcnik 
before  the  name  of  Gord  the  father,  which 
might  have  occasioned  a  doubt  whether 
the  devisor  had  finally  fixed  on  any  cer- 
tain person  in  his  mind.  The  devisor  has 
clearly  selected  a  particular  individual  as 
the  devisee.  Let  us  then  consider  what 
would  have  been  the  case  if  there  had 
been  no  mention  in  tlie  will  of  any  other 
George  Gord,  tlie  son  of  a  Gord  ;  on  that 
supposition  there  is  no  doul)t,  upon  the 
authorities,  but  that  evidence  of  the  testa- 
tor's intention,  as  proved  by  his  declara- 
tions, wouin  have  been  admissible.  Upon 
the  proof  of  extrinsic  facts,  which  is 
always  allowed,  in  order  to  enable  the 
court  to  place  itself  in  the  situation  of  the 
devisor,  and  to  construe  his  will,  it  would 
have  appeared  that  there  were  at  the  date 
of  the  will  tiro  persons,  to  each  of  whom 
the  description  would  be  equally  applica- 
ble. This  clearly  resembles  the  case  put 
by  Lord  Bacon  of  a  latt-nt  ambiguity,  as 
wiiere  one  grants  his  manor  of  S.  to  J.  F. 
and  his  heirs,  and  the  truth  is  that  he  has 
the  manors  iiolh  of  North  S.  and  South 
S. ;  in  whirh  case  Lord  Bacon  says,  '  it 
sliall  be  holpcn  by  averment  whetlier  of 
them  was  that  which  the  |)arty  intended 
to  pass.'  The  case  is  also  exactly  like 
that  mentioned  by  Lord  Coke  in  Altham's 
case,  8  Kcp.  l.'i.'j  a;  'if  A  levies  a  fine  to 
William,  his  son,  and  A  has  two  sons 
iiami'il  William,  the  averment  that  it  wiis 
/tis  iiil<  lit  to  levy  the  fine  to  the  younger  is 
gooil,  and  slnm/s  ircll  irilh  the  irorils  of  the 
fine'  Another  case  is  put  in  (/'oundcn  v. 
(y'Icrke,  Hob.  32,  which  is  in  [)oint;.'if 
one  device  to  his  son  John,  where  ho  has 

[70] 


two  sons  of  that  name,'  and  the  same  rule 
was  acted  upon  in  the  recent  case  of  Doe 
V.  Morgan,  1  Cromp.  &  M.  2.35.  The 
characteristic  of  all  these  cases  is,  that  the 
words  of  the  will  do  describe  the  object  or 
subject  intended  ;  and  the  evidence  of  the 
declarations  of  the  testator  has  not  the 
eflfect  of  varying  the  instrument  in  any 
way  whatever ;  it  only  enables  the  court 
to  reject  one  of  the  subjects  or  objects  to 
which  the  description  in  the  will  applies ; 
and  to  determine  which  of  the  two  the  tes- 
tator understood  to  be  signified  by  the 
description  which  he  used  in  the  will. 
.  .  .  .  There  would  have  been  no 
doubt  whatever  of  the  admissibility  of 
evidence  of  the  devisor's  intention,  if  the 
devise  to  '  George,  the  son  of  Gord,'  had 
stood  alone,  and  no  mention  had  been 
made  in  the  will  of  George,  the  son  of 
John  Gord,  and  George,  the  son  of  Georrje 
Gord.  But  does  the  circumstance  that 
there  are  two  persons  named  in  the  will, 
each  answering  the  description  of  '  George, 
the  son  of  Gord,'  prevent  the  application 
of  this  rule  ?  We  are  of  opinion  that  it 
docs  not.  In  truth,  the  mention  of  per- 
sons by  those  descriptions  in  other  parts 
of  the  will  has  no  more  effect,  for  this 
purpose,  than  proof  by  extrinsic  evidence 
of  the  existence  of  such  persons,  and  that 
they  were  known  to  the  devisor,  would 
have  had  ;  it  shows  that  there  were  two 
persons,  to  either  of  whom  the  description 
in  (|uestion  would  be  applicable,  and  that 
such  two  persons  were  both  known  ;  and 
the  present  case  really  amounts  to  no 
more  than  this,  that  the  person  to  whom 
the  imperfect  description  appears  on  the 
parol  evidence  to  apply  is  described  in 
other  parts  of  the  same  will  by  a  more 
full  and  perfect  description,  which  excludes 
any  other  object  than  himself."  Evidence 
of  intention  may  be  admitted,  where  there 
are  two  persons  of  the  same  name,  father 
and  son,  although  the  son  has  the  addi- 
tion of  jiin'r  to  iiis  name.  Coit  v.  Stark- 
weather, 8  Conn.  289.  See  Doe  v.  West- 
lake,  4  B.  &  Aid.  57.  If  in  cases  of 
latent  ambiguity  the  intent  of  the  parlies 
is  not  ascertained,  the  instrument  is  void 
for  uncertaintj'.  Bichardson  ?•.  Watson, 
4  B.  &  Ad.  787  ;  Cheyncy's  case,  5  liep. 
G8  b.  Much  will  be  gained  in  point  of 
accuracy,  it  is  conceived,  by  restricting 
the  term  latent  amliii/nit;/  to  the  case  where 
word.s  of  description  have  a  double  ajjpli- 


en.  I.]      COXSTRUCTION   AND   INTERPRETATION    OF   CONTRACTS.  *73 

thing  that  appeareth  upon  the  deed  or  instrument;  but  there  is 
some  collateral  matter  out  of  the  deed  that  brcedeth  the  ambi- 
guity. Amhiguitas  patens  is  never  holpen  by  averment,  and  the 
reason  is,  because  the  law  will  not  couple  and  mingle  matter  of 
specialty,  which  is  of  the  higher  account  with  matter  of  aver- 
ment, which  is  of  inferior  account  in  law;  for  that  were  to 
make  all  deeds  hollow,  and  subject  to  averments,  and  so,  in 
effect,  that  to  pass  without  deed,  which  the  law  appointeth 
shall  not  pass  but  by  deed.  Therefore,  if  a  man  give  land  to 
J.  D.  et  J.  S.,  et  hccredibus,  and  do  not  limit  to  whether  of  their 
heirs,  it  shall  not  be  supplied  by  averment  to  whether  of  them 
the  intention  was  the  inheritance  should  be  limited.  But  if  it 
be  ambig-uitas  latens,  then  otherwise  it  is :  as  if  I  grant  my 
manor  of  S.  to  J.  F.  and  his  heirs,  here  appeareth  no  ambiguity 
at  all ;  but  if  the  truth  be,  that  I  have  the  manors  both  of 
South  S.  and  North  S.,  this  ambiguity  is  matter  in  fact ;  and, 
therefore,  it  shall  be  holpen  by  averment,  whether  of  them  was 
that  the  party  intended  should  pass."  (i^) 

The  rules  of  Lord  Bacon  rest  entirely  upon  the  principle  that 
the  law  will  not  make,  nor  permit  to  be  made,  for  parties,  a 
contract  other  than  that  which  they  have  made  for  themselves. 
They  can  have  no  other  basis  than  this ;  and  so  far  as  they 
carry  this  principle  into  effect  they  are  good  rules,  and  no  far- 
ther. For  it  is  this  principle  which  underlies  the  whole  law  of 
construction,  and  originates  and  measures  the  value  of  all  its 
rules.  Thus,  if  a  contract  be  intelligible,  and  evidence  shows 
an  uncertainty,  not  in  the  contract,  but  in  its  subject-matter  or  its 
application,  other  evidence  which  will  remove  this  uncertainty 
is  admissible,  (w)     But  if  a  *cohtract  is  not  certainly  intelligible 

cation.  Indeed,  it  is  so  restricted  by  patent  and  latent  ambip;nities,  then,  falls 
Alderson,  B.,  in  Smith  v.  Jeftyres,  15  M.  to  the  ground,  as  furnishing  a  decisive 
&  W.  562.  If  the  term  is  so  restricted,  we  test  by  wliich  to  determine  in  all  cases 
then  have  the  cases  of  latent  ambiguities  whether  evidence  may  be  admitted  to  ex- 
proper,  in  which  alone  evidence  of  inten-  plain  a  written  instrument. 
tion  direct  is  admissible.  All  other  unccr-  {()  Bac.  Max.  Reg.  23. 
tainties,  whether  patent  or  latent,  in  the  (u)  "For  the  purpose  of  applying  the 
ordinary  sense  of  those  terms,  must  be  instrument  to  the  facts,  and  determining 
removed  by  the  same  kind  of  evidence,  what  passes  by  it,  and  wlio  take  an  inter- 
namely,  by  placing  the  court  which  is  to  est  under  it,  every  material  fact  that  will 
construe  an  instrument  as  nearly  as  pos-  enable  tlie  court  to  identify  the  person  or 
Bible  in  the  situation  of  tlie  author  of,  or  thing  mentioned  in  tlie  instrument,  and 
parties  to,  such  instrument.     The  rule  of  to  place  the  court,  whose  province  it  is  to 

[71] 


73- 


THE   LAW   OF   CONTRACTS. 


[PAllT  II. 


by  its'^lf,  it  may  be  said  that  evidence  which  makes  it  so 
must  make  a  new  contract ;  for  one  that  is  intelligible  cannot 
be  the  same  with  one  that  is  unintelligible:  and  therefore  the 
evidence  is  not  admissible.  But  this  argument  must  not  be 
carried  too  far,  for  it  is  not  always  applicable  without  much 
qualification.  What  indeed  is  the  meaning  of  uncertainty? 
If  words  of  a  foreign  language  are  used,  the  contract  is  uncer- 
tain until  they  are  interpreted ;  if  words  which  are  merely  tech- 
nical, then  it  is  uncertain  until  experts  have  given  their  mean- 
ing ;  if  words  which  are  applicable  to  two  or  three  different 
things  or  persons,  then  it  is  uncertain  until  the  one  thing  or  per- 
son is  clearly  pointed  oat.  Now,  where  does  the  law  stop  in 
this  endeavor  to  remove  uncertainty?  We  answer,  not  until  it 
is  found  that  the  contract  must  be  set  aside,  and  another  one 
substituted,  before  certainty  can  be  attained.  In  other  words, 
if  the  contract  which  the  parties  have  made  is  incurably  uncer- 
tain, the  law  will  not,  or  rather  cannot  enforce  it;  and  will  not, 
on  the  pretence  of  enforcing  it,  set  up  a  different  but  valid  one 


declare  the  meaning  of  the  words  of  the 
instrument,  as  near  as  maybe  in  the  situa- 
tion of  the  parties  to  it,  is  admissible  in 
evidence."  For  Parke,  B.,  in  Shore  v. 
Wilson,  9  Clark  &  F.  550.  See  Guy  i'. 
Sharp,  1  Mylne  &  K.  589,  G0;2,  per  Lord 
Browjhum  ;  Doe  v.  Martin,  1  Nov.  &  Man. 
524,  per  Parke,  J.  ;  Doe  d.  Hiscocks  v. 
Hiscocks,  5  M.  &  W.  367,  per  Lord 
Abiiitjer;  Ilildebrand  v.  Fogle,  20  Ohio, 
147;  llasbrook  v.  Faddock,  1  Barb.  635; 
Simpson  v.  Henderson,  Moody  &  M. 
300  ;  Wood  v.  Lee,  5  T.  B.  Mon.  50, 
59 ;  Ilitchin  v.  Groom,  5  C.  B.  515. 
"  Where  there  is  a  gift  of  the  testator's 
stock,  that  is  ambiguous,  it  has  diflerent 
meanings  when  used  i)y  a  farmer  and  a 
merchant.  So  with  a  bequest  of  jewels; 
if  by  a  nobleman,  it  would  pass  all ;  but 
if  by  a  jeweller,  it  would  not  pass  those 
that  lie  iiad  in  his  shop.  Tims  the  same 
expression  may  vary  in  meaning  accord- 
ing to  the  circumstances  of  the  testator." 
Per  Plinnir,  M.  11.,  in  Colpoys  v.  Col- 
povs,  Jacoli,  404.  See  also.'Keliey  v. 
J 'owlet.  A  mill.  005,  610.  Tlic  remarks 
of  Sir.Iafni's  \\'i;irain  upon  this  jjoint,  al- 
tbou;:li  made  wiih  reference  to  wills,  ap- 
j)ly  i'<|ual!y  to  all  instruments  to  be  con- 
Blrueil.  "  It  must  always  be  remembered," 
says  lu',  "  that,  the  words  of  a  testator, 

[72]     ,   , 


like  those  of  every  other  person,  tacitly 
refer  to  the  circumstances  by  which  at 
the  time  of  expressing  himself  he  is  sur- 
rounded. If,  therefore,  when  the  circum- 
stances under  which  the  testator  made  his 
will  are  known,  tlie  words  of  the  will  do 
sufficiently  express  the  intention  ascribed 
to  him,  the  strict  limits  of  exposition  can- 
not be  transgressed,  because  the  court,  in 
aid  of  the  construction  of  the  will,  refers 
to  those  extrinsic  collateral  circumstances 
to  which  it  is  certain  the  language  of  the 
will  refers.  It  may  be  true,  that,  without 
such  evidence,  the  precise  meaning  of  the 
words  could  not  be  determined  ;  but  it  is 
still  the  will  which  ex])resses  and  aseei-- 
tains  the  intention  ascribed  to  the  testator. 
A  ]Kige  of  history  (to  use  a  familiar  illus- 
tration) may  not  be  intelligible  till  some  col- 
lateral extrinsic  circumstances  arc  known 
to  the  reader.  No  one,  however,  would 
imagine  that  he  was  acquiring  a  knowl- 
edge of  the  writer's  meaning  from  anij 
other  source  than  the  page  he  was  reading, 
because,  in  order  to  make  tliat  page  intel- 
ligible, be  required  to  lie  informed  to  what 
country  the  writer  belonged,  or  to  be  fur- 
nished with  a  map  of  the  country  about 
which  he  was  reading."  Wigram  on 
Wills,  sec.  76. 


en.  I.]    CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.  *74-*75 

in  its  stead.  It  will  only  declare  such  a  supposed  contract  no 
*contract  at  all ;  and  will  leave  the  parties  to  the  mutual  rights 
and  obligations  which  may  then  exist  between  them.  But  on 
the  other  hand,  the  law  will  not  pronounce  a  contract  incurably 
uncertain,  and  therefore  null,  until  it  has  cast  upon  it  all  the 
light  to  be  gathered  either  from  a  collation  of  all  the  words 
used,  or  from  all  contemporaneous  facts  which  extrinsic  testi- 
mony establishes,  (v)  If  these  make  the  intention  and  mean- 
ing of  the  parties  certain,  it  may  still  be  an  intention  which  the 
words  cannot  be  made  to  express  by  any  fair  rendering.  In 
this  case  also  the  contract  is  null,  for  it  is  the  words  and  not  the 
intention  without  the  words  that  must  prevail.  But  if,  when  the 
intention  is  thus  ascertained,  it  is  found  that  the  words  will 
fairly   bear   a   construction  which    makes   them    express   *this 


{v)  Among  the  material  facts  necessary 
to  be  known  by  the  court  in  order  that  it 
may  he  placed  as  near  as  may  be  in  the 
position  of  the  parties  to  any  instrument, 
is  the  knowledife  or  ignorance  of  those  par- 
ties as  to  certain  facts  necessarily  involved 
in  the  application  of  the  instrument  to  the 
persons  or  thin;^s  described  in  it.  Thus, 
in  Doe  v.  Bcynon,  12  A.  &  E.  431,  there 
was  a  devise  to  Mary  B.,  with  remainder 
to  "  her  three  daughters,  Mary,  Elizabeth, 
and  Ann."  At  the  date  of  the  will,  Mary 
B.  had  two  legitimate  daughters,  Mary 
and  Ann,  living,  and  one  illegitimate, 
named  Elizabeth.  It  was  held  that  evi- 
dence was  admissible  to  show  thatMary  B. 
formerly  had  a  legitimate  daughter  named 
Elizabeth,  who  died  some  years  before  the 
"date  of  the  will,  and  that  "the  testator  did 
not  know  of  her  death,  or  of  the  birth  of 
the  illegitimate  daughter.  See  also,  Pow- 
ell V.  Biddle,  2  I)all.  70 ;  Goodinge  v. 
Goodinge,  1  Ves.  Sen.  231  ;  Careless  v. 
Careless,  19  Ves.  601  ;  Scanlan  v.  Wright, 
13  Pick.  523;  Brewster  v.  McCall,  15 
Conn.  274,  296.  —  So  where  the  question 
is  one  purely  of  intention,  the  6e//e/of  the 
author  of  an  instrument,  as  to  facts  neces- 
sarily involved  in  it,  may  have  an  impor- 
tant bearing  upon  its  construction.  A 
testator  devised  his  farm  in  A.,  in  the  pos- 
session of  T.  H.,  to  T.  R.  He  had  two 
farms  in  A.,  both  of  which  were  in  the 
possession  of  T.  H.,  but  at  different  rents. 
On  a  question  being  raised  which  of  these 
two  farms  the  testator  intended  to  give  to 
T.  R.,  held  that  the  devise  must  be  taken 
VOL.  II.  7 


to  have  been  made  to  T.  R.  for  his  per- 
sonal advantage  and  not  upon  trust ;  and 
if  therefore  it  could  be  ascertained  tliat 
one  of  the  farms  was  subject  to  a  trust,  or 
that  the  testator  supposed  it  to  be  so,  it 
must  then  be  inferred  that  such  farm  was 
not  the  one  intended  to  be  devised,  but 
that  the  other  was  the  one  referred  to  by 
the  testator.  Lord  St.  Leonards  said  : 
"  The  only  question  which  is  absolutely 
necessary  to  be  decided  is  this,  not  wheth- 
er the. testator  really  held  those  estates,  or 
one  of  them,  on  any  valid  trusts,  but 
rather  what  he  considered  and  understood 
to  be  his  interest,  that  is,  whether  he  sup- 
posed that  he  held  them,  or  one  of  them, 
on  any  trust,  or  treated,  or  intended  to 
treat,  or  to  have  them  or  one  of  them 
treated,  as  if  so  held  in  trust.  If  he  sup- 
posed that  he  held  one  of  them  in  trust, 
or  treated  it  as  if  so  held  and  intended 
tliat  it  should  be  considered  and  treated 
as  so  held,  and  if  it  does  not  appear 
that  he  held,  or  supposed  that  he  held,  the 
other  of  them  on  any  trust,  it  seems  to 
me  that  the  one  which  he  supposed  to  be 
held  on  any  trust,  or  treated  as  if  so  held, 
cannot  be  regarded  as  intended  to  be  the 
subject  of  the  devise  to  Mr.  Robinson, 
and  consequently  the  other  estate  may  be 
deemed  to  be  the  one  referred  to  in  that 
devise."  Blundell  v.  Gladstone,  3  McN. 
&  G.  692,  12  Eng.  L.  &  Eq.  52.  See 
also,  Quincey  v.  Quincey,  1 1  Jurist,  111; 
Connolly  v.  Pardon,  1  Paige,  291  ;  Baker 
V.  Baker,  2  Ves.  167. 

[73] 


75-  THE   LAW   OF   CONTRACTS.  [PART  II. 

intention,  then  the  words  will  be  so  construed,  and  the  contract, 
in  this  sense  or  with  this  interpretation,  will  be  enforced,  as  the 
contract  which  the  parties  have  made. 

The  distinction  and  the  rules  of  Lord  Bacon  are  therefore 
less  regarded  of  late  than  they  were  formerly,  [iv)  They  are 
intended  to  enable  the  court  to  distinguish  between  cases  of 
curable  and  those  of  incurable  uncertainty ;  to  carry  the  aid  of 
evidence  as  far  as  it  can  go  without  making  for  the  parties  what 
they  did  not  make  for  themselves,  and  to  stop  there.  And  it  is 
found  that  it  is  sometimes  of  doubtful  utility  to  refer  to  these 
rules  in  the  endeavor  to  ascertain  the  meaning  of  a  contract, 
rather  than  to  the  simpler  rule,  that  evidence  may  explain  but 
cannot  contradict  written  language.  This  last  rule  limits  all 
explanation  to  cases  of  uncertainty,  because  where  the  meaning 
is  plain  and  unquestionable,  another  meaning  is  nof  that  which 
the  parties  have  agreed  to  express.  Thus,  if  a  blank  be  left  in 
an  instrument  or  a  word  or  phrase  of  importance  omitted  by 
mistake,  the  omission  may  be  supplied,  if  the  instrument  con- 
tains the  means  of  supplying  it  with  certainty,  otherwise  not, 
because  the  parties  in  such  a  case  have  not  made  the  instru- 
ment ;  and  the  law  would  make  it,  and  not  the  parties,  if  it 
undertook  to  supply  by  presumption  an  omitted  word  necessary 
to  its  legal  existence.  And  if  it  permitted  this  to  be  supplied 
by  parol  testimony,  it  would  be  this  testimony,  and  not  a  writ- 
ten instrument  which  proved  the  property  or  determined  the 
rights  and  obligation  of  the  parties,  {x)  But  this  rule  permits 
all  fair  and  reasonable  explanation  of  actual  uncertainty.  Thus, 
if  a  guaranty  be  given,  beginning,  "  In  consideration  of  your 
having  this  day  advanced "  money,  &c.,  which  guaranty  is 
invalid  if  in  fact  for  a  past  or  executed  consideration,  evidence 
should  be  received  to  show  that  in  point  of  fact  the  advancing 
of  the  money  and  the  giving  of  the  guaranty  were  simultaneous 
acts,  {y) 

(w)  See  ante,  p.  G'J,  note  (s).  In  tliis  case,   Pir/ott,  of  counsel  for  the 

(x)  Miller  o.    Truver.s,    8   Uinpj.    244;  defendiint,  insisted  upon  the  rule  that  parol 

Saunderson  v.  J'ipcr,  5  JJiug.  N.  C.  425;  evidence  is  !iot  admissible  to  vary  tlie  terms 

JJaylis  V.   Altorn(^3-(jleneral,  2  Atk.  23'J  ;  of  a  written  instrument.     But  Parke,  13., 

Custledon  u. 'J'unicr,  .'j  Atk.  257  ;  lluut  V.  interruptinf^   liiin,    said:     "You   cannot 

Ilort,  .'>  I'ro.  (J.  C.  31 1.  vary  tlie  terms  of  a  written  instrument  by 

(^)  Goldsliedc  V.  bwan,  1  Exch.  154.  parol  evidence;  that  is  a  regular  rule;  but 

[74] 


OIL  I.]    CONSTRUCTION   AND   INTERPRETATION   OP   CONTRACTS.  76-*77 

It  is  not  easy  to  lay  down  rules  which  will  assist  in  deter- 
mining these  difficult  questions,  and  not  be  themselves  open  to 
much  question.  But  we  should  express  our  own  views  on  this 
subject  by  the  following  propositions. 

If  an  instrument  is  intelligible  and  certain  when  its  words 
are  taken  in  their  common  or  natural  sense,  all  its  words  shall 
be  so  taken,  unless  something  in  the  instrument  itself  gives  to 
them,  distinctly,  a  peculiar  meaning,  and  with  this  meaning 
the  instrument  is  intelligible  and  certain ;  and  in  that  case 
this  peculiar  meaning  shall  be  taken  as  the  meaning  of  the 
parties. 

If  the  meaning  of  the  instrument,  by  itself,  is  intelligible  and 
certain,  extrinsic  evidence  is  admissible  to  identify  its  subjects 
or  its  objects,  or  to  explain  its  recitals  or  its  promises,  so  far, 
and  only  so  far,  as  this  can  be  done  without  any  contradiction 
of,  or  any  departure  from,  the  meaning  which  is  given  by  a  fair 
and  rational  interpretation  of  the  words  actually  used. 

If  the  meaning  of  the  instrument,  by  itself,  is  affected  with 
uncertainty,  the  intention  of  the  parties  may  be  ascertained  by 
extrinsic  testimony,  (z)  and  this  intention  will  be  taken  *  as  the 


if  you  can  construe  an  instrument  by  parol  was  the  person  intended  to  be  designated 
evidence,  where  that  instrument  is  ambig-  by  a  testator  by  the  name  of  Catherine 
uous,  in  such  a  manner  as  not  to  contra-  Earnley  [see  the  case  stated  ante,  p.  62, 
diet  it,  you  are  at  liberty  to  do  so."  And  n.  (v)].  In  Thomas  v.  Thomas,  6  T.  R. 
the  other  judges  use  similar  language.  See  671,  there  was  a  devise  as  follows:  — 
also,  Butcher  v.  Steuart,  11  M.  &  W.  857,  "  Item.  I  devise  to  my  granddaughter, 
where,  "in  consideration  of  your  having  Mary  Thomas,  of  Llechloyd,  in  Merthyr 
released,"  was  held  to  have  a  prospective  parish,  &c."  The  testator  had  a  grand- 
and  conditional  meaning,  by  the  help  of  daughter  of  tlie  name  of  Elinor  Evans, 
extrinsic  evidence.  And  see  Colbourn  v.  living  at  the  place  mentioned  in  the  will, 
Dawson,  10  C.  B.  765,  4  Eng.  L.  &  Eq.  and  a  great-granddaughter,  Mary  Thomas, 
378;  Haigh  v.  Brooks,  10  A.  &  E.  309.  who  lived  at  a  place  some  miles  distant 
(2;)  See  ante,  p.  69,  n.  (s).  This  inten-  from  Merthyr  parish.  It  was  held  by  Lord 
tion,  of  course,  is  to  be  ascertained,  in  all  Kenyan,  that  evidence  of  declarations  made 
cases,  except  that  of  latent  ambiguity  prop-  by  the  testator  at  the  time  the  will  was 
er,  by  a  development  of  the  circumstances  made,  would  have  been  admissible  to  show 
under  which  the  instrument  was  made,  whom  the  testator  meant  by  the  inaccurate 
It  cannot  be  ascertained  by  bringing  for-  description.  See  also,  Hampshire  v.  Peirce, 
ward  proof  of  declarations  or  conversations  2  Ves.  216;  Strode  v.  Russel,  2  Vern. 
which  took  place  at  the  time  the  instru-  623  ;  Price  v.  Page,  4  Ves.  680  ;  Still 
ment  was  made,  or  before,  or  afterwards,  v.  Hoste,  6  Madd.  &  G.  192;  Hodgson 
After  considerable  confusion  caused  by  v.  Hodgson,  2  Vern.  593.  So  far  as  these 
some  anomalous  early  cases,  the  law  upon  cases  sanction  the  doctrine  that  evidence 
this  point,  especially  in  reference  to  wills,  of  intention  is  admissible  in  cases  not  fall- 
is  clearly  settled  in  England.  In  Beau-  ing  under  the  rule  as  to /a^pn/ a/n?«'(7!»Vy,  as 
mont  V.  Eell,  2  P.  Wms.  140,  it  was  per-  defined  ante,  p.  70,  n.  (s),  they  are  over- 
mitted  to  be  shown  that  Gertrude  Yardley  ruled  by  the  cases  of  Miller  y.-Travers,  8 

[75] 


78* 


THE  LAW   OF   CONTRACTS. 


[part  II. 


meaning  of  the  parties  expressed  in  the  instrument,  if  it  be  a 
meaning  which  may  be  distinctly  derived  from  a  *fair  and  ra- 


Bing.  244,  and  Doe  d.  Hiscocks  v.  His- 
cocks,  5  M.  &  W.  363.  In  Miller  v. 
Travers,  there  was  a  devise  of  all  the  tes- 
tator's estates  in  the  county  of  Limerick 
and  city  of  Limerick.  At  the  time  of 
making  the  will,  the  testator  had  no  estate 
in  the  county  of  Limerick.  He  had  a  small 
estate  in  the  city  of  Limerick,  inadequate  to 
meet  the  charges  in  the  will,  and  consider- 
able estates  situate  in  the  county  of  Clare. 
It  was  hdd,  that  it  could  not  be  shown  by 
parol  evidence  that  the  words  "  county  of 
Limerick  "  were  Inserted  by  mistake,  in- 
stead of  the  words  "  county  of  Clare  ;  " 
and  that  the  testator  intended  to  devise  his 
estate  in  the  county  of  Clare.  See  the 
very  able  review  of  the  cases  by  Tindall, 
C.  J.  In  Doe  d.  Hiscocks  v.  Hiscocks,  a 
testator  devised  lands  to  his  son  John  His- 
cocks for  life  ;  and  from  his  decease,  to  his 
grandson  John  Ulscocks,  eldest  son  of  the  said 
John  Hiscocks.  At  the  time  of  making  the 
will,  the  testator's  son  John  Hiscocks  had 
been  twice  married ;  by  his  first  wife  he 
had  one  son,  Simon ;  by  his  second  wife 
an  eldest  son  John,  and  other  younger 
children,  sons  and  daughters.  Held,  that 
evidence  of  the  instructions  given  by  the 
testator  for  his  will,  and  of  his  declara- 
tions, was  not  admissible  to  show  which 
of  these  two  grandsons  was  intended  by 
the  description  in  the  will.  Lord  Ahinger, 
after  stating  the  facts,  and  noticing  the 
question  raised,  .said  :  "  It  must  be  ad- 
mitted that  it  is  not  possible  altogether  to 
reconcile  the  different  cases  that  have  been 
decided  on  this  subject;  which  makes  it 
the  more  expedient  to  investigate  the  prin- 
ciples upon  wliich  any  evidence  to  explain 
the  will  of  a  testator  oj^ight  to  be  received. 
Tlie  ol)ject  in  all  cases  is  to  discover  the 
intention  of  the  testator.  The  first  and 
most.obvious  mode  of  doing  this  is  to  read 
his  will  as  he  has  written  it,  and  collect 
his  intention  from  his  words.  But  as  his 
words  refVr  to  facts  and  circumstances  rc- 
sj)e(tini;  his  pioperly  and  iiis  family,  and 
others  wIkmii  he  names  or  describes  in  his 
will,  it  is  evident  that  the  meaning  and 
application  of  his  words  cannot  be  ascer- 
tained without  evidence  of  all  those  facts 
and  circumstances.  To  understainl  the 
mi-aning  of  any  writer,  we  must  first  be 
apprised  of  tiie  persons  and  circunistanccs 
that  are  the  siilijects  of  his  allusions  or 
statements  ;  atnl  if  these  are  not  fully  dis- 
closed in  his  work,  wo  must  look  for  illus- 

[70] 


tration  to  the  history  of  the  times  in  which 
he  wrote,  and  to  the  works  of  contempo- 
raneous authors.  All  the  facts  and  cir- 
cumstances, therefore,  respecting  persons 
or  property,  to  which  the  will  relates,  are 
undoubtedly  legitimate,  and  often  neces- 
sary evidence,  to  enable  us  to  understand 
the  meaning  and  application  of  his  words. 
Again,  —  the  testator  may  have  liabitually 
called  certain  persons  or  things  by  pecul- 
iar names,  by  which  they  were  not  com- 
monly known.  If  these  names  should 
occur  in  his  will,  they  could  only  be  ex- 
plained and  construed  by  the  aid  of  evi- 
dence to  show  the  sense  in  which  he  used 
them,  in  like  manner  as  if  his  will  were 
written  in  cipher,  or  in  a  foreign  langunge. 
The  habits  of  the  testator  in  these  particu- 
lars must  be  receivable  as  evidence  to  ex- 
plain the  meaning  of  his  will.  But  there 
is  another  mode  of  obtaining  the  intention 
of  the  testator,  which  is  by  evidence  of  his 
declarations  of  the  instructions  given  for 
his  will,  and  other  circumstances  of  the 
like  nature,  which  are  not  adduced  for  ex- 
plaining the  words  or  meaning  of  the  will, 
but  either  to  supply  some  deficiency,  or 
remove  some  obscurity,  or  to  give  some 
effect  to  expressions  that  are  unmeaning 
or  ambiguous.  Now,  there  is  but  one  ease 
in  which  it  appears  to  us  that  this  sort  of 
evidence  of  intention  can  properly  he  ad- 
mitted, and  that  is,  where  the  meaning  of 
the  testator's  words  is  neither  ambiguous 
nor  obscure,  and  where  the  (le\  ise  is  on 
the  face  of  it  perfect  and  intelligible,  but, 
from  some  of  the  circumstances  adniitied 
in  proof,  an  ambiguity  arises  as  to  which 
of  the  two  or  more  things,  or  which  of  the 
two  or  more  persons  (each  answering  the 
words  in  the  will),  the  testator  intendedto 
cx])ress.  Thus,  if  a  testator  devise  his 
manor  of  S.  to  A.  B.,  and  has  two  manors 
of  North  S.  and  South  S.,  it  Iteing  clear 
he  means  to  devise  one  only,  whereas  both 
are  e()ually  denoted  by  the  words  he  has 
used,  in  that  case  tiiere  is  what  Lord  Ba- 
con calls  'an  equivocation,'  ('.  e.  tiie  words 
equally  apply  to  either  manor,  and  evi- 
dence of  previous  intention  may  be  re- 
ceived to  solve  this  latent  ambiguity ;  for 
the  intention  shows  wliat  he  meant  to  do; 
and  wiicn  you  know  that,  you  imnicdiate- 
ly  iicrceive  that  he  has  done  it  l)y  the  gen- 
eral words  he  has  used,  vvhicli,  in  their 
ordinary  sense,  may  jiroperly  bear  that 
construction.     It  appears  to  hs  that,  in  all 


en.  I.]      CONSTRUCTION   AND   INTERPRETATION   OF   CONTRACTS.         -78 

tional  interpretation  of  the  words  actually  used.  But  if  it  be 
incompatible  with  such  interpretation,  the  instrument  will  then 
be  void  for  uncertainty,  or  incurable  inaccuracy. 

A  contract  may  be  enforced  in  its  plain  and  natural,  or  in  its 
legal  meaning,  although  evidence  be  offered  tending  to  show 
that  the  intention  of  the  parties  differed  absolutely  from  their 
language,  unless  the  transaction  be  void  from  fraud,  illegality, 
incapacity,  or  in  some  similar  way. 

Lastly,  no  contract  will  be  enforced,  as  a  contract,  if  it  have 
no  plain  and  natural  or  legal  meaning,  by  itself;  and  if  ad- 
missible extrinsic  evidence  can  only  show  that  the  intention 
of  the  parties  was  one  which  their  words  do  not  express.  But 
the  supposed  contract  being  set  aside  for  such  reasons  as  these, 
the  parties  will  be  remitted  to  their  original  rights  and  obli- 
gations. 

other  cases,  parol  evidence  of  what  was  late  case  of  Attorney-general  v.  Clapham, 
the  testator's  intention  ought  to  be  ex-  4  De  G.,  M.  &  G.  591,  31  Eng.  L.  & 
eluded,  upon  this  plain  ground,  that  his  Eq.  142,  where  this  whole  matter  is  very- 
will  ought  to  1)0  made  in  writing ;  and  if  fully  discussed.  For  tlie  present  state  of 
his  intention  cannot  be  made  to  appear  by  the  law  upon  the  various  points  discussed 
the  writing,  explained  by  circumstances,  in  this  last  section,  the  profession  are 
there  is  no  will."  See  also.  Shore  v.  Wil-  very  greatly  indebted  to  the  admirable 
son,  9  Clark  &  F.  355,  s.  c.  nom.  Attor-  little  treatise  by  Sir  James  Wigram  on  the 
ney-general  v.  Shore,  11  Sim.  592,  and  the  Interpretation  of  Wills. 

7*  [77] 


79-80*  THE   LAW   OF   CONTRACTS.  [PART  U. 


CHAPTER  II. 

THE  LAW  OF  PLACE. 

Sect.  I.  —  Preliminary  Remarks. 

If  one  or  both  parties  to  a  contract  entered  into  it  away  from 
their  home,  or  if  a  contract,  or  questions  dependent  upon  it, 
come  into  litigation  before  a  foreign  tribunal,  the  construction  of 
the  contract,  the  rights  that  it  gives,  the  obligations  that  it  im- 
poses, and  the  remedies  which  either  party  may  have,  may  de- 
pend upon  the  law  of  the  place  where  the  contract  was  made,  or 
the  law  of  the  domicil  of  the  parties,  or  the  law  of  the  place  where 
the  thing  to  which  the  contract  refers  is  situated,  or  the  law  of 
the  tribunal  before  which  the  questions  are  litigated  ;  or,  to  use 
the  Latin  phrases  generally  employed,  the  lex  loci  contractus, 
the  lex  domicilii,  the  lex  loci  rei  sitce,  and  the  lex  fori. 

The  common  law  has  left  many  of  these  questions  unsettled; 
but  the  immense  immigration  into  this  country,  the  great  and 
growing  intercourse  between  it  and  foreign  nations,  and  the  ex- 
treme facility  and  frequency  of  foreign  travel,  and,  more  than 
this,  the  fact  that  our  own  nation  is  composed  of  thirty-one  in- 
dependent sovereignties,  all  combine  to  give  to  questions  of 
this  kind  peculiar  importance,  and,  on  some  points,  peculiar 
difficulty.  It  will  not  be  possible  to  exhaust  the  consideration 
of  these  topics  within  the  space  which  can,  in  this  work,  be 
given  to  them.  But  an  attempt  will  be  made  to  present  the 
leading  principles  which  must  determine  all  these  questions. 
To  few  of  them  is  there  a  precise  and  certain  answer  given  by 
the  common  law ;  and  some  of  them  have  not  yet  passed  into 
adjudication.  By  writers  on  the  civil  and  continental  law  of 
Europe,  they  have  been,  perhaps  all  of  them,  very  fully  consid- 
ered ;  but  with  *sucli  a  diversity,  and  irreconcilable  contrariety 
[78] 


en.  II.]  THE   LAW   OF   PLACE.  *81 

of  conclusion,  that  we  shall  confine  ourselves,  as  far  as  possible, 
to  the  common-law  authorities,  (a) 


.  SECTION    II. 

GENERAL  PRINCIPLES. 

The  first  principle  we  state  is  this.  Laws  have  no  force  by 
their  own  proper  vigor,  beyond  the  territory  of  the  State  by 
which  they  are  made  ;  excepting,  for  some  purposes,  the  high 
seas,  or  lands  over  which  no  State  claims  jurisdiction.  Without 
this  limit,  they  have  no  sanction;  obedience  cannot  be  com- 
pelled, nor  disobedience  punished  ;  and  no  contiguity  of  border, 
and  no  difference  of  magnitude  or  power  between  two  inde- 
pendent States  can  affect  this  rule.  For  if  the  State,  a  law  of 
which  is  broken,  sends  its  officers  into  another,  and  there  by 
force  or  intimidation  acts  in  reference  to  this  breach  as  it  might 
act  at  home,  such  act  is  wholly  illegal ;  and  if  it  thus  acts  with 
the  consent  of  the  foreign  State,  within  whose  domininion  it 
goes  by  its  officers,  it  is  this  consent  only  which  legalizes  its 
acts,  (b) 

*In  the  next  place,  all  laws  duly  made  and  published  by  any 
State  bind  all  persons  and  things  within  that  State,  (c)     This 

(a)  Mr.  Justice  Story's  large  work  on  grows  out  of  the  conflict  of  laws  of  differ- 
the  Conflict  of  Laws  is  in  a  great  meas-  ent  States.  Our  former  experience  had 
ure  composed  of  those  conflicting  state-  taught  us  that  questions  of  this  kind  are 
ments  ;  and  in  his  closing  paragraph  he  the  most  embarrassing  and  difficult  of  de- 
says  :  "  It  will  occur  to  the  learned  cision  that  can  occupy  the  attention  of 
reader,  upon  a  general  survey  of  the  sub-  those  who  preside  in  courts  of  justice, 
ject,  that  many  questions  are  still  left  in  a  The  argument  of  this  c»se  has  shown  us 
distressing  state  of  uncertainty  as  to  tlie  that  the  vast  mass  of  learning  which  the 
true  principles  which  ouglit  to  regulate  research  of  counsel  has  furnished,  leaves 
and  decide  them.  Diff"erent  nations  enter-  the  subject  as  much  enveloped  in  obscurity 
tain  diff'erent  doctrines  and  different  usages  and  doubt  as  it  would  have  appeared  to 
in  regard  to  them.  The  jurists  of  differ-  our  own  understandings,  had  we  been 
ent  countries  hold  opinions  opposite  to  called  oa  to  decide,  without  the  knowledge 
each  other,  as  to  some  of  the  fundamental  of  what  others  had  thought  or  written 
principles  which  ought  to  have  a  universal  upon  it." 

operation,  and  the  jurists  of  the  same  na-         (6)  Le  Louis,  2  Dods.  210  ;  Blanchard 

tion  are  sometimes  as  ill  agreed  among  v.  Russell,  13  Mass.  4 ;  Bank  of  Augusta 

themselves."     And  in  Saul  v.  His  Credi-  v.  Earle,  13  Pet.  584;  Smith  v.  Godfrey, 

tors,  17  Mart.  La.  570,  Porter,  J.,  says  :  8  Foster,  379. 

"  The  onfy  question  presented  for  our  de-        (c)  "  The  law   and  legislative  govern- 

cisioQ  is  one  of  law ;  but  it  is  one  which  ment  of  every  dominion  equally  affects  all 

[79] 


82*  THE   LAW   OF   CONTRACTS.  [PART  II. 

is  a  general,  and  perhaps  a  universal  rule  ;  for  the  few  seeming 
exceptions  to  it  are  not  such  in  fact.  A  stranger  is  bound  to  the 
State  wherein  he  resides  only  by  a  local  and  limited  allegiance ; 
but  it  is  one  which  is  sufficient  to  subject  him  to  all  the  laws 
of  that  State,  excepting  so  far  as  they  relate  to  duties  which 
only  citizens  can  perform.  For,  as  every  State  has  the  right, 
in  law,  of  excluding  whom  it  will,  so  it  may  put  what  terms 
and  conditions  it  will  upon  the  admission  of  foreigners.  All 
contracts,  therefore,  which  are  construed  within  the  State  in 
which  they  are  made,  must  be  construed  according  to  the  law 
of  that  State.  The  same  thing  is  true,  in  general,  when  con- 
tracts are  construed  in  a  place  other  than  that  in  which  they 
are  made ;  but  this  rule,  and  the  exceptions  to  it,  will  be  con- 
sidered presently. 

In  the  next  place,  every  State  may,  by  its  own  laws,  bind  all 
its  own  subjects  or  citizens,  wherever  they  may  be,  with  all  the 
obligations  which  the  home  tribunals  can  enforce.  Further 
than  this,  if  such  laws  are  made,  they  must  needs  be  inopera- 
tive, as  they  cannot  be  enforced  beyond  the  jurisdiction  of  the 
home  tribunals,  except  with  the  consent  and  by  the  action  of 
the  foreign  State. 

Lastly,  it  may  now  be  said,  on  good  authority,  that  foreign 
laws  may  have  a  qualified  force,  or  some  effect,  within  a  State, 
either  by  the  comity  of  nations,  which  is  one  of  the  fruits  of 
modern  civilization,  or  by  special  agreement,  as  by  treaty,  or  by 
constitutional  requirements,  as  in  the  case  of  our  own  country, 
of  which  the  constitution  requires  that  "  full  faith  and  credit 
shall  be  given  in  each  State  to  the  public  acts,  records,  and 
judicial  proceedings  of  every  other  State."  But  in  none  of 
these  cases  do  laws  acquire,  strictly  speaking,  the  force  of  laws, 
within  a  sovereignty  which  is  *foreign  to  that  in  which  they 
were  enacted ;  nor  could  this  be  the  case  without  a  confusion 
of  sovereignties.     But  the  effect  of  such  comity,  aided  in  some 

persons  and  all  property  within  the  litnits  of  Man,  or  the  Plantations,  has  no  privi- 

thcrcof;  and  is  tiic  nilc  of  decision  for  all  le^^e  distinct  from  the  natives."     I'er  Lord 

quCHtions    which    arise    there.     Whoever  Munsjiclil,    in    Hall    v.   Campbell,    Cowp. 

jiurchascs,  lives,  or  sues  tlu're,  puts  him-  208.     Sec  Kuding  f.  Smith,  2  liiigg.  Cou- 

Hclf   under   the    laws    of   the    place.     An  sist.  R.  383. 
Englishman  in  Ireland,  Minorca,  the  JLslo 

[80] 


CH.  II.] 


THE  LAW  OF  PLACE. 


-82 


instances  by  special  agreements,  or  constitutional  requirements, 
may  be  stated  to  be,  that  the  laws  of  civilized  nations  are  per- 
mitted to  have  some  operation  in  foreign  States,  so  far  as  they 
in  no  degree  conflict  with  the  powers  or  the  rights  of  such 
foreign  States,  or  with  the  operation  of  their  laws,  {d) 

The  first  and  most  general  principle  as  to  the  talidity  of  a 
contract,  rests  upon  obvious  reasons,  and  certain  expediency,  if 
indeed  we  may  not  say  that  it  is  founded  in  the  necessities  of 
national  intercourse  ;  it  is,  that  a  contract  which  is  valid  where 
it  is  made  is  to  be  held  valid  everywhere.  And  on  the  other 
hand,  if  void  or  illegal  by  the  law  of  the  place  where  made,  it 
is  void  everywhere,  (e)     There  may  be  an  exception  to  this, 


{d)  Story  quotes  from  Huberus  a  very 
precise  statement  of  this  rule.  "Rectores 
imperiorum  id  comitur  agunt,  ut  jura  cujus- 
que  populi  intra  terminos  ejus  exercita  teneant 
vhique  suam  vim,  quatenus  nihil  potestati  aut 
juri  alterius  imperantis  ejusque  civium  prce- 
judicetur."  Confl.  of  Laws,  §  29,  n.  3. 
And  see  Zipcey  v.  Thompson,  1  Gray, 
243. 

(e)  Trimbey  v.  Vignier,  1  Bing.  N.  C. 
15i  ;  De  Sobry  v.  De  Laistre,  2  Ilarris  & 
J.  191  ;  Willings  v.  Consequa,  Pet.  C. 
C.  317 ;  Pearsall  v.  Dwight,  2  Mass. 
88;  Smith  v.  Mead,  3  Conn.  253  ;  Med- 
bury  V.  Hopkins,  id.  472 ;  Houghton  v. 
Page,  2  N.  H.  42 ;  Dyer  v.  Hunt,  5  id. 
401  ;  Gassett  v.  Godfrey,  6  Foster,  415; 
Smith  V.  Godfrey,  8  id.  379;  Whiston  v. 
Stodder,  8  Mart.  La.  95 ;  Andrews  v. 
His  Creditors,  1 1  La.  464 ;  Young  v. 
Harris,  14  B.  Mon.  559;  Bank  of  Uni- 
ted States  V.  Donnally,  8  Pet.  361  ;  An- 
drews V.  Pond,  13  id.  65 ;  Wilcox  v. 
Hunt,  id.  378 ;  Van  Reimsdyk  v.  Kane, 
1  Gallis.  371;  Touro  v.  Cassin,  1  Nott 
&  McC.  173;  Houghtaling  v.  Ball,  20 
Mo.  563  ;  M'lntyre  v.  Parks,  3  Met. 
207  ;  Robinson  v.  Bland,  2  Burr.  1077 ; 
Burrows  v.  Jemino,  2  Stra.  733  ;  La  Jeune 
Eugenie,  2  Mason,  459  ;  Alves  v.  Hodg- 
son, 7  T.  R.  241  ;  Clegg  v.  Levy,  3 
Camp.  166.  These  two  rules,  or  rather 
this  one  rule,  is  generally  asserted  as 
broadly  as  we  have  stated  it  in  the  text ; 
and  yet  tliere  are  cases  and  dicta  of  weight 
that  conflict  with  it.  In  James  v.  Cather- 
Tvood,  3  Dowl.  &  R.  190,  where  on  as- 
sumpsit for  money  lent  in  France,  receipts 
were  offered  in  evidence  not  stamped  as 
the  laws  of  France  required  to  make  them 


available  there,  they  were  received  in 
England.  It  is  true  that  on  the  motion 
for  a  new  trial,  it  is  put  on  the  ground 
that  it  is  perfectly  well  settled  that  an 
English  court  will  not  take  notice  of 
foreign  revenue  laivs.  This  is  undoubtedly 
established.  See  Boucher  v.  Lawson, 
Cas.  Temp.  Hardw.  85,  194  ;  Holman  v. 
Johnson,  Cowp.  341  ;  Biggs  v.  Lawrence, 
3  T.  R.  454  ;  Clugas  v.  Penaluna,  4  id. 
466 ;  Planche'  v.  Fletcher,  1  Doug.  251  ; 
Ludlow  V.  Van  Rensselaer,  1  Johns.  94. 
In  Wynne  v.  Jackson,  2  Russ.  351,  it 
was  held  that  a  holder  might  recover  in  an 
English  court  on  a  bill  drawn  in  France 
on  a  French  stamp,  though  in  conse- 
quence of  its  not  being  in  the  form  re- 
quired by  the  French  code,  he  had  failed 
in  an  action  which  he  brought  on  it  in 
France.  Even  if  the  contracts  in  these 
cases  were  to  be  considered  as  violating 
only  revenue  laws,  still,  could  a  contract 
made  in  Franco,  between  Frenchmen 
there,  to  smuggle  goods  against  the  law 
of  France,  be  lield  good  in  Jlngland  or 
America  ?  Not  on  an^'  general  principles 
that  we  are  aware  of;  and  certainly  not 
because  a  contract  made  in  England  to 
smuggle  into  France  would  be  held  good 
in  England  ;  for  the  cases  are  entirely  dis- 
tinct. —  So,  if  contracts  are  made  only 
orally,  where  by  law  they  should  be  in 
writing,  they  cannot  be  enforced  elsewhere 
where  writing  is  not  required.  And  if 
made  orally  where  writing  is  not  required, 
they  can  be  enforced  in  other  countries 
where  such  contracts  should  be  in  writing. 
Vidal  V.  Thompson,  11  Mart.  La.  23; 
Alves  V.  Hodgson,  7  T.  R.  241 ;  Clegg  v. 
Levy,  3  Camp.  166. 

[81] 


83* 


THE  LAW   OF   CONTRACTS. 


[part  II. 


where  a  contract  which  violates  the  revenue  laws  of  the  coun- 
try where  it  was  made,  comes  before  the  court  of  another 
country,  (ea) 

*  The  general  rule  as  to  the  construction  of  contracts  is,  that 
if  they  relate  to  movables,  which  have  no  place,  no  sequelam, 
in  the  language  of  the  civil  law,  for  "  mohilia  inhcerent  ossibus 
dominij"  they  are  to  be  construed  according  to  the  law  of  the 
place  where  they  are  made,  or  the  lex  loci  contractus ;  (/)  and 
if  they  relate  to  immovables,  or  what  the  common  law  calls  real 
property,  they  are  to  be  construed  according  to  the  law  of  the 
place  where  the  property  is  situated,  or  the  lex  loci  rei  sites,  (g*) 


{ea)  Sharp  v.  Taylor,  2  Phillips,  811. 
And  see  preceding  note. 

(/)  Thorne  v.  Watkins,  2  Ves.  3.5  ; 
Holmes  v.  Remsen,  4  Johns.  Ch.  487  ; 
Harvey  v.  Richards,  1  Mason,  412  ;  Bruce 
V.  Bruce,  2  B.  &  P.  229,  n.  (a)  ;  Somer- 
ville  V.  Somerville,  5  Ves.  750.  In  die 
case  In  re  Ewin,  1  Cromp.  &  J.  156,  Ba^- 
Zey,  B.,  says:  "It  is  clear,  from  the  au- 
thority of'Bruce  v.  Bruce,  2  B.  &  P.  229, 
and  the  case  of  Somerville  v.  Somerville, 
5  Ves.  750,  that  the  rule  is  that  personal 
property  follows  the  person,  and  it  is  not 
in  any  respect  to  he  regulated  hy  the 
situs ;  and  if  in  any  instances,  the  situs 
has  heen  adopted  as  the  rule  by  which  the 
property  is  to  be  governed,  and  the  lex  loci 
rei  sitie  resorted  to,  it  has  been  improperly 
done.  Wherever  the  domicil  of  the  pro- 
prietor is,  there  the  property  is  to  be  con- 
sidered as  situate  ;  and,  in  the  case  of 
Somerville  ?;.  Somerville,  which  was  a 
case  in  which  there  was  stock  in  tlie  funds 
of  this  country,  which  were  at  least  as  far 
local  as  any  of  the  stocks  mentioned  in 
this  case  arc  local,  there  was  a  question 
whether  the  succession  to  that  ])ro|icrty 
should  be  regulated  by  the  English  or  by 
tbe  Scotcli  rules  of  succession.  The  Mas- 
ter of  the  Rolls  was  of  opinion  that  the 
proper  domicil  of  the  party  was  in  Scot- 
land. And  having  ascertained  that,  the 
conclusion  which  he  drew  was,  that  the 
property  in  the  Englisli  funds  was  to  be 
rcgu^jitcd  by  till!  Scotch  mode  (jf  succes- 
sion ;  and  if  tbe  executor  had,  as  he  no 
doui)t  would  have,  tlie  power  of  reducing 
tiie  prof)t;rty  inio  his  own  possession,  and 
putting  the  .-imount  into  his  own  pocket, 
it  would  lie  rii-trjliuti'd  by  the  law  of  the 
country  in  wliii-ji  the  [)arty  was  domiciled. 
Personal  propcrlv  is  always  liable  to  bo 

[82]" 


transferred,  wherever  it  may  happen  to  be, 
by  the  act  of  the  party  to  whom  that 
property  belongs ;  and  there  are  authori- 
ties that  ascertain  this  point,  which  bears 
by  analogy  on  this  case,  namely,  that  if  a 
trader  in  England  becomes  bankrupt,  hav- 
ing that  which  is  personal  property,  debts, 
or  other  personal  property,  due  to  him 
abroad,  the  assignment  under  the  com- 
mission of  bankrupt  operates  upon  the 
property,  and  effectually  transfers  it,  at 
least  as  against  all  those  persons  who  owe 
obedience  to  these  bankrupt  laws,  the  sub- 
jects of  this  country."  In  Milne  v.  More- 
ton,  6  Binn.  353,  Tilghinan,  C.  J.,  states 
the  rule  with  some  qualification.  He 
says  :  "  This  proposition  is  true  in  gen- 
eral, but  not  to  its  utmost  extent,  nor 
without  several  exceptions.  In  one  sense 
personal  property  has  locality,  that  is  to 
say,  if  tangible,  it  has  a  place  in  which  it 
is  situated,  and  if  invisible  (consisting  of 
debts)  it  may  be  said  to  be  in  the  place 
where  the  del)tor  resides  ;  and  of  these 
circumstances  the  most  liberal  nations 
have  taken  advantage,  by  making  such 
]iroperty  subject  to  regulations  which  suit 
their  own  convenience." 

(//)  Upon  this  general  rule  the  common 
law  and  civil  law  agree  ;  and  the  Ameri- 
can authorities  are  cx])licit.  Sec  War- 
render  V.  Warrender,  9  Bligh,  127;  Dun- 
das  V.  Dundas,  2  Dow  &  C.  349  ; 
Coppin  ?'.  Coppin,  2  P.  Wms.  291  ; 
I'nitcd  States  r.  Crosby,  7  Cranch,  115; 
Cutter  V.  Davenport,  1  Pick.  81  ;  llos- 
(ord  V.  Nichols,  1  Paige,  220 ;  Wills  v. 
Cowper,  2  Ilamm.  312;  Kerr  v.  Moon,  9 
AVlicat.  5G5;  McCormick  v.  Sullivant,  10 
id.  192;  Darby  !'.  Mayer,  id.  405.  It  is 
a  conclusion  from  this  rule,  as  will  bo 
seen  from  the  preceding  authorities  that 


en.  II.]  THE   LAW   OF   PLACE.  *84 

This  we  have  said  to  be  *the  general  rule ;  and  if  we  do  not 
call  it  a  universal  rule,  it  is  because  we  are  not  quite  pre- 
pared to  say  that  none  of  the  apparent  exceptions  to  the  rule 
are  real. 

Thus,  there  is  a  question  involved  in  the  construction  of 
every  contract,  or  rather,  a  qud^tion  prior  to  its  construction ; 
namely,  whether  the  parties  to  the  contract  had  the  power  to 
make  it.  This  is  the  question  of  the  capacity  of  persons  ;  and 
it  is  decided  by  what  civilians  term  personal  laws.  And  the 
general  rule  is  said  to  be  that  a  personal  capacity  or  incapacity, 
created  by  a  law  of  the  State  wherein  a  party  has  his  domicil, 
follows  him  wherever  he  may  go.  (h)  But  if  this  be  the  rule 
of  law,  it  is  not  one  of  universal  application,  and  in  some  cases 
needs  important  qualification.  For  this  rule  as  to  capacity 
may  come  into  direct  conflict  with  the  general  rule,  that  all 
personal  contracts  are  to  be  construed  and  applied  according  to 
the  law  of  the  place  where  they  were  made,  and  when  this  con- 
flict exists,  the  important  question  arises,  which  rule  shall  pre- 
vail.    This  we  consider  in  the  next  section. 


SECTION    III. 

CAPACITY  OF  PARTIES. 

It  must  be  remembered  that  the  rule  is  that  persons  have 

the  title  to  land  can  be  given  or  taken,  ac-  by,  peculiar  local  laws.  No  positive  trans- 
quired  or  lost,  only  in  conformity  with  all  fer  can  be  made  of  such  property,  except 
the  requirements  of  the  law  of  the  place  in  the  manner  prescribed  by  the  local  rcg- 
where  the  real  estate  is  situated.     Some  tilations." 

question   may   exist  as   to   what    comes         (h)  This  rule  is  laid  down  by  most  of 

under   this   rule   as  to   immovables.     lu  the  great  multitude  of  writers,  who  may 

Robinson  v.  Bland,  2  Burr.  1079,  Lord  be  cited  as  authorities   of  greater  or  less 

Mansfield  applies  it  to  pubHc  stock.    And  weight,  on  the  law  of  Continental  Europe ; 

Mr.  Justice  Stori/,  Confl.  of  Laws,  §  383,  but  it  does  not  seem  to  have  been  asserted, 

says  :    "  The   same   rule    may  properly  in  so  many  words,  by  the  courts  of  com- 

apply  to   all  other  local  stock  or  funds,  mon  law.     la  Ruding  v.  Smith,  2  Hagg. 

although  of  a  personal  nature,  or  so  made  Consist.  R.  391,  Lord  Stowell  discusses 

by   the   local  law,   such    as   bank-stock,  it  somewhat.     And  it  seems   to   be   im- 

insurance     stock,    turnpike,    canal,    and  plied  in  many  of  the  cases  to  which  we 

bridge  shares,  and  other  incorporeal  prop-  shall  refer,  in  the  further  consideration  of 

erty,  owing  its  existence  to,  or  regulated  the  question  of  capacity. 

[83] 


85*  THE  LAW   OF   CONTRACTS.  [PART  H. 

capacity  to  contract ;  and  the  exception  is,  their  want  of  *capac- 
ity.  This  exception,  therefore,  must  be  made  out.  And  capac- 
ity or  competency  will  be  held  not  only  when  there  is  no  evi- 
dence and  no  rule  against  it,  but  when  the  evidence,  or  the 
rules,  or  the  argument,  leave  it  in  doubt,  (ha) 

Incapacities  are  of  two  kinds  ;  those  which  may  be  called 
natural  incapacities,  as  absolute  duress,  insanity,  or  imbecility; 
and  those  which  may  be  called  artificial,  because  arising  by 
force  of  local  laws,  from  marriage,  or  slavery,  or  such  other 
causes  as  are  made  grounds  of  incapacity  only  by  positive  laws, 
which  vary  in  different  States.  And  then  there  is  a  third  kind 
between  these  two,  or  composed  of  these  two,  when  a  natural 
incapacity,  as  that  of  an  actual  infant,  passes  by  imperceptible 
degrees  into  the  artificial  incapacity  of  a  legal  infant  of  twenty 
years  of  age.  In  regard  to  the  first  class,  it  is  true  that  wher- 
ever the  incapacitated  person  goes  he  carries  his  incapacity  with 
him ;  but  this  is  perhaps  not  because  his  incapacity  was  created 
by  a  law  of  the  home  from  which  he  came,  for  it  was  only 
recognized  by  that  law ;  but  because  it  must  be  recognized  by 
every  other  law,  and  he  finds  himself  under  the  same  incapacity 
in  every  State,  because  he  finds  a  similar  law  everyw^here  in 
force.  For  this  law  is  one  which  may  well  be  called  a  law  of 
nature  ;  that  is,  a  law  enacted  by  the  supreme  Creator  of,  and 
lawgiver  for,  human  nature,  and  as  wide  in  its  scope  and  opera- 
tion as  that  nature. 

When  we  come  to  the  incapacities  of  the  second  kind,  that 
is,  to  artificial  incapacities,  the  law  is  not  so  certain.  Upon  the 
law  of  the  capacity  of  the  person,  and  the  law  of  the  place  of 
the  contract,  on  cither  or  on  both,  the  law  of  construction  of 
contracts  as  to  place,  would  seem  to  be  founded.  Nor  is  there 
any  difficulty  in  applying  cither  alone,  or  both  if  they  are  coin- 
cident ;  but  if  they  are  both  applicable,  but  would  lead  to 
directly  opposite  results,  this  collision  gives  rise  to  questions 
which  it  would  be  impossible  to  settle  absolutely,  even  on  the 
authority  of  civilians ;  because  there  is  an  irreconcilable  difTer- 
ence  among  them.     But,  judging  as  well  as  we  may,  from  the 

(ha)  Sec  ante,  vol.  1,  p.  242. 
[84] 


CH.  II.] 


THE   LAW   OF   PLACE. 


*86 


general  principles  which  belong  to  this  subject,  we  should  prefer 
the  opinion  of  those  w^ho  hold,  that  when  the  two  rules  above 
mentioned  come  into  conflict,  that  which  gives  controlling  power 
to  the  *law  of  the  place  of  the  contract  should  prevail.  We 
might  admit  a  distinction  sometimes  intimated,  and  say  that  a 
question  which  related  only  to  the  state  and  condition  of  a  per- 
son, without  reference  to  other  parties,  would  generally  be  con- 
strued by  the  law  of  his  domicil,  wherever  he  might  be.  But  if 
one  away  from  his  domicil  disposes  of  his  movable  property, 
or  enters  into  personal  contracts,  we  cannot  but  think  that  the 
law  of  the  place  in  which  he  does  these  acts  would  be  applied 
to  them,  (i) 


(i)  On  this  point,  as  on  most  of  the 
questions  of  the  lex  loci,  tlie  opinions  of 
civilians  stand  opposed  to  each  other  irrec- 
oncilably ;  the  <jreat  majority,  both  in 
number  and  weiglit,  assert  that  the  law  of 
the  domicil  determines  everywhere  the 
capacity  of  the  party  ;  but  they  differ  very 
much  in  the  application  of  the  rule  ;  and 
some  of  hi^h  authority  hold  a  different 
doctrine.  But  on  this  subject  we  must 
refer  to  such  works  as  Livermore's  Disser- 
tations, Story's  Conflict  of  Laws,  Bur<re's 
Commentaries  on  Colonial  and  Foreign 
Laws,  and  Henry  on  Foreign  Law,  in 
which  these  authorities  are  cited  and  com- 
pared ;  and  tiie  student  who  would  push 
his  inquiries  further  in  this  direction  will 
be  guided  to  the  original  authors,  and  re- 
ferred to  the  places  in  which  these  ques- 
tions are  considered.  The  whole  discus- 
sion of  this  question,  among  civilians, 
turns  upon  the  exact  distinction  between 
real  and  personal  statutes ;  a  distinction 
wholly  unknown  to  the  common  law. 
And  indeed  they  understand  liy  "  statute  " 
not  what  we  do,  but  any  thing  which  has 
the  force  of  law,  whatever  be  its  origin 
and  authorization.  Kent  says  that  while 
the  continental  jurists  generally  adopt  the 
law  of  tlic  domicil  (supposing  it  to  come 
in  conflict  with  the  law  of  the  place  of  the 
contract),  the  English  common  law  adopts 
the  lex  loci  contractus.  See  2  Kent's  Com. 
4.59,  n.  (})).  We  have  not,  however,  been 
able  to  And  direct  and  conclusive  author- 
ity for  this.  In  Male  r.  Eoberts,  3  Esp. 
16.3,  in  -which  the  plaintiff"  sought  to  re- 
cover money  paid  for  the  defendant  in 
Scotland,  and  the  defence  was  infancy, 
Lord  Elclon  said  :    "  It  appears  from  the 

VOL.  II.  8 


evidence  in  this  cause  that  the  cause  of  ac- 
tion arose  in  Scotland  ;  the  contract  must 
be  therefore  governed  by  the  laws  of  that 
country  where  the  contract  arises.  Would 
infancy  be  a  good  defence  by  the  law  of 
Scotland,  had  the  action  been  commenced 
there  ?  What  the  law  of  Scotland  is 
with  respect  to  the  right  of  recovering 
against  an  infant  for  necessaries  I  cannot 
say ;  but  if  the  law  of  Scotland  is,  that 
such  a  contract  as  the  present  could  not 
be  enforced  against  an  infant,  that  should 
have  been  given  in  evidence,  and  I  liold 
myself  not  warranted  in  saying  that  such 
a  contract  is  void  by  the  law  of  Scotland, 
because  it  is  void  by  the  law  of  England. 
The  law  of  the  country  where  the  contract 
arose  must  govern  tlie  contract ;  and  what 
that  law  is  should  be  given  in  evidence  to 
me  as  a  fact.  No  sucli  evidence  has  been 
given  ;  and  I  cannot  take  the  fact  of  what 
that  law  is  without  evidence."  It  would 
seem  in  this  case,  though  not  distinctly 
stated,  that  both  parties  were  domiciled  in 
England.  In  Saul  v.  His  Creditors,  17 
]\Iart.  La.  569,  590,  which  it  might  be  sup- 
posed would  be  governed  rather  by  the 
rules  of  the  civil  law,  the  court  say  : 
"  A  personal  statute  is  that  which  follows 
and  governs  the  party  subject  to  it  wher- 
ever he  goes.  The  real  statute  controls 
things,  and  does  not  extend  beyond  the 
limits  of  the  country  from  which  it  derives 
its  authority.  The  personal  statute  of  one 
country  controls  the  personal  statute  of 
another  country,  into  which  a  party  once 
governed  liy  the  former,  or  who  may  con- 
tract under  it,  should  remove.  But  it  is 
suliject  to  a  real  statute  of  the  place  where 
the  person  subject  to  the  personal  should 

[85] 


87  THE  LAW  OF  CONTRACTS.  [PART  II. 

Thus,  if  a  woman  at  the  age  of  nineteen,  whose  domicil  was 
in  Massachusetts,  having  gone  into  Vermont  (where  women 
are  so  far  of  age  at  eighteen  that  they  may  bind  themselves  at 
that  age  for  things  not  necessary),  there  bought  non-necessaries, 
and  gave  her  note  for  the  price,  and  while  i^he  was  there  the 
note  was  put  in  suit  against  her,  we  do  not  think  that  she  could 
interpose  the  law  of  Massachusetts  in  her  defence.  And  if  a 
woman  of  that  age,  whose  domicil  was  in  Vermont,  came  into 
Massachusetts,  and  there  bought  non-necessaries,  and  was  sued 
for  the  price,  we  think  she  could  interpose  the  defence  of  infancy. 
If,  in  the  first  case,  the  woman  returned  to  Massachusetts,  and 
the  note  was  sent  after  her  and  put  in  suit  there,  it  might  admit 
of  more  question  whether  the  law  of  the  forum  would  now  pre- 
vail over  the  law  of  the  place  of  the  contract,  and  constitute  a 
good  defence ;  or,  if  in  the  second  case,  the  woman  returned  to 
Vermont,  and  suit  was  brought  against  her  there,  it  might  admit 
of  more  question  whether  the  law  of  the  forum  would  now  pre- 
vail over  the  law  of  the  place  of  the  contract,  and  enforce  the 
contract,  negativing  this  defence.  But  this  doubt  would  be  in 
fact  a  doubt  whether,  when  the  law  of  the  domicil  and  the 
law  of  the  place  of  the  contract  conflict,  the  law  of  the 
forum  may  not  come  in,  and  decide  in  favor  of  the  law  of 
the  domicil,  if  that  be  also  the  place  of  the  forum,  or  in  favor 


fix  liimsclf,  or  where  the  property  on  age  of  twenty-four  lie  came  into  this  State, 
which  the  contest  arises  may  be  situated."  ami  entered  into  contracts  ;  — would  it  be 
Afterwards,  p.  597,  in  illustration  of  these  permitted  that  he  should,  in  our  courts, 
rules,  the  court  say  what  we  should  sup-  and  to  the  demand  of  one  of  our  citizens, 
pose  to  mean  simjily  that  the  law  of  the  plead,  as  a  protection  against  his  engage- 
place  of  the  contract  overcomes  the  law  of  mcnts,  the  laws  of  a  foreign  country,  of 
the  domicil  as  to  capacity.  "Now  sup-  which  the  people  of  Louisiana  had  no 
posing  the  case  of  our  law  fixing  the  age  knowledge ;  and  would  we  tell  them  that 
of  nuijority  at  twenty-five,  and  the  country  ignorance  of  foreign  laws,  in  relation  to  a 
in  which  a  man  was  born  and  lived,  ]n-e-  contract  made  here,  was  to  prevent  them 
vious  to  his  coming  here,  ))lacing  it  at  enforcing  it,  though  the  agreement  was 
twenty-one,  no  olijection  could  be  pcrlia])s  binding  l)y  those  of  their  own  State? 
made  to  the  rule  just  stated,  and  it  nuiy  Most  assuredly  we  would  not.  IGJMartin, 
be,  and  we  believe  would  be  true,  that  a  193.  Take  another  case.  By  the  laws  of 
contract  made  here  at  any  time  between  this  country  slavery  is  j)crmittcd,  and  tho 
the  two  periods  already  mentioned  would  rights  of  the  master  can  be  enforced. 
bind  him.  But  reverse  the  facts  of  this  Sujipose  the  individual  subject  to  it  is  car- 
case, and  sujipose,  as  is  the  truth,  tliat  uur  ried  to  lOngland  or  Massachusetts ;  — 
law  i>la(('d  tlie  age  of  majority  at  twenty-  would  their  courts  sustain  the  argument 
one;  that  twenty-live  was  tlie  j)eriod  at  that  his  state  or  condition  was  fixed  by  the 
wlii<h  a  man  ceased  to  be  a  minor  in  the  laws  of  his  domicil  of  origin  1  We  know 
country  where  he  resided  ;  and  that  at  tho  they  would  not." 

[8G] 


en.  II.]  THE   LAW   OF   PLACE.  *88 

of  the  law  of  the  place  of  the  contract,  if  that  be  the  place 
of  the  forum.  But  we  are  not  satisfied  that  such  would  be  the 
rule. 

*There  is  another  principle  which  may  have  a  bearing  upon 
this  question ;  for  it  seems  reasonable  at  least  to  say  that  a  con- 
tract, void  or  voidable  at  its  inception,  cannot  be  made  valid 
against  the  will  of  the  party  having  the  right  of  avoidance,  by 
a  mere  change  of  his  place,  nor  can  a  contract  valid  and  enforc- 
able  when  and  where  entered  into  be  made  invalid  in  this  way. 
Any  woman  over  eighteen,  buying  on  credit  non-necessaries  in 
Vermont,  makes  a  contract  which  is  valid  then  and  there,  and 
any  woman  of  that  age  making  such  a  contract  in  Massachu- 
setts makes  one  which  is  not  valid  then  and  there  ;  and  these 
contracts  must  remain,  the  first  valid  and  the  second  invalid, 
wherever  it  may  be  sought  to  enforce  them,  unless,  in  the  first 
case,  a  foreign  law  is  admitted  to  destroy  the  validity  of  the 
contract,  and  in  the  second  case,  comes  in  to  give  the  contract 
validity  and  force ;  and  we  think  a  foreign  law  can  do  neither 
of  these  things. 

By  the  second  of  the  general  principles  which  we  presented 
early  in  this  chapter,  the  laws  of  every  State  have  a  binding 
force  over  all  persons  and  things  within  its  dominion  ;  and  con- 
tracts are  among  the  things  which  it  thus  controls.  It  must  be 
true,  therefore,  that  these  laws  govern  and  determine  all  con- 
tracts made  within  their  territorial  scope,  or,  in  other  words,  that 
every  contract  must  be  construed  according  to  the  law  of  the 
place  of  the  contract,  unless  we  are  at  liberty  to  say  one  of  two 
things ;  either  that  the  foreign  law  affected  the  contract,  and 
controlled  the  home  law  at  the  time  the  contract  was  made,  or 
else  that  it  had  this  effect  subsequently.  Now,  to  say  that  the 
foreign  law  thus  operated  upon  the  contract  at  its  inception, 
would  be  to  say  that  a  foreign  law  entered  into  a  foreign  and 
independent  State  with  a  power  of  its  own,  and  there  by  this 
power  resisted  and  controlled  the  home  law,  and  importantly 
affected  the  rights  of  parties  who  made  the  contract  under  the 
home  laws.  And  this  would  be  giving  to  this  foreign  law  a 
power  far  beyond  what  it  could  derive  from  any  principle  which 

[87] 


89*  THE  LAW   OP   CONTRACTS.  [PART  II. 

can  be  admitted  to  belong  to  the  comity  of  nations,  (j)  On 
*the  other  hand,  if  we  admit  that  the  contract  when  made  was 
valid  only  according  to  the  laws  of  the  country  where  it  was 
made,  but  say  that  afterwards  another  law,  the  law  of  the  dom- 
icil  of  a  party,  or  of  the  forum  before  which  the  question  comes, 
varies  the  contract  in  imjDortant  respects,  we  say  no  less  than 
that  a  law  which  the  parties  in  making  their  contract  could  not 
be  supposed  to  contemplate,  and  were  not  affected  by,  after- 
wards made  a  new  contract  for  them,  or  established  or  dis- 
charged relations  or  obligations  between  them,  against  or  with- 
out their  will  and  consent. 

Upon  the  whole  we  are  of  opinion  that  the  rule  which  requires 
that  every  contract  should  be  construed  according  to  the  law  of 
the  place  where  it  was  made,  is  very  nearly  universal.  The  ex- 
ceptions we  should  admit  are,  principally,  those  founded  upon 
the  possible  fact  that  the  law  of  a  State  might  oppose  or  vary 
the  law  of  natural  capacity  or  incapacity,  or  might  permit  a 
contract  which  could  be  performed  only  by  acts  in  another 
country,  which  acts  would  be  distinctly  and  positively  prohibited 
by  the  law  of  that  country.  And  even  in  such  cases  it  might 
more  properly  be  said,  that  the  contract  should  be  construed 
according  to  the  law  of  the  place  where  it  w^as  made,  but  that 
whenever  such  construction  could  make  it  illegal,  it  would  be 
for  that  reason  void.     But  the  illegality  here  meant  is  not  that 

{j)  In  Saul  ?.'.  His  Creditors,  17  Mart,  and  fixed.  They  seem  to  have  forgotten 
La.  59.5,  the  court  say,  after  quoting  fi-om  that  they  wrote  on  a  question  which 
Chancellor  D'Agusseau:  "If  the  suhjcct  touched  the  comity  of  nations,  and  that 
had  been  susceptible  of  clear  and  positive  that  comity  is,  and  ever  must  be  uncertain, 
rules,  we  may  safely  believe  this  illustrious  That  it  must  necessarily  depend  on  a 
man  would  liot  have  left  it  in  doubt,  for  if  variety  of  circumstances  which  cannot  be 
anv  tiling  be  more  reniarkal)lo  in  him  than  reduced  within  any  certain  rule.  That  no 
his" genius  and  his  knowledge  it  is  the  ex-  nation  will  suffer  the  laws  of  another  to 
traordinary  fulness  and  clearness  with  interfere  with  her  own,  to  the  injury  of  her 
which  he  expresses  himself  on  all  ques-  citizens:  that  whether  they  do  or  not  must 
tions  of  jurisprudence.  When  he,  there-  depend  on  the  condition  of  the  country  in 
fore,  and  so  many  other  men  of  great  which  the  foreign  law  is  sought  to  be  en- 
talents  and  learning,  are  thus  found  to  fail  forced  —  the  particular  nature  of  her  leg- 
in  (i.\ing  certain  ])riiicii)les,  we  are  forced  islation  —  her  ))olicy,  atul  the  character  of 
to  conclude  that  llicy  liave  failed  not  from  her  institutions.  That  in  the  conflict  of 
want  of  al)ility,  but  because  the  matter  was  laws,  it  must  be  often  a  matter  of  doubt 
rot  Kusceptibic  of  being  settled  on  certain  which  should  jjrevail,  and  that  whenever 
principles.  They  have  attempted  to  go  that  douiit  does  exist,  the  court  which  de- 
too  fur.  To  define  and  fix  that  which  cidcs  will  prefer  the  law  of  its  own  coun- 
cannot  in  the  nature  of  things  be  delincd  try  to  that  of  the  stranger." 

[KM] 


en.  II.]  THE    LAW   OF   PLACE.  *90 

of  an  infant's  contract  for  non-necessaries,  or  the  contract  of  a 
married  woman.  Wiien  it  is  said  that  he  or  she  cannot  do  this, 
it  is  meant  only  that  the  law  *permits  a  party  making  such  a 
contract  to  treat  it  as  void  ;  not  that  the  law  prohibits  such 
parties  from  making  these  contracts. 

All  of  these  questions  are  sometimes  much  complicated  with 
other  questions,  as  where  the  domicil  of  the  party  is,  or  where 
was  the  place  in  which  the  contract  was  made ;  and  they  be- 
come in  this  way  much  more  difficult. 


SECTION    IV. 

DOMICIL. 

Every  person  has,  in  law,  a  home,  or  domicil ;  (k)  and  every 
domicil  which  one  has,  whether  the  original  domicil  or  a  sub- 
sequent one,  continues  until  a  new  one  is  acquired,  (l)  and  when 
a  new  one  is  acquired,  the  former  domicil  ceases,  (m)  because 
no  person  can  have  more  than  one  domicil  at  the  same  time,  (w) 
One's  domicil,  or  home,  is  in  the  country  in  which  he  perma- 
nently resides.  To  the  idea  of  domicil,  or  home,  two  elements 
belong ;  one,  that  of  act,  the  other,  that  of  intent.  The  very 
beautiful  definition  of  the  Roman  law  cannot  be  literally  and 
adequately  translated  into  English.  "  It  is  not  doubted  that 
individuals  have  a  home  in  that  place  where  each  one  has 
established  his  hearth  and  the  sum  of  his  possessions  and  his 
fortunes ;  (larem  rerumque  ac  foi'timarnm  suarnm  summam  con- 
stituU),  whence  he  will  not  depart  if  nothing  calls  him  away ; 
whence  if  he  has  departed  he  seems  to  be  a  wanderer,  and  if 
he  returns  he  ceases  to  wander."  (o) 

The  questions  of  domicil  sometimes  present  much  difficulty 
in  determining  what  is  the  measure,  or  what  is  the  evidence  of 
the  residence  which  constitutes  domicil  in  fact,  or  in  intent. 

{k]  Crawford  v.  Wilson,  4  Barb.  504.        water,  2.3  Pick.  170  ;  Thorndike  v.  The 
(/)  Id. ;  Brewer  v.  Linnreus,  36  Me.  428.     City  of  Boston,  1  Met.  242. 
(m)  Crawford  v.  Wilson,  4  Barb.  504.  (o)  Code,  Lib.  10,  tit.  39,  7. 


(n)  Id. ;    Abingtoa  v.  North  Bridge- 


[89] 


91*  THE   LAW    OF   CONTRACTS.  [PART  II. 

Residence  and  domicil  are  not  convertible  terms,  because  they 
are  not  the  same  things.  A  man  may  have  more  than  one  res- 
idence. He  may  reside  a  part  of  the  time  in  the  city,  and  a  part 
in  the  country  ;  or  a  part  in  one  country  and  a  part  in  another. 
But  he  can  have  but  one  domicil ;  (oa)  and  where  that  is,  must 
be  determined  by  a  consideration  on  the  one  hand  of  the  facts  at- 
tending his  residence,  and  on  the  other,  of  the  intention  with 
which  he  resides  in  one  place  or  another.  For  both  fact  and 
intent  are  necessary  to  constitute  a  domicil.  Both  are  implied 
in  favor  of  *the  home  which  one  has  by  birth  and  parentage,  and 
subsequent  inhabitancy.  The  dwelling  in  a  place,  or  even  being 
there,  may  constitute  prima  facie  evidence  of  domicil ;  but  it  is 
evidence  which  maybe  rebutted,  (p)  Audit  is  quite  certain 
that  no  definite  period  of  time,  no  exact  manner  of  residence, 
no  precise  declarations  or  specific  acts,  are  necessary  to  ascer- 
tain domicil,  or  perhaps  suffice  to  determine  domicil ;  although 
the  Supreme  Court  of  the  United  States  have  intimated  that 
an  exercise  of  the  right  of  suffrage  would  be  the  highest  evi- 
dence ;  and  perhaps  it  would  be  conclusive  against  the  party,  {q) 
When  a  domicil  is  in  any  way  acquired,  it  may  be  changed, 
by  a  change  both  in  fact  and  in  intent,  but  not  by  either  change 
alone  ;  the  change  in  fact  not  being  enough  without  intent,  (/•) 
nor  the  cliange  in  intent  without  the  change  in  fact,  (s)  One 
who  goes  abroad  animo  revertendi,  does  not  change  his  domicil, 
because  only  the  fact  of  residence  is  changed,  and  not  the  in- 
tent. But  if  he  remains  very  long  abroad,  and  in  one  place, 
the  intent  may  be  inferred  from  the  fact.     And  this  inference 

(oa)  Biirtlctt  v.  The  Mayor,  5   Sandf.  acquiring  :i  right  of  suffrage,  accompanied 

44.     (Jn  this  point  sec  also,  Hood's  Es-  by  acts  whicli  show  a  permanent  location, 

tate,  21   Penn.   St.   lOG,  and  Douglas  v.  uncxjilained,  may  he  sufficient."    Seealso, 

Mayor  of  New  York,  2  Diier,  110.  Cole  r.  Clicshire,  1  Gray,  441. 

(  p)  Crawford  v.  Wilson,  4  Barb.  .'')(»4,         (r)  Bradley  r.  Lowry,  1    Spcer.s,  Eq.  1  ; 

519;  Bruce  v.  Bruce,  2  B.  &  P.  229,  n.  Granby  r.  Amherst,  7  JNIass.  1  ;  Lincoln 

(«) ;  .Scars  v.  The  City  of  Boston,  1  Met.  v.  Ilapgood,  1 1  id.  350  ;  Harvard  College 

2.i0.  V.    Gore,    5    Pick.    370 ;    Cadwalader   v. 

(t/)  Shelton  v.  Tillin,  G  IIow.  18.").     In  Howell,  3  Harrison,  138;  Wilton  v.  Fal- 

this   case   the  court  say:    "On  a  change  mouth,  ir)]\Ie.  479. 

of  domicil  from  one  state  to  another,  cit-         (s)  Tlic   Attorney-General  v.  Dunn,   G 

i/.enship  may  (h'jicnd  upon  the  intention  of  M.    &    W.    .'Jll  ;    llallowell    i'.    Saco,    5 

the  individual.     I5ut  this  iutcution  may  be  (ireenl.  143  ;  The  State  ?7.  Hallctt,  8  Ala. 

shown    more    saii.sf.ictorily    by   acts    than  l.'JO;  Williams  r.  Wiuting,  1 1  Mass.  424 ; 

(IcciarationH.     An  exercise  of  tlie  right  of  Hairston  c.  llairston,  27  Missis.  704. 
gulfrage  is  conclusive  on  the  subject ;  but 

[00] 


en,  il]  the  law  of  place.  *92 

may  be  made  against  the  express  declarations  and  assertions  of 
the  person.  (/)  For  the  fact  and  the  intent  together  determine 
the  domicil,  and  not  the  language ;  nor  is  this  important  except 
as  evidence  of  intent.  If  therefore  one  insists  upon  his  pur- 
pose of  return,  and  the  preservation  of  his  domicil,  but  the  facts 
arc  such  as  to  lead  to  and  justify  the  belief  that  this  expressed 
intention  of  return  is  but  a  faKse  pretence,  made  for  the  sake  of 
preserving  as  long  as  he  can  the  rights  of  domicil,  while  in  fact 
he  means  to  abide  where  he  now  is,  the  intent  will  *govern,  and 
the  change  of  domicil  will  be  complete.  It  seems  to  be  agreed 
that  "  residence"  and  "inhabitancy"  mean  the  same  thing  ;(m) 
and  there  are  cases  in  which  these  words  and  "  domicil"  are 
used  as  if  they  were  synonymous,  (c)  which  we  think  they  are 
not,  as  we  have  just  now  stated.  This  may  however  be  re- 
garded as  rather  a  question  about  the  meaning  and  use  of 
words,  than  a  question  of  principle ;  for  all  admit  that  one  may 
dwell  for  a  considerable  time,  and  even  regularly  during  a 
large  part  of  the  year,  in  one  place,  or  even  in  one  State,  and 
yet  have  his  domicil  in  another,  (w)  If  one  resides  in  Boston 
five  months  in  the  twelve,  including  the  day  on  which  resi- 
dency determines  taxation,  and  the  other  seven  months  at  his 
house  in  the  country,  he  will  be  taxed  in  Boston,  and  may  vote 
there,  and  his  domicil  is  there,  [x) 

(t)  See  supra,  n.  (q).  is  there  for  a  particular  purpose.     So  sol- 

(m)  Roosevelt    V.   Kcllog:g,   20  Johns,  diers  and  seamen  may  be  legal  residents 

208;  In  the  matter  of  Wrigley,  4  Wend,  and  inhabitants  of  a  place,  ajihough  tliey 

602,  8  id.  134.  may    have    been    absent    thei-etVom    for 

(v)  See   Jefferson   v.   Washington,    19  years.     They  do  not  lose  their  residence 

Maine,  293  ;  In  the  matter  of  Thompson,  or  domicil  by  following  their  profession." 

1  Wend.  45;  Frost  v.  Brisbin,  19  id.  11  ;  In   regard   to   seamen,    in   Thorndike   v. 

Thorndike  v.  The  City  of  Boston,  1  Met.  The    City   of   Boston,    1    Met.    242,   the 

245  ;  McDaniel  v.  King,  5  Cush.  473  ;  Cad-  court  say  :  "  If  a  seaman  without  family 

walader  i\  Howell,  3  Harrison,'  144  ;  Craw-  or  property  sails  from  the  place  of  his  na- 

ford  V.  Wilson,  4  Barb.   522.     Sec  also,  tivity,  which  may  be  considered  his  domi- 

cases  cited  in  preceding  note.     In  Craw-  cil  of  origin,  although  he  may  return  only 

ford  V.  Wilson,  4  Barb.  522,  the  court  put  at  long  intervals,  or  even  be"absent  many 

soldiers  and  seamen  on  the  same  footing  years,  yet  if  he  docs  not  by  some  actual 

■with  foreign  ministers  in  respect  to  domicil.  residence  or  other  means  acquire  a  domi- 

"  The  actual  residence  is  not  always  the  cil   elsewhere,  he   retains   his   domicil  of 

legal  residence  or  inhabitancy  of  a  man.  origin."     See  also.  Sears  i-.  Tiic  City  of 

A  foreign  minister  actually  resides  and  is  Boston,  1  Met.  250. 
personally  present  at  the  court  to  which  he         {w)  Frost  v.  Brisbin,  19  Wend.  11. 
is  accredited,  but   his   legal   residence  or         {x)  This    is    the    estal)lished    rule    and 

inhabitancy,  and  domicil,  are  in  his  own  common  practice  in  Massachusetts,  as  to 

country.      His    residence    at    the   foreign  the  right  of  taxing  one  not  actually  a  resi- 

court  is  only  a  temporary  residence.     He  dent.     It  is  provided  by  statute  that  per- 

[91] 


93-94* 


THE  LAW   OF   CONTRACTS. 


[part  II. 


A    woman    marrying    takes    her    husband's    domicil,    and 
*  changes  it  with  him.  (//)     A  minor  child  has  the  domicil  of  his 


sonal  estate  sliall  be  assessed  to  the  owner 
in  the  town  where  he  shall  be  an  iiJmbitant 
on  the  tirst  day  of  May.  Rev.  Stat.  cb.  7, 
sect  9.  It  is  held  that  inhabitancy  under 
this  statute  means  substantially  the  same 
thing  as  domicil.  Thorndike  r.  The  City 
of  Boston,  1  Met.  242.  In  this  case  a 
citizen  of  Boston,  who  had  been  at  school 
in  the  City  of  Edinburgh  when  a  boy,  and 
formed  a  predilection  for  that  place  as  a 
residence,  and  had  expressed  a  determina- 
tion to  reside  there,  if  he  ever  should  have 
the  means  of  so  doing,  removed  with  his 
family  to  that  cit}^  in  1 8.36,  declaring,  at 
the  time  of  his  departure,  that  he  intended 
to  reside  abroad,  and  that  if  he  should  re- 
turn to  the  United  States  he  should  not 
live  in  Boston.  He  resided  in  Edinburgh 
and  the  vicinity,  as  a  housekeeper,  taking 
a  lease  of  an  estate  for  a  term  of  yeai's, 
and  endeavored  to  engage  an  American 
to  enter  his  family  for  two  years,  as  in- 
structor of  his  children.  Before  he  left 
Boston  he  made  a  contract  for  the  sale  of 
his  mansion-house  and  furniture  there,  but 
shortly  afterwards  procured  said  contract 
to  be  annulled  {assigning  as  his  reason 
therefor,  that  in  case  of  his  death  in  Eu- 
rope, his  wife  might  wish  to  return  to 
Boston),  and  let  his  house  and  furniture 
to  a  tenant.  Held,  that  he  had  changed 
his  domicil,  and  was  not  liable  to  taxation 
as  an  inhabitant  of  IJoston  in  1837.  Shaw, 
C.  J.,  said  :  "  The  questions  of  residence, 
inhabitancy,  or  domicil,  —  for  although 
not  in  all  respects  precisely  the  same, 
they  are  nearly  so,  and  depend  upon  much 
the  same  evidence, — arc  attended  with 
more  difficulty  than  almost  any  other 
which  are  ]ircsented  for  adjudic.ition.  No 
exact  delinition  can  be  given  of  domicil; 
it  dcficnds  upon  no  one  fact  or  comliina- 
tion  of  circumstances,  lint  from  the  whole 
taken  together  it  must  be  determined  in 
each  particular  case.  It  is  a  maxim,  that 
every  man  must  liave  a  domicil  some- 
where ;  and  also  tliat  lie  can  have  but  one. 
Of  course  it  follows  that  bis  existing  dom- 
icil continues  until  he  ac(iuircs  another ; 
and  vice  vfrsa,  l)y  acipiiring  a  new  domicil 
lie  relinquishes  his  former  one.  From 
tiiis  view  it  is  manifest  that  very  slight 
circumstances  must  oflcn  decide  the  (pies- 
tion.  It  depends  upon  the  preponderance 
of  tlic  evidence  in  favor  of  two  or  more 


places ;  and  it  may  often  occur  that  the 
evidence  of  facts,  tending  to  establish  the 
domicil  in  one  place,  would  be  entirely 
conclusive,  were  it  not  for  the  existence  of 
facts  and  circumstances  of  a  still  more 
conclusive  and  decisive  character,  which 
fix  it,  beyond  question,  in  another.  So, 
on  the  contrary,  very  slight  circumstances 
may  fix  one's  domicil,  if  not  controlled  by 
more  conclusive  facts  fixing  it  in  another 
place.  If  a  seaman,  without  family  or 
property,  sails  from  the  place  of  his  na- 
tivity, which  may  be  considered  his  domi- 
cil of  origin,  although  he  may  return  only 
at  long  intervals,  or  even  be  absent  many 
years,  yet  if  he  does  not  by  some  actual 
residence  or  other  means  acquire  a  domi- 
cil elsewhere,  he   retains   his   domicil  of 

origin The    actual    change    of 

one's  residence,  with  his  family,  and  the 
taking  up  of  a  residence  elsewhere,  with- 
out any  intention  of  returning,  is  one  of 
the  strong  indications  of  change  of  domi- 
cil, and,  unless  controlled  by  other  cir- 
cumstances, is  decisive.  It  was  for  the 
jury  to  determine  whether  there  were  any 
circumstances  sufficient  to  control  such 
conclusion.  If  the  plaintiff  had  left  Bos- 
ton, and  actually  taken  up  a  residence, 
with  his  family,  in  Scotland,  without  any 
intention  of  returning,  thereby  assuming 
that  country  as  his  definite  abode  and  place 
of  residence  until  some  new  intention  had 
been  formed  or  resolution  taken,  he  had 
ceased  to  be  an  inhabitant  of  Boston,  lia- 
ble to  taxation  for  his  personal  property." 
In  Scars  v.  The  City  of  Boston,  1  Met. 
250,  a  native  inhabitant  of  Boston,  intend- 
ing to  reside  in  France,  with  his  family, 
departed  for  that  country  in  June,  1836, 
and  was  followed  by  his  family  about 
three  months  afterwards.  His  dwelling- 
house  and  fiuMiiture  were  leased  for  a 
year,  and  he  hired  a  house  for  a  year  in 
Paris.  At  the  time  of  his  departure  ho 
intended  to  return  and  resume  his  resi- 
dence in  Boston,  but  bad  not  fixed  on  any 
time  for  his  return.  He  retm-ncd  in  about 
sixteen  months,  and  his  family  in  about 
nine  months  afterwards.  //(/(/,  that  ho 
continued  to  be  an  inhabitant  of  Boston, 
and  that  he  was  rightly  taxed  there,  during 
his  absence,  for  his  person  and  i)ersonal 
jiropcrty.  Shaw,  C.  J.,  said  :  "  Actual 
residence,  that  is,  personal  presence  in  a 


[92] 


(y)  Warrcndcr  v.  Warrcnder,  9  Bligh,  89,  103,  104. 


en.  II.] 


THE   LAW   OF  PLACE. 


-94 


father,  (c)  or  of  his  mother  if  she  survive  his  father;  and  the  sur- 
viving parent,  with  whom  a  child  lives,  by  changing  his  or  hA 
own  domicil  in  good  faith,  changes  that  of  the  child,  [a)  And 
even  a  guardian  has  the  same  power,  (b) 


SECTION    V. 

THE   PLACE   OF   THE   CONTRACT. 

The  rules  of  law  in  respect  to  domicil  are  quite  well  settled, 
and  when  difficult  questions  occur,  they  are  usually  questions 
of  fact.  But  the  law  as  to  what  shall  be  deemed  the  place  of 
the  contract  seems  not  to  be  quite  well  settled.  A  contract  is 
made  when  both  parties  agree  to  it,  and  not  before ;  if  it  be  an 
oral  contract,  it  is  made  when  the  offer  of  one  party  is  distinctly 
accepted  by  the  other ;  and  if  it  be  made  by  letter,  then  it  is 
made  when  the  party  receiving  the  proposition  puts  into  the 
mail  his  answer  accepting  it,  or  does  an  equivalent  act.     If  the 


place,  is  one  circumstance  to  determine 
the  domicil,  or  the  fact  of  l)eing  an  inhab- 
itant ;  but  it  is  far  from  being  conclusive. 
A  seaman  on  a  long  voyage,  and  a  soldier 
in  actual  service,  may  be  respectively  in- 
habitants of  a  place,  though  not  personally 
present  there  for  years.  It  depends,  there- 
fore, upon  many  other  considerations,  be- 
sides actual  presence.  Wiiere  an  old  res- 
ident and  iiiliabitant,  having  a  domicil 
from  his  birtii  in  a  particular  place,  goes 
to  another  place  or  country,  the  great 
question  whether  he  has  changed  his  dom- 
icil, or  wliether  he  lias  ceased  to  be  an  in- 
habitant of  one  place,  and  become  an  in- 
habitant of  another,  will  depend  mainly 
upon  the  question,  to  be  determined  from 
all  the  circumstances,  whether  tlie  new 
residence  is  temjiorary  or  permanent; 
whether  it  is  occasional,  for  tiie  purpose 
of  a  visit,  or  of  accomplishing  a  tempo- 
rary object;  oi"  wliether  it  is  for  the  pur- 
pose of  continued  residence  and  abode  un- 
til some  new  resolution  be  taken  to  re- 
move. If  the  departure  from  one's  fixed 
and  settled  abode  is  for  a  purpose  in  its 
nature  temporary,  whether  it  be  business 
or  pleasure,  accompanied  with  an  intent 


of  returning  and  resuming  the  former  place 
of  abode  as  soon  as  such  purpose  is  ac- 
complished ;  in  general,  such  a  person 
continues  to  be  an  inhabitant  at  such 
place  of  abode,  for  all  purposes  of  enjoy- 
ing civil  and  political  privileges,  and  of 
being  subject  to  civil  duties."  The 
learned  Chief  Justice  then  remarks  that 
the  facts  in  the  present  case  are  considered 
by  the  court  as  indicating  only  a  casual 
and  temporary  departure  of  the  plaintiff 
from  his  place  of  permanent  residence; 
that  Paris  was  his  place  of  temporary  and 
not  of  permanent  abode  ;  and  that  he  did 
not  relinquish  his  domicil,  or  cease  to  be 
an  inhaliitant  of  Boston.  The  case  is 
distinguished  fiom  the  case  of  Thorndike 
V.  The  City  of  Boston,  by  tlie  ditlerent 
intent  of  the  parties  upon  their  departure. 

(z)  Guier  v.  O'Daniel,  1  Binn.  349,  n.  a. 

(a)  Cumner  v.  Milton,  2  Salk.  5-28; 
Woodend  v.  Paulspury,  2  Ld.  Kaym. 
147.3;  Potinger  r.  \Vightman,  3  Meriv. 
67  ;  Holyoke  z;.  Haskins,  5  Pick,  20.  See 
Story's  Confl.  of  Laws,  (j  46,  n.  (2). 

{!>)  Potinger  i-.  Wightman,  3  Meriv.  67  ; 
Holyoke  v.  Haskins,  5  Pick.  20.  See 
Story's  Conll.  of  Laws,  §  46,  n.  (2).  •, 

[93] 


95*  THE  LAW   OF   CONTRACTS.  [PART  II. 

contract  is  in  writing,  it  is  made  when  all  the  parties  have 
executed  it ;  and  therefore  is  not  made  until  the  latest  party  has 
put  to  it  his  name  or  seal,  or  both,  as  may  be  requisite,  (c) 
Suppose,  however,  that  the  contract  is  made  in  one  place,  but 
is  to  be  performed  in  another ;  then,  in  general,  although  per- 
haps not  always,  and  for  *all  purposes,  the  place  of  payment  or 
performance,  is  the  place  of  the  contract,  (d)  The  most  famil- 
iar instance  is  a  promissory  note,  made,  that  is,  signed,  we 
will  say  in  Boston,  and  payable  in  New  York.  Is  this  note  to  be 
construed  by  the  law  of  Massachusetts  or  the  law  of  New  York  ? 
It  would  seem,  from  the  authorities,  that  a  contract  may  have 
two  different  places,  the  law  of  which  enters  into  its  construc- 
tion. If  it  be  expressly  payable,  or  to  be  otherwise  performed, 
there  where  it  is  signed,  then  that  is  its  only  place.  If  it  be  but  a 
naked  promise,  without  any  special  condition  as  to  the  place  of 
payment,  then  it  must  be  demanded  of  the  maker  where  he  is, 
or  at  his  domicil,  but  it  would  be  regarded  as  made  where  it 
was  signed.  If  expressly  payable  in  a  place  other  than  that 
where  it  is  made,  it  would  seem,  according  to  some  authorities, 
that  the  law  of  either  place  may  be  applied ;  thus,  if  the  legal 
interest  in  New  York  is  seven  per  cent.,  and  the  legal  interest 
in  Boston  is  six  per  cent.,  a  note  on  interest  payable  at  Boston, 
and  made  in  New  York,  would  be  held  not  to  be  usurious  in 
Boston  if  it  expressed  seven  per  cent,  as  its  rate  of  interest; 
while  according  to  other  authorities,  if  payable  at  Boston,  it 
must,  wherever  signed,  conform  to  the  law  of  Massachusetts  in 
respect  to  interest,  and  would  therefore  be  usurious  there  if  it 
bore  on  its  face  more  than  six  per  cent,  although  not  usurious 
at  New  York,  where  it  was  made.  Our  own  opinion  is  decid- 
edly in  favor  of  the  former  view.     That  is,  if  a  note  be  made, 

(c)  Sec  ante,  vol.  1,  B.  2,  cli.  2,  and  Percy  v.  Percy,  9  La.  Ann.  185  ;  Thomp- 

vol.  1,  p.  440,  n.  (h).     Also,  Arnold  v.  son   r.   Ketcliani,   8  Johns.   189;  Cox  v. 

Richmond    Iron    Works,    1    Gray,   434;  The  United  States,  6  Pet.  172 ;  Fanning 

Orciitt  V.   Nelson,  id.   3.30;    Whiston  v.  v.  Conse<[na,  17  Johns.  511;  Andrews  i'. 

Stoddcr,   8  Mart.    La.   95;    Western  v.  Pond,  13  Pet.    65;    Duncan  v.  Cannan, 

The  Gcn<'sc<-  Miit.  Ins.  Co.  2  Kern.  258.  7   I)e  G.,  M.  &  Ci.  78,  31    Euf,'.  L.  &  l<:([. 

(fl)  Itol.inson  r.  Pland,  2  Burr.  1077  ;  443  ;  Dacosta  v.  Davis,  4  N.  J.  319  ;  Lcn- 

fer  Jiithlij-iii,  J.,  in  Strother  v.  Lucas,  12  nijjj  v.  Balston,  23  Penn.  St.  137;  Davis 

'et.  410,   43ri ;    Bell  v.   Bruen,  1    How.  ij.  Cleinson,  0  McLean,  022  ;  Emerson  w. 

169,  182;  L(!  Breton  v.  Miles,  8  Pai^e,  Partrid^^  1  Williams,  8. 
£61  ;    Prentiss  v.  Savage,  13  Mass.  23  ; 

[iM] 


en.  II.] 


THE    LAW    OF    PLACE. 


^96 


bona  fide ^  in  one  place,  expressly  bearing  an  interest  legal  there, 
and  payable  in  another  place  in  which  so  high  a  rate  of  interest 
is  not  allowed,  it  may  be  sued  in  the  place  where  payable,  and 
the  interest  expressed  recovered.  Because  the  parties  had  their 
election  to  make  the  interest  payable  according  to  the  law  of 
either  place ;  or  to  express  the  same  thing  differently,  they  may 
lawfully  agree  upon  the  largest  interest  allowed  by  the  law  of 
either  place,  or  any  less  interest,  (e)      But  if  no  *  interest  be 


(e)  This  is  the  result  arrived  at  after 
much  consideration,  by  the  Supreme  Court 
of  Louisiana,  in  Depau  v.  Humphreys, 
20  Mart.  La.  1.  Mr.  Justice  Slory,  in 
his  Conflict  of  Laws,  discusses  the  ques- 
tion at  great  length,  and  with  a  citation  of 
very  numerous  authorities,  most  of  which 
are  from  the  civil  law,  and  comes  to  an 
opposite  conclusion,  if  we  understand  him 
aright,  although  some  statements  might 
leave  the  matter  in  doubt.  In  i-cference 
to  the  case  of  Depau  v.  Humphreys,  he 
says  :  "  Another  case  has  arisen  of  a 
very  different  character.  The  circum- 
stances of  the  case  were  somewhat  com- 
plicated, but  the  only  point  for  considera- 
tion there  arose  upon  a  note,  of  which  the 
defendants  were  the  indorsers,  and  with 
the  amount  thereof  they  had  debited  them- 
selves in  an  account  with  the  plaintiff; 
and  which  they  sougiit  now  to  avoid  upon 
the  ground  of  usury.  The  note  was 
given  in  New  Orleans,  payable  in  New 
York,  for  a  large  sum  of  money  bearing 
an  interest  of  ten  per  cent.,  being  the 
legal  interest  of  Louisiana,  the  New  York 
legal  interest  being  seven  per  cent.  only. 
The  question  was  whether  the  note  was 
tainted  with  usury,  and  therefore  void,  as 
it  would  be,  if  made  in  New  York.  The 
Supreme  Court  of  Louisiana  decided  that 
it  Avas  not  usurious ;  and  tliat  although 
the  note  was  made  payable  at  New  York, 
yet  the  interest  might  be  stipulated  for 
either  according  to  the  law  of  Louisiana 
or  according  to  that  of  New  York.  The 
court  seem  to  have  founded  their  judgment 
upon  the  ground,  that  in  the  sense  of  the 
general  rule  already  stated,  there  arc  or 
there  may  lie  two  places  of  contract ;  that 
in  which  the  contract  is  actually  made, 
and  that  in  which  it  is  to  be  paid  or  per- 
formed; Locus,  ubi  contractus  celebratus  est  ; 
locus,  ubi  (lestinata  solutio  est ;  and  there- 
fore, that  if  the  law  of  both  places  is  not 
violated,  in  respect  to  the  rate  of  interest, 
the  contract  for  interest  will  be  valid.     In 


support  of  their  decision  the  court  mainly  re- 
lied upon  the  doctrines  supposed  to  be  main- 
tained by  certain  learned  jurists  of  continen- 
tal Europe,  whose  language,  however,  does 
not  appear  to  me  to  justify  any  such  inter- 
pretation when  properly  considered,  and 
is  perfectly  compatible  with  the  ordinary 
rule,  that  tlie  interest  must  be  or  ought  to 
be  according  to  the  law  of  the  place 
where  the  contract  is  to  be  performed,  and 
the  money  is  to  be  paid.  It  may  not  be 
without  use  to  review  some  of  the  more 
important  authorities  thus  cited,  although 
it  must  necessarily  involve  the  repetition 
of  some  which  have  been  already  cited." 
Confl.  of  Laws,  §  298.  Then  after  twenty 
pages  of  the  examination  of  authorities, 
he  comes  to  the  conclusion  that  the  decis- 
ion of  the  court  of  Louisiana  is  not  sup- 
ported by  the  reasoning  or  principles  of 
foreign  jurists,  and  is  directly  opposed  by 
the  J^nglish  case  of  Robinson  v.  Bland, 
2  Burr.  1077,  and  the  American  case  of 
Andrews  v.  Pond,  13  Pet.  65.  Such  is 
not  our  view  of  those  cases.  The  first  is 
wholly  different  in  its  facts.  A  bill  of 
exchange  was  sued,  drawn  in  France  upon 
the  drawer  in  England ;  and  all  that  the 
case  finds,  so  far  as  the  present  question  is 
concerned,  is,  that  Lord  Mansfield  says  : 
"  The  law  of  the  place"  (meaning  France) 
"  can  never  be  the  rule,  where  tlie  trans- 
action is  entered  into  with  an  express 
view  to  the  law  of  another  country,  as  the 
rule  by  which  it  is  to  be  governed."  The 
case  of  Andrews  v.  Pond  only  decides 
that  if  the  interest  allowable  at  the  place 
of  payment  be  larger  than  that  where  the 
note  is  made  or  the  bill  drawn,  the  parties 
may  stipulate  for  the  higher  interest.  No 
doubt  of  this ;  but  the  case  does  not  say 
that  if  the  interest  where  the  note  is  made 
be  the  highest,  the  parties  may  not  stipu- 
late for  that ;  and  this  alone  is  the  ques- 
tion. We  consider  Depau  v.  Humphreys 
as  fully  sustained  by  Pecks  v.  Mayo,  14 
Vt.  33,   and  Chapman  v.  Robertson,  6 

[95] 


96- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


expressed,  then  the  interest  will  be  measured  by  the  law  of  the 
place  where  the  note  is  payable. 


Paige,  627.  The  former  was  an  action  of 
assumpsit  on  two  promissory  notes  given 
by  Horatio  Gates  &  Co.  of  Montreal,  to 
the  defendants,  payahle  in  Albany,  N.  Y., 
and  by  the  defendants  indorsed  to  the 
plaintiffs.  It  appeared  that  the  notes 
were  made  at  Montreal,  where  the  makers 
resided,  and  that  tlie  indorsers  and  the 
plaintiffs  resided  in  Vermont.  The  law- 
ful rate  of  intefest  in  Montreal  was  six 
per  cent.,  and  in  New  York  seven  per 
cent,  per  annum.  liedjield,  J.,  in  deliver- 
ing the  opinion  of  the  court,  after  an  ex- 
amination of  all  the  authorities,  says : 
"  From  all  which  I  consider  the  following 
lilies  in  regard  to  interest  on  contracts 
made  in  one  country,  to  be  executed  in 
another,  to  be  well  settled;  1.  If  a  con- 
tract be  entered  into  in  one  place  to  be 
performed  in  another,  and  the  rate  of 
interest  differ  in  the  two  countries,  the 
parties  may  stipulate  for  the  rate  of  in- 
terest of  cither  country,  and  thus  by  their 
own  express  contract  determine  with  ref- 
erence to  the  law  of  which  country  that 
incident  of  the  contract  shall  be  decided. 
2.  If  the  contract  so  entered  into  stipulate 
for  interest  generally,  it  shall  be  the  rate 
of  interest  of  the  place  of  payment,  unless 
it  appear  the  parties  intended  to  contract 
with  reference  to  the  law  of  the  other 
place.  .'3.  If  the  contract  be  so  entered 
into  for  money,  payable  at  a  place  on  a 
day  certain,  and  no  interest  be  stipulated, 
and  payment  be  delayed,  interest,  by  way 
of  damages,  shall  be  allowed,  according 
to  the  law  of  the  i)lacc  of  i)aynient,  where 
the  money  may  be  supposed  to  have  been 
required  by  the  creditor  for  use,  and  where 
he  might  be  supposed  to  have  borrowed 
money  to  supply  the  deficiency  thus  oc- 
curring, and  to  have  paid  the  rate  of 
interest  of  that  country."  Chapman  v. 
liobertson,  C  Paige,  G27,  was  a  bill  in 
C(|uity  to  foreclose  a  mortgage,  given  by 
the  defendant,  a  resident  of  New  York, 
on  lands  in  that  State,  to  the  complainant, 
who  resided  in  England,  to  secure  the 
payment  of  .£800  sterling.  The  money 
wjw  borrowed  by  lloliertson  when  in  Eng- 
land, upon  an  agreement  for  interest  at 
the  rate  of  seven  jjcr  cent,  per  annum, 
payaljle  annuiilly.  According  to  the  agree- 
ment, liobertson  upmi  bis  return  to  this 
country  exccntcii  the  bond  and  mortgage 
and  transmitted  them  to  the  comijlainant, 
who  then  de|io>ited  the  X80U  with  Robert- 

[OG] 


son's  bankers  in  London.  The  defendant 
contended  that  as  the  original  agreement 
for  the  loan  was  made  in  England,  and 
the  money  was  received  there,  the  con- 
tract for  the  payment  of  more  than  five 
per  cent,  per  annum  rendered  the  bond 
and  mortgage  usurious  and  void.  Wal- 
rcortli,  C,  after  disposing  of  a  preliminary 
point  which  arose  in  the  case,  said  :  "  The 
other  point  in  this  case  presents  a  very 
nice  cjuestion  arising  out  of  the  conflict  of 
laws  in  this  State  and  England  relative  to 
the  legal  rate  of  interest.  It  is  an  estab- 
lished principle  that  the  construction  and 
validity  of  contracts  which  are  purely 
personal  depend  upon  the  laws  of  the 
place  where  the  contract  is  made,  unless 
it  was  made  in  reference  to  the  laws  of 
some  other  place  or  country,  where  such 
contract,  in  the  contemplation  of  the  par- 
ties thereto,  was  to  be  carried  into  effect 
or  performed.  2  Kent's  Com.  457 ; 
Story,  Confl.  Laws,  §  272.  On  the  other 
hand",  it  appears  to  be  equally  well  settled 
by  the  laws  of  every  State  or  country, 
that  the  transfer  of  lands  or  other  heredit- 
able  property,  or  the  creation  of  any  in- 
terest in,  or  lien  or  incumbrance  thereon, 
must  be  made  according  to  the  lex  situs, 
or  the  local  law  of  the  i)lace  where  the 
property  is  situated.  And  it  has  been 
decided  that  the  lex  loci  rei  sitie  must  also 
be  resorted  to  for  the  purpose  of  deter- 
mining what  is,  or  is  not,  to  be  consid- 
ered as  real  or  hereditable  property,  so 
as  to  have  locality  within  the  intent  and 

meaning  of  this  latter  principle 

Upon  a  full  examination  of  all  the  cases 
to  be  found  u])on  the  subject,  either  in 
this  country  or  in  England,  none  of  which, 
however,  appear  to  have  decided  the  pre- 
cise question  which  arises  in  this  cause,  I 
have  arrived  at  the  conclusion  that  this 
mortgage  executed  here,  and  upon  i)rop- 
erty  in  this  State,  being  valid  by  the  lex 
silus,  whicli  is  also  the  law  of  the  domicil 
of  the  mortgagor,  it  is  the  duty  of  this 
court  to  give  full  effect  to  the  security, 
without  reference  to  the  usury  laws  of 
England,  wiiich  neither  party  intended  to 
evade  or  violate  by  the  execution  of  a 
mortgage  upon  the  lands  here.  If  no 
rate  of  interest  was  specified  in  the  con- 
tract, it  might  jierhaps  be  necessary  to 
iiHluire  wheri;  the  money  was  legally  pay- 
able when  it  became  due,  for  the  purpose 
of  ascertaining  what  interest  the   luort- 


CH.  II.] 


THE   LAW    OF   PLACE. 


97-'98 


If  a  merchant  in  New  York  comes  to  Boston  to  buy  goods, 
and  there  receives  them,  and  gives  his  note  for  them,  *\vhich 
specifies  either  Boston  or  no  place  for  payment,  it  is  a  Boston 
transaction.  When  tlie  note  is  due,  it  may  be  demanded  of  the 
maker  wherever  he  is,  but  wherever  demanded  would  be  con- 
strued by  the  law  of  Massachusetts.  If  the  note  were  made 
payable  in  New  York,  it  could  be  demanded  nowhere  else,  and 
would  be  construed  by  the  law  of  New  York.  If  he  did  not 
come  to  Boston,  but  sent  his  orders  from  New  York,  and  the 
goods  were  sent  to  him  from  Boston,  either  by  a  carrier  whom 
he  pointed  out,  or  in  the  usual  course  of  trade,  this  would  be  a 
completion,  a  making  of  the  contract,  and  it  would  be  a  Bos- 
ton contract,  whether  he  gave  no  note,  or  a  note  payable  in 
Boston,  or  one  without  express    place  of  payment.  (/)     But 


gagee  was  entitled  to  receive.  Quince  v. 
Callender,  1  Des.  160;  Scofield  et  al. 
V.  Day,  20  Johns.  102.  But  if  a  contract 
for  the  loan  of  money  is  made  liere,  and 
upon  a  mortgage  of  lands  in  this  State, 
which  would  be  valid  if  the  money  was 
payable  to  the  creditor  here,  it  cannot  be 
a  violation  of  the  English  usury  laws, 
although  the  money  is  made  payable  to 
the  ci'editor  in  that  country,  and  at  a  rate 
of  interest  which  is  greater  than  is  allowed 
by  the  laws  of  England.  This  question 
was  very  fully  and  ably  examined  by 
Judge  Martin,  in  the  case  of  Depau  v. 
Humphreys,  in  the  Supreme  Court  of 
Louisiana  (20  Martin,  1),  and  that  court 
came  to  the  conclusion,  in  which  decision 
I  fully  concur,  that  in  a  note  given  at  New 
Orleans  upon  a  loan  of  money  made  there, 
tlie  creditor  might  stipulate  for  the  highest 
legal  rate  of  conventional  interest  allowed 
by  the  laws  of  Louisiana,  although  the 
rate  of  interest  thus  agreed  to  be  paid  was 
higher  than  that  which  could  be  taken, 
upon  a  loan,  by  the  laws  of  the  State 
where  such  note  was  made  payable."  In 
Hosford  V.  Nichols,  1  Paige,  220,  where  a 
contract  for  the  sale  of  land  situated  in 
New  York  was  made  between  two  citizens 
of  New  York,  one  of  whom  removed  to 
Pennsylvania,  where  the  contract  was 
afterwards  executed,  by  giving  a  deed, 
and  taking  a  mortgage  of  the  premises  to 
secure  the  payment  of  the  purchase- 
money,  in  which  mortgage  the  New  York 
rate  of  interest  was  reserved,  which  was 
greater  than  that  of  Pennsylvania,  it  was 
held  that  the  giving  the  deed  and  taking  the 

VOL.  II.  9 


mortgage  was  only  a  consummation  of  the 
original  contract  made  in  New  York,  and 
that  the  mortgage  was  not  void  for  usnrj'. 
It  is  true  tliat  in  this  case  the  court  also 
say:  "Again,  there  is  no  evidence  in 
this  case  to  show  that  the  bond  and  mort- 
gage were  not  both  valid  l)y  the  law  of  the 
State  where  they  were  originally  executed. 
E.  Kane  testifies  that  at  the  time  of  their 
date,  and  for  some  years  previous,  six  per 
cent,  was  the  legal  rate  of  interest  in 
Pennsylvania.  But  it  docs  not  appear 
that  any  law  existed  in  that  State  wh.icli 
prohibited  the  parties  from  agreeing  upon 
a  higher  rate  of  interest,  or  declaring  se- 
curities void  in  which  a  higher  rate  of 
interest  was  reserved.  And  courts  of  this 
State  cannot  take  notice  of  the  laws  of 
other  States,  unless  they  are  proved  in  the 
same  manner  as  other  facts."  But  there 
is  little  doubt  that  the  decision  would  have 
been  the  same,  independently  of  this  last 
ground.  See  further  upon  this  question, 
Champant  v.  Kanelagh,  Prec.  in  Ch.  128  ; 
Connor  v.  Bellamont,  2  Atk.  382  ;  Staple- 
ton  I'.  Conway,  1  Ves.  427,  3  Atk.  727  ; 
Phipps  V.  Anglesea,  5  Vin.  Abr.  209,  pi. 
8 ;  1  Eq.  Cas.  Abr.  ch.  36,  Tit.  Interest 
Money,  (E);  Ekins  v.  East  India  Co.  1 
P.  wins.  395  ;  Anonymous,  3  Birig.  193  ; 
Fergusson  v.  FyfFe,  8  Clark  &  F.  121; 
Harvey  v.  Archbold,  Ryan  &  M.  184; 
Boyce  v.  Edwards,  4  Pet.  Ill  ;  Fanning 
I'.  Consequa,  17  Johns.  ^W  ;  Winthrop  i'. 
Carleton,  12  Mass.  4;  Foden  i\  Sharp,  4 
Johns.  183  ;  Dewar  v.  Span,  3  T.  R.  425. 
(/)  Whiston  V.  Stodder,  8  Mart.  La. 
95. 

[97] 


99*  THE  LAW   OF   CONTRACTS.  [PART  II. 

if,  as  before,  he  gave  his  note  payable  in  New  York,  it  would 
be  a  New  York  note.  And  if,  by  the  terras  of  the  orders  or  the 
bargain,  the  *property  in  the  goods  were  not  to  pass  to  the  pur- 
chaser until  their  arrival  in  New  York,  they  being  previously  at 
the  risk  of  the  seller,  and  then  a  note  was  given  by  the  buyer 
in  New  York,  this  would  be,  we  think,  a  New  York  transac- 
tion and  a  New  York  note,  unless  the  note  was  made  expressly 
payable  in  Boston.  Such  would  be  the  inferences  which  we 
should  draw  from  the  reasons  of  the  cases,  and  from  what  seem 
to  be  the  stronger  authorities  ;  but  many  of  these  questions  are 
not  yet  distinctly  determined  by  adjudication.  It  is  quite  cer- 
tain that  the  Roman  civil  law  considered  the  place  of  pay- 
ment or  performance  as  the  place  of  the  contract-  And  this 
law  has  much  title  to  respect  on  a  question  of  this  kind,  both 
as  the  basis  of  a  widely  extended  system  of  law  now  in  force, 
and  as  the  embodiment,  in  its  commercial  law,  of  sound  sense 
and  accurate  justice. 

It  is  to  be  noticed  that  the  payment  is  to  be  measured  or 
regulated  by  the  law  of  the  place  where  the  note  is  by  the 
terms  of  the  contract  to  be  performed,  and  not  by  that  where 
it  happens  to  be  performed.  A  note  made  in  Boston  may  be 
demanded  and  sued  in  England,  or  vice  versa;  because  a  note 
without  a  specified  place  of  payment  has  no  controlling  place, 
but  may  be  demanded  of  the  maker  wherever  he  is.  But  such 
a  note  would  still  be  a  Boston  note  or  an  English  note,  accord- 
ing to  the  place  of  its  signature.  In  fact,  all  debts  are  pay- 
able everywhere,  unless  there  be  some  special  limitation  or  pro- 
vision in  respect  to  the  payment ;  the  rule  being  that  debts, 
as  such,  have  no  locus  or  situs,  but  accompany  the  creditor 
everywhere,  and  authorize  a  demand  upon  the  debtor  every- 
where, (i,'). 

A  discharge  of  a  contract  under  the  law  of  a  country  which 
is  not  that  where  the  contract  was  made  or  to  be  performed, 
will  not  discharge  the  contract  in  the  country  where  it  was 
made  or  to  be  performed,  (g-a) 

{//)  Blandianl  v.  Eusscll,  13  Mass.  1  ;  v.  Marshall,  8  id.  194.  Sco  also,  ante,  p. 
Blake  V.  Wiiliuins,  G  i'iek.  286  ;  Braynard    83,  n.  (  /"). 

(ga)  Very  v.  McIIcnry,  29  Me.  206. 

[98] 


en.  II.]  THE  LAW   OF  PLACE.  100 


SECTION    VI. 

OF  THE   LAW   OF   THE   FORUM   IN   RESPECT   TO  PROCESS  AND   REMEDY. 

Every  state  holds  jurisdiction  over  all  persons  and  all  things 
within  its  dominion,  and  no  further.  In  England  and  America, 
foreigners  may  avail  themselves  of  the  courts  for  suits  or  de- 
fences against  each  other,  in  like  manner  as  citizens  may.  And 
a  person  who  has  property  within  the  jurisdiction  of  an  English 
or  American  court,  is  liable  in  respect  to  that  property  to  the 
action  of  such  court,  though  he  himself  may  be  out  of  the  juris- 
diction, provided  he  receives  such  notice  as  the  general  law  of 
the  State  or  the  rules  of  the  court  may  require.  (//) 

But  on  the  trial,  and  in  respect  to  all  questions  as  to  the 
forms,  or  methods,  or  conduct  of  process,  or  remedy,  the  law 
of  the  place  of  the  forum  is  applied,  (i)  A  familiar  instance  of 
this  is  an  action  on  an  instrviment  which,  having  a  scrawl  with 
a  mere  locus  sigilli  (or  L.  S.)  upon  it,  was  made  in  a  State  where 
this  is  all  that  it  is  necessary  to  constitute  it  a  sealed  instrument, 
but  is  sued  in  a  State  where  a  seal  of  some  kind  must  be  put 
to  it.  This  instrument  must  not  only  be  declared  on  as  a 
simple  contract,  but  if  sued  there  it  is  only  as  a  simple  contract 
that  it  will  be  there  construed  in  respect  to  all  the  rights  and 
obligations  of  the  parties,  [j) 

(A)  In  this  country  we  have,  very  gen-  bey  v.  Vignier,  1  Bing.  N.  C.  151,  159  ; 

erally,  statutory  provisions  for  giving  ab-  British  Linen  Co.  v.  Drummond,  10  B. 

sent  defendants  due  notice ;  and  there  are  &  C.  903;  Don  v.  Lippman,  5  Clarlc  & 

generally,   perhaps    universally,    rules  of  F.  1  ;  Nash  v.   Tupper,   1    Caines,  402  ; 

court  and  of  practice,  for  the  same  pur-  Pearsall  v.  Dwight,  2  Mass.  84  ;  Smith  v. 

pose.     And  the  principle  that  they  are  en-  Spinolla,  2  Johns.  198;  Van  Reimsdyck 

titled  to  this  protection  is  universally  rec-  ?j.  Kane,  1  Gallis.  371  ;  Lodge  v.  Phelps, 

ognizcd.     Fisher  v.  Lane,  3  Wilson,  302,  1  Johns.  Cas.  139,  2  Caines'  Cas.  in  Er- 

303;    The   Mary,   9   Cranch,    126,   144;  ror,  321  ;  Peck  i;.  Hozier,  14  Johns.  346 ; 

Bradstreet  v.  Neptune  Ins.  Co.  3  Sumner,  Jones  v.  Hook,  2  Rand.  303 ;  Wilcox  v. 

600.  Hunt,  13  Pet.  378 ;  Pickering  v.  Fisk,  6 

(t)  This  rule  is  constantly  asserted,  not  Vt.  102;  Wood  v.  Watkinson,  17  Conn, 

only  by  all  civilians,  but  in  numerous  cases  500. 

in  England  and  in  this  country.    See  Rob-         (j)  Andrews  v.  Herriot,  4  Cowen,  508, 

inson   v.   Bland,    2    Burr.    1077;  De    La  overruling  Meredith  y.  Hinsdale,  2  Caines, 

Vega  V.  Vianna,  1  B.  &  Ad.  284 ;  Trim-  362 ;  Bank  of  United  States  v.  Donnally, 

[99] 


101-102* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


Some  question  has  arisen  in  the  case  of  an  arrest  in  a  suit 
on  a  contract  made  where  the  arrest  would  not  have  been  per- 
mitted by  law  ;  and  it  has  been  held  that  the  right  to  arrest 
would  be  that  only  which  was  given  by  the  law  of  the  place 
where  the  contract  was  made.  (A')     It  seems,  however,  *  to  be 


8  Pet.  361  ;  Douglas  v.  Oldham,  6  N.  II. 
150;  Thrasher  v.  Everhart,  3  Gill  &  J. 
234 ;  Adams  v.  Kerr,  1  B.  &  P.  360  ;  Le 
Koy  v.  Beard,  8  How.  4.51. 

(k)  Sueh  at  least  has  been  understood  to 
he  the  deeision  of  the  court  in  Melan  v. 
Pitzjames,  1  B.  &  P.  138.  We  would  sub- 
mit, however,  that  the  judgment  of  the 
court  in  that  ease  proceeded  on  a  different 
ground.  It  was  an  action  on  an  instru- 
ment executed  in  France.  The  defendant 
having  been  held  to  bail,  a  rule  was  ob- 
tained calling  on  the  plaintitF  to  show 
cause  why  the  bail-bond  should  not  be 
given  up  to  be  cancelled,  on  the  defend- 
ant's entering  a  common  appearance.  At 
the  hearing  an  affidavit  of  a  French  coun- 
sellor was  produced,  stating  that,  by  the 
law  of  France,  "  not  only  the  person  of  the 
contractor  or  grantor  was  not  engaged  or 
liable,  but  it  \yas  not  even  permitted  to 
the  party  contracting  to  stipulate  that  his 
body  should  be  arrested  or  imprisoned  by 
reason  of  a  deed  of  that  sort."  After  ar- 
gument, the  court  made  the  rule  absolute, 
Heath,  J.,  dissenting.  But  it  seems  clear 
from  the  opinions  delivered  that  Eijre,  C. 
J.,  and  liooke,  J.,  who  constituted  a  ma- 
jority of  the  court,  went  upon  the  ground 
that  the  instrument  in  question  did  not, 
according  to  the  law  of  France,  contain 
any  personal  ol>li(/nlioit,  and  did  not  author- 
ize any  proceedings  in  jKisoiKim,  hut  only 
in  rem.  And  it  was  upon  this  point,  that 
Heath,  J.,  differed  from  them.  Eyre,  C.  J., 
said :  "  If  it  appears  that  this  contract 
creates  no  personal  obligation,  and  that  it 
could  not  be  sued  as  such  l>y  the  laws  of 
France,  on  the  jiriticijile  of  ))revcnting  ar- 
rests so  vexatious  as  to  be  an  abuse  of  tlie 
process  of  the  court,  there  seems  to  be  fair 
groiirul  on  which  the  court  may  interpose 
to  prevent  a  i)roceeding  so  oppressive  as  a 
personal  arrest  in  a  foreign  country,  at  the 
comineiK'enientof  asuit,  in  a  case  wliich,as 
far  as  we  can  judge  at  ])rcsent,  authorizes 
no  ])rocc<din<4  a;r:iiiist  tile  person  in  the 
country  in  whiih  tla;  transaction  passed. 
If  there  could  lie  none  in  France,  in  my 
opinion  there  can  he  none  here.  I  camiot 
conceive  tliat  what  is  no  jicrsonal  obliga- 
tion in  llie  country  in  which  it  arises,  can 

[100] 


ever  be  raised  into  a  personal  obligation 
by  the  laws  of  another.  If  it  be  a  per- 
sonal obligation  there,  it  must  be  enforced 
here  in  the  mode  pointed  out  by  the  law 
of  this  country;  but  what  the  nature  of 
the  obligation  is  must  be  determined  liy 
the  law  of  the  country  where  it  was  en- 
tered into,  and  then  this  country  will  apply 
its  own  law  to  enforce  it."  Heath,  J.,  said  : 
"  This,  on  consideration,  does  seem  to 
me  to  be  a  personal  contract,  and  if  it  be 
so,  I  have  not  the  least  doubt  that  the  de- 
fendant should  be  held  to  bail.  That 
being  the  case,  we  all  agree,  that  in  con- 
struing contracts,  we  must  be  governed  by 
the  laws  of  the  country  in  which  they  are 
made  ;  for  all  contracts  have  a  reference 
to  such  laws.  But  when  we  come  to  rem- 
edies it  is  another  thing ;  they  must  be 
pursued  by  the  means  which  the  law  points 
out  where  the  party  resides.  The  laws  of 
the  country  where  the  contract  was  made 
can  only  have  a  reference  to  the  nature  of 
the  contract,  not  to  the  mode  of  enforcing 
it.  Whoever  comes  into  a  country  volun- 
tarily subjects  himself  to  all  the  laws  of 
that  country,  and  therein  to  all  the  reme- 
dies directed  by  those  laws,  on  his  partic- 
ular engagements."  liooke,  J.  :  "I  en- 
tirely agree  with  my  Lord  Chief  Justice. 
Though  the  contract,  on  the  face  of  it,  may 
seem  to  bind  the  person  of  the  Duke  de 
Fitzjamcs,  by  the  words  '  binding  him- 
self,' &c.,  yet  being  made  abroad,  we  must 
consider  how  it  would  be  understood  in 
the  country  wliere  it  was  made.  Accord- 
ing to  the  athdavit  which  has  been  pro- 
duced on  one  side,  and  not  contradicted  by 
the  other,  this  contract  is  considered  in 
France  as  not  affecting  the  person.  Then 
what  does  it  amount  to  ?  It  is  a  contract 
that  the  Duke's  estate  shall  be  liable  to 
answer  the  demand,  but  not  his  person. 
If  the  law  of  France  has  said  that  the  per- 
son shall  not  be  liable  on  such  a  contract, 
it  is  the  same  as  if  the  law  of  France  had 
been  expressly  asserted  in  the  contract.  If 
it  had  been  specially  agreed  between  the 
])arties  not  to  consider  the  Duke's  person 
liable,  and  under  those  circumstances  he 
had  couK!  over  here,  there  would  have  been 
no  diU'erenee  bctwecu  us ;   for  if  it  were 


CII.  II.] 


THE   LAW   OF   PLACE. 


-103 


settled  otherwise,  arrest  being  of  the  remedy,  and  not  of  the 
right.  (/) 

So,  too,  limitation  and  prescription  are  applied  only  according 
to  the  law  of  the  forum.  At  least,  it  seems  quite  well  estab- 
lished, that  a  foreigner,  bringing  an  action  on  a  debt  which  is 
barred  by  lapse  of  time  in  the  State  where  it  is  sued,  but  would 
not  be  at  home,  is  bound  by  the  law  of  the  forum,  and  cannot 
recover  payment,  (m)  The  general  reason  is,  that  all  States 
make  their  laws  of  peace  to  prevent  oppressive  and  wasteful 
litigation  within  their  jurisdiction,  and  have  a  right  to  determine 
for  all  who  resort  to  their  tribunals,  how  soon  after  the  debt  is 
due  the  creditor  mvist  claim  it  or  lose  it.  But  the  question 
which  might  arise,  if  the  action  would  be  barred  if  brought  in 
the  place  of  the  contract,  but  is  not  barred  by  the  law  of  the 
forum,  whether  the  shorter  limitation,  being  that  by  the  law  of 
the  place  of  contract,  shall  now  prevail,  is  not  so  well  settled. 
We  should  say,  however,  in  this  as  in  the  former  case,  the  law 
of  the  forum  must  govern,  on  the  general  ground  that  the  whole 
question  of  *limitation  or  prescription  is  one  of  process  and 
remedy,  and  not  of  right  and  obligation,  [n)     Thus,  it  seems  to 


agreed  there  that  the  person  should  not  be 
liable,  it  would  not  be  liable  here.  Now, 
as  far  as  I  can  understand  the  contract, 
this  is  the  true  meaning  of  it.  The  defend- 
ant is  not  bound  by  the  mere  words  of  the 
contract,  but  has  a  right  to  explain  by 
affidavit  how  it  would  be  considered  in 
France.  With  the  explanation  given  I 
am  satisfied,  and  being  satisfied  with  it,  I 
think  the  defendant  should  be  permitted  to 
enter  a  common  appearance."  Such  was 
also  understood  to  be  the  turning-point  of 
the  case  by  Adair,  Sergeant,  who  showed 
cause  against  the  rule.  "  This  rule,"  said 
he,  "was  granted  in  order  to  ascertain 
whether  the  security  in  question  was  that 
kind  of  security  which  imported  a  remedy 
against  the  person  of  the  defendant,  or 
Avhether  it  was  only  in  the  nature  of  a 
mortgage  on  his  estate.  If  this  be  a  mere 
security,  affecting  the  land  and  personal 
property  only  of  the  defendant,  and  if  it 
so  appears  on  the  face  of  it,  the  court  will 
attend  to  that  circumstance.  But  if  I  can 
show  that  it  is  a  personal  security  affect- 
ing the  person  and  following  it  every- 
where, whatever  may  be  the  law  of  France 
as  to  the  form  of  proceeding,  yet  when 

9* 


the  party  is  found  in  this  or  any  other 
country,  he  may  be  proceeded  against  ac- 
cording to  the  rules  and  practice  of  the 
country  in  which  he  is  resident." 

(/)  i)e  La  Vega  v.  Vianna,  1  B.  &  Ad. 
284  ;  Imlay  t>.  Ellefsen,  2  East,  433  ;  Peck 
V.  Hozier,  14  Johns.  346;  Hinkley  v. 
Marean,  3  Mason,  88 ;  Titus  v.  Hobart, 
5  id.  378;  Smith  v.  Spinolla,  2  Johns, 
198;  Woodbridge  r.  Wright,  3  Conn. 
.523  ;  Atwater  v.  Townsend,  4  id.  47  ; 
Smith  V.  Healy,  id.  49;  Whittemore  v. 
Adams,  2  Cowen,  626. 

(m)  British  Linen  Co.  v.  Drummond, 
10  B.  &  C.  903 ;  Van  Reimsdyk  v.  Kane, 

1  Gallis.  371 ;  Le  Roy  v.  Crowninshield, 

2  Mason,  151  ;  Nash  v.  Tupper,  1  Caines, 
402  ;  Bank  of  United  States  v.  Donnally, 
8  Pet.  361  ;  Ruggles  v.  Keeler,  3  Johns. 
263 ;  Decouche  v.  Savetier,  3  Johns.  Ch. 
190  ;  Lincoln  v.  Battelle,  6  Wend.  475; 
M'Elmoyle  v.  Cohen,  13  Pet.  312;  Thi- 
bodeau  v.  Levassuer,  36  Me.  362. 

(n)  Williams  v.  Jones,  13  East,  439  ; 
Medbury  v.  Hopkins,  3  Conn.  472  ;  Van 
Reimsdyk  v.  Kane,  1  Gallis.  371  ;  Le  Roy 
V.  Crowninshield,  2  Mason,  151  ;  Huberi;. 
Steiner,  2  Bing.  N.  C.  202  ;  Decouche  v. 

[101] 


103- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


be  decided,  that  the  section  of  the  Statute  of  Frauds,  providing 
that  certain  agreements  shall  not  be  enforced  unless  in  writing 


Savctijr,  3  Johns.  Ch.  190;  Rusgles  y. 
Keeler,  3  Johns.  263  ;  Pcarsall  v.  Dwight, 
2  Mass.  84.  Mr  Justice  Story,  in  Iiis  Con- 
flict of  Laws,  §  582,  takes  this  distinction. 
"  Suppose  the  statutes  of  limitation  or 
prescription  of  a  particular  country  do  not 
only  extinguish  the  right  of  action,  but  the 
claim  or  title  itself,  ipso  facto,  and  declare 
it  a  nullity  after  the  lapse  of  the  prescribed 
period,  and  the  parties  are  resident  within 
the  jurisdiction  during  the  whole  of  that 
period,  so  that  it  has  actually  and  fully 
operated  upon  the  case,  under  such  cir- 
cumstances the  question  might  properly 
arise  whether  such  statutes  of  limitation 
or  prescription  may  not  afterwards  be  set 
up  in  any  other  country  to  which  the  par- 
ties may  remove,  by  way  of  extinguish- 
ment or  transfer  of  the  claim  or  title.  This 
is  a  point  which  does  not  seem  to  have  re- 
ceived as  much  consideration  in  the  decis- 
ions of  the  common  law  as  it  wotxld  seem 
to  require."  In  Don  v.  Lippman,  5  Clark 
&  F.  16,  Lord  Brougham  speaks  of  this 
as  an  excellent  distinction.  And  it  is  ap- 
proved of  l)y  Tiiidal,  C.  J.,  in  Huber  v. 
yteiner,  2  Bing.  N.  C.  202.  But  in  Bul- 
ger V.  Eoche,  11  Pick.  36,  where  a  debt 
Avas  contracted  in  a  foreign  country,  be- 
tween subjects  thereof,  who  remained  there 
until  the  del)t  became  barred  by  the  law  of 
limitations  of  such  country,  it  was  held 
that  such  debt  coiUd  be  recovered  in  Mas- 
sachusetts, the  action  having  been  brought 
within  six  years  after  the  parties  came  into 
that  commonwealth.  And  Shaw,  C.  J., 
said  :  "  That  the  law  of  limitation  of  a 
foreign  country  cannot  of  itself  be  pleaded 
as  a  bar  to  an  action  in  this  common- 
wealth seems  conceded,  and  is  indeed  too 
well  settled  by  authority  to  be  drawn  in 
question.  Byrne  v.  Crowninshield,  17 
Mass.  5.5.  The  authorities,  both  from  the 
civil  and  the  common  law,  concur  in  fix- 
ing the  rule,  that  the  nature,  validity,  and 
construction  of  contracts  is  to  be  deter- 
mined by  tiie  law  of  the  place  where  the 
contract  is  made,  and  that  all  remedies  for 
cnfonting  sudi  contracts  are  regulated  i)y 
the  law  of  tlie  j)lace  wliere  such  remedies 
arc  pursued.  Whether  a  law  of  ])rescrip- 
tion  or  statute  of  limitation,  which  takes 
away  every  legal  mode  of  recovering  a 
debt,  sliall  lie  considered  as  affecting  the 
contract  like  jiaynn'iit,  release,  or  judg- 
ment, which  in  effect  extinguish  the  con- 
tract, or  wlii'llicr  they  arc  to  be  considered 

[102  J 


as  aflTecting  the  remedy  only  by  determin- 
ing the  time  within  which  a  particular 
mode  of  enforcing  it  shall  be  pursued,  were 
it  an  open  question,  might  be  one  of  some 
difKculty.  It  was  ably  discussed  upon 
general  principles  in  a  late  case  (Le  Koy 
V.  Crowningshield,  2  Mason's  Bep.  151), 
before  the  Circuit  Court,  in  which,  how- 
ever, it  was  fully  conceded,  by  the  learned 
judge,  upon  a  full  consideration  and  re- 
view of  all  the  authorities,  that  it  is  now 
to  be  considered  a  settled  question.  A 
doubt  was  intimated  in  that  case,  whether, 
if  the  parties  had  remained  sulijeets  of  the 
foreign  country  until  the  term  of  limitation 
had  expired,  so  that  the  plaintiff's  remedy 
would  liave  been  e.x^tinguished  there,  such 
a  state  of  facts  would  not  have  presented 
a  stronger  case,  and  one  of  more  serious 
difficulty.  Such  was  the  case  in  the  pres- 
ent instance,  but  we  think  it  sufficient  to 
advert  to  a  well-settled  rule  in  the  con- 
struction of  the  statute  of  limitations,  to 
show  that  this  circumstance  can  make  no 
difference.  The  rule  is  this,  that  where 
the  statute  has  begun  to  run,  it  will  con- 
tinue to  run,  notwithstanding  the  inter- 
vention of  any  impediment,  which,  if  it 
had  existed  when  the  cause  of  action  ac- 
crued, would  have  prevented  the  operatioa 
of  the  statute.  For  instance,  if  this  action 
accrued  in  Nova  Scotia  in  1821,  and  the 
plaintiff  or  defendant  had  left  that  country 
in  1825  within  six  years,  in  1828,  after  the 
lapse  of  six  years,  the  action  would  be  as 
effectually  barred,  and  the  remedy  extin- 
guished there,  as  if  both  had  continued  to 
reside  in  Halifax  down  to  the  same  period. 
So  that  when  the  parties  met  here  in  1829, 
so  far  as  the  laws  of  that  country,  l)y  tak- 
ing away  all  legal  remedy,  could  affect  it, 
the  debt  was  extinguished,  and  tliateciually 
whether  they  had  both  remained  under  the 
jurisdiction  of  those  laws  till  the  time  of 
limitation  had  elapsed,  or  whether  either 
or  both  had  previously  left  it.  The  au- 
tlujrities  referred  to,  therefore,  must  bo 
held  api)licable  to  a  case  where  both  par- 
ties were  subject  to  the  jurisdiction  of  a 
foreign  State  when  the  bar  arising  from  its 
statute  of  limitations  attached.  The  same 
conclusion  results  from  the  reason  ujiou 
which  these  cases  proceed,  which  is,  that 
statutes  of  limitation  affect  oidy  the  time 
within  which  a  legal  remedy  must  be  ])ur- 
sued,  and  do  not  allect  the  nature,  validity, 
or   coustriictiou   of  the   contract.      This 


en.  II.]  THE   LAW   OF   PLACE.  *104 

if  made  not  to  be  performed  within  a  year,  does  not  make  the 
contract  void,  but  is  a  law  of  remedy  only ;  and  therefore  such 
a  contract  made  abroad,  where  it  may  be  enforced  because  there 
is  no  such  law,  cannot  be  enforced  here  or  in  England  where 
that  law  prevails,  {no) 

So  the  courts  of  one  State,  where  a  note  is  sued,  will  not 
enforce  the  laws  of  set-ofF  of  another  State  where  it  was 
made,  {nb) 

In  some  of  our  States,  as  in  Iowa,  Indiana,  and  Ohio,  there 
are  statute  provisions  that  actions  shall  not  be  maintained  in 
their  courts,  if  they  would  have  been  barred  by  the  statutes  of 
limitations  where  the  cause  of  action  arose. 

*If  one  holds  personal  property  by  adverse  title,  long  enough 
to  acquire  a  title  to  it  in  that  way  by  the  law  of  prescription  of 
the  place  where  he  holds  it,  and  afterwards  removes  with  the 
property  to  a  place  where  the  prescription  necessary  to  give 
title  is  longer,  the  original  owner  cannot,  as  it  seems,  maintain 
his  title  in  this  new  place,  but  is  bound  by  the  prescription  of 
the  former  place,  (o) 


SECTION    VII. 


OF   FOREIGN   MARRIAGES. 

It  seems  to  be  generally  admitted,  and  is  certainly  a  doctrine 
of  English  and  American  law,  that  a  marriage  which  is  valid 
in  the  place  where  it  is  contracted  is  valid  every VN^here.  {p)      The 

reason,  whether  well  founded  or  not,  ap-  (1853),  §  22  ;  Indiana  Civil  Code  (1852), 

plies  equally  to  cases  where  the  term  of  §  216;  Iowa  Code  (1851),  §  1665. 
limitation  has  elapsed,  when  the  parties         {na)  Leroux  v.  Brown,   12  C.  B.  801, 

leave  the  foreign  State,  as  to  those  where  14  Eng.'L.  &  Eq.   247.      See   the  case 

it  has  only  be^un  to  run  before  they  have  stated,  post,  p.  337,  note  [li). 
left  the  State,  and   elapses   afterwards."         {)ib)  Bank  of  Galliopolis  v.  Trimble,  6 

And  see  Horton  v.  Horner,  16  Ohio,  145  ;  B.  Mon.  599. 

Pratt  I'.  Hubbard,  1    Greene,   Iowa,    19;         (o)   BecUford   v.    "Wade,    17    Ves.    87. 

Hale  V.  Lawrence,  1  N.  J.  714  ;  Beardslcy  And  see  Shelby  v.  Guy,  II  Wheat.  361. 
V.  Southmayd,  3  Green,  171  ;  Cownsend         (p)  In  England  this  may  be  considered 

D.  Jennison,  9  How.  407  ;  Nichols  w.  Hog-  as   established    law,  at  least  since    1768, 

ers,   2  Paine,  C.   C.  437  ;  Henry  v.   Sar-  when  the  case  of  Compton   v.  Bearcrofc 

geant,   13  N.    H.    321  ;    Martin    v.   Hill,  was  decided.     That  case  is  thus  stated  in 

12   Barb.   631.     Also,   Ohio  Civil  Code  Buller's  JS'isi  Prius,  pp.  11-3,  114:  "The 

[103] 


105* 


THE  LAW   OF   CONTRACTS. 


[part  II. 


necessity  and  propriety  of  this  rule   are  so  *obvious  and  so 
stringent,  that  it  can  hardly  be  called  in  question.     Nevertheless 


appellant  and  respondent,  both  English 
subjects,  and  the  appellant  being  under 
age,  ran  away,  without  the  consent  of  her 
guardian,  and  were  married  in  Scotland, 
and  on  a  suit  brought  in  the  spiritual 
court  to  annul  the  marriage,  it  was  holden 
that  the  marriage  was  good."  An  account 
of  this  case  will  be  found  also  in  Middle- 
ton  V.  Janverin,  2  Hagg.  Consist.  R.  443. 
The  case  of  Conway  v.  Beazlcy,  3  Ilagg. 
Consist.  R.  639,  has  been  supposed  to 
hold  an  opposite  doctrine  ;  but  this  case 
only  decides  that  a  Scotch  divorce,  where 
the  husband  and  wife  were  domiciled  in 
England  at  the  time,  and  had  been  mar- 
ried in  England,  is  void  there.  See  re- 
marks on  this  case  in  Bishop's  valuable 
■work  on  Marriage  and  Divorce,  ^  127, 
128.  The  same  rule  is  generally  held  in 
this  country.  Thus  in  Medway  v.  Need- 
ham,  16  Mass.  157,  where  parties  inca- 
pable by  the  law  of  Massachusetts,  of 
contracting  marriage  with  each  other,  by 
reason  of  one  of  them  being  a  white  per- 
son and  the  other  a  negro,  went,  for  the 
express  purpose  of  evading  the  law,  into 
Rhode  Island,  where  such  marriages  are 
allowed,  and  were  there  married,  and  im- 
mediately returned,  it  was  held  that  the 
marriage,  being  good  in  Rhode  Island, 
was  good  in  Massachusetts.  And  Parker, 
C.  J.,  said  :  "  According  to  the  case  set- 
tled in  England  by  the  ecclesiastical 
court,  and  recognized  by  the  courts  of 
common  law,  the  marriage  is  to  be  held 
valid  or  otlierwise  according  to  the  laws 
of  the  place  where  it  is  contracted ;  al- 
though tiie  parties  went  to  the  foreign 
country  with  an  intention  to  evade  the 
laws  of  their  own.  This  doctrine  is  re- 
pugnant to  the  general  ]irinciples  of  law 
relating  to  contracts  ;  for  a  fraudulent 
evasion  of  the  laws  of  the  country  where 
the  parties  luivc  their  domieil  could  not, 
except  in  tlie  contract  of  marriage,  be  pro- 
tected under  the  general  ])rinei])lc.  Thus 
parties  intending  to  make  a  usurious  bar- 
gain cannot  give  validity  to  a  contract,  in 
wiiich  more  than  the  lawful  interest  of 
their  country  is  secured,  by  passing  into 
another  territfiry  where  there  may  be  no 
restriction  of  interest,  or  where  it  is  estab- 
lished at  a  liiglicr  rate,  and  there  execut- 
ing a  contract  before  agreed  u|)on.  Tiic 
exception  in  favor  of  marriages  so  con- 
tracted must  be  founded  on  principles  of 
policy,  with   a  view  to  prevent  the  dis- 

[104] 


astrous  consequences  to  the  issue  of  such 
marriages,  as  well  as  to  avoid  the  public 
mischief  which  would  result  from  the  loose 
state  in  which  people  so  situated  would 
live."  So  in  Putnam  v.  Putnam,  8  Pick. 
433,  where  parties,  both  resident  in  Mas- 
sachusetts, where  one  of  them  having 
been  divorced  for  his  adulteiy,  was  tliere- 
fore  prohibited  under  a  general  statute 
from  contracting  marriage  while  his  late 
wife  was  living,  went,  in  order  to  evade 
this  statute,  into  the  adjoining  State  of 
Connecticut,  where  no  such  prohibition 
existed,  and  were  there  married,  and  im- 
mediately returned,  the  marriage  was  held 
to  be  good  in  Massachusetts.  Parker,  C. 
J.,  in  delivering  the  judgment  of  the  court, 
after  referring  to  the  case  of  Medway  v. 
Needham,  said  :  "  This  decision  covers 
the  whole  ground  of  the  present  case,  and 
to  decide  this  against  the  petitioner  would 
be  to  overrule  that  decision.  The  court 
were  aware  of  all  the  objections  to  the 
doctrine  maintained  in  that  case,  and  knew 
it  to  be  vexata  quastio  among  civilians ; 
but  they  adopted  tne  rule  of  the  law  of 
England  on  this  subject,  on  the  same 
ground  it  was  adopted  there,  namely,  the 
extreme  danger  and  difficulty  of  vacating 
a  marriage,  which  by  the  laws  of  the 
country  where  it  was  entered  into  was 
valid.  The  condition  of  parties  thus  situ- 
ated, the  effect  upon  their  innocent  off- 
spring, and  the  outrage  to  public  morals, 
were  considered  as  strong  and  decisive 
reasons  for  giving  jilace  to  the  laws  of  the 
foreign  country,  not  merely  on  account  of 
comity,  for  that  would  not  be  offended  by 
declaring  null  a  contract  made  in  viola- 
tion of  tiie  laws  of  the  State  in  which  the 
parties  lived,  by  evasion,  but  from  general 
policy ;  nor  will  tlic  same  principle  be 
necessarily  applied  to  contracts  of  a  dif- 
ferent nature  —  usurious,  gaming,  or  oth- 
ers made  unlawful  by  statute  or  common 
law;  for  comity  will  not  require  that  the 
subjects  of  one  country  shall  be  allowed  to 
I)rotect  themselves  in  the  violation  of  its 
laws,  by  assuming  oiiligations  under  an- 
other jurisdit'tion,  jiurposely  to  avoid  the 
effect  of  those  laws.  The  law  on  this  sub- 
ject having  been  declared  by  this  court 
ten  years  afo,  in  the  case  before  cited,  it 
is  binding  upon  us  ami  the  eomiiuinity, 
until  tiie  legislature  shall  see  (it  to  alter  it. 
If  it  sliall  be  fouiul  inconvenient,  or  re- 
pugnant to  sound  principle,  it  may  be  ex- 


en.  II.] 


THE   LAW   OF   PLACE. 


"lOG-no? 


it  must  be  subject  to  some  qualification.    *  A  marriage  made  else- 
where would  not  be  acknowledged  as  *valid  in  a  State  the  law 


pccted  tliat  the  legislature  will  explicitly 
enact,  that  marriages  contracted  within 
another  State,  which  if  entered  into  liere 
would  he  void,  shall  have  no  force  within 
this  commonwealth.  But  it  is  a  suhject 
which,  whenever  taken  into  consideration, 
will  be  found  to  require  the  exercise  of  the 
highest  wisdom."  This  judgment  was 
pronounced  in  1829.  But'in  1835,  at  the 
time  of  the  passage  of  the  Revised  Stat- 
utes, the  legislature  interfered  by  enacting 
as  follows :  "  When  any  persom^,  resi- 
dent in  this  State,  shall  undertake  to  con- 
tract a  marriage,  contrary  to  the  preced- 
ing provisions  of  this  chapter,  and  shall, 
in  order  to  evade  those  provisions,  and 
with  an  intention  of  returning  to  reside  in 
this  State,  go  into  another  State  or  coun- 
try, and  there  have  their  marriage  solem- 
nized, and  shall  afterwards  return  and 
reside  here,  such  marriage  shall  be  deemed 
void  in  this  State."  Rev.  Stat.  eh.  75, 
sect.  6.  As  to  what  cases  this  statute 
embraces,  see  Sutton  v.  Warren,  10  Met. 
451  ;  Commonwealth  v.  Hunt,  4  Cash. 
49.  The  case  of  Williams  v.  Gates,  5 
Ired.  535,  contains  a  doctrine  materially 
different  from  that  of  the  Massachusetts 
cases  above  cited.  Tliat  was  a  petition  by 
the  plaintiff,  as  widow  of  the  defendant's 
intestate,  for  an  allowance  out  of  his  estate. 
It  appeared  that  the  plaintiff  had  formerly 
intermarried  with  one  Allen  in  North 
Carolina,  botli  being  domiciled  there.  Her 
husband  afterwards  instituted  a  suit  against 
her  for  a  divorce  for  cause  of  adultery  on 
her  part,  in  wliich  there  was  a  decree 
divorcing  him  a  vinculo  matrimonii.  After- 
wards the  plaintiff  and  the  defendant's  in- 
testate, both  being  citizens  of  North  Car- 
olina, and  domiciled  there,  with  the  pur- 
pose of  evading  the  laws  of  that  State, 
which  prohibited  Iier  from  marrying  again, 
went  into  South  Carolina  and  there  inter- 
married, according  to  the  laws  of  that 
State,  and  immediately  returned  to  North 
Carolina,  and  continued  to  live  there  for 
several  years  as  husband  and  wife,  until 
the  death  of  the  intestate.  And  the  Su- 
preme Court  of  North  Carolina  held  this 
latter  marriage  to  be  void.  Ruffin,  C.  J., 
said :  "  It  is  unquestionable  that  if  this 
second  marriage,  in  this  case,  had  been 
celebrated  in  tins  State,  it  would  have 
subjected  the  jjlaintiff  to  the  pains  of 
bigamy,  and  would  have  been  void.  The 
case  stands,   as   to   her,   precisely  as    if 


there  never  had  been  a  divorce  ;  and,  pro 
hac  vice,  the  first  marriage  is  still  subsist- 
ing. We  conceive  the  second  marriage 
acquires  no  force  by  the  celebration  of  it 
having  been  in  South  Carolina.  We  have 
been  at  some  loss  to  determine  in  what 
sense  we  arc  to  understand  the  phrase  in 
the  case,  that  the  parties  married  in  South 
Carolina,  '  according  to  the  laws  of  that 
State.'  We  suppose  it  was  meant  to  say 
thereby  merely  that  the  ceremony  was 
duly  celebrated  with  the  formalities,  and 
by  the  persons,  and  with  the  witnesses, 
there  i-equisite  to  constitute  a  marriage. 
It  would  be  great  injustice  to  our  sister 
State  to  assume  that  by  her  laws  her  own 
citizens  can  marry  a  second  time,  a  former 
marriage  not  being  dissolved  by  death  or 
divorce  ;  or  that  she  makes  it  lawful  for 
citizens  of  other  States,  who  have  married 
at  home,  and  by  their  domestic  laws  can- 
not marry  a  second  time,  to  leave  their 
own  State  and  go  into  South  Carolina  ex- 
pressly to  evade  their  own  laws,  and,  with- 
out acquiring  a  domicilin  South  Carolina, 
contract  a  marriage  there.  We  cannot 
suppose  that  South  Carolina  allows  of 
polygamy,  either  by  her  own  citizens  or 
those  of  any  other  country.  Therefore  we 
might  cut  the  case  short  at  that  point, 
upon  the  presumption  that,  the  contrary 
not  expressly  appearing,  the  law  of  South 
Carolina  does  not  tolerate  this  marriage 
more  than  our  own  law  does.  Indeed,  we 
believe  that  in  truth  she  does  not  so  much, 
as  we  have  been  informed  that  she  grants 
no  divorces.  But  if  it  were  otherwise,  we 
should  still  hold  the  marriage  void.  We 
do  not  undertake  at  present  to  say  what 
might  be  the  effect  of  a  marriage  of  a  per- 
son, in  the  situation  of  this  plaintiff,  con- 
tracted in  another  State  in  which  she  had 

become  bona  Jide  domiciled The 

case  before  us  is  not  one  of  a  domicil  out 
of  North  Carolina,  but  it  is  stated  that  the 
parties  were  domiciled  here,  and  went  to 
South  Carolina  in  fraud  of  our  law.  Now 
if  the  law  of  South  Carolina  allow  of  such 
a  marriage,  and  although  it  be  true  that 
generally  marriages  are  to  be  judged  by 
the  lex  loci  contractus,  yet  every  country 
must  so  far  respect  its  own  laws,  and  their 
operation  on  its  own  citizens,  as  not  to 
allow  them  to  be  evaded  by  acts  in  another 
country  purposely  to  defraud  them.  It 
cannot  allow  such  acts  abroad,  under  the 
pretenec  that  they  were  lawful  there,  to 

[105] 


108* 


THE  LAW   OF  CONTRACTS. 


[part  n. 


of    which   forbade   it   as   incestuous ;  (q)   although  a  question 
might  be  made  whether  it  would  be  *held  incestuous,  so  far  as  to 


defeat  its  own  laws  at  home,  in  their 
operation  upon  persons  within  her  own 
territory.  If  a  person  contract  marriage 
here,  and,  living  the  other  party,  he  goes 
to  Turkey,  and  marries  half  a  dozen 
•wives,  contrary  to  the  laws  of  this  State, 
it  would  be  impossible  that  we  could  give 
up  our  whole  policy  regulating  marriages 
and  inheritances,  and  allow  all  those 
women  and  children  to  come  in  here,  as 
wives  and  heirs,  with  the  only  true  wife 
and  heirs  according  to  our  law.  And  it 
would  be  yet  more  clear,  if  two  persons 
were  to  go  from  this  country  to  Turkey, 
merely  for  the  sake  of  getting  married  at 
a  place  in  which  polygamy  is  lawful,  and 
^hen  coming  back  to  the  place  where  it  is 
not  lawful Certainly  every  coun- 
try should  be  disposed  to  respect  the  laws 
of  another  country  ;  but  not  more  than  its 
own.  That  ought  not  to  be  expected.  If 
a  Turk  with  two  wives  were  to  come  here, 
we  would  administer  to  them  the  justice 
due  to  the  relations  contracted  by  them  at 
home.  But  an  American  marries  at  home, 
where  plurality  of  wives  is  excluded,  and 
then,  contrary  to  his  engagement  with 
that  wife,  takes  another,  where  a  plurality 
of  wives  is  tolerated,  and  tiie  first  wife 
claims  the  benefit  of  the  law  of  her  own 
country  from  the  courts  of  her  own  coun- 
try, while  the  second  wife  claims  from  the 
same  courts  the  immunities  and  rights 
conceded  to  her  in  the  law  of  her  original 
country.  Tliese  claims  are  incompatible, 
and  one  only  can  be  granted ;  and  it  is 
easy  to  see  that  tlie  obligations  arising  out 
of  the  first  contract  are  to  be  sustained  by 
the  country  in  which  they  were  assumed  ; 
and  that  our  courts  must  hold  the  second 
marriage  void  in  our  law,  which  denied 
the  capacity  to  contract  it.  For  the  same 
reason  we  must  obey  the  positive  injunc- 
tion of  our  statute,  which  applies  to  this 
case." —  In  Dickson  v.  Dickson,  1  Ycrg. 
110,  which  was  a  petition  for  Dower,  it 
appeared  tliat  the  plaintiff  had  formerly 
been  married  in  Kentucky,  and  inid  been 
there  divorced,  she  being  the  ofl'end- 
jng  party.  She  afterwards  removed  to 
Tennessee  and  was  married  again,  her 
former  husiiand  living.  It  further  ap- 
peared, that  by  the  law  of  Kentucky,  a 

(7)  flrcenwood  v.  Curtis,  G  Mass.  3.'J8, 
378  ;  Snced  r.  Kwing,  5  J.J.  Marsh.  4fi(), 
48y  ;    Sutton   r.   Wurren,   lU  Met.    451. 

[lUG] 


divorce  obtained  in  that  State  does  not 
release  the  offending  party  from  the  pains 
and  penalties  of  bigamy,  if  he  or  she 
afterwards  marry.  Under  these  circum- 
stances the  question  arose  whether  the 
second  marriage  should  be  held  valid  by 
the  courts  of  Tennessee.  And  it  was  held 
that  it  should.  Catron,  J.,  said:  "Mary 
May  was  legally  divorced  from  her  hus- 
band, Benjamin  Ma}',  by  the  Union  Cir- 
cuit in  Kentucky  ;  being  a  court  of  com- 
petent jurisdiction  over  the  subject-matter 
and  the  parties  —  the  decree  dissolving 
the  marriage  is  conclusive  on  all  the  world. 
The  statute  of  Kentucky  provides  that 
the  offending  party  (the  petitioner  in  this 
case)  shall  not  be  released  from  the  mar- 
riage contract,  but  shall  be  subject  to  all 
the  pains  and  penalties  of  bigamy.  It  is 
impossible,  in  the  nature  of  things,  that 
all  the  relations  of  wife  shall  exist  when 
she  has  no  husband  ;  who,  as  soon  as  the 
decree  dissolving  the  marriage  was  pro- 
nounced, was  an  unmarried  and  single 
man,  freed  from  all  connections  and  rela- 
tions to  his  former  wife ;  and  ecjually  so 
was  the  petitioner  freed  from  all  marriage 
tics  and  relations  to  Benjamin  May,  in 
reference  to  whom  she  stood  like  unto 
every  man  in  the  community.  Therefore, 
he  has  no  right  to  complain  of  the  second 
marriage.  Who  has  ?  Not  the  common- 
wealth of  Kentucky,  whose  penal  laws 
cannot  extend  beyond  her  own  territorial 
jurisdiction,  and  cannot  be  executed  or 
noticed  in  this  State,  where  the  second 
marriage  took  place,  and  the  violation  of 
saiil  laws  was  effected.  Had  Mary  May 
married  a  second  time  in  Kentucky,  such 
second  marriage  would  not  be  void  be- 
cause she  continued  the  wife  of  Benjamin 
May,  but  because  such  second  marriage  in 
that  State  would  have  been  in  violation  of 
a  highly  penal  law  against  bigamy  ;  and 
it  being  a  well-settled  principle  of  law 
that  any  contract  which  violates  the  penal 
laws  of  the  country  where  made  shall  be 
void.  The  inquiry  with  this  court  is  not, 
however,  nor  cannot  be  whether  the  laws  of 
Iventucky  have  been  violated  by  this  sec- 
ond marriage  —  but  have  our  own  laws 
been  violated  ?  The  act  of  1820,  eh.  18, 
against  bigamy,  declares  it  felony  for  any 

And  Fco  Wightman  v.  Wightnuin,  4 
Johns.  CI).  ;J43 


CH.  II.] 


TUE   LAW    OF   PLACE. 


-108 


avoid  the  marriage,  if  within  the  degrees  prohibited  by  the  law 
of  the  State  in  which  the  question  arose,  or  only  if  it  be  between 
kindred  who  are  too  near  to  marry  by  the  law  of  the  civilized 
world,  (r)  Thus,  if  it  be  the  law  in  England  that  a  man  shall 
not  marry  the  sister  of  his  deceased  wife,  the  validity  of  such  a 
marriage  contracted  abroad  might  be  determined  in  England 
by  a  reference  to  the  question  of  domicil.  That  is,  an  English- 
man going  abroad,  and  there  marrying  his  wife's  sister,  might, 
on  his  return,  be  held  not  to  have  legally  married ;  while  two 
Americans  contracting  such  a  marriage  here,  where  it  is  cer- 
tainly lawful,  would  be  held  to  be  husband  and  wife  in  Eng- 
land. We  think,  however,  that  both  here  and  in  England  the 
law  of  the  place  of  the  marriage  would  prevail  in  such  a  case 
over  the  law  of  the   domicil.  (s)      But  if   a  married  man,  a 


person  to  marry  having  a  former  husband 
or  wife  living.  Mary  May  had  no  hus- 
band living,  and  is  not  guilty  of  bigamy 
by  our  statute  ;  nor  has  she  violated  the 
sanction  of  any  penal  law  of  this  State." 
See  further,  on  the  proposition  stated  in 
the  text,  Scrimshire  v.  Scrimshire,  2  Hagg. 
Consist.  R.  395  ;  Herbert  v.  Herbert,  id. 
263,  3  Phillim.  58  ;  Swift  v.  Kelly,  3 
Knapp,  257  ;  Munro  v.  Saunders,  6  Bligh, 
468;  State  v.  Patterson,  2  Ired.  346; 
Fornshill  v.  Murray,  1  Bland's  Ch.  479 ; 
Dumaresly  v.  Fishly,  3  A.  K.  Marsh.  368 ; 
Wall  V.  Williamson,  8  Ala.  48 ;  Lacon  v. 
Higgins,  3  Stark.  178;  Morgan  v.  Mc- 
Ghee,  5  Humph.  L3. 

(r)  See  Sutton  v.  Warren,  10  Met.  451, 
and  Bonham  v.  Badgley,  2  Gilman,  622, 
as  cited  ante,  vol.  1,  p.  563,  n.  (c). 

(s)  See  preceding  note.  In  Warrender 
V.  Warrender,  9  Bligh,  89,  112,  Lord 
Brougham  said,  obiter  however  :  "  We 
should  expect  that  the  Spanish  and  Portu- 
guese courts  would  hold  an  English  mar- 
riage avoidable  between  uncle  and  niece, 
or  brother  and  sister-in-law,  though,  solem- 
nized under  papal  dispensation,  because  it 
would  clearly  be  avoidable  in  tliis  country. 
But  I  strongly  incline  to  think  that  our 
courts  would  refuse  to  sanction,  and  would 
avoid  by  sentence,  a  marriage  between 
those  relatives  contracted  in  the  Peninsula, 
under  dispensation,  although  beyond  all 
doubt  such  a  marriage  would  there  be  valid 
by  the  lex  loci  contractus,  and  incapable  of 
being  set  aside  by  any  proceedings  in  that 
country."    In  True  v.  Eanney,  1  Foster, 


55,  Gilchrist,  C.  J.,  extends  the  exception 
to  the  rule  that  marriages  valid  where 
celebrated  are  valid  everywhere,  to  cases  in 
which  the  marriage  is  opposed  to  "  the 
municipal  institutions  of  the  country " 
where  the  rule  is  sought  to  be  applied. 
See  ante,  vol.  1,  p.  565,  n.  (j).  But  we 
think  this  is  going  rather  too  far.  la 
Greenwood  v.  Curtis,  6  Mass.  358,  378, 
the  court  say:  "If  a  foreign  State  al- 
lows of  marriages  incestuous  by  the  law 
of  nature,  as  between  parent  and  child, 
such  marriage  could  not  be  allowed  to 
have  any  validity  here.  But  marriages 
not  naturally  unlawful,  but  prohibited  by 
the  law  of  one  State  and  not  of  another,  if 
celebrated  where  they  are  not  prohibited, 
would  be  holden  valid  in  a  State  where 
they  are  not  allowed.  As  in  this  State,  a 
marriage  between  a  man  and  his  deceased 
wife's  sister  is  lawful,  but  it  is  not  so  in 
some  States.  Such  a  marriage  celebrated 
here  would  be  held  valid  in  any  other 
State,  and  the  parties  entitled  to  the  ben- 
efits of  the  matrimonial  contract."  And 
Mr.  Justice  Story,  after  quoting  this  lan- 
guage, says  :  "  Indeed,  in  the  diversity 
of  religious  opinions  in  Christian  coun- 
tries, a  large  space  must  be  allowed  for 
interpretation,  as  to  religious  duties,  rights, 
and  solemnities.  In  the  Catholic  coun- 
tries of  continental  Europe,  there  are 
many  prohibitions  of  marriage,  which  are 
connected  with  religious  canons  and  estab- 
lishments, and  in  most  countries  there 
are  some  positive  or  customary  prohibi- 
tions, which  involve  peculiarities  of  re- 

[1071 


109  THE   LAW    OF   CONTRACTS.  [PAIIT  II. 

citizen  of  one  of  our  States,  journeyed  into  a  Mormon  terri- 
tory, and  there  married  again,  he  certainly  would  not  be  held  on 
his  return  to  be  the  lawful  husband  of  two  wives.  And  it  may 
be,  at  least,  conjectured,  that  if  a  Mormon  came  into  Massa- 
chusetts or  New  York  with  half  a  dozen  wives,  he  would  not 
be  held  there  to  be  the  lawful  husband  of  all  of  them,  (t) 

The  fact  that  the  parties  went  abroad  for  the  purpose  of  con- 
tracting a  marriage  there,  which  would  be  illegal  at  home, 
ought,  it  might  seem,  to  destroy  the  validity  of  the  marriage  at 
home.  But  the  contrary  doctrine  appears  to  have  been  held, 
and  to  be  established  in  England  and  in  this  country,  {u) 
There  must,  however,  be  some  limit  to  this.  The  common 
case  of  Gretna  Green  marriages  only  shows  that  persons  may 
be  married  in  Scotland,  and  then  regarded  in  England  as  hus- 
band and  wife,  who  could  not  have  been  married  in  that  ivay  in 
England.  At  least  we  are  not  aware  of  any  English  case 
recognizing  the  validity  of  a  marriage  contracted  abroad  be- 
tween English  subjects  who  could  not,  in  any  way,  become 
legally  husband  and  wife  by  any  marriage  contracted  in  Eng- 
land ;  and  quite  recently  it  has  been  held  in  England  that  the 
marriage  of  an  Englishman  to  the  sister  of  his  deceased  wife, 
both  parties  being  domiciled  in  England  would  be  unlawful  in 

ligious  opinion  or  of  conscientious  doubt.  sanp;uinity,  affinity,  and  certain   corporal 

It  would  be  most  inconvenient  to  hold  all  infirmities.     See  Elliott  r.  Gurr,  2  Phill. 

marriages  celebrated  elsewliere  void  which  IG  ;  Gatliings  v.  Williams,  5  Ired.  487. 

are  not  in  scrupulous  accordance  with  the  The  statute  of  6  Wm.  4,  ch.  .54,  makes 

local  institutions  of  a  i)articular  country."  some  of  these  marriages  absolutely  void. 
Confl.  of  Laws,  sWlO.     It  is  to  bcrcnicm-         (/)  It   might   be   a   different    question 

bcrcd  that  even  incestuous  marriages  are  whether  his  children  by  all  his  wives,  who 

not  void  at  common  law,  but  only  void-  were  equally  his  wives,  were  all,  or  were 

able ;  and  voidable  only  daring  the  lives  any   of    them,   legitimate.      In   Wall   v. 

of  both  parties ;    for  after   the   death  of  "Williamson,  3   Ala.  48,  the   court  say  : 

cither,  they  are  valid,  as  to  the  legitimacy  "A  parallel  case  to  a  Turkish  or  other 

of  the  children,  and  it  would  se«m  all  marriage  in  an  infidel  country,  will  prob- 

othcr  purposes.    Sec  1  Bl.  Com.  4.'i4, 4-'5.'),  ably    be    found    among    all    our   savago 

and    i!   lust.   014.     See    also   I'onliani   r.  tribes;    but    can   it   be  possible   that  the 

liadgley,  2  Oilman, G22;  Sution  ('.Warren,  children  must  be  illegitimate  if  born  of 

10  Met.  4.').3  ;  Kay  r.  Sherwood,  1  Curteis,  the  second  or   other  succeeding   wife^" 

19.3,  199.     The  rule  is,  that  for  civil  iVis-  And  in  reference  to  the  case  ])Ut  in  the 

abilities,"  such  as  jirior  marriage,  idiocy,  text,  Riijfin,  C.  J.,  says,  in  Williams  v. 

and  tin;  like,  the  marriage  may  br  (hclared  Gates,  5  Ired.  SS."),  .541,  cited  ante,  p.  107, 

cither  hf/arr.  or  (iflcr  the  dcatii  of  the  jiar-  n.  (/))  :  "If  a  Turk  with  two  wives  were 

tics,  or  either  of  them,  to  have  been  void  to    come    here,   we  would    administer   to 

from  the  bfginiiin;,' ;  but  U>v  i-anouicdl  dis-  them  the  justice  due  to  the  relations  con- 

abiliticH  only  during  the  lives  of  l)0th  ;  and  tractcnl  by  them  at  home." 
canonical  disabilities  arc  said  to  be  cou-         («)  Sec  ante,  p.  104,  n.  (p). 

[108] 


en.  II.]  THE   LAW    OF   PLACE.  *110 

that  country,  and  therefore  invalid,  although  perforn:ied  in  Den- 
mark where  such  a  marriage  is  allowed,  and  the  children  of  the 
marriage  were  held  to  be  illegitimate  on  the  ground  that  the 
statute  of  5  &  6  William  IV.  c.  54,  declares  all  marriages  within 
the  prohibited  degrees  to  be  absolutely  null  and  void,  and  that 
the  lex  loci  did  not  apply  to  a  contract  prohibited  by  the  posi- 
tive law  of  the  country  of  which  both  parties  were  subjects,  [ua) 
In  Massachusetts  the  cases  go  somewhat  further,  but  expressly 
except  those  foreign  marriages  "  which  would  tend  to  outrage 
the  principles  and  feelings  of  all  civilized  nations."  (y)  It  may, 
however,  be  *remarked,  that  while  the  converse  of  this  rule  is 
also  true,  and  a  marriage  which  is  void  where  contracted  is 
valid  nowhere,  [w)  there  must  also  be  some  exceptions  to  this 
rule ;  as  if  two  Americans  intermarried  in  China,  where  the 
marriage  was  celebrated  in  presence  of  an  American  chaplain, 
according  to  the  American  forms.  If  such  a  marriage  were 
perfectly  void  in  China,  it  would  nevertheless  be  held  certainly 
valid  here,  {x) 

It  is  also  the  general  rule,  both  in  England  and  in  this  coun- 
try, that  the  incidents  of  marriage,  and  contracts  in  relation  to 
marriage,  as  settlements  of  property  and  the  like,  are  to  be  con- 
strued by  the  law  of  the  place  where  these  were  made ;  for  any 
different  construction  cannot  be  supposed  to  carry  into  effect 
the  intentions  and  agreements  of  the  parties,  or  to  deal  with 


[ua)  Brook  v.  Brook,  before  Stuart,  V.  perhaps  it  was,  if  solemnized  by  a  Protes- 

C,  and    Cresswell,   J.,   27    Law   J.    Ch.  tant  priest,  whom  they  do  not  acknowl- 

400,  22  Law  Reporter,  216.  edge,  or  if  in   any  way  clandestine,  or 

(;;)  Med  way  w.  Needham,  16  Mass.  1.57.  without  consent;    and   that   therefore   it 

(w)  M'CulIoch  V.  M'Culloch,  Ferg.  Di-  should  be  set  aside  by  a  court  in  Eng- 

vorce  Cases,  257 ;  Dalrymple  v.  Dalrym-  land,  upon  account  of  its  being  void  by 

pie,   2    Hagg.   Consist.  R.   54 ;    Kent  v.  the  law  of  France  ?     No."     And  on  p. 

Burgess,    11     Sim.   361;    Scrimshire    v.  432,  he  says  :  "  And  here  I  must  observe, 

Scrimshire,  2  Hagg.  Consist.  R.  395.  that  I  do  not  mean  that  every  domicil  is 

(x)  Ruding  v.  Smith,  2  Hagg.  Consist,  to  give  a  jurisdiction  to  a  foreign  country, 

R.  371  ;  Kent  v.  Burgess,  11   Sim.  361  ;  so  that  the  laws  of  that  country  are  ncccs- 

The  King  v.  Brampton,   10  East,  282;  sarily  to  obtain  and  attach  upon  a  mar- 

Newbury  v.  Brunswick,  2  Vt.   151.     In  riage  solemnized  there;  for  what  would 

Hai-ford  v.  Morris,  2  Hagg.  Consist.  R.  become  of  our  factories  abroad,  in  Leg- 

430,   Sir  George  Ilay  says :  "  Will  any-  horn  or  elsewhere,  where  the  marriage  is 

body  say,  that  before  the  act,  a  marriage  only  by  the  law  of  England,  and  might 

solemnized  by  persons  going  over  to  Ca-  be  void  by  the  law  of  that  country ;  noth- 

lais,  or  happening  to  be  there,  was  void  ing  will  be  admitted  in  this  court  to  affect 

in  this  country,  because  such  a  man-iage  such  marriages  so  celebrated,  even  where 

might  be  void  by  the  laws  of  France,  as  the  parties  are  domiciled." 

VOL.  II.  *  10  [  109  ] 


Ill*  THE   LAW   OF    CONTRACTS.  [PART  II. 

them  justly,  (i/)  This  being  the  reason  of  the  rule,  it  cannot 
apply  to  the  construction  of  settlements  and  the  like,  where  the 
parties  are  married  while  accidentally  or  transiently  absent  from 
their  homes,  without  actual  or  intended  change  of  domicil,  and 
make  their  settlements  or  arrangements  there,  at  the  time  of 
marriage  ;  for  in  such  cases  the  law  of  the  domicil  should  gov- 
ern, and  the  marriage,  although  actually  foreign,  should  be 
regarded  as  constructively  and  virtually  domestic.  For,  as  a 
general  rule,  the  *rights  of  the  parties,  as  springing  from  the 
relation  of  marriage,  must  be  determined  by  the  place  where 
they  then  supposed  themselves,  and  intended  to  be,  domi- 
ciled, (z) 

In  respect  to  the  capacity  of  the  wife  to  contract  with  a  third 
party,  we  are  inclined  to  hold  that  the  law  of  the  place  of  the 
contract  determines  this,  as  well  as  other  questions  of  capacity, 
at  least  in  respect  to  personal  contracts,  although  in  the  absence 
of  sufficiently  direct  adjudication,  and  in  the  conflict  of  opinion 
to  be  found  in  text  writers,  it  is  difficult  to  ascertain  what  the 
law  is  on  this  point.  And  it  must  depend  much  on  the  circum- 
stances. If  an  American  wife,  for  instance,  being  only  on  a 
brief  visit  in  some  country  where  she  may  contract,  does  so  on 
some  accidental  occasion,  it  might  be  more  doubtful  whether 
the  contract,  though  valid  where  made,  would  have  any  force 
on  her  return  to  this  country.  But  if  husband  and  wife  go 
abroad,  and  visit  a  country  for  business  purposes,  and  there  enter 
into  business  contracts  obligatory  on  both  by  the  law  of  that 
place,  although  it  might  be  difficult   to  enforce  the  contract 


(y)  Fcaubcrt  v.  Turst,  Prcc.  in  Ch.  207,  Lanussc,  3  Mart.  La.  581.     But  though 

1  Bro.  P.  C.  38,  llobcrtsoii's  App.  Cas.  the  contract  he  made  in  one  country,  and 

3 ;  Anstrutlier  v.  Adair,  2  Mylnc  &  K.  it  refer  to  the  law  of  anotlicr,  it  will  be 

513;  Frccmoult  v.   Dedirc,   1    P.  Wnis.  valid  and  effectual  if  both  parties  have 

42'J  ;  Dccoucbe  v.  Savcticr,  3  Johns.  Ch.  agreed  upon  making  tliat  otlier  country 

190;   Crosby  v.  Bcrger,  3  Kdw.  Ch.  538;  their  ])hu'e  of  residence,  and  do  actually 

Uc  JJarante  v.  Gott,  6  Barb.  4"J2.  settle  there.     Poreven  without  a  contract, 

(z)  Lc  Breton  v.  Nouchet,  3  Mart.  La.  the   rights  of  the  husband  to  the  wife's 

60;  Ford  v.  Ford,  14  id.  574;  Allen  v.  property  are  determined  in  such  ease  by 

Allen,  6  Rob.  La.  104;  Doe  v.  Vardiil,  5  the  law  of  the  intended  and  actual  subsc- 

B.  &  C.  438.     Jt  seems  that  parties  can-  tpient   domicil.     Lc   Breton   v.   Miles,  8 

not  by  a  contract  made  in  Louisiana  ]iro-  Paige,  2G1  ;  Knccland  v.  Ensley,  Meigs, 

vide  ••flcctually  that  the  rights  of  iIk'  jiar-  020;  Lyon  v.  Knott,  2  Am.  Law  Reg. 

tics  shall  be,  (h'tcrinincd  by  tlic  jirovisions  G04. 
of  a  specified  foreign  luw.     Bourcier  v. 

[110] 


CH.  II.]       .  THE   LAW   OF  PLACE.  *112-*113 

against  the  wife  in  America,  while  the  husband  lived,  we 
should  think  the  contract  would  be  valid,  and  enforceable  here 
after  her  husband's  death,  and  perhaps  against  a  second  hus- 
band, (a) 

There  is  one  peculiar  result  of  marriage,  which  seems  to  be 
an  exception.  In  some  places,  if  the  parents  of  a  child  inter- 
marry after  his  birth,  this  marriage  legitimates  him.  In  Eng- 
land it  does  not ;  and  it  has  been  held  in  England  that  such 
subsequent  marriage  in  Scotland,  where  it  legitimates  the  child, 
did  not  so  far  legitimate  him  *in  England  as  to  enable  him  to 
take  by  inheritance  land  situated  in  England,  (b)  The  rule 
would  be  otherwise  as  to  personal  property,  the  law  of  the  dom- 
icil  of  the  parents  determining  the  legitimacy  as  to  that.  And 
we  think  that  such  a  marriage  in  Scotland,  supposing  parents 
and  child  afterwards  to  come  to  America  and  be  naturalized 
here,  would  be  held  here  to  make  the  child  an  heir,  as  well  as  to 
give  him  all  other  rights  of  legitimacy,  (c)  We  have  however 
considered  the  subject  of  illegitimate  children  in  our  first  volume. 

The  place  of  marriage  does  not  determine  absolutely  as  to 
the  domicil  acquired  by  marriage.  It  would  be  obviously  un- 
reasonable to  permit  the  domicil  of  the  parties  to  depend  upon 
the  mere  place  where  the  marriage  is  celebrated,  while  the 
parties  are  perhaps  only  in  transitu.  This  question  is  therefore 
settled  by  their  actual  domicil  at  the  time ;  the  husband's 
domicil  is  determined  by  the  two  elements  of  actual  residence 
and  intent,  as  in  other  cases ;  while  the  wife  acquires  by  mar- 
riage  the   domicil    of    the    husband,    and    changes   it   as   his 

changes,  {d)     And  in  such  case  the  wife's  rights  in  *and  to  the 

« 

(n)  In  the  absence  of  much  direct  adju-  (d)  See  ante,  p.   94,  n.    (?y).     But  the 

dication,  we  refer  the  reader  to  the  follow-  wife  may,  so  far  as  the  question  of  divorce 

mg  authorities,  as  bearing  more  or  less  is  concerned,  have  a  domicil  distinct  from 

directly  upon  this  question.     Polydore  v.  that  of  the  husband.     In  Harteau  v.  Har- 

Prince,    Ware,    402;    Drue    v.    Thome,  teau,    14   Pick.    181,    Shaio,  C.  J.,  after 

Aleyn,    72 ;    Thompson    v.   Ketcham,    8  considering   certain   questions  arising  in 

Johns.  189  ;  Gamier  v.  Poydras,  13  La.  the   case  which   have   no   direct   bearing 

177;  Potter  r.  Brown,  5  East,  131.  upon   this  point,   says:    "This   suggests 

(6)  Doe  t;.  Vardill,  5  B.  &  C.  438,  9  another  course  of  inquiry,  that  is,  how  far 

Bligh,  32.  the  maxim  is  applicable  to  this  case,  that 

(c)  Such  seems  very  certainly  to  be  the  the  domicil  of  the  wife  follows  that  of  the 

doctrine  of  the  greater  number  and  most  husband.     Can  this  maxim  be  true,  in  its 

authoritative  of  the  civilians.     See  Story  application  to  this  subject,  where  the  wife 

on  Confl.  of  Laws,  §  93  a,  et  seg.  claims  to  act,  and  by  law,  to  a  certain  ex- 

[111] 


113- 


THE  LAW  OF   CONTRACTS. 


[part  II. 


property  of  the  husband,  or  her  own,  would  be  determined  by 
the  law  of  that  domicil,  so  far  at  least  as  relates  to  the  personal 
property  of  both,  and  the  real  property  of  the  husband.  If  the 
wife  had  real  property  in  the  country  of  her  own  domicil,  hers 
and  her  husband's  rights  in  respect  to  it  might  now  be  governed 
by  the  lex  loci  rei  sites. 


SECTION  VIII. 


OF  FOREIGN  DIVORCES. 


The  relation  of  the  law  of  place  "to  the  subject  of  divorce 
presents   questions   of  much  difficulty.     And  although    many 


tent  and  in  certain  eases,  is  allowed  to  act 
adversely  to  her  husband  ?  It  would  oust 
the  court  of  its  jurisdiction,  in  all  cases 
where  the  husband  should  change  his 
domicil  to  another  State  before  the  suit  is 
instituted.  It  is  in  the  power  of  a  hus- 
band to  change  and  fix  his  domicil  at  his 
will.  If  the  maxim  could  apply,  a  man 
might  go  from  tliis  county  to  Providence, 
take  a  house,  live  in  open  adultery,  aban- 
doning his  wife  altogether,  and  yet  she 
could  not  libel  for  a  divorce  in  this  State, 
where,  till  such  change  of  domicil,  they 
had  always  lived.  He  clearly  lives  in 
Rhode  Island  ;  her  domicil,  according  to 
the  maxim,  follows  his  ;  she  therefore,  in 
contemplation  of  law,  is  domiciled  there 
too  ;  so  tliat  neither  of  t/te  parties  can  be 
said  to  lice  in  this  Commonwealth.  It  is 
probably  a  justcr  view,  to  consider  that 
the  maxim  is  founded  upon  the  theoretic 
identity  of  person  and  of  interest  between 
husband  and  wife,  as  established  by  law, 
and  the  presumption,  that  from  the  nature 
of  that  relation  tlic  home  of  the  one  is 
that  of  the  other,  and  intended  to  pro- 
mote, strengthen,  and  secure  their  interests 
in  this  relation,  as  it  ordinarily  exists, 
where  union  and  harmony  prevail.  But 
the  law  will  recognize  a  wife  as  having  a 
separate  existence  and  separate  interests, 
and  separate  riglits,  in  those  cases  wlierc 
the  express  oI)ject  of  all  proceedings  is  to 
bIiow  that  tiie  relation  itself  ought  to  be 
dissolved,  or  so  niodilied  as  to  establish 
separate  interests,  and  csijccially  a  sc'pa- 
rate  domicil  and  iiomc,  IxmI  niid  ixiard  be- 
ing put,  a  pait  for  the  whole,  as  expressive 
of  the  idea  of  Ikhiic.    Otiierwisc,  the  par- 

[112] 


ties  in  this  respect  would  stand  upon  very 
unequal  grounds,  it  being  in  the  power  of 
a  husband  to  change  his  domicil  at  will, 
but  not  in  that  of  the  wife."  Mr.  Bishop, 
in  his  work  on  Marriage  and  Divorce, 
§  730,  after  quoting  from  the  preceding 
case,  says  :  "  And  the  doctrine  that,  for 
purposes  of  divorce,  the  wife  may  have  a 
domicil  separate  from  her  husband,  is  well 
established  in  the  American  tribunals,  al- 
though some  of  the  authorities  would 
seem  to  take  the  distinction  (it  is  submit- 
ted without  proper  foundation),  that  a 
wife  cannot  lose  her  domicil  by  the  hus- 
band's change  of  residence  after  the  of- 
fence is  committed,  yet  cannot  on  the  other 
hand  accpiire  a  new  one.  Indeed  it  has 
been  distinctly  laid  down  that  the  wife 
cannot,  by  a  removal  of  her  habitation 
after  the  commission  of  the  offence,  ac- 
quire a  new  jurisdiction  in  which  to  pros- 
ecute her  claim  for  divorce,  though  it  is  be- 
lieved that  the  preponderance  of  American 
authority,  as  well  as  weight  of  argument, 
is  greatly  the  other  way."  See  further  on 
this  question,  Irby  v.  Wilson,  1  Dev.  & 
Bat.  Ecj.  568,  582  ;  Frary  v.  Frary,  10  N. 
H.  61  ;  Harding  v.  Alden,  9  Greenl.  140  ; 
Sawtell  V.  Sawtell,  17  Conn.  284;  Brett 
V.  Brett,  5  Met.  233  ;  Tolcn  v.  Tolen,  2 
Blackf.  407  ;  Jackson  i\  Jackson,  1  Johns. 
425;  Magnire  ;;.  Maguire,  7  Dana,  181  ; 
Pawling  V.  Willson,  13  Joiins.  192,  208. 
If  the  husband  and  wife  have  been  sepa- 
rated by  a  judicial  decree,  and  are  living 
separate,  the  domicil  of  the  wife  is  inde- 
pendent of  that  of  the  husband.  Wil- 
liams V.  Dormer,  2  liob.  Fee.  K.  505,  9 
Fng.  L.  &  Eq.  598. 


CH.  II.]  THE   LAW   OF   PLACE.  *114 

cases  involving  some  of  these  questions,  have  been  decided  after 
very  full  consideration,  both  in  England  and  in  this  country, 
some  topics  remain,  in  relation  to  which  there  exists  at  present 
much  uncertainty. 

The  law  of  divorce  differs  greatly  in  different  countries,  be- 
cause marriage  itself  is  viewed  under  so  great  a  diversity  of 
aspect.  The  Catholic  Church  regards  it  as  a  sacrament,  over 
which  the  civil  law  and  civil  tribunals  have  no  power  whatever, 
and  which  can  only  be  dissolved  by  the  supreme  *spiritual  power 
of  the  Church.  Protestants  deny  it  to  be  a  sacrament.  They 
regard  it  as  a  civil  contract,  of  a  religious  character  it  may  be, 
and  therefore  properly  associated  with  religious  ceremonies  ; 
but  wholly  within  the  power  of  the  civil  authority.  But  Eng- 
land, which  was  Catholic  while  its  common  law  was  in  course 
of  formation,  had  no  means  provided  for  effecting  divorce  after 
it  became  Protestant ;  and  in  that  country  complete  divorce  a 
vinculo,  was  effected  only  by  parliament,  until  the  statute  of  20 
and  21  Vict.  ch.  85,  constituted  a  special  court  for  the  trial  of 
such  questions,  with  full  power  to  decree  a  dissolution  of  the 
marriage.  We  suppose  that  in  all  Protestant  countries  judicial 
tribunals  may  grant  divorces  a  vinculo.  In  the  States  of  this 
Union,  divorce  is  granted  by  the  tribunals,  for  reasons  which 
are  defined  by  statute.  In  some  States  these  causes  are  limited 
to  adultery,  and  facts  of  equivalent  character,  and  in  others  are 
extremely  liberal,  not  to  say  lax.  And  in  some  of  the  States 
it  is  the  custom  of  the  legislatures  to  grant  divorces  by  private 
acts,  and  in  practice  this  is  sometimes  done  for  very  feeble 
reasons,  and  almost  without  other  reason  than  the  request. 

The  question  must  therefore  be  one  of  much  difficulty,  how 
far  a  State  will  recognize  the  validity  of  a  foreign  divorce, 
granted,  perhaps,  for  causes  which  the  law  of  the  tribunal  try- 
ing the  question  would  hold  to  be  wholly  insufficient. 

The  general  rule  is  certainly  this.  A  divorce  granted  in  a 
State  in  which  both  parties  had  their  actual  domicil,  and  also 
were  married,  i§  valid  everywhere,  (e)     Then  it  may  be  said 

(e)   Story's   Confl.  of  Laws,  §  201  ;  2  adjudications,  for  the  reason  that  it  is  too 

Kent's  Com.  108.     It  would  not  be  easy  well  settled  to  be  questioned, 
to  find  this  rule  established  by  distinct 

.10*  [113] 


115* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


that,  generally,  every  State  recognizes  the  validity  of  a  divorce 
granted  where  both  parties  have  their  actual  domicil,  if  granted 
according  to  the  law  of  that  place.  It  has  been  very  authorita- 
tively declared  to  be  the  law  of  England,  that  the  tribunals  of 
that  country  acknowledge  no  foreign  divorce  of  an  English  mar- 
riage. (/)     A  more  careful  consideration  *of  the  cases  would, 


(/)  In  Lolley's  case,  Russ.  &  Ry.  Cr. 
Cas.  237,  English  subjects  were  married 
in  England ;  the  husband  went  to  Scot- 
land; there  he  was  divorced  a  vinculo; 
he  returned  to  England  and  married  there, 
his  first  wife  living ;  lie  was  indicted  for 
bigamy,  convicted,  and  sentenced  to  trans- 
portation. Lord  Brougham,  in  deciding 
M'Carthy  v.  Decaix,  2  Russ.  &  M.  614, 
619,  comments  upon  Lolley's  case,  and 
upon  Lord  Eldon's  remarks  upon  it, 
and  says  :  "  I  find,  from  the  note  of  what 
fell  from  Lord  EhJon  on  the  present 
appeal,  that  his  lordship  labored  under 
considerable  misapprehension  as  to  the 
facts  in  Lolley's  case  ;  he  is  represented 
as  saying  he  will  not  admit  that  it  is  the 
settled  law,  and  that  therefore  he  will  not 
decide,  whether  the  marriage  was  or  not 
premature!}'  determined  by  the  Danish 
divorce.  His  words  are,  '  I  will  not  with- 
out other  assistance  take  upon  myself  to 
do  so.'  Now,  if  it  has  not  validly  and  by 
the  highest  authorities  in  Westminster 
Hall  been  holdcn,  that  a  foreign  divorce 
cannot  dissolve  an  English  marriage,  then 
nothing  whatever  lias  been  established. 
Eor  what  was  Lolley's  case  ?  It  was  a 
case  the  strongest  possible  in  favor  of  the 
doctrine  contended  for.  It  was  not  a 
question  of  civil  right,  but  of  felony.  Lol- 
ley  liad  honajidc,  and  in  a  confident  belief, 
founded  on  the  authority  of  the  Scotch 
lawyers,  tliat  the  Scotch  divorce  had  ef- 
fectually dissolved  his  prior  English  mar- 
riage, intermarried  in  England,  living  his 
first  wife.  He  was  tried  at  Lancaster  for 
bigamy,  and  foimd  guilty  ;  but  the  point 
was  reserved,  and  was  afterwards  argued 
befon;  all  the  most  learned  judges  of  the 
day,  who  after  hearing  the  case  fully  and 
thoroughly  discussed,  lirst  at  Westminster 
Hall,  and  then  at  Sergeant's  Inn,  gave  a 
clear  and  unanimous  opinion,  that  no 
divorce  or  jiroceeding  in  the  nature  of 
divorce  in  any  foreign  country,  Scotland 
included,  could  dissolve  a  marriage  con- 
tnictcd  in  ICngland  ;  and  they  sentenced 
Lolley  to  kcvcii  years'  transportation.  And 
he  wu.s  ucconiingly  sent  to  the  hulks  for 
one  or  two  years ;  though  in  mercy  the 

[IM] 


residue  of  his  sentence  was  ultimately  re- 
mitted. I  take  leave  to  say,  he  ought  not 
to  have  gone  to  the  hulks  at  all,  because 
he  had  acted  bona  fide,  though  this  did  not 
prevent  his  conviction  from  being  legal. 
But  he  was  sent  notwithstanding,  as  if  to 
show  clearly  that  the  judges  were  confi- 
dent of  the  law  they  had  laid  down ;  so 
that  never  was  there  a  greater  mistake 
than  to  suppose  that  the  remission  argued 
the  least  doubt  on  the  part  of  the  judges. 
Even  if  the  punishment  had  been  entirely 
remitted,  the  remission  would  have  been 
on  the  ground  that  there  had  been  no 
criminal  intent,  though  that  had  been  done 
which  tlic  law  declares  to  be  felony.  I 
hold  it  to  be  perfectly  clear,  therefoi'e,  that 
Lolley's  case  stands  as  the  settled  law  of 
Westminster  Hall  at  this  day.  It  has 
been  uniformly  recognized  since  ;  and  in 
particular  it  was  repeatedly  made  the  sub- 
ject of  discussion,  before  Lord  Eldon  him- 
self, in  the  two  appeals  of  Tovey  v.  Lind- 
say, 1  Dow,  117,  131,  in  the  House  of 
Lords,  when  I  furnished  his  lordship  with 
a  note  of  Lolley's  case,  which  he  followed 
in  disposing  of  both  those  appeals,  so  far 
as  it  alfeeted  them.  That  case  then  set- 
tled that  no  foreign  proceeding  in  the  na- 
ture of  a  divorce  in  an  ecclesiastical  court 
could  effectually  dissolve  an  English  mar- 
riage." But  in  Conway  v.  Beazley,  3 
Ilagg.  Ecc.  R.  639,  643,  Dr.  Lushimjton 
says :  "  Cases  have  been  cited  in  which 
it  is  alleged  that  a  final  decision  has  been 
pronounced  by  very  high  authority  upon 
the  operation  of  a  Scotch  divorce  on  an 
English  marriage,  —  that  it  lias  been  de- 
termined that  a  marriage  celebrated  in 
England  cannot  be  dissolved  by  the  sen- 
tence of  a  Scotch  tribunal,  —  that  the  con- 
tract remains  for  ever  indissoluble.  The 
authorities  i)rinpii)ally  relied  upon  for 
establishing  that  ])()sition  are  the  decis- 
ions of  the  twelve  judges  in  Lolley's 
case,  and  the  decision  of  the  present  Lord 
Chancellor  on  a  very  recent  occasion.  If 
those  authorities  sustained  to  its  full  ex- 
tent the  doctrine  contended  for,  the  court 
would  feel  inijjlicitly  bound  to  adopt  it ; 
but  I  must  consider  whether  in  Lolley's 


CII.  II.] 


THE   LAW   OF   PLACE. 


116 


however,  lead  to  the  conclusion,  that  the  eslahlislted  rule  in 
England  goes  no  further,  than  that  an  *English  marriage  cannot 
be  terminated  by  a  foreign  divorce,  unless  both  parties  are  act- 
ually domiciled  in  the  country  where  the  divorce  takes  place. 
All  the  courts  in  this  country,  and  all  our  legislatures  do  not  go 
so  far  as  this ;  for  some  hold,  and  practise  upon  the  rule,  that  if 
the  parties,  or  indeed  if  only  the  party  seeking  the  divorce,  is 
within  the  jurisdiction  of  the  court  by  a  present  domicil,  it  is 
enough,  without  asking  whether  the  party  came  there  merely 
for  the  purpose  of  obtaining  the  divorce,  {g) 


case  it  was  the  intention  of  those  very 
learned  persons  to  decide  a  principle  of 
universal  operation,  absolutely  and  with- 
out reference  to  circumstances,  or  whether 
they  must  not  almost  of  necessity  be  pre- 
sumed to  have  confined  themselves  to  the 
particular  circumstances  that  were  then 
under  their  consideration.  Lolley's  case 
is  very  briefly  reported,  none  of  the  au- 
thorities cited  on  the  one  side  or  on  the 
other  are  referred  to,  nor  arc  the  opinions 
of  the  learned  judges  given  at  any  length ; 
all  that  we  have  is  the  decision.  It  is 
mucli  to  be  regretted  tliat  some  more  ex- 
tended reports  of  tlie  very  learned  argu- 
ments which  I  well  remember  were  urged 
upon  that  occasion,  and  the  multitude  of 
authorities  quoted,  have  not  been  com- 
municated to  the  profession  and  to  the  pub- 
lic. In  that  case  the  indictment  stated 
that  on  the  18th  of  July,  Lolley  was  mar- 
ried at  Liverpool  to  Ann  Levaia,  and 
afterwards  to  Helen  Hunter,  his  former 
wife  being  then  living.  It  was  proved 
that  both  marriages  were  duly  solemnized 
at  Liverpool,  that  the  first  wife  was  alive 
a,  week  before  the  assizes,  and  that  the 
second  wife  agreed  to  marry  the  prisoner 
if  he  could  obtain  a  divorce.  The  jury 
did  not  find  that  any  fraud  had  been  com- 
mitted, but  there  does  not  appear  to  have 
been  any  discussion  upon  the  very  impor- 
tant question  of  domicil.  A  case  in  which 
all  the  parties  are  domiciled  in  England, 
and  resort  is  had  to  Scotland  (with  which 
neither  of  them  have  any  connection)  for 
no  other  purpose  than  to  obtain  a  divorce 
a  vinculo,  may  possibly  be  decided  on 
principles  which  would  not  altogether  ap- 
ply to  a  case  difl\;rcntly  circumstanced  ; 
as  wlicre,  prior  to  the  cause  arising  on 
account  of  which  a  divorce  was  sought, 
the  parties  had  been  bona  jide  domiciled 
in  Scotland.     Unless  I  am  satisfied  that 


every  view  of  this  question  had  been  taken, 
the  court  cannot,  from  the  case  referred 
to,  assume  it  to  have  been  established  as 
a  universal  rule,  that  a  marriage  had  in 
England,  and  originally  valid  by  the  law 
of  England,  cannot  under  any  possible  cir- 
cumstances be  dissolved  by  the  decree  of 
a  foreign  court.  Before  I  could  give  my 
assent  |D  such  a  doctrine  (not  meaning  to 
deny  that  it  may  be  true),  I  must  have  a 
decision  after  argument  upon  such  a  case 
as  I  will  now  suppose,  namely,  a  marriage 
in  England  —  the  parties  resorting  to  a 
foreign  country,  becoming  actually  bona 
Jide  domiciled  in  that  country,  and  then 
separated  by  a  sentence  of  divorce  pro- 
nounced by  the  competent  tribunal  of  that 
country.  If  a  case  of  that  description  had 
occurred,  and  had  received  tlie  decision 
of  the  twelve  judges,  or  the  other  high  au- 
thority to  which  allusion  has  been  made, 
then  indeed  it  might  have  set  this  impor- 
tant matter  at  rest,  but  I  am  not  aware 
that  that  point  has  ever  been  distinctly 
raised,  and  I  think  I  may  say  with  cer- 
tainty that  it  never  has  received  any  ex- 
press decision." 

(g)  There  is  but  little  uniformity  among 
our  different  States,  either  as  to  statutory 
provisions  on  this  subject,  or  the  principles 
Ijelonging  to  it  as  settled  by  adjudication, 
or  the  application  of  these  principles  to 
cases,  or  in  the  practice  and  usage  of 
legislatures  in  relation  to  legislative  divor- 
ces. Mr.  Bishop,  from  a  very  full  con- 
sideration of  the  American  cases,  deduces 
the  following  rules  :  —  "1.  The  tribunals 
of  a  country  have  no  jurisdiction  over  a 
cause  of  divorce,  wherever  the  oft'ence  may 
have  occurred,  if  neither  of  tlie  parties  has 
an  actual  6o«a^V/e  domicil  within  its  terri- 
tory. Nor  is  this  proposition  at  all  modi- 
fied by  the  fact  that  one  or  both  of  them 
may  be  temporarily  residing  within  reach 

[115] 


117 


THE   LAW   OF   CONTRACTS. 


[part  II. 


In  this  country,  the  law  on  this  subject  is  regulated  very  gen- 
erally by  statutes ;  and  these  differ  very  much,  and  are  still  sub- 
ject to  not  unfrequent  change.  In  the  absence  of  statutory  pro- 
vision, we  should  incline  to  think,  that  the  courts  would 
generally  hold  a  divorce  which  was  valid  where  granted,  and 
was  obtained  in  good  faith,  valid  everywhere.  Perhaps  it  may 
be  said  that  the  tendency  of  American  law  is  towards  a  recog- 
nition of  a  divorce  obtained  in  another  State,  for  causes  which 
would  be  sufficient  ground  for  divorce  in  the  State  whose  tri- 
bunal tries  the  question,  but  not  otherwise.  For  the  courts  of 
each  State  go  behind  a  cause  of  divorce  in  another  State,  so 
far  as  to  inquire  into  the  sufficiency  of  the  cause ;  but  not  so  far 
as  to  deny  the  existence  of  the  cause,  if  ascertained  by  a  com- 
petent tribunal,  on  a  regularly  conducted  trial. 


of  the  process  of  the  court,  or  that  the  de- 
fendant appears  and  submits  to  ffie  suit. 
This  is  the  firmly  established  doctrine  both 
in  England  and  America."  As  authori- 
ties for  this  rule,  he  cites  Conway  v.  Beaz- 
lev,  3  Hagg.  Eccl.  R.  631  ;  Rex  v.  Lol- 
ley,  Russ.  &  Ry.  Cr.  Cas.  237  ;  Sugden 
V.  Lolley,  2  Clark  &  F.  567,  n. ;  Fellows 
V.  Fellows,  8  N.  H.  160;  Hanover  v. 
Turner,  14  Mass.  227;  Barber  v.  Root, 
10  Mass.  260  ;  Pawling  v.  Bird,  13  Johns. 
192;  Jackson  v.  Jackson,  1  Johns.  424; 
Bradshaw  v.  Heath,  13  Wend.  407;  ]Ma- 
guire  V.  Maguirc,  7  Dana,  181  ;  Tolen  v. 
Tolen,  2  Bhukf.  407  ;  Freeman  v.  Free- 
man, 3  West.  liaw  Journ.  475  ;  White  v. 
White,  5  N.  II.  476.  — "2.  To  entitle  the 
court  to  take  jinnsdiction,  however,  it  is 
sufficient  that  one  of  the  parties  be  domi- 
ciled in  tiie  country;  it  is  not  necessary 
that  botli  should  tie,  nor  that  the  citation, 
when  the  domiciled  party  is  plaintiff,  should 
he  served  personally  ui)on  the  defendant, 
if  such  personal  service  cannot  be  made." 
Ilarteau  c.  Ilartcau,  14  Pick.  181 ;  Harding 
V.  Alden,  9  Greeid.  140;  Mansfield  v. 
Mclntyn;,  10  Oliio,  27;  Tolen  v.  Tolen, 
2  Blackf.  407;  Hull  v.  Hull,  2  Strobh. 
Eq.  174. — "3.  The  place  where  the  of- 
fence was  committed,  whether  in  the  coun- 
try in   wliicii  tiic   suit   is   brought,  or  a 

[110] 


foreign  country,  is  quite  immaterial.  This 
is  the  universal  doctrine  ;  it  is  the  same  in 
the  English,  Scotch,  and  American  courts, 
and  there  is  no  conflict  upon  the  point.  — 
4.  The  domicil  of  the  parties,  at  the  time 
the  offence  was  committed,  is  of  no  con- 
sequence ;  the  jurisdiction  depends  upon 
their  domicil  at  the  time  the  proceeding  is 
instituted,  and  judgment  rendered.  A 
contrary  doctrine  has  been  maintained  in 
New  Hampshire  and  Pennsylvania,  in 
which  States  it  is  held  that  the  tribunals 
of  the  country  in  which  the  parties  were 
domiciled  when  the  delictum  occurred,  have 
alone  the  jurisdiction."  In  support  of  the 
New  Hampshire  and  Pennsylvania  rule, 
he  cites  Clark  v.  Clark,  8  N.  H.  21 ;  Fra- 
ry  V.  Frary,  10  id.  61  ;  Smith  v.  Smith,  12 
id.  80  ;  Greenlaw  v.  Greenlaw,  id.  200  ; 
Batchelder  v.  Batchelder,  14  id.  380 ;  Dor- 
sey  I'.  Uorsey,  7  Watts,  349  ;  HoUister  v. 
Hollistcr,  6  Pcnn.  St.  449.  — "5.  It  is 
immaterial  to  this  question  of  jurisdiction, 
in  what  country,  or  under  Avhat  system  of 
divorce  laws  the  marriage  was  contracted. 
—  6.  The  view  we  have  taken  is  in  no  way 
controlled  by  that  provision  in  the  United 
States  Constitution  which  prohibits  the 
States  from  i)assing  laws  impairing  the 
obligation  of  contracts."  See  Bishop  on 
IMarriage  and  Divorce,  §  721,  cl  seq. 


CH.  II.]  THE  LAW   OF   PLACE.  *118 


SECTION    IX. 

FOREIGN  JUDGMENTS. 

The  principle  that  questions  which  have  been  distinctly  set- 
tled by  litigation  shall  not  be  again  litigated,  has  been  in  *many 
cases  extended  to  foreign  jiidgnnents  ;  and  although  the  whole 
law  on  this  subject  is  not  perhaps  definitely  settled,  (h)  it  may 
be  considered  as  the  rule,  both  in  England  and  in  this  country, 
that  a  question  settled  abroad,  by  courts  of  competent  jurisdic- 
tion, between  actual  parties,  after  trial,  will  not  be  opened  at 
home,  (i)  It  will  be  presumed  that  all  the  defences  which  the 
losing  party  has,  were  made,  and  were  insufficient.  But  it  may 
be  said  that  the  foreign  judgment  will  not  be  entitled  to  this 
respect  when  it  appears  that  the  foreign  law*or  foreign  process, 
on  which  the  foreign  judgment  rested,  conflicts  with  reason  and 
justice  ;  (j)  or  that  the  foreign  court,  in  deciding  a  question  de- 
pending more  or  less  upon  the  law  of  that  other  country  in 
which  the  foreign  judgment  comes  under  consideration,  is  found 
to  have  mistaken  the  law  of  that  country,  [k)  And  it  is  ob- 
viously essential  to  the  application  of  the  general  rule,  that  the 
foreign  judgment  be  definite,  exact,  final,  and  conclusive,  in  the 
court  and  country  in  which  it  was  rendered.  (/)  Nor  can  it  be 
necessary  to  say  that  if  the  foreign  judgment  can  be  shown  to 
have  been  obtained  by,  or  to  be  founded  upon,  fraud,  it  can 
have  no  force. 

On  the  general  ground  stated  above,  a  collection  by  a  foreign 
attachment  or  trustee  process,  in  a  foreign  country,  is  a  bar.  (m) 

(h)  Smith  V.  Nicolls,  7  Scott,  147,  167.  Cowan  v.  Braidwood,  12  Scott,  N.  R.  138  ; 

(i)  Henderson  v.  Henderson,  6  Q.  B.  Ferguson   v.  Mahon,  11    A.  &  E.   179; 

288;  Smith  u.  Lewis,  3  Johns.  157;  Em-  Alivon  v.  Furnival,  1   Cromp.  M.  &  R. 

ory  V.  Greenough,  3  Dall.  369,  372,  n.  277. 

In  Burrows  v.  Jemino,  Stra.  733,  a  for-         (k)  Novclli  v.  Rossi,  2  B.  &  Ad.  757. 
eign  decree  avoiding  the  acceptance  of  a         (/)  Sadler  v.   Robins,    1    Camp.    253 ; 

bill  of  exchange  was  held  good.  Maule  v.  Murraj',  7  T.  R.  470. 

ij)  Henderson  v.  Henderson,  6  Q.  B.         {in)  Holmes  v.  Remsen,  4  Johns.  Ch. 

288,  298;  Vallee  v.  Dumergue,  4  Exch.  460,  20  Johns.  229  ;  M'Daniel  v.  Hughes, 

290;  Reynolds  v.  Fenton,  3  C.  B.  187;  3  East,  367  ;  Philips  v.  Hunter,  2  H.  Bl. 

[117] 


119^ 


THE  LAW   OF   CONTRACTS. 


[part  II. 


So  the  pendency  of  a  foreign  attachment  or  trustee  process  in  a 
foreign  country  may  be  pleaded  in  abatement,  (n)  *But  the 
pendency  of  a  suit  in  a  foreign  country,  which  began  by  process 
against  the  person,  has  not  the  same  force  with  a  foreign  at- 
tachment ;  and  will  not  abate  a  suit  at  home,  before  the  foreign 
suit  is  carried  to  judgment,  (o)     And  an  action  brought  in  this 


402.  In  Hull  V.  Blake,  13  Mass.  153,  in 
an  action  by  the  indorsee  of  a  promissory 
note  against  tlie  maker,  the  defendant 
pleaded  in  bar  a  judgment  rendered  against 
him  by  a  county  court  in  the  State  of 
Georgia,  having  jurisdiction  of  the  cause, 
as  the  garnishee  or  trustee  of  the  promisee, 
the  defendant  having  in  the  said  cause  dis- 
closed the  said  note  ;  the  action,  in  which 
such  judgment  was  rendered,  having  been 
commenced  after  the  actual  indorsement 
of  the  note  to  the  present  plaintiif ;  and 
the  plea  was  holden  to  be  a  good  bar.  And 
see  Gould  v.  Webb,  4  Ellis  &  B.  933,  30 
Eng.  L.  &  Eq.  331,  which  was  an  action 
of  assumpsit  to  recover  damages  for  the 
breach  of  a  special  contract,  made  by  de- 
fendant to  pay  plaintiff  a  certain  salary  as 
European  correspondent  of  a  newspaper 
called  the  "  New  York  Courier  and  En- 
quirer." The  declaration  also  contained 
the  common  counts.  The  defendant, 
among  other  things,  pleaded  as  to  50/., 
part  of  the  plaintiff's  demand  in  the  money 
counts,  tliat  an  action  had  been  brought 
against  the  plaintiff  in  the  Supreme  Court 
of  New  York,  for  a  sum  exceeding  50/.  ; 
that  process  duly  issued  out  of  said  court, 
and  executed  on  the  defendant,  the  said 
sum  of  50/.,  due  and  owing  from  defend- 
ant to  plaintiff,  was  attaclied  in  defend- 
ant's liands  according  to  the  laws  of  said 
State,  to  satisfy  the  demand  in  the  action  ; 
that  judgment  was  afterwards  recovered 
in  the  said  court,  and  executi(jn  was  issued 
to  the  slieriff  of  New  York,  whereuiion  the 
defendant  was  obliged  by  tlie  laws  of  the 
State  to  ])ay,  and  did  pay  over  to  the 
sheriff,  the  value  of  the  said  sum  of  50/., 
deducting  tlie  necessary  ex])enses  of  tlic 
attaclimeiit.  The  plea  further  alleged  that 
the  defendant  and  tlie  plaintilT  were  citi- 
zens of  the  said  State,  and  the  defendant 
was  n.'sideiit  tlien.-,  and  subject  to  the  juris- 
diction and  process  of  the  said  court;  and 
that  l)y  the  laws  of  tlie  State  llie  defend- 
ant was  discharged  and  acipiitted  of  tlic 
said  sum  of  50/.  I/r/d,  up(jn  ileinurrer, 
that  the  plea  was  suflicient,  and  a  good 
defence  pro  tdiilo.     See  also,  the  reporter's 

[118] 


learned  note  to  Andrews  v.  Herriot,  4 
Co  wen,  521. 

{n)  Embrce  v.  Hanna,  5  Johns.  101. 
In  this  case  the  defendant  pleaded  a  for- 
eign attachment  pending  in  Maryland  for 
the  same  demand.  And  Ke7it,  C.  J.,  said : 
"  If  the  defendant  would  have  been  pro- 
tected under  a  recovery  had  by  virtue  of 
the  attachment,  and  could  have  pleaded 
such  recovery  in  bar,  the  same  principle 
will  support  a  plea  in  abatement  of  an  at- 
tachment pending,  and  commenced  prior 
to  the  present  suit.  The  attachment  of 
the  debt  in  the  hands  of  the  defendant 
fixed  it  there,  in  favor  of  the  attaching 
creditors  ;  the  defendant  could  not  after- 
wards lawfully  pay  it  over  to  the  plaintiff. 
The  attaching  creditors  acquired  a  lien 
upon  the  debt,  binding  upon  the  defend- 
ant ;  and  which  the  courts  of  all  other 
governments,  if  they  recognize  such  pro- 
ceedings at  all,  cannot  fail  to  regard.  Qui 
prior  est  tempore  potior  est  jure.  In  Brook 
V.  Smitli,  1  Salk.  280,  Lord  Holt  held  that 
a  foreign  attachment  before  writ  purchased 
in  the  suit,  was  pleadable  in  abatement. 
If  we  were  to  disallow  a  plea  in  abatement 
of  the  pending  attaclnnent,  the  defendant 
would  be  left  without  protection,  and  be 
obliged  to  pay  the  money  twice  ;  for  we 
may  reasonably  presume,  that  if  the  pri- 
ority of  file  attachment  in  Maryland  be 
ascertained,  the  courts  in  that  State  would 
not  suffer  that  proceeding  to  be  defeated, 
by  the  subsequent  act  of  the  defendant 
going  abroad,  and  subjecting  himself  to  a 
suit  ami  recovery  here."  And  see  Wheeler 
V.  llaymond,  8  Cowen,  311. 

(o)"Howne  c.  Joy,  9  Johns.  221.  In  this 
case  the  defendant  pleaded  the  pendency 
of  another  action,  between  the  same  par- 
ties and  for  the  same  cause,  in  the  cora- 
monwealtii  of  Massachusetts.  And  upon 
demurrer,  judgment  was  given  for  the 
])laintifl'.  The  court  said  :  "  Tlie  excep- 
tlo  rei  judicata',  applies  only  to  final  defini- 
tive sentences  abroad,  U]ion  the  merits  of 
the  case.  Goix  i\  Low,  1  Johns.  Cas.  345. 
Nor  is  this  analogous  to  the  case  of  the 
pendency  of  a  prior  foreign  attachment,  at 


en.  II.] 


THE    LAW    OF    PLACE. 


-119 


country  directly  on  a  foreign  judgment,  for  the  purpose  of  en- 
forcing it,  may  be  defeated  by  evidence  going  to  set  that  judg- 
ment aside.  Indeed,  according  to  the  weight  of  authority,  it  is 
no  more  than  prima  facie  evidence,  when  an  action  is  brought 
to  enforce  it ;  but  where  an  action  is  brought  for  a  cause  of 
action  which  was  litigated  abroad  between  the  same  parties, 
then  the  foreign  judgment  against  such  cause  of  action  is  a  bar 
to  the  new  action  brought  at  home.  []>) 


the  suit  of  a  third  person,  for  here  the  de- 
fendant wouhl  not  be  obliged  to  pay  the 
money  twice,  since  payment  at  least,  if  not 
a  recovery,  in  the  one  suit,  might  be 
pleaded  pins  darrein  continuance  to  the 
other  suit ;  and  if  the  two  suits  sliould 
even  proceed  pari  passu  to  judgment  and 
execution,  a  satisfaction  of  either  judg- 
ment might  be  shown  upon  audita  querela, 
or  otherwise,  in  discharge  of  the  other." 
In  Maule  v.  Murray,  7  T.  R.  470,  a  for- 
eign judgment  was  disregarded,  because  it 
was  taken  subject  to  a  case  which  had  not 
then  been  decided,  in  respect  to  the 
amount. 

(p)  This  distinction  is  clearly  stated 
by  Etjre,  C.  J.,  in  Philips  v.  Hunter,  2  H. 
Bl.  410.  "  It  is,"  said  he,  "in  one  way 
only  that  the  sentence  or  judgment  of  the 
court  of  a  foreign  state  is  examinable  in 
our  courts,  and  that  is,  when  the  party 
who  claims  the  benefit  of  it  applies  to  our 
courts  to  enforce  it.  When  it  is  thus  vol- 
untarily submitted  to  our  jurisdiction,  we 
treat  it,  not  as  obligatory  to  the  extent  to 
which  it  would  be  obligatory,  perhaps,  in 
the  country  in  which  it  was  pronounced, 
nor  as  oliligatory  to  the  extent  to  which, 
by  our  law,  sentences  and  judgments  are 
obligatory,  not  as  conclusive,  but  as  matter 
in  pais,  as  consideration  prima  Jiicie  suffi- 
cient to  raiye  a  promise  ;  we  examine  it,  as 
we  do  all  other  considerations  of  promises, 
and  for  that  purpose  we  receive  evidence 
of  what  the  law  of  the  foreign  state  is,  and 
whether  the  judgment  is  warranted  by 
that  law.  In  all  other  cases,  we  give  en- 
tire faith  and  credit  to  the  sentences  of 
foreign  courts,  and  consider  them  as  con- 
clusive upon  us."  Lord  Nottinriham,  in 
Cottington's  case,  2  Swanst.  326,  n.,  and 
Loi-d  Ilardiciche,  in  Boucher  v.  Lawson, 
Cas.  Temp.  Hardw.  89,  seem  to  hold 
that  the  foreign  judgment  is  conclusive, 
for  all  purposes.  And  see  Roach  r.  Gar- 
van,  1  Ves.  Sen.  157.  But  £'y;e'.s  distinc- 
tion is  maintained  by  Lord  Mansfield,  iu 


Walker  v.  "Witter,  Doug.  1  ;  and  hvBulIer, 
J.,  in  Galbraith  v.  Neville,  Doug.  6,  n.  (3) ; 
and  in  Houlditch  v.  Donegal,  8  Bligli,  337, 
Lord  Broiir/hain  gives  his  reasons  at  length 
for  holding  a  foreign  judgment  to  be  only 
prima  facie  evidence.  And  see  Herbert  i'. 
Cook,'Willes,  36,  n.;  Hall  v.  Odber,  11 
East,  118;  Bayley  w.  Edwards,  3  Swanst. 
703.  But  Lord  Kenijon,  in  Galbraith  v. 
Neville,  cited  above,  doubts  whether  a 
foreign  judgment  be  not  conclusive  in 
English  courts ;  and  Lord  Ellenborongh  at 
least  implies  a  similar  doubt  in  Tarleton 
r.  Tarleton,  4  M.  &  S.  20;  and  Sir  L. 
ShadiceU,  in  Martin  v.  Nicolls,  3  Sim.  458, 
rejected  this  distinction  altogether,  and 
therefore  allowed  a  demurrer  to  a  bill  for 
a  discovery  and  a  commission  to  examine 
witnesses  abroad  in  aid  of  the  plaintiff's 
defence  to  an  action  brought  in  England 
on  a  foreign  judgment.  The  law  on  this 
subject  cannot  be  considered  as  settled  in 
England;  but  from  Smith  v.  Nicolls,  5 
Bing.  N.  C.  208,  it  may  perhaps  be  infer- 
red that  in  an  action  on  a  foreign  judg- 
ment, the  judgment  is  only  prima  facie 
evidence.  It  is  believed  that  in  this  coun- 
try this  distinction  has  been  regarded  in 
practice,  but  the  reported  adjudications  do 
not  authorize  us  to  speak  of  it  as  estab- 
lished here.  See  Cummings  v.  Banks,  2 
Barb.  602,  where  the  question  is  discussed 
by  Edmonds,  J.  In  Boston  India  E.  F. 
r.'Hoit,  14  Vt.  92,  it  was  held  that  debt 
and  not  assumpsit  should  be  brought  on 
the  judgment  of  another  State ;  and  in 
Noyes  v.  Butler,  6  Barb.  613,  a  judgment 
in  another  State  was  held  conclusive  as  to 
all  facts  but  those  which  went  to  show  the 
jurisdiction  of  the  court  rendering  the 
judgment.  It  must  be  remembered,  how- 
ever, that  the  question  does  not  stand  in 
this  country,  as  between  the  courts  of  the 
several  States,  in  the  same  position  in 
which  it  stands  in  England,  as  between  the 
courts  of  that  country  and  those  of  foreign 
countries,  by  reason  of  the  intervention  of 

[119] 


120-121* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


The  very  first  essential  to  this,  or  to  any  efficacy  of  a  foreign 
judgment,  is  that  the  court  by  which  it  is  pronounced  has  un- 
questionable jurisdiction  over  the  case,  (q)     And  if  *the  origin 


our  constitutional  provisions.  Judgments 
rendered  in  any  State  have  generally  the 
same  force  and  effect  in  all  other  States  as 
in  that  in  which  they  are  rendered.  See, 
for  an  account  of  the  decisions  on  this 
subject,  Robinson  v.  Prescott,  4  N.  H. 
450;  1  Kent,  Com.  260,  261.  See  also, 
Downer  v.  Shaw,  2  Foster,  277. 

(7)  Buchanan  v.  Rucker,  9  East,  192; 
Thurber  v.  Blakbourne,  1  N.  li.  242; 
Bissell  t'.Briggs,  9  Mass.  462;  Aldrich  v. 
Kinney,  4  Conn.  380  ;  Shumway  v.  Still- 
man,  6  Wend.  447;  Curtis  v.  Gibbs,  1 
Penning.  399;  Don  v.  Lippman,  f>  Clark 
&  F.  20  ;  Rogers  v.  Coleman,  Hardin,  413  ; 
Borden  r.  Fitch,  15  Jolins.  121  ;  Benton 
V.  Burgot,  10  S.  &  R.  240.  And  see  the 
reporter's  note  to  Andrews  i'.  Hcrriot,  4 
Cowen,  524.  From  Mills  v.  Duryee,  7 
Cranch,  481,  apparently  confirmed  by 
Chief  Justice  Marshall,  in  Hampton  v. 
M'Connell,  3  Wheat.  234,  it  might  seem 
to  be  the  established  law  of  this  country, 
that  a  judgment  recovered  in  one  State  by 
a  citizen  thereof,  against  a  citizen  of  an- 
other, was  absolute  and  final,  and  per- 
fectly exclusive  of  all  inquiry  into  the 
jurisdiction  of  the  court  wliich  rendered 
the  judgment.  But  this  question  was  very 
fully  considered  in  Bissell  v.  Briggs,  9 
Mass.  462  ;  and  it  was  there  held  that  a 
court  of  another  State  must  have  had  juris- 
diction of  the  parties,  as  well  as  of  tlie 
cause,  for  its  judgment  to  be  entitled  to 
the  full  faitli  and  credit  mentioned  in  the 
federal  constitution.  The  same  question 
was  again  fully  considered  in  Hall  r.  Wil- 
liams, 6  Pick.  232,  wliich  was  debt  on  a 
judgment  of  tlie  Superior  Court  in  Geor- 
gia ;  and  it  was  held  that  the  defendant, 
under  the  plea  of  nil  dchct,  might  show  that 
the  court  had  no  jurisdiction  over  his  per- 
son. And  Parker,  C.  J.,  in  delivering  the 
judgment  of  the  court,  said  :  "  It  cannot 
be  pretended,  we  think,  that  a  citizen  of 
Massachusetts,  against  whom  a  judgment 
may  iiave  been  rendered  in  Illinois  or 
Missouri,  ho  never  liaving  been  within  a 
thousanil  miles  of  those  States,  should  be 
coni|)i'll((l  by  our  courts  to  execute  that 
judgment,  it  not  a])])eariiig  l)y  the  record 
tliat  lie  received  any  manner  of  notice  that 
any  suit  was  |)ending  there  against  liim, 
and  lieing  reaily  to  show  that  he  never  liad 
any  dealings  with  the  party  wiio  has  ob- 

[120] 


tained  the  judgment;  and  yet  this  must 
be  the  consequence,  if  the  doctrine  con- 
tended for  by  some  is  carried  to  its  full 
length,  namely,  that  the  record  of  a  judg- 
ment is  to  have  exactly  the  same  effect 
here  as  it  would  have  in  Illinois  or  Mis- 
souri ;  for  in  those  States,  if  the  process 
has  been  served  according  to  their  laws, 
which  may  be  in  a  manner  quite  consistent 
with  an  utter  ignorance  of  the  suit  by  the 
party  without  the  State,  the  judgment 
would  be  binding  there  until  reversed  by 
some  proceedings  recognized  by  their  laws. 
If  it  be  said  that  a, party  thus  aggrieved 
may  obtain  redress  by  writ  of  error  or  a 
new  trial,  in  the  State  where  the  judgment 
was  rendered,  it  is  a  sufficient  answer,  that 
never  having  been  within  their  jurisdiction, 
or  amenable  to  their  laws,  he  shall  not  be 
compelled  to  go  from  home  to  a  distant 
State,  to  protect  himself  from  a  judgment 
which  never,  accoi'ding  to  universal  prin- 
ciples of  justice,  had  any  legal  operation 
against  him.  The  laws  of  a  State  do  not 
operate,  except  upon  its  own  citizens,  ex- 
tra territorium  ;  nor  does  a  decree  or  judg- 
ment of  its  judicial  tribunals,  except  so 
far  as  is  allowed  by  comity,  or  required  by 
the  constitution  of  the  United  States  ;  and 
neither  of  these  can  be  held  to  sanction  so 
unjust  a  principle.  If  the  States  were 
merely  foreign  to  each  other,  we  have  seen 
that  a  judgment  in  one  would  not  be  re- 
ceived in  another  as  a  record,  but  merely 
as  evidence  of  debt,  controvertible  by  the 
party  sued  upon  it.  By  the  constitution, 
such  a  judgment  is  to  have  the  same  effect 
it  would  have  in  tlie  State  where  it  was 
rendered,  that  is,  it  is  to  conclude  as  to 
every  thing  over  which  tlic  court  which 
rendered  it  had  jurisdiction.  If  the  prop- 
erty of  a  citizen  of  another  State,  witliin 
its  lawful  jurisdiction,  is  condemned  by 
lawful  process  there,  the  decree  is  final 
and  conclusive.  If  the  citizen  himself  is 
there,  and  served  with  process,  he  is  bound 
to  appear  and  make  his  defence,  or  submit 
to  the  conscfiuenccs ;  but  if  never  there, 
there  is  no  jurisdiction  over  his  person, 
and  a  judgment  cannot  follow  liim  l)eyond 
tlie  territories  of  the  State,  and  if  it  does 
he  may  treat  it  as  a  nullity,  and  the  courts 
here  will  so  treat  it,  when  it  is  made  to 
ajjpear  in  a  legal  way  that  he  was  never  a 
proper  subject  of  the  adjudication.     These 


en.  II.] 


THE    LAW    OF    PLACE. 


122 


of  this  jurisdiction  do  not  appear,  or  if  it  be   of  the  ordinary 
kind  admitted  among  civilized  nations,  and  established  *in  an 


principles  were  settled  in  a  most  lucid  and 
satisfactory  course  of  reasoning  by  Chief 
Justice  Parsons,  in  tlie  opinion  of  the 
court  delivered  by  him  in  the  case  of  Bis- 
scU  i>.  Briggs,  9  Mass.  462.  And  see 
Dobson  V.  Pearce,  2  Kern.  156.  This 
exposition  of  the  constitutional  provision 
respecting  the  records  and  judicial  pro- 
ceedings, authenticated  as  tlie  act  of  Con- 
gress requires,  takes  a  middle  ground  be- 
tween the  doctrine  as  held  by  the  court  of 
this  State,  in  the  case  of  Bartlett  v.  Knight, 
1  Mass.  401,  and  by  the  coui't  of  New 
York  in  the  case  of  Hitchcock  v.  Aick- 
cn,  1  Caines,  460,  in  both  of  which  it 
was  held  that  the  Constitution  and  act 
of  Congress  had  produced  no  other  ef- 
fect than  to  establish  definitively  the  mode 
of  authentication,  leaving  in  other  respects 
such  judgments  entirely  upon  the  footing 
of  foreign  judgments,  according  to  the 
principles  of  the  common  law.  But  in 
the  case  of  Bissell  v.  Briggs,  the  principle 
settled  is  that  by  virtue  of  the  provision 
of  the  constitution,  and  the  act  of  legisla- 
tion under  it,  a  judgment  of  another  State 
is  rendered  in  ,a!l  respects  like  domestic 
judgments,  when  the  court  where  it  was 
I'ecovered  had  jurisdiction  over  the  subject 
acted  upon  and  the  person  against  whom 
it  was  rendered,  leaving  open  for  incjuiry 
in  the  court  where  it  was  sought  to  be 
enforced  the  question  of  jurisdiction,  and 
taking  the  obvious  distinction  between  the 
effect  of  the  judgment  v\\^o\\  property  within 
the  territory,  and  the  person  who  was  with- 
out it.  It  was  tliought  that  this  was  cai-- 
rying  the  sanctity  of  judgments  of  other 
States  as  far  as  was  consistent  with  the 
safety  of  the  citizen  who  was  not  amenable 
to  their  laws,  and  as  far  as  is  required  by 
the  spirit  or  letter  of  the  constitution  of  the 
United  States.  The  doctrine  thus  estab- 
lished here  has  been  approved  and  adopted 
by  the  courts  of  the  great  States  of  Penn- 
sylvania and  New  York,  in  both  of  which 
before,  it  had  been  held,  that  the  judg- 
ments of  the  several   States  were  to  be 

treated  as  foreign  judgments 

The  principle  upon  which  this  exception 
is  made  to  the  conclusiveness  in  every 
particular  of  the  judgments  of  other  States, 
is  well  expressed  by  Mr.  Justice  Johnson, 
of  the  Supreme  Court  of  the  United 
States,  when  dissenting  from  the  decision 
of  the  court  in  the  case  of  Mills  v.  Dur- 

VOL.  II.  11 


yee.  He  says  it  is  an  eternal  principle  of 
justice,  'that  jurisdiction  cannot  be  justly 
exercised  by  a  State  over  property  not 
within  the  reach  of  its  process,  or  over 
persons  not  owing  them  allegiance,  or  not 
subjected  to  their  jurisdiction  by  being 
found  within  their  limits.'  Indeed,  so 
palpable  is  this  principle,  that  no  doubt 
could  exist  in  the  mind  of  any  lawyer 
upon  the  subject,  but  for  the  construction 
supposed  to  be  given  to  the  constitution 
of  the  United  States,  and  the  act  of  Con- 
gress following  it,  in  the  case  of  Mills  v. 
Duryee,  7  Cranch,  481,  and  resanctioned 
in  the  case  of  Hampton  v.  M'Connel,  3 
Wheat.  234,  in  the  brief  opinion  delivered 
by  Chief  Justice  Marshall.  This  con- 
struction, when  first  referred  to  in  this 
court  in  the  case  of  the  Commonwealth  v. 
Green,  was  supposed  to  have  put  an  end 
to  all  questions  on  this  subject,  and  to 
have  established,  as  the  law  of  the  land, 
that  a  judgment  recovered  in  one  State 
by  a  citizen  thereof,  against  a  citizen  of 
anotlier,  was  absolute  and  incontroverti- 
ble, and  would  admit  of  no  inquiry,  even 
as  to  the  jurisdiction  of  the  court  which 
rendered  it.  This  court  yielded  a  painful 
deference  to  the  decision,  without  that 
close  examination  it  would  have  received 
if  presented  to  them  otherwise  than  inci- 
dentally, and  if  its  bearing  had  been  of 
importance  in  the  case  then  before  the 
court;  but  the  notice  taken  of  the  case 
was  merely  the  expression  of  opinion  ar- 
guendo, and  not  a  judicial  determination 
of  the  question.  And  as  a  further  reason 
for  not  receiving  the  doctrine  implicitly 
as  authority,  it  may  be  remarked  that  the 
case  to  winch  it  was  applied  was  one 
clearly  within  the  jurisdiction  of  the  court 
which  decided  it,  s6  that  the  point  now 
raised  was  not  brought  into  question. 
.  .  • .  .  .  The  case  of  Mills  v.  Dur- 
yee has,  as  its  importance  merited,  under- 
gone a  revision  in  almost  every  State 
court  in  the  Union  of  whose  decisions  we 
have  any  printed  account,  and  the  opinion 
has  been  unanimous,  without  the  dissent- 
ing voice,  so  far  as  we  can  learn,  of  a 
single  judge,  that  that  case,  however  un- 
qualified it  may  appear  in  the  report,  does 
not  warrant  the  conclusion,  that  judg- 
ments of  State  courts  are  in  all  respects 
the  same,  when  carried  into  another  State 
to  be  enforced,  as  they  are  in  the  State 

[121] 


123* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


authentic  manner,  it  will  be  presumed  to  be  legitimate;  if,  how- 
ever, it  be  of  unusual  origin  or  character,  *or  not  yet  certainly 
established,  then  its  legitimacy  must  be  proved  by  the  party 
relying  upon  it.  (r)  It  is  not,  however,  necessary  that  the 
authority  on  which  the  jurisdiction  of  the  tribunal  rests,  should 
be  proved  to  be  legitimate  de  jure  as  well  as  de  facto.  It  is 
generally  enough  if  it  be  de  facto  established,  and  the  tribunal 
be  commissioned  by  the  government  in  which  the  sovereign 
power  of  the  country  is  actually  vested,  [s) 

Another  essential  is,  that  the  defendant  in  the  foreign  action 
had  such  personal  notice  as  enabled  him  to  defend  himself;  or 
that  his  interests  were  otherwise  actually  and  in  good  faith  pro- 
tected, [t)  And  the  notice  must  be  such  as  .the  court  from 
which  it  issued  has  authority  to  give.  («) 


■wherein  they  are  rendered,  but  that  in  all 
instances  the  jurisdiction  of  the  court  ren- 
derinfr  the  judoment  may  be  inquired  into. 
In  truth  all  of  them  sanctioning  the  prin- 
ciples, and  some  of  them  by  express  refer- 
ence, which  were  asserted  by  this  court  in 
the  case  of  Bisscll  v.  Briggs,  as  the  only 
just  exposition  of  the  provision  in  the 
constitution  of  the  United  States  in  rela- 
tion to  tlie  records  and  judicial  proceed- 
ings of  States With  such 

a  cloud  of  witnesses  in  favor  of  the  con- 
struction given  to  the  clause  of  the  consti- 
tution wiiicli  is  in  question  by  this  court 
in  the  case  of  Bissell  v.  Briggs,  we  may 
well  rest  upon  that  as  the  true  construc- 
tion, if  it  is  not  most  clearly  and  explicitl}^ 
overruled  by  the  only  tribunal  whose 
autliority  ought  to  be  submitted  to,  the 
Supreme  Court  of  the  United  States.  But 
notwithstanding  all  these  decisions,  many 
of  which  arc  subsequent  in  point  of  time 
to  the  case  of  Mills  v.  Durycc,  ami  most 
of  them  commenting  on  it,  we  should  be 
bound  to  give  up  the  ))oint,  if  that  case 
settles  the  ((ucstion  as  conchisively  as  it 
has  been  sujqiosed  it  did.  But  all  the 
State  juilges  who  have  considercil  that 
case  are  of  opinion  that  it  was  intended 
only  to  embrace  judgments  where  the  de- 
fendant bad  been  a  party  to  tlie  suit,  by 
an  actual  appearance  and  defence,  or  at 
least  by  having  l)etn  duly  served  with 
process  wIk'ii  within  tlie  jinisdiction  of  the 
court  wliicli  gave  it,  and  tliey  formed  tiicir 
opinion  upon  the  following  cbmse  in  the 
ojiinioM  of  Mr.  Justice  Stori/,  nuinely:  — 

[122] 


'In  the  present  case  the  defendant  had 
full  notice  of  the  suit,  for  he  was  arrested 
and  gave  bail,  and  it  is  beyond  all  doubt 
that  the  judgment  of  the  Supreme  Court 
of  New  York  was  conclusive  upon  the 
parties  in  that  State.'  If  this  is  all  that 
was  intended  to  be  decided,  the  case  har- 
monizes with  the  general  course  of  decis- 
ions in  the  State  courts  as  before  cited, 
and  it  is  in  no  respect  different  from  the 
decision  of  this  court  in  the  case  of  Bissell 
V.  Briggs."  That  the  doctrine  of  the  two 
preceding  cases  is  now  the  established  doc- 
trine throughout  the  country,  see  the  au- 
thorities cited  at  the  end  of  the  preceding 
note.  See  also,  Monroe  v.  Douglas,  4 
Sandf.  Ch.  126.  In  this  very  long  and 
interesting  case  the  whole  doctrine  of  the 
law  of  foreign  judgments  is  examined 
with  great  ability.  And  see  Gleason  v. 
Dodd,  4  Met.  333 ;  D'Arcy  v.  Ketehum, 
11  How.  165. 

(?•)  Sncll  V.  Foussat,  3  Binn.  239,  n. ; 
Cheriot  r.  Foussat,  id.  220. 

(s)  Bank  of  Korth  America  v.  M'Call, 
4  Binn.  371. 

(t)  Sec  ante,  p.  100,  n.  (A),  and  supra, 
n.  (7). 

(u)  Therefore,  where  a  court  in  Rhode 
Island  ordered  ])ersoiKil  notice  to  be  given 
a  defendant  in  Massachusetts,  which  was 
done,  it  was  not  such  a  notice  as  would 
sullice  for  the  fouiulation  of  a  judgment 
on  wJiich  an  action  could  I)0  niuintaitied 
in  Massachusetts.  Ewer  v.  Coihn,  1  Cush. 
23. 


CH.  II.]  THE   LAW   OF  PLACE.  *124 

It  seems  to  be  held  that  a  plaintiff  who  has  recovered  a  judg- 
ment abroad  may  elect  to  sue  at  home  on  that  judgment,  or  on 
the  original  cause  of  action,  because  there  is  no  merger,  [v) 

The  relations  between  the  several  States  of  the  Union  are 
peculiar.  In  some  respects  they  are  held  to  be  foreign  to  each 
other,  as  they  are  for  most  purposes  in  the  law  of  admiralty ; 
and  in  other  respects  not  foreign,  excepting  so  far  as  this  is 
necessarily  implied  in  their  independence  of  each  other.  On 
this  subject  the  Constitution  of  the  United  States  declares,  that 
"  full  faith  and  credit  shall  be  given  in  each  *  State  to  the  public 
acts,  records,  and  judicial  proceedings  of  every  other  State. 
And  the  Congress  may,  by  general  laws,  prescribe  the  manner 
in  which  such  acts,  records,  and  proceedings  shall  be  proved, 
and  the  effect  thereof"  (iv)  In  execution  of  this  power,  the 
first  congress  passed  a  statute,  providing  "  that  the  records  and 
judicial  proceedings  of  the  courts  of  any  State  shall  be  proved 
or  admitted  in  any  other  court  within  the  United  States  by  the 
attestation  of  the  clerk,  and  the  seal  of  the  court  annexed,  if 
there  be  a  seal,  together  with  a  certificate  of  the  judge,  chief 
justice,  or  presiding  magistrate,  as  the  case  may  be,  that  the 
said  attestation  is-in  due  form.  And  the  said  records  and  judi- 
cial proceedings,  authenticated  as  aforesaid,  shall  have  such 
faith  and  credit  given  to  them  in  every  court  within  the  United 
States  as  they  have  by  law  or  usage  in  the  courts  of  the  State 
from  whence  the  said  records  are  or  shall  be  taken."  (x) 

In  the  construction  of  these  clauses,  many  questions  have 
been  raised,  and  a  great  diversity  of  opinion  manifested.  The 
more  important  of  these  questions  we  have,  however,  already 
considered. 

It  has  been  held  that  the  provisions  of  the  statute  must  be 
strictly  complied  with.  Thus,  it  will  be  noticed  that  the 
records  are  to  be  attested  by  the  seal  of  the  court,  "  if  there  be 
a  seal ; "  therefore  the  records  of  a  court  not  having  a  seal 
may  be  sufficiently  attested  otherwise.  But  there  is  no. similar 
phraseology  as  to  the  attestation  of  the  clerk ;  that  is  therefore 

(v)  Smith  V.   Nicolls,   5   Bing.  N.    C.         (x)  1    U.  S.  Stats,  at  Large,  122,  ch. 
208;  Hall  v.  Odber,  11  East,  118.  xxxvii. 

(w)  Art.  4,  sec.  1. 

[123] 


125*  THE  LAW   OF   CONTRACTS.  [PART  II. 

absolutely  requisite  ;  and  consequently  the  proceedings  of  a 
court  which  has  no  clerk,  as  a  court  held  by  a  justice  of  the 
peace,  cannot  be  authenticated  in  the  terms  of  the  statute,  and 
therefore  cannot  be  entitled  to  the  whole  privilege  which  pur- 
ports to  be  given  by  the  clause  in  the  constitution,  (y) 

*  There  remains  to  be  considered  the  operation  of  the  law  of 
place  upon  the  insolvent  laws  of  this  country.  But  these  laws 
are,  in  this  respect,  principally  influenced  and  affected  by  the 
clause  in  the  constitution  which  forbids  the  several  States  from 
passing  laws  impairing  the  obligation  of  contracts,  and  we 
shall  advert  to  this  subject  when  we  speak  specifically  of  that 
clause,  and  of  the  law  of  bankruptcy. 

{y)  This  question  is  very  fully  consid-  and  Silver  Lake  Bank  v.  Harding,  5  Ohio, 

ered  in  Snyder  v.  Wise,  10  Penn.  St.  157  ;  545.     But,  for  cases  which  incline  to  an 

and  the   decision    there  is  in  accordahce  opposite  opinion,  see  Bissell  v.  Edwards, 

with  the  text,  and  with  Warren  v.  Flags,  5  Day,  363  ;    Starkweather  v.  Loring,  2 

2  Pick.  448 ;  Robinson  v.  Prescott,  4  N.  Vt.  573 ;   and  Blodgett  v.  Jordan,  6  id. 

H.  450  ;  Mahurin  v.  Bickford,  6  id.  567  ;  580. 

[124] 


CH.  in.] 


DEFENCES. 


126-*127 


CHAPTER   III. 


DEFENCES. 


Sect.  I.  —  Payment  of  Money. 

1.   Of  the  party  to  lohom  payment  should  he  made. 

Payment  to  an  agent  in  the  ordinary  course  of  business  binds 
the  principal,  unless  the  latter  has  notified  the  debtor  before- 
hand that  he  requires  the  payment  to  be  made  to  himself,  (c) 
And  sometimes  a  payment  to  the  debtor^s  own  agent  suffices,  [a) 
So  payment  to  an  attorney  is  as  effectual  as  if  made  to  the 
principal  himself;  [b)  but  not  so  to  an  *agent  of  the  attorney 


(s)  Favenc  v.  Bennett,  11  East,  36; 
Hornby  v.  Lacy,  6  M.  &  S.  166  ;  Drink- 
water  V.  Goodwin,  Cowp.  251.  So  if  one 
allows  an  agent  to  trade  in  his  own  name, 
and  as  carrying  on  business  for  himself, 
payment  to  such  agent  is  a  bar  to  an 
action  by  the  piincipal.  Gardiner  v.  Da- 
vis, 2  C.  &  P.  49.  And  see  Coates  v. 
Lewis,  1  Camp.  444  ;  Moore  v.  Clement- 
son,  2  id.  24.  And  in  Capel  v.  Thornton, 
3  C.  &  P.  352,  it  was  ruled  by  Lord  Ten- 
terden  that  an  agent  authorized  to  sell 
goods  has,  in  the  absence  of  advice  to  the 
contrary,  an  implied  autliority  to  receive 
payment.  But  see  Jackson  v.  Jacob,  5 
Scott,  79  ;  Blackburn  v.  Scholes,  2  Camp. 
343. 

{a)  Horsfall  v.  Fauntleroy,  10  B.  &  C. 
755.  In  this  case  the  plaintiff,  who  was 
an  importer  of  ivory,  had  caused  cata- 
logues to  be  circulated,  stating  that  a 
quantity  of  ivory  was  to  be  sold  on  his 
account  on  a  certain  day  by  auction,  sub- 
ject to  the  condition,  among  others,  that 
payment  was  to  be  made  on  delivery  of 
the  bills  of  parcels.  The  defendant,  hav- 
ing received  one  of  the  catalogues,  in- 
structed his  broker  to  purchase  certain 
lots  on  his  account.     The  broker  did  so, 

11* 


and  shortly  after  drew  bills  on  the  defend- 
ant for  the  amount,  which  were  accepted 
and  paid  at  maturity.  In  an  action  by 
the  plaintiff  against  the  defendant  for  the 
price  of  the  ivory,  the  court  held  that  the 
payment  of  the  bills  drawn  b)'  the  broker 
constituted  a  good  defence,  inasmuch  as 
the  plaintiff,  by  the  condition  of  sale  con- 
tained in  his  catalogues,  had  authorized 
the  defendant  to  believe  that  the  ivory 
had  been  paid  for  by  the  broker  on  de- 
livery of  the  bills  of  parcels. 

(6)  Powell  V.  Little,  1  W.  Bl.  8  ;  Yates 
V.  Freckleton,  2  Doug.  623 ;  Hudson  v. 
Johnson,  1  Wash.  Va.  10 ;  Branch  v. 
Burnley,  1  Call,  147.  And  an  attorney 
has  authority  to  receive  payment  as  well  af- 
ter judgment  has  been  recovered  as  before. 
Brackett  v.  Norton,  4  Conn.  517  ;  Erwin 
V.  Blake,  8  Pet.  18;  Gray  v.  Wass,  1 
Greenl.  257 ;  Lewis  v.  Gamage,  1  Pick. 
347.  But  an  attorney  has  no  authority 
to  receive  any  thing  but  money  in  pay- 
ment of  his  client's  debt,  nor  a  part  in 
satisfaction  of  the  whole,  nor  to  assign 
the  execution.  Savoury  v.  Chapman,  8 
Dowl.  656  ;  Jackson  v.  Bartlett,  8  Johns. 
361  ;  Kellogg  v.  Gilbert,  10  id.  220;  Car- 
ter V.   Talcot,  10   Vt.    471;    GuUett  v. 

[125] 


128* 


THE   LAW   OP   CONTRACTS. 


[part  II. 


appointed  by  the  attorney  to  sue  the  debtor,  (c)  And  where 
one  contracts  to  do  work  and  sues  for  the  price,  the  defendant 
may  prove  that  the  plaintiff  had  a  partner  in  the  undertaking, 
and  that  he  has  paid  that  partner,  (d)  Payment  to  the  credi- 
tor's ivife  will  not  be  a  good  payment ;  (e)  unless  she  was  his 
agent,  either  expressly  or  by  course  of  business.  (/)  She  has 
no  authority,  as  wife,  to  receipt  for  her  husband's  claims,  al- 
though she  be  the  meritorious  cause,  (g-)  An  auctioneer  or 
other  agent  employed  to  sell  real  estate  has  no  implied  authority 
to  receive  payment.  (//)  In  case  of  sales  by  auction,  the  auc- 
tioneer has  usually  by  the  conditions  of  sale  authority  to  re- 
ceive the  deposit,  but  not  the  remainder  of  the  purchase- 
money,  (i) 

One  may  be  justified  in  making  payments  to  a  party  who  is 
sitting  in  the  creditor's  counting-room,  and  apparently  intrusted 
with  the  transaction  of  the  business  and  authorized  to  receive 
the  money,  although  he  be  not  so  in  fact,  (j)  In  general  it  is 
only  a  money  payment  that  binds  the  principal ;  (k)  so  that  he 
is  not  affected  by  any  claim  which  the  debtor  may  have  against 
the  agent.  (/)     And  an  agent  authorized  *to  receive  payment  in 


Lewis,  3  Stew.  23  ;  Kirk  v.  Glover,  5 
Stew.  &  P.  340 ;  Wilson  v.  Wadleigh,  36 
Me.  496. 

(c)  Yates  i'.  Freckleton,  2  Doug.  623. 
For  an  attorney  at  law,  by  virtue  of  his 
ordinary  pour-rs,  cannot  delegate  his  au- 
thority to  another,  so  as  to  raise  a  privity 
between  such  tliird  person  and  liis  princi- 
pal, or  to  confer  on  him  as  to  the  princi- 
pal, his  own  rights,  duties,  and  obliga- 
tions. Johnson  v.  Cunningliam,  1  Ala. 
249;  Kellogg  v.  Norris,  5  Eng.  Ark.  18. 
So  payment  to  a  sherifi"  employed  by  an 
attorney  to  serve  a  writ  will  not  discharge 
the  di'bt.  Green  v.  Lowell,  3  Greenl. 
373;   Waite  v.  Delcsdernier,  1.^  Me.  144. 

{il)  Shcpard  v.  Ward,  8  Wend.  .')42. 
And  it  is  a  general  rule  tliat  jjayment  to 
one  partntT  is  good,  and  binds  the  firm. 
Duff  V.  The  Kast  India  Co.  15  Vcs.  198; 
Yandes  v.  Ix'favour,  2  lUaekf  371  ;  (iregg 
V.  James,  IJrecse,  107  ;  Porter  i\  Tnylor, 
f.  M.  &  S.  l.'if.  ;  Scott  ('.  Trent,  1  Wash. 
Va.  77.  lOven  lifter  dissolution.  King*;. 
Smith,  4  (J.  &  P.  108.  And  see  JMorse 
V.  IJellowH,  7  N.  II.  ."iOH.  So  payment  to 
one  of  two  joint  creditors   is  good,  al- 

[12G] 


though  they  are  not  partners  in  business. 
Morrow  v.  Starke,  4  J.  J.  Marsh.  367. 

(e)  Offley  r.  Clav,  2  Scott,  N.  R.  372. 

(/)  Spencer  v.'  Tisue,  Addis.  316 ; 
Seaborne  v.  Blackston,  2  Frecm.  178; 
Thrasher  v.  Tuttlc,  22  Me.  335. 

(q)  Offley  V.  Clav,  supra.' 

(It)  Mynn  r.  Joliffe,  1  Moody  &  E.  326. 

(/)  Mynn  v.  Joliffe,  supra;  Sykcs  v. 
Giles,  5  M.  &  W.  645. 

(,;■)  Barrett  v.  Deere,  Moody  &  M.  200. 
Anil  see  Wilmot  ?;.  Smith,  id.  238  ;  Mof- 
fat V.  Parsons,  5  Taunt.  307.  But  pay- 
ment to  an  apprentice  not  in  the  usual 
course  of  the  creditor's  business,  liut  on  a 
colhiteral  transaction,  has  been  held  not  to 
discharge  the  debt,  although  made  at  the 
creditor's  counting-room.  Sanderson  v. 
Bell,  2  Cromp.  &  M.  304. 

(/.:)  Thorold  v.  Smith,  11  ]\Iod.  71. 

(/)  Tims,  where  an  assured  who  resided 
at  Plymmiili  employed  an  insurance  broker 
in  Loudon  to  recover  a  loss  from  the  un- 
derwriters, and  the  latter  adjusted  the  loss 
by  setting  olV  in  account  against  it  a  debt 
du(!  from  liim  to  tlie  underwriters  for  pre- 
miums, and  the  broker  became  bankrupt, 


en.  III.] 


DEFENCES. 


*129 


money  cannot  bind  his  principal  by  receiving  goods,  (m)  or  a 
bill  or  note,  (n) 

Payment  by  bankers  to  one  of  several  persons  who  have 
jointly  deposited  money  with  them,  and  who  are  not  partners, 
or  to  one  of  several  joint  trustees,  does  not  discharge  the 
bankers  as  to  the  others,  unless  they  had  authorized  the  pay- 
ment, (o)  And  payment  to  one  of  two  or  more  joint  creditors 
of  a  part  of  the  debt  does  not  so  alter  the  nature  of  the  debt  as 
to  permit  the  other  creditors  to  sue  alone  for  the  remainder,  (p) 
But  payment  to  one  of  several  executors  is  held  to  be  suffi- 
cient, (q)  Whether  payment  to  one  of  several  assignees  of  a 
bankrupt  is  sufficient,  may  be  doubtful ;  it  seems  clear  that  it 
is  not,  if  shown  to  have  been  against  the  will  of  the  co-as- 
signees, (r)      In  general,  a  payment  to  a  *  trustee  is  effectual 


and  never  paid  the  money  to  the  assured, 
it  was  held  that  the  set-oiF  in  account  be- 
tween the  underwriters  and  the  broker 
was  not  payment  to  the  assured,  inasinudi 
as  the  broker  had  only  authority  to  re- 
ceive payment  in  nionev.  Bartlett  v. 
Penthnd,  10  B.  &  C.  760." 

(?«)  Howard  v.  Chapman,  4  C.  &  P. 
508. 

(n)  Svkes  i'.  Giles,  5  M.  &  W.  645; 
Ward  v'.  Evans,  2  Ld.  Raym.  928.  And 
see  Townsend  v.  Inglis,  Holt,  N.  P.  278. 
But  qimre  whether,  in  those  States  where 
the  giving  of  a  negotiable  promissory 
note  is  regarded  as  prima  fade  payment, 
an  agent  would  not  be  authorized  to  re- 
ceive payment  by  such  bill  or  note. 

(o)  Innes  v.  Stephenson,  1  Moody  & 
K.  145.  The  depositors  here  were  co- 
assignees  of  a  bankrupt,  and  the  money 
had  been  drawn  out  on  the  check  of  two 
out  of  three  depositors,  but  the  name  of 
one  of  the  two  was  forged.  Lord  Tenter- 
den  said  "  that  the  case  was  a  very  clear 
one  ;  that  money  was  paid  to  bankers  by 
three  persons,  not  partners  in  trade  ;  that 
it  had  been  stated  that  one  of  them  could 
draw  checks  so  as  to  bind  the  others,  but 
that  was  not  the  law,  and  to  allow  it 
would  defeat  the  very  object  of  paying 
the  money  in  jointly ;  and  it  must  be  well 
known  to  the  jury  that  it  Mas  not  the 
practice,  unless  the  persons  drawing  stood 
in  the  relation  of  partners."  And  see  to 
the  same  effect  Stone  v.  Marsh,  Eyan 
&  M.  364.  But  this  rule  as  to  bankers 
is  peculiar.     "  It  is  a  general  rule,"  says 


]\[r.  Justice  MauJe,  "that  a  man  may  pay 
a  debt  to  one  of  several  persons  with 
whom  he  has  contracted  jointly.  In  the 
case  of  a  banker  he  cannot  do  so  ;  but 
that  arises  from  the  particular  contract 
which  exists  between  him  and  his  cus- 
tomer." Husband  v.  Davis,  10  C.  B.  645, 
4  Eng.  L.  &  Eq.  342. 

(/))  Hatsall  V.  Griffith,  4  Tyrwh.  488. 
In  this  case  two  of  three  part-owners  of 
a  vessel,  acting  for  themselves  and  the 
other  part-owner,  employed  an  agent  to 
sell  the  whole  vessel.  He  did  so,  and  paid 
the  two  their  proportion  of  the  proceeds. 
The  other  part-owner  brought  an  action 
against  the  agent  to  recover  his  proportion. 
It  was  held  that  he  could  not  sue  alone,  as 
the  agent  was  employed  by  all  the  owners. 
The  case  of  Garret  v.  Taylor,  1  Esp.  117, 
contra,  is  not  law.  See  ante,  vol.  1,  p.  29, 
n.  But  this  rule  does  not  apply  in  cases 
founded  upon  tort.  Sedgworth  v.  Over- 
end,  7  T.  R.  279. 

(q)  "Because,"  says  Lord  Hardwicke, 
"  they  have  each  a  power  over  the  whole 
estate  of  the  testator,  and  are  considered 
as  distinct  persons."  Can  v.  Read,  3  Atk. 
695. 

(r)  In  Can  v.  Read,  supra,  if  the  report 
is  correct,  Lord  Hardwicke  stated  in  gen- 
eral terms  that  payment  to  one  assignee 
would  not  be  a  discharge  without  a  receipt 
from  the  others  also.  In  Smith  v.  Jame- ' 
son,  1  Esp.  114,  Lord  Kcnjpn  ruled,  at 
Nisi  Prius,  that  one  assignee  of  a  bank- 
rupt estate  might  receive  the  money  be- 
longing to  the  estate,  and  give  a  legal  and 

[127] 


129- 


THB   LAW   OF   CONTRACTS. 


[part  n. 


against  his  cestui  que  trust  at  law,  even  in  cases  where  it  would 
be  relieved  against  in  equity,  [s) 

If  one  of  several  plaintiffs,  or  a  nominal  plaintiff  suing  for 
the  benefit  of  another,  discharge  the  debt  by  a  collusive  receipt, 
without  payment  of  money,  a  court  of  law  will  prevent  the 
defendant  from  availing  himself  thereof,  on  application  by  the 
plaintiff",  made  as  soon  as  may  be  after  a  knowledge  of  the 
fraud,  [t) 

2.    Of  part  payment. 

It  has  been  said  that  the  payment  of  a  part  of  a  debt,  or  of 
liquidated  damages,  is  no  satisfaction  of  the  whole  debt,  even 


valid  discharge  for  it.  Afterwards  in 
Bristow  V.  Eastman,  1  Esp.  172,  the  same 
question  was  presented  to  Lord  Keni/on 
again.  That  was  an  action  of  assumpsit 
for  money  had  and  received,  brought  by 
the  assignees  of  a  bankrupt.  At  the  trial 
the  defendant  produced  a  receipt  from  one 
of  tlie  assignees.  But  upon  its  being 
shown  tliat  it  had  been  given  against  the 
■will  of  the  co-assignee,  the  learned  judge 
said,  "  that  all  the  rights  of  property  of 
the  bankrupt  centred  in  the  assignees, 
and  though  the  act  of  one  in  receiving 
part  of  the  bankrupt  estate  might,  if  foirly 
done,  bind  tlie  estate  by  any  discharge  he 
might  give  for  it,  that  it  could  never  be, 
that  where  one  assignee  had  sliown  his 
express  dissent  that  the  other  might  give 
a  receipt,  binding  on  the  estate ;  as  such  a 
construction  would  enable  one  assignee  to 
dissipate  and  destroy  the  estate,  in  despite 
of  his  brother  trustee."  See  also,  Wil- 
liams V.  Walsby,  4  Esp.  220;  Steward  v. 
Lee,  Moody  &  M.  158. 

(s)  This  is  because  the  cestui  que  trust  is 
obliged  to  proceed  in  a  court  of  law  in 
the  name  of  tlie  trustee,  and  as  a  court  of 
law  can  only  consider  the  i)arties  on  the 
record,  whatever  is  an  answer  as  to  the 
trustee  is  an  answer  to  the  action.  Gil)son 
V.  Winter,  .'3  B.  &  Ad.  9G.  In  modern 
times,  however,  courts  of  law  have  been 
in  tiic  habit  of  exercising  an  cquitalilo 
jurisdiction  on  motion,  an(l  jjrcventing  a 
defendant  from  availing  himself  of  such  a 
defence,  unjustly.     See  tlie  next  note. 

(t)  Barker  (;.  llichnrdson,  1  Young  &  J. 
302;  J.ci-ii  V.  Leigh,  1  B.  &  1*.  447  ;  In- 
ncll  V.  Newman,  4  B.  &  Aid.  410  ;  Mount- 
stcphcn  V.   Brook,    1   Cliitty,  3'JO;  Man- 

[128] 


ning  V.  Cox,  7  J.  B.  Moore,  617  ;  Johnson 
V.  Holdsworth,  4  Dowl.  P.  C.  63 ;  Payne 
V.  Rogers,  Doug.  407  ;  Hiekey  v.  Burt, 
7  Taunt.  48  ;  Alner  v.  George,  1  Camp. 
392;  Strong  v.  Strong,  2  Aikens,  373; 
Green  v.  Beatty,  Coxe,  142.  But  a  re- 
lease from  one  of  several  plaintiffs  will 
not  be  set  aside,  unless  a  clear  case  of 
fraud  is  made  out  between  the  releasor  and 
the  releasee.  Fraud  upon  the  releasor, 
alone  is  not  a  sufficient  ground  for  calling 
upon  the  equitable  jurisdiction  of  the  court, 
since  that  may  be  replied.  Wild  v.  Wil- 
liams, 6  M.  &  W.  490.  "  If  such  a  re- 
lease," says  Baron  Parke,  Phillips  v. 
Chxgett,  11  M.  &  W.  93,  "is  a  fraud  in 
point  of  law  upon  one  of  the  parties  to  it, 
the  court  would  not  interfere  ;  that  is  the 
proper  subject  for  a  replication  ;  they  can 
only  interfere  when  it  is  a  fraud  on  third 
persons,  and  when  a  court  of  equity 
would  clearly  set  aside  the  release,  not 
merely  a«  between  the  parties  one  of  whom 
releases,  but  where  they  would  set  it 
aside  as  against  the  defendant."  So  in 
the  still  later  case  of  Rawstorne  v.  Gan- 
dell,  1 5  M.  &  W.  304,  the  rule  was  laid 
down  that  the  court  will  not  set  aside  a 
plea  of  a  release  by  one  of  .several  co- 
]ilainti(l's,  unless  it  is  clearly  shown  to 
iiave  been  made  in  fraud  of  the  other 
plaintifis,  or  uidcss  the  releasor  be  a  mere 
nominal  jiarty  to  the  action,  having  no 
interest  whatever  in  the  subject-matter  of 
it.  In  the  case  of  Alner  v.  George, 
1  Camp.  302,  Lord  Ellcnborough  ruled 
that  this  C(|uituble  jurisdiction  could  not 
be  exercised  by  a  single  judge  at  Nisi 
Prius. 


en.  III.] 


DEFENCES. 


130-*131 


where  the  creditor  agrees  to  receive  a  part  for  the  whole,  and 
gives  a  receipt  for  the  whole  demand ;  and  a  plea  of  payment 
of  a  small  sum  in  satisfaction  of  a  larger  is  bad  even  after  ver- 
dict, (u)  But  this  rule  must  be  so  far  qualified  as  not  to  in- 
clude the  common  case  of  a  payment  of  a  debt  by  a  fair  and 
well  understood  compromise,  carried  faithfully  into  effect,  even 
though  there  were  no  release  under  seal,  [v)     *Some  exceptions 


(u)  Pinncl's  case,  5  Rep.  117  ;  Cumber 
V.  Wane,  Stra.  426  ;  Thomas  v.  Hea- 
thorn,  2  B.  &  C.  477;  Fitch  v.  Sutton,  5 
East,  230 ;  Blanchard  v.  Noyes,  3  N.  H. 
518;  Wheeler  v.  AVhecler,  11  Vt.  60; 
Bailey  v.  Day,  26  Me.  88;  Down  t'. 
Hatcher,  10  A.  &  E.  121  ;  Geiser  v. 
Kershner,  4  Gill  &  J.  305  ;  Watkinson  v. 
Inglesby,  5  Johns.  386 ;  Dcderick  v.  Le- 
man,  9  Johns.  333  ;  Seymour  r.  Minturn, 
17  Johns.  169;  Eobbins  v.  Alexander,  11 
How.  Pr.  Rep.  100;  Hinckley  v.  Arey, 
27  Me.  362.  But  it  has  been  held  tha^t, 
upon  a  plea  of  payment,  the  acceptance  of 
a  less  sum  may  be  left  to  the  jury  as  evi- 
dence that  the  rest  has  been  paid.  Hen- 
derson V.  Moore,  5  Cranch,  11  ;  Blan- 
chard V.  Noyes,  3  N.  H.  518. — Payment 
of  a  debt  alone,  without  the  costs,  made 
after  suit  brought,  is  not  a  good  payment 
to  bar  the  action.  Costs  with  nominal 
damages  may  still  be  recovered,  at  least 
up  to  the  time  of  payment.  Stevens  v. 
Briggs,  14  Vt.  44;  Goings  v.  Mills,  1 
Pike,  Ark.  11.  And  see  Horsburgh  v. 
Orme,  1  Camp.  558,  note;  Godard  v. 
Benjamin,  3  Camp.  331 ;  Goodwin  v. 
Cremer,  18  Q.  B.  757,  16  Eng.  L.  & 
Eq.  90  ;  Kemp  v.  Balls,  10  Exch.  607,  28 
Eng.  L.  &  Eq.  498.  So  if  two  actions  be 
commenced  on  a  bill  or  note  against  sep- 
arate parties,  and  the  debt  and  costs  in 
one  suit  be  paid,  this  is  not  such  a  pay- 
ment as  will  defeat  the  other  action,  but 
the  plaintiff  is  entitled  to  nominal  dam- 
ages and  costs.  Randall  v.  Moon,  12  C. 
B.  261,  14  Eng.  L.  &  Eq.  243;  Goodwin 
V.  Cremer,  supra,  and  editor's  note.  But 
in  Beaumont  v.  Greathead,  3  Dowl.  &  L. 
P.  C.  631,  it  was  held  that  payment  and 
acceptance  of  the  amount  of  a  promissory 
note  after  it  becomes  due,  and  when  the 
holder  is  entitled  to  nominal  damages,  will 
support  a  plea  of  payment  and  acceptance 
in  discharge  of  the  debt  and  damages ; 
and  that  consequently  the  holder,  after 
such  payment  and  acceptance,  cannot 
maintain  an  action  for  such  nominal  dam- 
ages.   And  per  Made,  J.,  "  The  point  is, 


whether,  after  default  on  a  simple  con- 
tract for  £50,  in  respect  of  which  the 
defendant  is  liable  to  nominal  damages,  if 
the  party  accept  that  sum,  he  can  after- 
wards sue  for  those  nominal  damages.  I 
think  he  cannot.  Those  nominal  dam- 
ages, in  fiict,  are  introduced  solely  for  a 
technical  purpose,  because  the  statute  of 
Gloucester  (6  Ed.  1,  ch.  1,  s.  2)  says 
'  damages ; '  and  are,  in  effect,  only  a 
peg  to  hang  costs  on.  The  creditor,  for 
example,  says,  you  owe  me  a  debt  of  £50, 
and  a  nominal  sum  ;  the  debtor  thereupon 
takes  out  £50  and  pays  it  to  him,  saying 
here  is  the  £50  debt  and  the  nominal  sum. 
That  nominal  sum  means  in  fact  no  sura 
at  all ;  it  is  not  merely  an  insignificant 
sum,  but  a  sum  which  does  not  exist,  ia 
point  of  quantity,  at  all.  It  has  a  mere 
fictitious  existence;  and  therefore,  I  say, 
a  man  may  well  receive  £50  in  satisfac- 
tion and  discharge  of  a  debt  of  £50,  and 
nominal  damages."  And  see  Cooper  v. 
Parker,  15  C.  B.  823,  29  Eng.  L.  &  Eq. 
241. 

(r)  Milliken  v.  Brown,  1  Rawle,  391. 
There  a  creditor  «f  three  joint  debtors  ac- 
cepted from  one  of  them  one  third  of  the 
debt  with  intent  to  exonerate  him.  This 
was  held  to  operate  as  a  release  as  to  him, 
and  therefore  as  to  the  other  two  also. 
Huston,  J.,  said:  "There  was  a  time  in 
the  history  of  the  law,  when,  like  every 
thing  else  of  that  day,  it  was  a  system  of 
metaphysics  and  logic ;  and  when  the 
cause  was  decided  without  the  slightest 
regard  to  its  justice,  solely  on  the  techni- 
cal accuracy  of  the  pleaders  on  the  several 
sides  ;  defect  of  form  in  the  plea  was  defect 
of  right  in  him  who  used  it.  This  period 
of  juridical  history,  however,  was  in  some 
respects  distinguished  by  great  men,  of 
great  learning,  and  abounds  with  informa- 
tion to  the  student.  At  the  time  I  speak 
of,  payment  of  debt  and  interest  on  a 
bond,  the  next  day  after  it  fell  due,  was 
no  defence  in  a  court  of  law;  nay,  it  was 
no  defence  to  prove  payment  without  an 
acquittance  before  the  day;  nav,  if  you 

[129] 


132* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


to  the  rule  have  always  been  acknowledged ;  as  if  a  part  be 
paid  before  all  is  due,  (w)  or  in  a  way  more  beneficial  to  the 
creditor  than  that  prescribed  by  the  contract ;  (x)  here  it  is  said 
there  is  a  new  consideration  for  the  release  of  the  whole  debt. 
And  if  a  stranger  pay  from  his  own  money,  or  give  his  own 
note,  for  a  part  of  a  debt  due  from  another,  in  consideration  of 
a  discharge  of  the  whole,  such  discharge  is  good,  (y) 

*If  a  creditor  by  his  own  act  and  choice  compel  a  payment  of 


pleaded  and  proved  a  payment,  which 
was  accepted  in  full  of  the  debt,  yet  you 
failed  unless  your  plea  stated  that  you 
paid  it  in  full,  as  well  as  that  it  was  ac- 
cepted in  full ;  or  perhaps  because  you 
pleaded  it  as  a  payment,  when  you  ought 
to  have  pleaded  it  as  an  accord  and  satis- 
faction. An  act  of  parliament  or  two, 
and  the  constant  interference  of  the  Court 
of  Chancery,  granting  relief,  have  changed 
this  in  a  great  measure ;  but  it  is  not  a 
century  since  it  was  solemnly  decided, 
that  if  a  creditor,  finding  his  debtor  in 
failing  circumstances,  and  being  afraid  of 
losing  his  debt,  proposed  to  give  him  a 
discharge  in  full  if  he  paid  half  the  money, 
and  the  debtor  borrowed  the  money  and 
paid  the  one  half  on  the  day  the  bond  fell 
due,  and  got  an  acquittance  in  terms  as 
explicit  as  the  English  language  could 
afford,  yet,  if  sued,  he  must  pay  the  rest 
of  the  debt ;  for  it  was  impossible,  say  the 
court,  payment  of  part  could  be  a  satis- 
faction of  the  whole ;  but,  if  part  was  paid 
before  the  day,  it  was  a  good  satisfaction 
of  the  M-hoIe.  I  mention  this  not  from  a 
general  disrespect  to  the  law  or  lawyers 
of  the  days  I  speak  of,  but  for  another 
purpose.  It  has,  alas !  become  too  com- 
mon for  men  of  good  character  and  prin- 
ciples, but  who  trade  on  borrowed  capital, 
to  fail,  and  tlicir  creditors  are  glad  to 
receive  fifty  cents  in  the  dollar,  and  give 
a  discharge  in  full ;  and  I  do  not  know 
the  lawyer  who  would  be  hardy  enough 
to  deny  the  validity  of  such  discharge, 
although  given  after  tlie  money  was  due, 
and  although  the  discharge  was  not  under 
seal,  or  altiioiigli  it  might  be  doubtful 
v/iictlicr  it  could  more  properly  be  called 
a  reccijit  or  a  release,  or  a  eovenant  never 
to  sue,  if  the  meaning  can  be  certainly 
aKcertaincd,  and  no  fraud,  concealment, 
or  mistake  at  the  giving  it,  it  is  eireeliial. 
It  avails  little,  then,  to  go  back  to  the  last 
century,  or  furiher,  to  cite  cases  in  wliich 


a  matter  was  of  validity  or  effect  accord- 
ing as  it  was  couched  in  this  or  that  form. 
Universally  the  law  is,  or  ought  to  be, 
that  the  meaning  or  intention  of  the  par- 
ties is,  if  it  can  be  distinctly  known,  to 
have  effect,  unless  the  interition  contra- 
venes some  well-established  principle  of 
law." 

(iv)  Pinnel's  case,  5  Rep.  117;  Brooks 
V.  White,  2  Met.  283 ;  Smith  v.  Brown,  3 
Hawks,  .580. 

{x)  As  if  the  debtor  give  his  own  nego- 
tiable note  for  part  of  the  debt.  Sibree  v. 
Tripp,  15  M.  &  W.  23,  where  the  cases 
of  Cumber  v.  Wayne,  1  Stra.  426,  and 
Thomas  v.  Heathorn,  2  B.  &  C.  477,  are 
somewhat  shaken.  Or  if  the  debtor  pay 
a  part  at  a  more  convenient  place  than 
stipulated  for  in  the  conti^act,  this  will  be 
a  good  satisfaction  for  the  whole,  if  so  re- 
ceived. Smith  V.  Brown,  3  Hawks,  580. 
So  if  the  debtor  give  and  the  creditor 
receive  a  chattel,  in  satisfaction  of  a  whole 
debt,  this  is  a  good  defence,  although  the 
chattel  may  not  be  of  half  the  value  of  the 
debt.  Andrew  i\  Boughey,  Dyer,  75,  a; 
Pinnel's  case,  5  Rep.  117;  and  see  Sibree 
V.  Tripp,  15  M.  &  W.  35,  Parke,  B. ; 
Brooks  V.  White,  2  Met.  285,  28G,  Dewey, 
J. ;  Jones  v.  Bullitt,  2  Litt.  49  ;  Douglass 
V.  White,  3  Barb.  Ch.  621.  So  if  the 
debtor  render  certain  services,  by  consent 
of  the  creditor,  in  full  payment  of  a  debt, 
this  is  a  good  discharge,  whatever  the 
nature  of  the  services.  Blinn  (•.  Chester, 
5  Day,  359.  Or  assign  certain  property. 
AVatkinson  i'.  Inglesi)y,  5  Johns.  386; 
Eaton  V.  Lincoln,  13  Mass.  424. 

(V)  Brooks  V.  White,  2  Met.  283  ;  Boyd 
?'.  llitchcock,  20  Johns.  76;  Kellogg  v. 
Ricliards,  14  Wend.  116;  Le  Rage  v. 
MeCrea,  1  Wend.  164;  Sanders  ;;.  Branch 
Bank,  13  Ala.  353;  Lewis  v.  Jones,  4  B. 
&.  C.  506;  Stcinman  v.  Magnus,  11  East, 
390. 


CH.  III.]  DEFENCES.  -132 

a  part  of  his  claim  by  process  of  law,  this  will  generally  oper- 
ate as  an  extinguishment  of  his  whole  claim,  under  the  rule 
that  he  shall  not  so  divide  an  entire  cause  of  action  as  to  give 
himself  two  suits  upon  it.  (z)  He  may  often  bring  his  action 
for  a  part ;  but  a  recovery  in  that  action  bars  a  suit  for  the 
remainder.  As  if  one  has  a  demand  for  three  articles  under 
one  contract,  and  sues  for  one,  he  cannot  afterwards  bring  his 
action  for  the  other  two.  This  has  been  carried  so  far,  that 
where  a  note,  given  as  security  for  a  sum  to  be  paid  by  instal- 
ments, was  sued,  and  judgment  recovered  for  the  instalments 
then  due,  it  was  held  that  the  note  could  not  afterwards  be  put 
in  suit  to  recover  the  remaining  instalments  when  they  fell 
due  ;  (a)  we  cannot  accept  this  however  as  a  general  rule  of  law. 
But  a  second  indorser  may  bring  one  action  against  a  prior 
indorser  for  moneys  paid,  and  a  second  action  for  moneys  sub- 
sequently paid,  (b) 

3.    Of  payment  hy  letter. 

Payment  is  often  made  by  letter;  and  the  question  arises, 
at  whose  risk  it  is  when  so  made.  This  must  depend  upon  cir- 
cumstances ;  but  in  general  the  debtor  is  discharged,  although 
the  money  do  not  reach  the  creditor,  if  he  was  directed  or  ex- 
pressly authorized  by  the  creditor  so  to  send  it,  or  if  he  can  dis- 
tinctly derive  such  authority  from  its  being  the  usual  course  of 
business  ;  but  not  otherwise,  (c) 

(s)  Ingraham  v.  Hall,  11  S.  &  E.  78;  separate  action  for  each  article.    Farring- 

Smith  r.  Jones,  15  Johns.  229;  Farring-  ton  r.  Payne,   15  Johns.  432.     But  the 

ton  V.  Payne,  id.  432  ;  Willard  v.  Speny,  general  rule  stated  in  the  text  must  be 

16  Johns.  12i ;  Phillips  v.  Berick,  id.  136.  confined  to  cases  where  the  claim  is  single 

So  assigning  a  part  of  his  claim  will  not  and   indivisible.     Phillips   v.  Berick,    16 

enable  a  creditor  to  subject  his  debtor  to  Johns.  136. 

two  suits.     Ingraham  v.  Hall,  11  S.  &  R.  (a)  Siddall  v.  Rawcliff,  1  Moody  &  R. 

78 ;  Cook  v.  The  Genesee  Mut.  Ins.  Co.  8  263.     We  should  have  much  doubt  of  this 

How.  Pr.  Rep.  514  ;  Field  v.  The  Mayor,  case  ;  for  it  is  every  day's  practice  to  bring 

&c.  of  New  York,  2  Seld.  179;  Palmer  v.  actions  on  notes  when  interest  is  payable 

Merrill,  6  Cush.  282.     Nor  can  a  creditor,  annually,  and  recover  the  same  from  year 

after  having  compelled  payment  of  a  part  to  year,  although  the  note  may  not  be  due 

of  his  claim  by  process  of  law,  avail  him-  for  many  years.     And  indeed  the  above 

self  of  the  residue  by  way  of  set-off  in  an  case  seems  to  have  been  decided  in  a  great 

action  against  him  by  the   other  party,  measure  on  the  ground  that  such  a  note 

Miller  v.  Covert,  1  Wend.  487.     And  the  was  a  fraud  on  tlie  stamp  acts. 

same  rule  applies  to  torts.     If  a  person  [b]  Wright  v.  Butler,  6  Wend.  284. 

by  one  and  the  same  act  convert  several  of  (c)  Warwick    v.   Noakes,    Peake,    67. 

the  plaintiff's  articles,  he  cannot  have  a  This  was  an  action  of  assumpsit  for  goods 

[131] 


133-134* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


4.    Of  payment  in  hank-bills. 

In  this  country,  where  paper-money  is  in  universal  use,  ques- 
tions often  arise  as  to  payments  made  in  that  way.  It  seems 
to  be  settled  that  a  payment  in  good  bank-bills,  not  objected  to 
at  the  time,  is  a  good  payment ;  and  so  is  a  tender  of  such 
bills ;  (d)  but  the  creditor  may  object  and  demand  *specie.  (e) 


sold  and  delivered,  and  money  had  and 
received.  The  plaintiff  was  a  hop  mer- 
chant, and  the  defendant  his  customer, 
living  at  Sherborne,  in  Dorsetshire.  The 
plaintiff  sold  him  hops,  and  also  sold  hops 
to  several  persons  in  tl)at  neighborhood  ; 
and  requested  the  defendant,  as  his  friend, 
to  receive  the  money  due  to  him  from  liis 
other  customers,  and  remit  him  by  the 
post  a  bill  for  those  sums,  and  also  the 
money  due  to  him  from  tlie  defendant 
himself.  A  bill  was  accordingly  remitted, 
but  the  letter  got  into  bad  hands,  and  the 
bill  was  received  by  some  third  person  at 
the  banker's  on  whom  it  was  drawn. 
Upon  this  evidence.  Lord  Kenyan  non- 
suited the  plaintiff,  and  said  :  "  Had  no 
directions  been  given  about  the  mode  of 
remittance,  still  this  being  done  in  the 
usual  way  of  transacting  business  of  this 
nature,  I  should  have  held  the  defendant 
clearly  discharged  from  the  money  he  had 
recei\ed  as  agent.  It  was  so  determined 
in  the  Court  of  Chancery  forty  years 
since ;  and  as  the  plaintiff  in  this  case 
directed  the  defendant  to  remit  the  whole 
money  in  tiiis  way,  it  was  remitted  at  the 
peril  of  the  plaintiff."  And  see  Kington 
V.  Kington,  1 1  M.  &  W.  233.  In  Wake- 
field V.  Litligow,  3  Mass.  249,  a  sheriff 
had  allowed  an  execution  in  his  liands  to 
lie  by  until  tlie  return  day  had  passed, 
and  tlie  creditor's  attorney  wrote  to  tlie 
slieriiV,  ])resuming  lie  iiad  collected  the 
money,  and  requested  liim  to  send  it  to 
him  by  mail.  At  that  time  the  siieriff  had 
not  n.ccived  tlie  money,  but  collecting  it 
several  iiiontlis  afterwards,  sent  it  by  mail 
to  the  jilaiiitil]"s  attorney,  to  whom,  liow- 
ever,  it  was  never  delivered.  It  was  held 
that  the  sheriff  was  liable  to  tlic  creditor, 
and  that  the  money  was  b'ent  at  his  own 
risk.  Otherwise,  if  tlie  money  had  been 
sent  iiiiniediati'ly  upon  receipt  of  the  at- 
torney's lctt(;r. —  \\']i(Mi  ])ayiiient  is  to  be 
made  by  letter,  care  should  be  taken  that 
tlic  letter  is  projicrly  directed,  or  it  will 
not  discharge  the  ilebtor.  Thus  in  AValter 
V.  llaynes,  Kyun  &  M.  140,  a  letter  was 

[132] 


put  into  the  office  directed  to  "  Mr.  Haynes, 
Bristol,"  and  this  was  held  to  be  insuf- 
ficient. And;  per  Ahhotf,  C.  J. :  "Where 
a  letter  fully  and  particularly  directed  to 
a  person  at  his  usual  place  of  residence  is 
proved  to  have  been  put  into  the  post- 
office,  this  is  equivalent  to  proof  of  a  de- 
livery into  the  hands  of  that  person ;  be- 
cause it  is  a  safe  and  reasonable  presump- 
tion that  it  reaches  its  destination  ;  but 
where  a  letter  is  addressed  generally  to  A. 
B.  at  a  large  tov/n,  as  in  the  present  case, 
it  is  not  to  be  absolutely  presumed,  from 
the  fact  of  its  having  been  put  into  the 
post-office^  that  it  was  ever  received  by  the 
party  for  whom  it  was  intended.  The 
name  may  be  unknown  at  the  post-office, 
or  if  the  name  be  known,  there  may  be 
several  persons  to  whom  so  general  an 
address  would  apply.  It  is  therefore 
always  necessary,  in  the  latter  case,  to 
give  some  further  evidence  to  show  that 
the  letter  did  in  firct  come  to  the  hands  of 
the  person  for  whom  it  was  intended." 
See  also,  Gordon  v.  Strange,  1  Exch.477. 
So  in  the  case  of  Hawkins  v.  Eutt,  Peake, 
186,  Lord  Kemjon  ruled  that  a  person  re^- 
mitting  money  by  the  post  should  deliver 
the  letter  at  the  general  post-office,  or  at  a 
receiving  house  ap])ointed  by  that  office, 
and  that  a  delivery  to  a  bell-man  in  the 
street  was  not  sufficient. 

(d)  Snow  V.  Perry,  9  Pick.  542  ;  Wgr- 
ren  v.  Mains,  7  Johns.  476  ;  Wheeler  v, 
Kraggs,  8  Ohio,  169  ;  Hovt  v.  Byrnes,  2 
Fairf.  475  ;  Tiley  i'.  Courtier,  2  Croinp.  & 
J.  16,  n. ;  Wright  v.  Keed,  3  T.  R.  554  ; 
Ball  ('.  Stanley,  5  Yerg.  199;  Polglass 
I'.  Oliver,  2  Cromp.  &  J.  15;  Brown  v. 
Saul,  4  Esp.  267  ;  Noo  r.  Ilodgcs,  3 
Humph.  162;  Seawell  v.  Ilcnry,  6  Ala. 
226. 

(e)  Coxo  V.  State  Bank,  3  Halst.  172  ; 
INIoody  V.  Mahurin,  4  N.  H.  296 ;  Don- 
aldson r.  Benton,  4  Dev.  &  Bat.  435. 
And  a  legal  tender  cannot  be  made  in 
copper  cents  under  the  constitution  of  the 
United  States.  M'Clariu  v.  Nesbit,  2  Nott 
&  M'C.  519. 


CII.  III.] 


DEFENCES. 


-134 


If  the  bills  are  forged,  both  in  England  and  in  this  country,  the 
payee  may  treat  them  as  a  nullity,  for  such  bills  are  not  what 
they  purport  to  be.  (/)  But  if  the  bills  are  true  and  genuine, 
the  responsibility  of  the  solvency  of  the  bank  would  seem  from 
some  cases  to  rest  upon  the  payee,  (g)  But  if  the  debtor  knew 
of  the  insolvency,  and  did  not  disclose  it,  or  if  he  might  have 
known  it,  and  his  ignorance  was  the  result  of  his  negligence,  he 
certainly  is  not  discharged  by  such  payment.  (A)  And  the  ma- 
jority of  our  cases  appear  to  take  the  ground  that  Avhere  bills  of 
a  bank  that  has  failed  are  paid  and  received  in  ignorance  of 
such  failure,  the  loss  falls  on  the  party  paying;  putting  such 
bills  on  the  same  footing  as  forged  bills,  and  as  equally  a  nul- 
lity. (?)     But  if  such  a  rule  were  adopted,  it  would  undoubtedly 


(/)  United  States  Bank  v.  Bank  of 
Georgia,  10  Wlieat.  333;  Markle  v.  Hat- 
field, 2  Jolins.  455 ;  Tliomas  v.  Todd,  6 
Hill,  340 ;  Hargrave  v.  Dusenbeny,  2 
Hawks,  326 ;  Anderson  v.  Hawkins,  3 
Hawks,  568  ;  Pindall  v.  The  Northwestern 
Bank,    7   Leigh,    617;  Mudd  v.  Eeeves, 

2  Harris  &  J.  368  ;  Wilson  v.  Alexander, 

3  Scam.  392  ;  Eagle  Bank  v.  Smith,  5 
Conn.  71  ;  Young  v.  Adams,  6  IMass. 
182;  Sims  v.  Clarke,  11  111.  137;  Rams- 
dale  V.  Horton,  3  Barr,  330 ;  Keene  v. 
Thompson,  4  Gill  &  J.  463.  See  also, 
ante,  vol.  1,  p.  220.  But  such  forged  notes 
(and  the  same  applies  to  forged  coin), 
must  be  returned  by  the  receiver  in  a 
reasonable  time,  or  he  must  bear  the 
loss.  Pindall  v.  The  Northwestern  Bank, 
7  Leigh,  617;  Sims  v.  Clarke,  11  111. 
137.  But  payment  made  to  a  bank, 
bona  fide,  in  its  own  notes,  which  are 
received  as  genuine,  but  afterwards  ascer- 
tained to  be  forged,  is  good,  and  the  bank 
must  bear  the  loss.  See  ante,  vol.  1,  p. 
220.  This  seems  to  be  on  the  ground  that 
the  bank,  or  its  officers,  having  superior 
means  of  determining  the  genuineness  of 
their  own  bills,  are  guilty  of  negligence  in 
receiving  them  without  examination.  But 
payment  to  a  bank  by  its  own  notes, 
which  have  been  stolen  from  such  bank,  is 
no  payment.  State  Bank  v.  Welles,  3 
Pick.  394. 

(q)  Lowrey  v.  Murrell,  2  Port.  280; 
Bayard  v.  Shunk,  1  Watts  &  S.  92; 
Scruggs  V.  Gass,  8  Yerg.  175.  Perhaps 
these  cases  rest  upon  the  ground  that  the 
identical  bills  given  and  received  were  re- 
ceived as  payment,  per  se,  whether  the}'- 

VOL.  II.  12 


were  good  or  bad.  Possibly  also,  there 
may  be  a  difference  between  bills  received 
in  payment  of  an  antecedent  debt  and  bills 
passed  in  payment  at  the  time  of  a  pui'- 
chase.  In  the  latter  case,  perhaps,  the 
doctrine  of  cai-ent  emptor  applies  to  the  re- 
ceiver of  the  bills,  as  well  as  to  the  pur- 
chaser of  the  goods.     Sed  qiicere. 

(/()  See  Commonwealth  ;;.  Stone,  4 
Met.  43. 

(/)  Wainwright  v.  Webster,  11  Vt. 
576;  Oilman  r.  Peck,  id.  516;  Fogg  v. 
Sawyer,  9  N.  H.  365  ;  Frontier  Bank  v. 
Morse,  22  Me.  88 ;  Lightbodv  v.  Ontario 
Bank,  11  Wend.  1,  13  Wend.  101; 
Houghton  V.  Adams,  18  Barb.  545.  See 
also,  ante,  vol.  1,  p.  220.  In  Timmins  v. 
Gibbins,  18  Q.  B.  722,  14  Eng.  L.  &  Eq. 
64,  M.  W.  deposited  certain  country 
bank-notes,  payable  in  London,  represent- 
ing j£80  in  value,  with  a  banking  com- 
pany, and  received  the  following  memo- 
randum, signed  by  the  manager :  "  Re- 
ceived of  M.  W.  £80,  for  which  we  are 
accountable.  £80,  at  3  per  cent,  inter- 
est, with  fourteen  days'  notice."  The 
notes  were  sent  on  the  same  evening  by 
post  to  the  London  agents  of  the  banking 
company,  and  were  presented  on  the  next 
day,  and  refused  payment.  They  were 
transmitted  by  that  night's  post  to  the 
banking  company,  who  on  the  following 
day  gave  notice  of  dishonor  to  M.  W., 
and  tendered  to  him  the  notes,  which  he 
refused.  It  turned  out  that  the  bank 
which  had  issued  the  notes  had  stopped 
payment  upon  the  day  when  M.  W. 
made  the  deposit  with  the  banking  com- 
pany, but  that  neither  M.  W.    nor  the 

[133] 


135-136*  THE   LAW    OF   CONTRACTS.  [PART  II. 

■ 

be  so  far  qualified,  that  where  both  parties  were  entirely  and 
equally  ignorant,  and  the  creditors  by  receiving  and  retaining 
the  bills  without  notice,  deprived  the  debtor  of  any  remedy  or 
indemnity  he  might  have,  the  debtor  is  then  discharged,  (j) 


5.   Of  payment  hy  chech. 

Payment  is  also  often  made  by  the  debtor's  check  upon  a 
bank.  A  check  is  a  draft,  and  the  law  of  bills  and  notes  is  gen- 
erally applicable  to  it.  If  given  in  the  ordinary  course  of  busi- 
ness, and  unattended  by  especial  circumstances,  it  is  not  pre- 
sumed to  be  received  as  absolute  payment,  even  if  the  drawer 
have  funds  in  the  bank.  The  holder  is  not  bound  by  receiving 
it,  but  may  treat  it  as  a  nullity  if  he  derives  no  benefit  from  it, 
provided  he  has  been  guilty  of  no  negligence  which  has  caused 
an  injury  to  the  drawer.  (A;)  Nor  is  it  necessary  to  preserve  the 
payee's  rights  that  it  should  be  presented  on  the  day  on  which 
it  is  received.  {I)  And  if  *drawn  on  a  bank  in  which  the  drawer 
has  no  funds,  it  need  not  be  presented  at  all  in  order  to  sustain 
an  action  upon  it.  [m)  The  drawing  of  such  a  check  knowingly 
is  a  fraud,  which  deprives  the  drawer  of  all  right  of  presentation 
or  demand. 

company  were  then  aware  of  this.     It  was  is  offered  cither  cash,  in  payment  of  his 

lield,  that,  under  the  aljove  cirt'uinstanccs,  debt,  or  a   check  of  the  debtor's  agent, 

M.    W.    coukl   not   maintain   an    action,  and  he  prefers  the  latter,   tliis  does  not 

either  for  money  lent,  or  for  money  had  discliargc   the   debt  if  the  check   is  not 

and  received,  against  the  banking  com-  paid ;    although    such    agent   afterwards 

pany.  fails  with  a  large  balance  of  the  debtor's 

( /)  Thus,  where  a  baidving   company  funds  in  his  iiands ;  for  the  clieck  of  the 

paid   notes,  on  whicii  the   name   of  the  agent  is  considered,  in  such  a  case,  as  the 

president  }ia<l  been  forged,  and  neglected  check  of  the  ])rincipal  debtor.     Everett  v. 

for  fifteen  days  to  return  tliem,  it  was  iLeld  Collins,  2  Camp.  515.     See  also,  Taplcy 

that  tliey  had  lost  tlieir  remedy  against  v.  Martens,  8  T.  R.  451  ;  Bolton  v.  Kich- 

the  person  from  wliom  the;  notes  liad  been  ard,  0  T.  11.  139  ;  Brown  v.  Kewley,  2 

received.       (jioucester    Bank    v.    Salem  B.  &P.  518. 

Bank,  17  Mass.  33.    '  (/)  Tiic  Merchants  Bank  v.   Spicer,  6 

(/,•)   Cromwell  r.  Lovctt,  1    Hall,    5G.  Wend.  443  ;  Bobson  r.  Bennett,  2  Taunt. 

Tlie  liolder  of  tlie   clicck  in  sudi  a  case  39G  ;  Bickford  v.   Ividge,  2   Camji.  537  ; 

becomes  the  agent  of  the  drawer  to  col-  Gougli  v.  Staats,  13  Weud.  54',).     Checks 

led   the   money.     And    certainly   if  the  are  considered  as  inland  bills  of  exclnmgc, 

check  is  conditional,  as  if  it  is  stated  to  bo  and  tlic  iiohler  must  use  the  same  dili- 

for  the  "  hahmce  due  "  the  creditor,  tins  gence  in  ])rcseuting  thcni  for  payment  as 

would  be  no  payment,  iind  the  creditor  the  holder  of  such    bill.     Mamj,   J.,  in 

need  not  return  it  before  coniniencing  suit  Bank  v.  Spicer,  6  Wend.  443. 

on  the  original  cause  of  action,     llmigli  (m)   rranklin  v.  Vandcrpool,  1   Ilali, 

V.  May,  4  A.  &  Iv  954.     And  if  u  creditor  78. 

[1^4] 


CH.  III.] 


DEFENCES. 


-136 


G.   Of  payment  hy  note. 

Payment  is  also  often  made  by  the  debtor's  giving  his  own 
negotiable  promissory  note  for  the  amount.  In  Massachusetts, 
such  note  is  said  in  some  cases  to  be  an  absolute  payment  and  a 
discharge  of  the  debt,  [n)  It  is  said  that  this  rule  has  prevailed 
in  that  State  from  colonial  times ;  and  it  rests  upon  the  danger 
which  the  promisor  would  be  under  of  being  obliged  to  pay  the 
note  to  an  innocent  indorsee,  after  he  had  paid  the  sum  due  on 
a  suit  brought  by*  his  creditor  on  the  original  contract.  But 
most  of  the  cases  in  Massachusetts  treat  it  only  as  a  presump- 
tion of  payment,  in  the  absence  of  circumstances  going  to  show 
an  opposite  intention,  (o)  And  the  same  rule  is  recognized  in 
Maine,  [j))  But  even  in  this  the  law-  in  those  States  differs 
from  the  rule  as  held  in  the  courts  of  the  United  States,  and  of 
the  State  courts  generally.  There  it  is  held  that  a  negotiable 
promissory  note  is  not  payment,  unless  circumstances  show  that 
such  was  the  intention  of  the  parties,  [q) 


[n]  Thacher  v.  Dinsmorc,  5  Mass.  299  ; 
Whitcomb  v.  Williams,  4  Pick.  228. 

(o)  Watkins  v.  Hill,  8  Pick.  522  ;  Reed 
V.  Upton,  10  id.  .525  ;  Maneely  v.  McGee, 
6  Mass.  143  ;  Wood  v.  Bodwell,  12  Pick. 
268;  Ilslcy  V.  Jcwett,  2  Met.  168.  This 
presumption  is  but  prima  facie,  and  may 
be  rebutted  by  proof  of  a  different  intent. 
Butts  V.  Dean,  2  Met.  76.  And  the  fact 
that  taking  such  note  as  payment  would 
deprive  the  party  taking  it  of  a  substan- 
tial benefit,  or  where  he  has  other  security 
for  the  payment,  has  a  strong  tendency  to 
show  that  the  note  was  not  intended  as 
payment.  Curtis  v.  Hubbard,  9  Met. 
328.  And  see  Thurston  v.  Blanchard, 
22  Pick.  18;  McUedge  v.  Boston  Iron 
Company,  5  Cush.  1 58. 

(p)  Varner  v.  Nobleborough,  2  Grecnl. 
12i,  and  note  a;  Descadillas  v.  Harris,  8 
Greenl.  298;  Ncwall  f.  Ilussey,  18  Me. 
249;  Bangor  v.  Warren,  34  Me.  324; 
Fowler  v.  Ludwig,  id.  455  ;  Shumway  v. 
Reed,  id.  560  ;  Gilmore  v.  Bussey,  3 
Tairf.  418;  Comstock  v.  Smith,  23  Me. 
202;  Gooding  v.  Morgan,  37  Me.  419. 


But  this  rule  never  applies  to  notes  not 
negotiable.  Trustees,  &c.  v.  Kendrick,  3 
Fairf.  381 ;  Edmond  v.  Caldwell,  15  Me. 
340. 

{(]]  Peter  v.  Beverly,  10  Pet.  567  ; 
Sheehy  v.  Mandeville,  6  Cranch,  253 ; 
Wallace  v.  Agry,  4  Mason,  336  ;  Smith 
i\  Smith,  7  Foster,  244 ;  Van  Ostrand  v. 
Reed,  1  Wend.  424  ;  Burdick  v.  Green, 
15  Johns.  247  ;  Hughes  v.  Wheeler,  8 
Cowen,  77  ;  Booth  v.  Smith,  3  Wend.  66  ; 
Bill  V.  Porter,  9  Conn.  23 ;  Davidson 
V.  Bridgeport,  8  Conn.  472;  Elliott  v. 
Sleeper,  2  N.  H.  525 ;  Frisbie  v.  Lamed, 
21  Wend.  450  ;  St.  John  v.  Purdy,  1 
Sandf.  9;  Hawley  v.  Foote,  19  Wend. 
516  ;  Cole  v.  Sackett,  1  Hill,  516  ;  Way- 
dell  V.  Lucr,  5  Hill,  448;  Van  Eps  v. 
Dillaye,  6  Barb.  244;  Pratt  v.  Foote,  5 
Seld.  463  ;  Commercial  Bank  v.  Bobo,  9 
Rich.  31  ;  Mooring  v.  Mobile  M.  D.  &  M. 
I.  Co.  27  Ala.  254.  For  the  English  law 
upon  this  point  see  Crowe  v.  Clay,  9 
Exch.  604,  25  Eng.  L.  &  Eq.  454  ;  Max- 
well v.  Deare,  8  Moore,  P.  C.  363,  26 
Eng.  L.  &  Eq.  56.     See  post,  p.  196. 

[135] 


137-138*  THE  LAW   OF   CONTRACTS.  [PART  II. 


7.    Of  'payment  hj  delegation. 

Payment  may  be  made  by  an  arrangement  whereby  a  credit 
is  given  or  funds  supplied  by  a  third  party  to  the  creditor,  at 
the  instance  of  the  debtor.  But  such  an  arrangement  must  be 
carried  into  actual  effect  to  have  all  the  force  of  payment;  and, 
in  general,  it  may  be  compared  with  the  delegation  of  the  civil 
law.  Thus,  where  a  debtor  directed  his  bankers  to  place  to  the 
credit  of  the  creditor,  who  was  also  a  customer  of  the  bankers, 
such  a  sum  as  would  be  equal  to  a  bill  at  one  month,  and  the 
bankers  agreed  so  to  do,  and  so  said  to  the  creditor  who  as- 
sented to  the  arrangement,  and  the  bankers  became  bankrupt 
before  the  day  on  which  the  credit  was  to  be  given,  this  was  held 
to  be  no  payment,  and  the  creditor  was  permitted  to  maintain  an 
action  against  the  original  debtor  on  the  original  liability,  (r) 
It  would  doubtless  have  been  otherwise  had  there  been  a  remit- 
tance or  actual  transfer  on  account  of  the  debt ;  for  it  seems  to 
be  settled  that  the  actual  transfer  of  the  amount  of  the  debt  in 
a  banker's  books,  from  the  debtor  to  the  creditor,  with  the  knowl- 
edge and  assent  of  both,  is  equivalent  to  payment,  [s)  Where 
bankers  receive  funds  from  a  debtor,  to  be  by  them  transmitted 
*  through  their  foreign  correspondents  to  a  foreign  creditor,  it 
seeius  that  the  bankers  are  not  liable  if  they  pass  it  to  the  credit 
of  tlieir  foreign  correspondents,  and  give  notice  to  them  to  pay 
it  over  to  the  creditor,  and  afterwards  accept  bills  drawn  on 

(r)  Pcdder  v.  Watt,  Pcakc,  Ad.  Cas.  41.  Court  of  Common  Pleas  on  a  motion  for 
(s)  Eylcs  r.  Ellis,  4  Bing.  112.  This  a  new  trial.  Best,  C.  J.,  said:  "The 
was  an  action  of  covenant  for  rent  due  learned  Sergeant  was  right  in  esteeming 
from  the  defendant  to  the  plaintiff.  At  this  a  payment.  The  plaintiff  had  made 
the  trial  hcforc  Onflow,  Sergt.,  it  appeared  the  Maidstone  hankers  his  agents,  and  had 
that  the  plaintiff,  in  October,  authorized  authorized  them  to  receive  the  money  due, 
the  dcrcTidutit  to  pay  in  at  a  certain  hank-  from  the  defendant.  Was  it  then  paid, 
cr's  the  amount  due.  Owing  to  a  mis-  or  was  that  done  which  was  equivalent  to 
take  it  was  not  tlien  paid;  Init  the  defend-  payment?  At  first,  not;  hut  on  the  8th 
nnt,  who  kept  an  account  with  the  same  a  sum  was  actually  placed  to  the  plain- 
hankers,  transferred  the  sum  to  the  plain-  tiff's  account;  and  though  no  money  was 
tiff's  credit  on  Friflay,  the  9th  of  Decern-  transferred  in  specie,  that  was  an  acknowl- 
bcr.  'i'he,  plaintiff,  being  at  a  distance,  cdgmcnt  from  the  bankers  that  they  had 
did  not  ri'ci'ive  notice  of  this  transfer  till  received  the  amount  from  Ellis.  The 
the  Siimhiy  following,  and  on  the  Satiu'-  i)laintiff  might  then  have  drawn  for  it, 
day  the  liankcrs  failed.  The  learned  ser-  and  the  bankers  could  not  have  refused 
gcant  thought  that  this  transfer  amounted,  his  draft."  See  also,  Uodenham  v.  Pur- 
under  the  circumstances,  to  paynictit.  clias,  2  li.  &  Aid.  39,  and  ante,  vol.  1, 
And    this    ruling    was    sustaineil    iiy    iho  ])p.  187-191. 

[13G] 


CH.  III.] 


DEFENCES. 


*139 


them  by  the  foreign  correspondents,  although  the  foreign  corre- 
spondents become  bankrupts  before  the  notice  reaches  them, 
and  do  not  transmit  the  money  to  the  creditor,  (t)  The  rule 
seems  to  rest  on  the  fact  that  the  bankers  had  done  all  that 
was  to  be  expected  of  them,  and  all  that  they  had  undertaken 
to  do. 


8.   Of  stake-holders  and  ivagers. 

Payment  is  sometimes  made  to  a  third  party,  to  hold  until 
some  question  be  determined,  or  some  right  ascertained.  The 
third  party  is  then  a  stake-holder,  and  questions  have  arisen  as 
to  his  rights  and  duties,  and  as  to  the  rights  of  the  several  par- 
ties claiming  the  money.  If  it  be  deposited  with  him  to  abide 
the  result  of  a. wager,  it  seems  to  be  the  law  in  England,  or  to 
have  been  so  before  the  recent  statute  of  8  &  9  Vict,  that  where 
the  wager  is  legal,  neither  party  to  it  can  claim  the  money  until 
the  wager  is  determined,  and  then  he  is  bound  to  pay  it  to  the 
winning  party,  (w)  That  is,  neither  party  can  rescind  *the  agree- 
ment; although  Lord  Ellenhorough  said  otherwise,  in  one 
case,  (i')     If  the  wager  be  illegal,  either  party  may  claim  the 


(t)  Jl'Carthy  v.  Colvin,  9  A.  &  E.  607. 

(h)  Brandon  v.  Hibbert,  4  Camp.  37. 
There  the  plaintiflf  laid  a  wager  with  a 
butcher  that  another  butcher  would  sell 
hira  meat  at  a  certain  price.  The  wager 
was  accepted,  and  the  money  placed  in 
the  defendant's  hands,  and  the  decision  of 
the  question  was  left  to  him,  and  he  de- 
cided against  the  plaintiff,  who  then 
brought  this  action  to  recover  his  depos- 
it, but  Dampier,  J.,  was  of  opinion  that 
the  action  could  not  be  maintained,  and 
directed  a  nonsuit.  In  Bland  v.  Collett, 
id.  157,  the  plaintiif,  in  the  presence  of  the 
defendant  and  one  Porter,  f)oasted  of  hav- 
ing conversed  with  Lord  Kensington.  Por- 
ter asserted  that  the  plaintiff  had  never 
spoken  to  Lord  Kensington  in  his  life.  A 
bet  was  talked  of  upon  the  subject,  but 
none  was  then  laid.  JText  morning  the 
parties  again  met,  when  Porter  asked, 
"  What  will  you  now  lay  that  you  con- 
vei-sed  with  Lord  Kensington  ?  "  The 
plaintiff  answered,  "  80  guineas  to  10." 
The  money  was  accordingly  deposited  in 
the  hands  of  the  defendant,  as  a  stake- 
holder.    Upon  which  Porter  exclaimed, 

12* 


"  Now  I  have  you  ;  I  have  made  inquiries, 
and  the  person  j^ou  conversed  with  was 
Lord  Kingston,  not  Lord  Kensington." 
The  plaintiff  owned  his  mistake ;  but 
said  he  had  been  imposed  upon,  and  gave 
notice  to  the  defendant  not  to  pay  over 
the  money.  This  action  was  brought  to 
recover  back  the  deposit  of  eighty  guin- 
eas, on  the  ground  that  it  was  a  bubble 
bet.  But  per  Gibbs,  C.  J. :  "I  think  the 
action  cannot  be  maintained.  There  is 
nothing  illegal  in  the  wager.  Nor  can  it 
be  said  that  the  point  was  certain  as  to 
one  party,  and  contingent  as  to  the  other. 
The  plaintiff  relied  upon  his  own  obser- 
vation. Porter  upon  the  information  he 
had  received.  The  former  was  the  more 
confident  of  the  two  ;  and  either  might 
have  turned  out  to  have  been  mistaken." 
(v)  Eltham  v.  Kingsman,  1  B.  &  Aid. 
68.3.  This  was  an  action  against  a  stake- 
holder to  recover  back  a  wager.  Lord 
EUenboroucjh  said :  "  I  think  there  is  no 
distinction  between  the  situation  of  an 
arbitrator  and  that  of  the  present  defend- 
ant, for  he  is  to  decide  who  is  the  winner 
and  who  is  the  loser  of  the  wager,  and 

[137] 


139- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


money.  If  the  loser  claim  money  he  has  deposited  on  an  illegal 
wager,  and  claim  it  even  after  the  wager  is  decided  against 
him,  but  before  it  is  actually  paid  over,  the  stake-holder  is 
bound  to  retm-n  it  to  him.  (iv)  But  although  the  wager  be  ille- 
gal, if  the  stake-holder  has  paid  it  over  to  the  winner,  before 
notice  or  demand  against  him  by  the  loser,  he  is  exonerated,  (x) 
But  in  New  York  it  has  been  held,  under  a  statute  giving  the 
losing  party  a  right  of  action  against  the  stake-holder  for  the 
stake,  "  whether  the  same  shall  have  been  paid  over  by  such 
stake-holder  or  not,  and  whether  any  such  wager  be  lost  or 
not,"  that  the  stake-holder  was  liable  to  the  losing  party  al- 
though he  had  paid  over  the  stake  by  his  directions,  [xa)  But 
in  such  a  case  he  must  declare  on  the  statute  and  cannot  re- 
cover at  common  law.  (xb)  When  the  event  has  been  deter- 
mined, it  is  said  that  the  winner  may  bring  an  action  for  the 
money  against  the  stake-holder,  without  giving  him  notice  of 
the  happening  of  the  event.  {//) 


what  is  to  be  done  with  the  stalvC  deposit- 
ed in  his  hand.  Now  an  arljitrator's  au- 
thority before  he  has  made  his  award  is 
clearly  countcrmandable  ;  and  here,  befoi'e 
there  has  been  a  decision,  the  party  has 
countermanded  the  authority  of  the  stal^e- 
liolder."  This  position,  however,  was 
strongly  doubted  in  the  subsequent  case 
of  Marryat  v.  BrodcricI<,  2  M.  &  W. 
369. 

(lu)  Cotton  V.  Thurland,  .5  T.  R.  405 ; 
Smith  V.  Bicivmore,  4  Taunt.  474 ;  Bate 
V.  Cartwriglit,  7  Price,  540 ;  Ilastelow  v. 
Jael<son,  8  B.  &  C.  221  ;  liodson  v.  Ter- 
rili,  1  Cromp.  &  M.  797 ;  Martin  v. 
Hew.son,  10  Exch.  737,  29  Eng.  L.  &  Eq. 
424.  In  Manning  v.  rurccll,  7  l)e  G., 
M.  &  G.  55,  31  Eng.  L.  &  Eq.  452,  a 
testator  before  liis  deatli  liad  received 
sums  of  money,  which  lie  held  as  stake- 
holder for  others,  to  abide  the  result  of 
races,  upon  the  event  of  which  bets  had 
been  made  by  other  persons.  The  testa- 
tor bad  also  placed  about  .£G,000  in  the 
liands  of  other  parties,  which  by  thcni  bad 
been  di-pi)-itcd  in  a  hank  to  abide  the  re- 
sult ol' a  iict  made  by  biniself  (Ijut  which 
failed  liy  bis  deatii).  In  tiie  administra- 
tion of  the  estate  the  adniiiiistratri.K  had 
paid  X2,.'(49  to  persons  who  had  paid 
these  sums  to  the  testator  ;  the  fact  being 
that  part  of  the  money  was  in  respect  of 

[138] 


wagers  which  were  decided  before  the  tes- 
tator's death,  and  part  in  respect  of  bets 
not  decided  at  that  time.  IS^othing  had 
been  done  as  to  the  £6,000  in  the  hands 
of  the  stake-holders.  Held,  that  the  pay- 
ments made  by  the  testatrix  in  respect  of 
tlie  wagers  decided  in  the  testator's  lifetime 
could  not  be  allowed  against  the  estate  ; 
but  that  those  made  in  respect  of  wagers 
not  so  decided  were  good  payments,  those 
undecided  wagers  being  illegal  contracts 
which  citlier  party  might  determine,  and 
which  she  by  paying  must  be  taken  to 
have  determined,  lleld,  also,  that  the  tes- 
tatrix was  not  to  be  charged  with  the 
£0,000  in  the  hands  of  the  stake-holders 
upon  the  bets  made  by  the  testator,  be- 
cause it  having  been  paid  into  the  hands 
of  the  stake-holders,  was  not  at  any  sub- 
sequent moment  of  his  existence  in  his 
power  of  possession,  he  never  having 
elected  to  withdraw  from  the  bet. 

(.r)  Perkins  v.  Eaton,  3  N.  II.  152; 
Ilowson  V.  Hancock,  8  T.  11.  575  ;  M'Cul- 
lura  V.  Gourlcy,  %  Johns.  147;  Livings- 
ton v.  Wootan,  1  Nott  &  IMcC.  178. 

{xa)  Ivuckniuu  v.  Pitcher,  1  Comst. 
392. 

(xb)  Sec  Morgan  v.  Groff,  4  Barb.  528; 
Like  V.  Thompson,  9  Barb.  315. 

(.(/)  Duncan  v.  Cafe,  2  M.  &  W.  244. 


en.  III.]  DEFENCES.  *140 

The  statute  8  &  9  Vict.  ch.  109,  §  18,  makes  all  wagers,  or 
contracts  or  agreements  by  the  way  of  gaming  or  wagering, 
null  and  void,  and  provides  that  no  suit  shall  be  maintained  for 
the  recovery  of  any  thing  deposited  to  abide  the  event  of  any 
wager.  Many  of  the  courts  of  this  country  have  viewed  wagers 
as  entitled  to  no  favor ;  (z)  but  where  they  are  in  any  degree 
legal  contracts,  they  would  doubtless  be  governed  by  the  rules 
above  stated. 

An  auctioneer  is  often  made  a  stake-holder ;  and  where  he 
receives  a  deposit  from  a  purchaser,  to  be  paid  over  to  the  seller, 
if  a  good  title  to  the  property  be  made  out,  and  in  default 
thereof  to  be  returned  to  the  purchaser,  he  cannot  return  it»  to 
the  purchaser  on  his  demand,  without  such  default.  But  on 
default,  or  a  rescinding  or  abandonment  *of  the  contract,  the 
auctioneer  is  bound  to  return  it  to  the  purchaser  on  his  demand, 
and  if  he  have  paid  it  to  the  owner  of  the  property,  he  has 
done  so  in  his  own  wrong,  and  must  refund  it  to  the  deposi- 
tor, [a)  If  one  deposits  money  in  the  hands  of  a  stake-holder,  to 
be  paid  to  a  creditor  when  his  claim  against  the  depositor  shall 
be  ascertained,  and  the  stake-holder  pays  this  money  to  the 
creditor  on  his  giving  an  indemnity,  before  the  claim  is  ascer- 
tained, without  the  assent  of  the  depositor,  it  is  said  that  such 
depositor  may  maintain  an  action  against  the  stake-holder  for 
money  had  and  received,  without  any  reference  to  the  demand 
of  the  creditor,  (b)     But  if  the  check  of  the  depositor  be  given 

{z)   Perkins   v.  Eaton,  3  N.   H.    152;  upon  it  was  agreed  that  the  amount  should 

Bunn  V.  Rirker,  4  Jolins.  426;  McAllis-  be  deposited  with  the  defendant,  until  it 

tcr  V.  Hoffman,  16  S.  &  R.  147  ;  McAl-  should  be  ascertained  whether   tlie   auc- 

lister  V.  Gallaher,  3  Tenn.  468  ;  Wheeler  tioneer  was  entitled  to  tlie  whole  of  his 

V.  Spencer,  15  Conn.  28.  demand  or  not.     The  defendant  having 

(n)  Edwards  i\  Hodding,  5  Taunt.  815.  paid  over  the  amount  so  deposited  to  the 

In  Duncan  i\  Cafe,  2  M.  &  W.  244,  the  auctioneer  on   receiving    his    indemnity, 

plaintitl'  having  deposited  a  sum  with  the  without  the  knowledge  or  concurrence  of 

auctioneer,  until  a  good   title  was  made  the  plaintiff,  it  was  AcW  that  the  latter  was 

out,  was  allowed  to  recover  the  deposit,  entitled  to  recover  it  back  in  an  action  for 

without  notice  to  the  auctioneer  that  the  money  had  and  received.     And,  per  Bui-- 

contract  had  been  rescinded  by  the  parties,  roui/h,  J.,  "The  sum  in  question  was  de- 

And  see,  to  the  same  effect.  Gray  v.  Gut-  posited  by  the  plaintiff  with  the  defendant 

teridge,  1  Man.  &  R.  614.  for  an  express  purpose;  it  should,  there- 

(6)  Cowling  I'.  Beachum,  7  J.  B.Moore,  fore,  have  remained  in  his  hands  until  it 

465.     In  this  case  the  plaintifi'  had  em-  was   ascertained    to   what    remuneration 

ployed   one   Langdon,  an   auctioneer,  to  Langdon    was    entitled    for    selling    the 

sell    an    estate,    and   disputed   the    sum  estate  in  question.     The  payment  of  it  by 

charged  by  him  for  his  expenses  ;  where-  him  to  Langdon,  on  his  indemnity,  was  a 

[139] 


141*  THE   LAW   OF   CONTRACTS.  [PART  II. 

to  the  stake-holder,  the  mere  fact  that  he  cashes  it  and  holds 
the  money  is  not  such  wrong  doing  as  makes  him  liable  to  be 
sued  for  the  amomit.  (c) 

9.    Of  appropriation  of  payments. 

There  are  many  cases  relating  to  the  appropriation  of  a  pay- 
ment, where  the  creditor  has  distinct  accounts  against  the  debtor. 
In  Cremer  v.  Higginson,  [d)  Mr.  Justice  Story  lays  down  with 
much  precision  the  general  rules  governing  these  cases.  First, 
a  debtor  who  owes  his  creditor  money  on  distinct  accounts 
may  direct  his  payments  to  be  applied  *to  either,  as  he  pleases. 
Second,  if  the  debtor  makes  no  appropriation,  the  creditor  may 
apply  the  money  as  he  pleases.  Third,  if  neither  party  makes  a 
specific  appropriation  of  the  money,  the  law  will  appropriate  it 
as  the  justice  and  equity  of  the  case  may  require.  These  rules 
seem  to  apply,  although  one  of  the  debts  be  due  on  specialty 
and  the  other  on  simple  contract,  [e)  If  one  owe  money  in  re- 
spect of  a  debt  contracted  by  his  wife  before  marriage,  and  also 
a  debt  of  his  own,  and  pay  money  generally,  the  creditor  may 
apply  the  payment  to  either  demand.  (/)  And  if  one  of  the 
debts  be  barred  by  the  statute  of  limitations,  and  the  other  not, 
and  the  money  be  paid  generally,  the  creditor  may  apply  the 
payment  to  the  debt  that  is  barred  ;  {^)  but,  by  the  weight  of  au- 

wron^fful  act,  and  a  l)rcacli  of  tlic  trust  re-  count  of  debts  contracted  l>y  himself. 
po>cd  in  tlie  defendant  l)y  tlic  ])laintif}',  His  wife  was  also  indebted  to  tlie  plaintiff 
and  for  wliicli  tlie  sum  in  question  was  as  executrix.  The  defendant  nnule  pay- 
deposited  in  Ills  hands,  and  which  lie  can-  ments  to  tlic  ]ilaintitr  on  account  gcner- 
not  now  possilily  comply  with,  in  conse-  ally,  without  directing  what  debts  they 
qucnce  of  his  own  act."  siiould    be    applied   to.     lldd,  that    the 

(r.)  Wilkinson  v.  Godefroy,  9  A.  &  E.  ])laintilf  might  elect  whether  to  apply  the 

5.3G.  payments  to  discharge  tlic  debts  contract- 

(d)  1  Mason,  338.     And  sec  Franklin  ed'by  his  wife  d)uii  sola,  but  could  not  ap- 

Bank  /-.  Hooper,  36  Mc.  222.  ply  them  to  discharge  the  debts  due  from 

{(■)  Brazier  v.  Bryant,  2  Dowl.  P.  C.  the  wife  as  executrix. 
477;  Ciiitty   v.   Naish,   id.    511;    Mayor         (.-7)  Mills  y.  Fowkcs,  5  Bing.  N.  C.  455. 

&c.  of  Alexandria  v.  Patten,  4   Crancli,  In  this  case  Tindal,  C.  J.,  said:  "The 

317  ;  Peters  v.  Anderson,  5  Taunt.  590;  civil  law,  it  is  said,  applies  the  payment 

Hamilton  ('.  Benbury,  2  Hayw.  385 ;  liar-  to  the  more  burdensome   of  two   debts, 

groves   r.   Cooke,  15   Ga.  221.     And    sec  where  one  is  more   burdensome  than  the 

Pennypacker  r.  Unibergcr,  22  Penn.  St.  other  ;  but  I  do  not  think  that  such  is  the 

492.  rule  of  our  law.     According  to  the  law  of 

(/)  Goddard  v.  Cox,  2  Stra.  1194.    In  England,  the  debtor  may,  in  the  first  in- 

tbis  case   tin;  defendant  was   indebted   to  stance,  appropriate   the  payment ;  sniv'dur 

the  plaiTitiff  on  account  of  debts  contract-  in  vvidnm  aolvcnlis ;  if  he  omit  to  do  so, 

cd  Ity  his  wife  <ti(m  aoln,  and  also  on  ac-  the  crcdit(jr  may  make  the  a])propriation  ; 

[140] 


CH.  III.] 


DEFENCES. 


*142 


thority,  he  may  not  make  use  of  this  payment  to  revive  the 
debt,  and  remove  the  bar  of  the  statute,  (h) 

It  is  not  necessary  that  the  appropriation  of  the  payment 
should  be  made  by  an  express  declaration  of  the  debtor ;  for  *if 
his  intention  and  purpose  can  be  clearly  gathered  from  the  cir- 
cumstances of  the  case,  the  creditor  is  bound  by  it,  (t)  If  the 
debtor,  at  the  time  of  making  a  payment,  makes  also  an  entry 
in  his  own  book,  stating  the  payment  to  be  on  a  particular 
account,  and  shows  the  entry  to  the  creditor,  this  is  a  sufficient 
appropriation  by  the  debtor,  [j)  But  the  right  of  election,  or 
appropriation,  is  not  conclusively  exercised  by  entries  in  the 
books  of  either  party  until  those  entries  are  communicated  to 
the  other  party,  [k) 

Although  the  payment  be  general,  the  creditor  is  not  allowed 
in  all  cases  to  appropriate  the  same.  As  where  he  has  an  ac- 
count against  the  debtor  in  his  own  right,  and  another  against 
him  as  executor,  and  money  is  paid  by  the  debtor  without  ap- 
propriation, the  creditor  must  apply  it  to  the  personal  debt  of 
the  debtor,  and  not  to  his  debt  as  executor.  [1] 


recipitur  in  modinn  redpientis ;  but  if  neither 
make  any  uppropriation,  the  hiw  appro- 
pi'iates  tlie  payment  to  the  earlier  debt." 
See  also,  Williams  v.  Griffith,  5  M.  &  W. 
300  ;  Logan  ?;.  Mason,  (i  Watts  &  S.  9  ; 
Livermore  v.  Rand,  6  Foster,  85  ;  Watt  v. 
Hoch,  25  Penn.  St.  411.  But  if  a  cred- 
itor has  several  claims,  some  of  which 
are  illegal,  and  so  not  by  law  recoverable, 
he  cannot  appropriate  a  general  payment 
to  such  illegal  claims.  Caldwell  v.  Went- 
worth,  14  N.  H.  431  ;  Wright  v.  Laing,  3 
B.  &  C.  165  ;  Arnold  v.  The  Mavor  &c. 
of  Poole,  4  Man.  &  G.  860;  Ex  parte 
Randleson,  2  Deacon  &  Ch.  534.  But  see, 
contra,  Philpott  v.  Jones,  2  A.  &  E.  41  ; 
Cruickshanks  r.  Eose,  1  Moody  &  11. 
100;  Trcadwell  v.  Moore,  34  Me.'ll2. 

(h)  Mills  V.  Fowkes,  5  Bing.  N.  C.455  ; 
Nash  V.  Hodgson,  6  De  G.,  M.  &  G. 
474,  31  Eng.  L.  &  Eq.  555  ;  Pond  v.  Wil- 
liams, 1  Gray,  630.  But  the  case  of  Ayer 
V.  Hawkins,  19  Vt.  26,  shows  that  a  cred- 
itor having  several  notes  against  his  debtor, 
all  of  which  are  barred  by  the  statute  of 
limitations,  may  appropriate  a  general 
payment  of  such  debtor  to  any  o}ie  of  the 
notes,  even  the  largest,  and  revive  that 
particular  note,  but  he  cannot  distribute 


such  general  payment  upon  all  liis  claims, 
and  thus  avoid  the  statute  as  to  all. 

((')  The  question  is  always  one  of  intent, 
which  is  a  question  for  the  jury  under  all 
the  circumstances  of  tlie  case.  As  to 
what  circumstances  will  be  held  sufficient 
to  warrant  a  finding  of  such  appropriation 
bv  the  debtor,  see  Tayloe  v.  Sandiford,  7 
Wheat.  14  ;  Mitchell  v.  Dall,  2  Harris  & 
G.  159,  4  Gill  &  J.  361;  Eowke  v. 
Bowie,  4  Harris  &  J.  566  ;  Robert  v. 
Garnie,  3  Gaines,  14  ;  West  Branch  Bank 
V.  Moorehead,  5  Watts  &  S.  542;  Scott 
V.  Fisher,  4  T.  B.  Mon.  387 ;  Stone  v. 
Seymour,  15  Wend.  19;  Newmarch  v. 
Clay,  14  East,  239;  Shaw  v.  Picton,  4 
B.  &  C.  715.  If  the  debtor  pay  with  one 
intent,  and  the  creditor  receive  with  an- 
other, tiie  intent  of  the  debtor  shall  gov- 
ern.    Reed  v.  Boardman,  20  Pick.  441. 

(  /)  Frazer  v.  Bunn,  8  C.  &  P.  704. 

(k)  Simpson  v.  Ingham,  2  B.  &  C.  65. 

(/)  Goddard  v.  Cox,  2  Stra.  1194. 
And  see  Fowke  v.  Bowie,  4  Harris  &  J. 
566;  Sawyer  v.  Tappan,  14  N.  H.  352. 
But  where  one  debt  is  due  to  the  creditor 
in  his  own  right,  and  another  to  iiim  as 
trustee  or  agent  for  another,  and  neither 
is  secured,  the  creditor  cannot  apply  the 

[141] 


143*  THE   LAW   OF   CONTRACTS.  [PART  H. 

A  general  payment  must  be  applied  to  a  prior  legal  debt,  in 
preference  to  a  subsequent  equitable  claim,  (m)  If  the  equita- 
ble claim  be  prior,  it  has  been  said  that  it  may  be  preferred  by 
the  creditor ;  (n)  but  this  does  not  seem  to  be  certain,  (o) 

*In  general,  the  creditor's  right  of  appropriation,  springing 
from  the  neglect  or  refusal  of  the  debtor  to  make  such  appropri- 
ation, exists  only  where  the  debtor  has  in  fact  an  opportunity  of 
making  it ;  and  not  where  the  payment  was  made  on  his  account 
by  another,  or  in  any  way  which  prevents  or  impedes  his  exer- 
cise of  the  right  of  election,  (p) 

Several  rules  may  be  gathered  from  the  cases,  by  which  courts 
are  guided  where  the  appropriation  or  application  of  payments 
is  made  by  the  law.  Thus,  the  money  is  applied  to  the  case  of 
the  most  precarious  security,  where  there  is  nothing  to  control 
this  application,  (q)  But  if  one  debt  be  a  mortgage  debt,  and 
the  other  a  simple  account,  it  has  been  said  the  court  will  apply 
the  money  to  the  mortgage  debt  in  preference,  on  the  ground 
that  it  will  be  more  for  the  interest  of  the  debtor  to  have  this 
debt  discharged,  (r)  And  if  there  be  two  demands,  of  different 
amounts,  and  the  sum  paid  will  exactly  satisfy  one  of  them,  it 
will  be  considered  as  intended  to  discharge  that  one.  (s)     If  one 


whole  of  a  general  payment  to  his  own  barred  by  the  statute  of  limitations,  and 

debt,  but  must  apply  it  pro  rata  to  both  some  not,  received  from  a  third  person  a 

debts;  for  this  is  a  part  of  his  duty  as  sum  of  money  on  behalf  of  his  client,  and 

trustee,  to  take  the  same  care  of  the  debts  claimed  the  riirht  to  apply  such  sum  to 

of  his  cestui  que  trust  as  of  his  own.     See  the  ])ayment  of  the  earliest  items  in  his 

Scott  I'.  Kay,  18  Pick.  361;    Barrett  t\  own  account  against  the  client;   but  the 

Lewis,  2  id.  123;   Cole  v.   Trull,   9   id.  court  AeW  that  he  had  no  such  right. 
325.  iq)  See  Field  v.  Holland,  6  Cranch,  8  ; 

(m)  Goddard  v.  Hodges,  1   Cromp.  &  Plomcr  v.  Long,  1   Stark.  1.'33;  Smith  v. 

M.  33.  Ley  (I,  11   Leigh,  .512;  Stamford  Bank  w. 

(n)  Bosanrjuct  v.  Wray,  G  Taunt.  597.  Benedict,  15  Conn.  437;  Vance  v.  Mon- 

(o)  Iti  Birch  V.  Telii)utt,  2  Stark.  74,  roe,  4  Gratt.  53. 
A  had  certain  ijilis  of  exchange  accepted  (r)  Pattison  v.  Hall,  9  Cowcn,  747,  765. 
by  B,  and  also  a  mortgage  executed  by  B  And  sec  Dorsey  v.  Gassaway,  2  Harris  & 
to  a  third  jicrson,  but  of  whicli  A  might  J.  402 ;  Gwinn  v.  Whitakcr,  1  id.  754  ; 
compel  an  assignment  in  ctiuity  to  him-  Kobinson  y.  Doolittle,  12  Vt.  246 ;  Anon- 
self.  B  fiaid  A  money  on  arcount,  wliidi  ymous,  12  ]Mod.  559.  But  see,  contra, 
A  received  without  prejudice  to  the  claim  Anonymous,  8  Mod.  236  ;  Cliitty  v.  Naish, 
Jie  might  have  upon  any  securities.  Lord  2  Dowl.  511;  Field  r.  Holland,  supra; 
Ellciihoruuiih  liihl.  tiuit  the  money  shoidd  I'lanters  Bank  v.  Stockman,  1  Frcem.  Ch. 
be  ap|)lie(j  wholly  towards  the  bills  of  ex-  502;  Hilton  v.  Burlcy,  2  N.  H.  193; 
change,  .-md  none  on  the  ecpiitablc  claims.  Jones  u.  Kilgore,  2  Rich.  Eq.  64;  Moss 

(j))  Waller  v.  Lacy,   1    Man.  &  G.  54.  v.  Adams,  4  Ired.  Lq.  42;    Jlamsour  v. 

Here  an  .'ittorney  having  several  dcmamls  Tiiomiis,  10  Ired.  165. 
against  his  client,  some   of  which  were         (x)  Robert  v.  Garnie,  3  Caines,  14. 

[112] 


en.  III.]  DEFENCES.  *144 

of  the  debtor's  liabilities  be  contingent,  as  where  the  creditor  is 
his  indorser  or  surety,  but  has  not  yet  paid  money  for  him, 
the  court  will  apply  a  general  payment  to  the  certain  debt, 
and  will  not  permit  the  creditor  to  apply  it  to  the  contingent 
debt,  (t) 

If  a  partner  in  a  firm  owe  a  private  debt  to  one  who  is  *also 
a  creditor  of  the  firm,  and  make  to  this  creditor  a  general  pay- 
ment, but  of  money  belonging  to  the  firm,  the  payment  must  be 
appropriated  to  the  discharge  of  the  partnership  debt.  (?/) 

It  seems  to  be  settled,  that  where  one  of  several  partners  dies, 
the  firm  being  in  debt,  and  the  surviving  partners  continue 
their  dealings  with  a  particular  creditor,  and  the  latter  blends 
his  transactions  with  the  firm  before  and  after  such  death 
together,  the  payments  made  from  time  to  time  by  the  surviv- 
ing partners  must  be  applied  to  the  old  debt,  (v)  It  will  be 
presumed  that  all  the  parties  have  agreed  and  intend  to  con- 
sider the  whole  transaction  as  continuous,  and  the  entire  ac- 
count as  one  account,  (iv)  And  in  general,  the  doctrine  of  ap- 
propriation, and  the  right  of  election,  apply  only  where  the 
debts  or  accounts  are  distinct  in  themselves,  and  are  so  re- 
garded  and  tredted  by  the  parties.     Where  the  whole  may  be 


(t)  Niagara  Bank  v.  Rosevelt,  9  Cowen,  the  money  of  the  partners,  the  creditor  is 

409 ;  Newman  v.  Meek,  1   Smedes  &  M.  not  at  liberty  to  apply  it  to  tlae  payment 

Ch.   331 ;   Portland  Bank  v.  Brown,  22  of  the  debt  of  the  individual ;  that  would 

Me.  295.     So  a  general  payment  is  to  be  be  allowing  the  creditor  to  pay  the  debt 

referred  to  a  debt  due,  rather  than  to  one  of  one  person  with  the  money  of  others." 

not   yet   due.      Seymour  v.    Sexton,    10  And  see  Fairchild  f.  Holly,  lb  Conn.  175; 

Watts,  255 ;  Hammersley  v.  Knowlys,  2  Johnson  y.  Boone,  2  Harring.  Del.  172; 

Esp.  666;  Bacon  v.  Brown,  1  Bibb,  334;  Sueed  r.  AViester,  2  A.  K.  Marsh.  277. 

Stone  V.  Seymour,  15  Wend.  19;  Baker  {v)  Per  Z^ffy/f^,  J.,  in  Sirason  r.  Ingham, 

V.  Stackpoole,  9  Cowen,  420;  McDowell  2  B.  &  C.  65.     And   see,   to   the   same 

V.   Blackstone    Canal   Co.  5  Mason,  11.  effect,  Clayton's   case  (Devaynes   v.  No- 

But   by  express    agreement,    a  payment  ble),  1  Meriv.  529,  604;  Simson  y.  Cooke, 

may  be   applied   to  a  debt  not  yet  due.  1    liing.  452 ;  Williams  v.  Rawlinson,  3 

Shaw  V.  Pratt,  22  Pick.  305.  id.  71 ;  Bodenham   v.   Purchas,   2  B.  & 

(«)  Thompson  w.  Brown,  Moody  &  M.  Aid.  39  ;  Toulmin  i'.  Copland,  3  Young 

40.     And  Tpev  Abbott,  C.  J.:     "The  gen-  &  C.  625,  1  West,  164;  Smith  v.  Wig- 

eral  rule  certainly  is,  that  when  money  is  ley,   3   Moore   &  S.   174;   Livermore  v. 

paid  generally,   without   any   appropria-  Rand,  6  Foster,  85.    But  if  a  new  account 

tion,  it   ought   to  be  applied  to  the  first  is  opened  with  the  new  firm,  the  creditor 

items  in  the  account ;  but  the  rule  is  sub-  may  apply  a  general  payment  to  the  new 

ject  to  this  qualification,  that  when  there  account.      Logan  v.  Masou,  6  Watts  & 

are  distinct  demands,  one  against  persons  S.  9. 

in  partnership,  and  another  against  one  (iv)  Per  Baijleii,  J.,  ia  Simson  v.  Ing- 

only  of  the  partners,  if  the  money  paid  be  ham,  2  B.  &  C.  65. 

[143] 


145* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


taken  as  one  continuous  account,  payments  are,  generally, 
but  not  universally,  applied  to  the  earlier  items  of  the  ac- 
count. (.!■) 

*The  due  exercise  of  the  right  of  appropriation  by  the  credi- 
tor may  often  be  of  great  importance  to  the  surety  of  the  debt- 
or. Generally  the  law  favors  the  surety,  especially  if  his  sure- 
tyship be  not  for  a  previously  existing  debt.  So  where  one  has 
given  security  for  the  payment  for  goods  to  be  afterwards  sup- 
plied to  his  principal,  and  such  goods  are  supplied,  and  general 
payments  made  by  the  principal,  who  was  otherwise  indebted 
to  the  party  supplying  the  goods,  it  would  be  inferred  in  favor 
of  the  surety  that  the  payments  were  intended  to  be  made  in 
liquidation  of  the  account  which  he  had  guaranteed.  {?/)  But 
where  an  obligor  makes  a  general  payment  to  his  obligee,  to 
whom  he  is  indebted  not  only  on  the  bond  but  otherwise, 
the   surety  of    the  obligor   cannot    require   that  the    payment 


{x)  Clayton's  case  (Devaynes  v.  No- 
ble), 1  Meriv.  529,  609.  This  is  the  lead- 
ing case  upon  this  point.  See  also, 
Brooke  v.  Enderby,  2  Brod.  &  B.  70; 
United  States  v.  Kirkpatrick,  9  Wheat. 
720 ;  Jones  v.  United  States,  7  How.  C81  ; 
Postmaster-General  v.  Furber,  4  Mason, 
332  ;  United  States  v.  Wardwell,  5  id.  82  ; 
Gass  V.  Stinson,  3  Sumner,  98;  Fairchild 
V.  Holly,  10  Conn.  17.5;  IMcKcnzie  v. 
Ncvius,"22  j\Ic.  138;  United  States  v. 
Bradbury,  Davcis,  146.  See  also,  cases 
cited  in  preceding;;  note.  But  ])ayment 
will  not  be  applied  to  tlie  earliest  items  in 
an  account,  if  a  different  intention  is 
clearly  expressed  by  tiie  debtor,  or  by 
both  ])arties,  or  where  sucli  intention  can 
be  f;atliered  from  the  ])articular  circum- 
stances of  the  case.  See  Tavlor  v.  Kymer, 
3  B.  &  Ad.  320  ;  Ilenniker"?'.  Wijig,"  4  Q. 
B.  792;  Capen  v.  Alden,  5  Met.  268; 
Dulles  V.  Do  Forest,  19  Conn.  190  ;  Wil- 
son V.  Hirst,  1  Nev.  &  M.  742. 

(//)  Marryatts  ;•.  White,  2  Stark.  101. 
In  tills  case  a  son-in-law  of  the  defendant 
hchv^  indebted  to  the  jihiintilf,  and  wish- 
ing to  ()l)lain  a  furlhir  credit  for  some 
Hour,  the  (icffndant  Itecaine  his  surety  by 
giving  his  note  to  tlie  |>hiiiitlfr,  but  with  a 
Btipuhition  that  it  k)iouI<1  o|ierate  as  a 
security  for  the  flour  to  l)e  delivered,  and 
not  for  the  dflit  wliidi  tlien  existed.    The 

[III] 


term  of  credit  on  sales  of  flour  was  three 
months,  and  discount  was  allowed  for 
earlier  payment.  After  the  delivery  of 
the  flour  the  son-in-law  made  several  pay- 
ments on  account  generally,  but  upon  all 
those  which  were  made  within  three 
months  from  the  time  the  flour  was  de- 
livered, the  usual  discount  was  allowed. 
Held,  that  this  was  evidence  that  all  the 
payments  were  to  go  to  pay  for  the  flour, 
and  not  to  discharge  the  preexisting  debt. 
And  Lord  Ellenborough  said,  "  I  think 
that  in  favor  of  a  surety,  such  payments 
are  to  be  considered  as  paid  on  the  latter 
account.  In  some  instances  the  pay- 
ments were  immediate,  and  in  others  be- 
fore the  time  had  expired,  within  which 
a  discount  was  allowed  ;  ex  phirimis  disce 
omnes.  Where  there  is  nothing  to  show 
the  animus  sohr.ntis,  the  ]iayment  may  cer- 
tainly be  ap])lied  by  the  party  who  re- 
ceives the  money.  The  payment  of  the 
exact  amount  of  goods  previously  sup- 
plied is  irrefragable  evidence  to  show  that 
the  sum  was  intended  in  payment  of 
those  goods,  and  the  jiaymcut  of  sums 
within  the  time  allowed  for  discount,  and 
on  which  discount  has  -been  allowed, 
affords  a  strong  inference,  in  the  absence 
of  ])roof  to  the  contrary,  that  it  is  nuxde 
in  i-ellef  of  the  surety."  See  Kirby  v. 
The  Duke  of  Marlborough,  2  M.  &  S.  18. 


CH.  III.] 


DEFENCES. 


^146 


should  be  applied  to  the  bond,  unless  aided  by  circum- 
stances which  show  that  such  application  was  intended  by  the 
obligor,  (z) 

*  In  cases  of  payments  which  are  not  made  by  the  debtor 
voluntarily,  the  creditor  has  no  right  of  appropriation,  but  must 
apply  the  money  towards  the  discharge  of  ail  the  debts  in  pro- 
portion, {a) 

A  question  has  been  made  as  to  the  manner  of  making  tip 
the  account  where  partial  payments  have  been  made  at  differ- 
ent times,  on  bonds,  notes,  or  other  securities.  Interest  may 
be  cast  in  three  ways.  It  may  be  cast  on  the  whole  sum  to  the 
day  of  making  up  the  account,  and  also  upon  each  payment 
from  the  time  when  made  to  the  same  day,  and  the  difference 
between  these  sums  is  the  amount  then  due.     Or  interest  may 


(z)  riomer  v.  Long,  1  Stark.  153.  In 
Martin  i>.  Brecknell,  2  M.  &  S.  39,  it  was 
held  that  the  obligee  of  a  bond,  given  by 
principal  and  surety,  conditioned  for  the 
payment  of  money  by  instalments,  who 
iias  proved  under  a  commission  of  bank- 
ruptcy against  the  principal  the  whole 
debt,  and  received  a  dividend  thereon  of 
2s.  and  7c?.  in  the  pound,  may  recover 
against  the  surety  an  instalment  due,  mak- 
ing a  deduction  of  2s.  and  "id.  on  the 
amount  of  such  instalment,  and  the  surety 
is  not  entitled  to  have  the  whole  dividend 
applied  in  discharge  of  that  instalment, 
but  only  ratably  in  part  payment  of  each 
instalment  as  it  becomes  due.  See  fur- 
ther, Williams  v.  Eawlinson,  3  Bing.  71. 
The  fact  that  a  payment  was  made  to  a 
creditor  having  several  demands  against 
the  same  debtou,  by  a  surety  of  such 
debtor  on  one  of  the  debts,  but  with  the 
debtor's  own  money,  does  not  show  that 
the  debtor  intended  such  payment  to 
apply  to  the  debt  guaranteed.  Mitchell 
V.  Dall,  4  Gill  &  J.  361.  In  Donally 
'v.  Wilson,  5  Leigh,  329,  it  was  held 
that  if  A  owes  a  debt  to  13,  payable  on 
demand,  for  which  C  is  A's  surety,  and 
A  assigns  debts  of  others  to  B  in  part 
payment,  and  after  such  assignment,  but 
before  the  assigned  debts  are  collected,  A 
contracts  another  debt  to  B,  for  which 
there  is  no  security,  B  cannot  in  such 
case,  after  the  collection  of  the  assigned 
debts,  apply  the  same  to  the  payment  of 
A's  last  debt  contracted  after  the  assign- 
ment was  made,  and  recover  the  whole 

VOL.  II.  13 


amount  of  the  first  debt  from  the  surety. 
— A  debtor  cannot  appropriate  a  payment 
in  such  manner  as  to  affect  the  relative  lia- 
bility or  rights  of  his  different  sureties 
without  their  consent.  Postmaster-Gen- 
eral V.  Norvell,  Gilpin,  lOG. 

(a)  Thus,  where  a  creditor  recovered 
one  judgment  on  several  notes,  some  of 
which  were  made  by  the  judgment  debtor 
alone,  and  others  were  signed  also  by  a 
surety,  and  took  out  an  execution  which 
was  satisfied  in  part  by  a  levy,  it  was  held 
that  he  could  not  appropriate  this  pay- 
ment solely  to  the  notes  not  signed  by  the 
surety,  but  that  all  the  notes  were  paid 
proportionably.  Blackstonc  Bank  v.  Hill, 
10  Pick.  129.  So  where  an  insolvent 
delitor  assigns  his  property  for  the  benefit 
of  such  of  his  creditors  as  become  parties 
to  the  assignnient,  and  thereby  releases 
their  claims,  and  a  dividend  is  received 
by  one  of  such  creditors,  it  must  be  ap- 
])lied  ratably  to  all  his  claims  against  the 
debtor,  as  well  to  those  upon  which  other 
parties  are  liable,  or  which  are  otherwise 
secured,  as  to  those  which  are  not  so 
secured.  "  This  is  not  a  case,"  say  the 
court,  "in  which  the  debtor  or  creditor 
has  the  right  to  make  the  application  of 
any  payment,  for  the  application  is  made 
by  law  according  to  the  circumstances 
and  justice  of  the  case."  Commercial 
Bank  v.  Cunningham,  24  Pick.  270.  See 
also,  Merrimack  County  Bank  i\  Brown, 
12  N.  H.  320;  Waller  v.  Lacy,  1  Man.  & 
G.  54.  But  see,  contra,  Portland  Bank 
V.  Brown,  22  Me.  295. 

[145] 


147*  THE   LAW    OF   CONTRACTS.  [PART  II. 

be  cast  on  the  whole  sum  to  the  day  of  the  first  payment,  and 
added  to  the  original  debt,  and,  the  payment  being  deducted, 
on  the  remainder,  interest  is  cast  to  the  next  payment,  and  so 
on.  The  objection  to  this  method  is,  that  if  the  payment  to  be 
deducted  is  not  equal  to  the  interest  which  has  been  added  to 
the  original  sum,  then  a  part  of  this  interest  enters  into  the 
remainder,  on  which  interest  is  cast,  and  thus  the  creditor  re- 
ceives compound  interest.  A  third  method  is,  to  compute  the 
interest  oil  the  principal  sum  from  the  time  when  interest 
became  *payable  to  the  first  time  when  a  payment,  alone,  or  in 
conjunction  with  preceding  payments  with  interest  cast  on 
them,  shall  equal  or  exceed  the  interest  due  on  the  principal. 
Deduct  this  sum,  and  cast  interest  on  the  balance  as  before. 
In  this  way  payments  are  applied  first  to  keep  down  the  interest, 
and  then  to  diminish  the  principal  of  the  debt,  and  the  creditor 
does  not  receive  compound  interest.  This  last  method  has 
been  adopted  in  Massachusetts  by  decision,  and  generally  pre- 
vails, (b) 

One  holding  a  note  on  which  interest  is  payable  annually  or 
semiannually  may  sue  for  each  instalment  of  interest  as  it  be- 
comes payable,  although  the  note  is  not  yet  due.  (c)  But  after 
the  principal  becomes  due  the  unpaid  instalments  of  interest 
become  merged  in  the  principal,  and  must  therefore  be  sued  for 
with  the  principal,  if  at  all.  (d)  And  if  he  allows  the  time  to 
run  by  without  demanding  interest,  he  cannot  afterwards,  in  an 
action  on  the  note,  recover  compound  interest,  (e) 

(6)  Dean  v.  Williams,  17  Mass.  417;  Coolcy   v.   Kosc,  3   id.    221 ;  Ilerries  v. 

Fay  V.   Bradley,   1  Pick.   194;    and    sec  Janiicson,  .5  T.  K.  553.     And  sec  ante,  p. 

Connecticut  v.  Jackson,  1  Johns.  Cii.  17  ;  132,  note  (a). 
French  v.   Kennedy,  7  Barb.  452;  Wil-         (r/)  Howe  i\  Bradley,  19  Me.  31. 
liams  r.  IIoii<;litalin<,',  3  Cowcn,  87,  wo^r ;         (e)   Ilastinj^s  i'.  Wiswall,  8  Mass.  455  ; 

Union    liniik    v.   Kiiidrick,    10  lloh.  La.  Ferry  c.  Ferry,  2  Ciisli.  92  ;  Doe  r.  War- 

51  ;  Hart  I'.  Dorinan,  2  Fla.  445;  Jones  rcn,   7    Grecnl.   48,  and    Bennett's   note; 

V.  Ward,  10  Yerf^.  IGO  ;  Spires  r.  Ilaniot,  Connecticut  v.  Jackson,  1  Johns.  CIi.  13  ; 

8  Watts  &  S.  17  ;  United  States  v.  McLe-  Van  IJenschooter  v.  Lawson,  6  Johns.  Ch. 

more,  4  How.  286 ;  Story  v.  Livingston,  313;  Attwood  ik  Taylor,  1    Man.  &  G. 

13  Pet.  359.  279;  Sparks  v.  Garr'igues,  I  Binn.  152, 

(c)   Greenleaf  ?).  Kellogg,  2  JNIass.  5C8  ;  105. 

[MG] 


CH.  III.] 


DEFENCES. 


*148 


SECTION  II. 


OF   PERFORMANCE. 


Having  treated  of  payment  as  the  specific  defence  to  an 
action  grounded  on  alleged  non-payment,  we  will  now  speak  of 
performance,  generally,  as  the  most  direct  contradiction  and  the 
most  complete  defence  against  actions  for  the  breach  of  con- 
tract. 

■  To  make  this  defence  effectual,  the  performance  must  have 
been  by  him  who  was  bound  to  do  it;  and  whatsoever  is  neces- 
sary to  be  done  for  the  full  discharge  of  this  duty,  although 
only  incidental  to  it,  must  be  done  by  him.  *Nor  will  a  mere 
readiness  to  do  discharge  him  from  his  liability,  unless  he  makes 
that  manifest  by  tender  or  an  equivalent  act.  (/) 

1.   Of  tender. 

If  the  tender  be  of  money,  it  can  be  a  defence  only  when 
made  before  the  action  is  brought,  {g)  and  when  the  demand 


(  f)  Thus  if  a  tenant  by  deed  covenants 
to  pay  rent  in  the  manner  reserved  in  the 
lease,  but  no  -place  of  payment  is  men- 
tioned, the  tenant  must  seek  out  the  lessor 
on  the  day  the  rent  falls  duo,  and  tender 
him  the  money.  It  would  not  be  suffi- 
cient that  he  was  on  the  premises.leased, 
at  the  day,  ready  with  the  money  to  pay 
the  lessor,  and  that  the  latter  did  not  come 
there  to  receive  it.  Haldane  v.  Johnson, 
8  Exch.  689,  20  Enj^.  L.  &  Eq.  498.  And 
see  Poole  v.  Tumbridfre,  2  M.  &  W.  223 ; 
Shop.  Touch.  378  ;  Rowe  v.  Young,  2 
Brod.  &  B.  165.  In  Cranlcv  v.  Hillary, 
2  M.  &  S.  120,  the  plaintiff  had  agreed 
with  the  defendant,  his  debtor,  to  release 
him  from  the  whole  debt,  if  the  debtor 
would  secure  him  a  part  by  giving  him 
certain  pi-omissory  notes.  The  plaintiff 
never  applied  for  the  notes,  nor  did  the 
defendant  ever  tender  them,  but  he  was 
ready  to  give  them  if  they  had  been  ap- 
plied for.  The  plaintiff  afterwards  sued 
the  defendant  on  the  original  cause  of  ac- 


tion, and  the  defendant  relied  upon  the 
agreement  to  compound.  Held,  that  the 
defendant  should  have  offered  the  plain- 
tiff the  notes,  and  that  as  he  had  not,  the 
plaintiff  was  not  barred  from  his  action. 
See  Soward  v.  Palmer,  2  J.  B.  Moore, 
274;  Reay  v.  White,  1  Cromp.  &  M. 
748,  that  a  tender  may  be  dispensed  with 
nnder  certain  circumstances. 

{g)  Bac.  Abr.  Tender,  (D)  ;  Suffolk 
Bank  v.  Worcester  Bank,  5  Pick.  106. 
And  in  Hume  ik  Peploe,  8  East,  168,  it 
was  held  that  a  plea  of  tender  after  the 
day  of  pai/ment  of  a  bill  of  exchange,  and 
before  action  brouglit,  is  not  good  ;  though 
the  defendant  aver  that  he  was  always 
ready  to  pay  from  the  time  of  the  tender, 
and  that  the  sum  tendered  was  the  ivhole 
monetj  then  due,  owing,  or  payable  to  the 
plaintiff  in  respect  of  the  bill,  with  in- 
terest from  the  time  of  the  default,  for 
the  damages  sustained  by  the  plaintiff 
by  reason  of  the  non-performance  of  the 
promise.     And   Lord  Ellenhorow/h,  said  : 

[147] 


149 


THE   LAAV   OF   CONTRACTS. 


[part  II. 


is  of  money,  and  is  definite  in  amount  or  capable  of  being 
made  so.  It  seems  to  be  settled  that  a  tender  may  be  made  to 
a  quantum  meruit,  although  once  held  otherwise ;  (//)  but,  gen- 
erally, where  the  claim  is  for  unliquidated  damages,  it  has  been 
held,  in  England,  very  strongly,  that  no  tender  is  admissible,  {i) 
In  this  country  cases  of  accidental  or  involuntary  tresjoass  form 


"  In  strictness  a  plea  of  tender  is  applica- 
ble only  to  cases  where  the  party  pleading 
it  has  never  been  guilty  of  any  breach 
of  his  contract ;  and  we  cannot  now  suffer 
a  new  form  of  pleading  to  be  introduced, 
different  from  that  which  has  always  pre- 
vailed in  this  case."  And,  per  Lawrence, 
J.  :  "  This  is  a  plea  in  bar  of  the  plain- 
tiff's demand,  which  is  for  damages  ;  and 
therefore  it  ought  to  show  upon  the  record 
that  he  never  iiad  any  such  cause  of  action, 
but  here  the  plea  admits  it."  So  in  Poole 
V.  Tumbridge,  2  M.  &  W.  223,  where  the 
defendant,  the  acceptor  of  a  bill  of  ex- 
change, pleaded  that,  after  the  hill  became 
due,  and  before  the  commencement  of  the 
suit,  he  tendered  to  the  plaintiff  the 
amount  of  the  bill,  with  interest  from  the 
day  when  it  became  due,  and  that  he  had 
always,  from  the  time  ivhen  the  bill  became 
due,  lieen  ready  to  pay  the  plaintiff  the 
amount,  witli  interest  aforesaid  ;  the  Court 
held  the  plea  bad  on  special  demurrer. 
And  Parke,  B.,  said  :  "  I  have  no  doubt 
this  plea  is  bad.  The  declaration  states 
the  contract  of  the  defendant  to  be,  to 
pay  tiie  amount  of  the  bill  on  the  day  it 
became  due,  and  that  promise  is  admitted 
by  the  plea.  It  is  clearly  settled  tliat  an 
indorsee  has  a  right  of  action  against  tlie 
acceptor  by  tiie  act  of  indorsement,  with- 
out giving  him  any  notice  ;  when  a  party 
accepts  a  negotiable  bill,  he  binds  him- 
self to  pay  the  amount,  without  notice,  to 
wliomsoever  may  happen  to  be  the  holder, 
and  on  the  precise  day  when  it  becomes 
due  ;  if  he  places  himself  in  a  situation 
of  hardshi|)  from  the  difficulty  of  finding 
out  the  holder,  it  is  his  own  fault.  It  is 
also  clearly  settled  that  ilie  meaning  of  a 
plea  of  tender  is,  that  the  defendant  was 
always  ready  to  peiform  his  engagement 
according  to  the  nature  of  it,  and  did  jicr- 
form  it  so  far  as  he  was  able,  the  other 
party  refusing  to  receive  the  money. 
Ilunu;  /•.  J'eploc  is  a  decisive  authority 
that  the  pica  must  state  not  only  that  the 
deffMidant  was  ready  to  piiy  on  the  day  of 
payment,  liutthathe  tendered  on  that  day. 
i'liis  plea  rlocs  not  so  st;itc,  and  is  there- 
fore bud."     And  see  to  the  same  point, 

[148] 


City  Bank  v.  Cutter,  3  Pick.  414  ;  Dewey 
V.  Humphrey,  5  id.  187.  The  case  of 
Johnson  v.  Clay,  7  Taunt.  486,  if  correct- 
ly reported,  is  not  law.  Per  Parke,  B., 
in  Poole  v.  Tumbridge,  supra. 

(h)  This  was  settled  in  the  case  of 
Johnson  v.  Lancaster,  Stra.  576.  The  re- 
port of  that  case  is  as  follows  :  "  It  was 
settled  on  demurrer,  that  a  tender  is  plead- 
able to  a  quantum  meruit,  and  said  to  have 
been  so  held  before  in  B.K.,  10  W.  3, 
Giles  V.  Hart,  2  Salk.  622."  In  refer- 
ence to  this  case  of  Giles  v.  Hart,  the 
learned  reporters,  in  a  note  to  Dearie  v. 
Barrett,  2  A.  &  E.  82,  say  :  "  In  Johnson 
V.  Lancaster  this  case  is  cited  from  Sal- 
kekl ;  and  it  is  said  to  have  been  there  de- 
cided that  a  tender  is  pleadable  to  a 
quantum  meruit ;  but  that  does  not  appear 
from  the  report  in  Salkeld,  and  the  rejjort 
in  1  Lord  Raymond,  255,  states  a  contrary 
doctrine  to  have  been  laid  down  by  Holt, 
C.  J.,  and  is  cited  accordingly,  in  20  Vin. 
Ab.  tit.  Tender  (S),  pi.  6.  The  point  is 
not  expressly  mentioned  in  the  reports  of 
the  same  case  in  Carth.  413,  12  Mod.  152, 
Comb.  443,  Holt,  556."  And  see  Cox  v. 
Brain,  3  Taunt.  95. 

(/)  Dearie  v.  Barrett,  2  A.  &  E.  82. 
This  was  an  action  by  a  landlord  against 
a  tenant,  for  not  keei)ing  the  ])remises  in 
repair,  &c.  The  defendant  moved  for 
leave  to  pay  .£5  into  court  by  way  of  com- 
pensation, under  statute  3  &  4  Will.  4,  c. 
42,  §  21,  and  also  that  it  might  be  re- 
ceived in  court  under  a  plea  of  tender 
before  action  brought.'  Patteson,  J.,  said: 
"  Is  there  any  instance  of  such  a  plea  to 
an  action  for  unli(piidated  damages'?" 
To  which  While,  for  the  defendant,  an- 
swered :  "  A  plea  of  tender  is  allowed  to 
a  count  on  a  quantum  meruit.  It  was  so 
settled  in  Johnson  i\  Ijancaster,  1  Stra. 
576.  Although  the  contrary  was  once 
held  in  Giles  v.  Hart,  2  Salk.  622." 
Lord  Denman  added  :  "  It  does  not  fol- 
low because  you  may  jilcad  a  tender  to  a 
count  on  a  ipunitum  meruit,  that  you  may 
also  ])Iead  it  to  any  count  for  nrdiiiuidatcd 
d.iniiigcs."  And  sec  Grceu  v.  bhurtliff, 
I'J  Vt.  592. 


CH.  III.] 


DEFENCES. 


150 


an  exception  ;  in  part  by  usage,  or  by  an  extension  of  the  prin- 
ciple of  the  21  Jas.  1,  ch.  16,  or  express  statutory  provision,  (j) 
This  seems  to  be  settled  in  some  States,  and  would,  we  think, 
be  held  generally.  A  tender  may  be  pleaded  to  an  action  on  a 
covenant  to  pay  money,  (k) 

A  plea  of  tender  admits  the  contract,  and  so  much  of  the 
declaration  as  the  plea  is  applied  to.  It  does  not  bar  the  debt, 
as  a  payment  would,  but  rather  establishes  the  liability  of  the 
defendant;  for,  in  general,  he  is  liable  to  pay  the  sum  which  he 
tenders  whenever  he  is  required  to  do  so.  (/)     But  it  *puts  a  stop 


(j)  New  York  Ecv.  St.  vol.  2,  p.  5,53, 
^  120,  22  ;  Slack  v.  Brown,  1.3  Wend. 
390;  Mass.  Rev.  St.  c.  105,  §  12;  Tracy 
V.  Stron<r,  2  Conn.  659 ;  Brown  v.  Neal, 
36  Me.  407. 

(/.)  Johnson  v.  Clay,  7  Taunt.  486,  1 
J.  B.  Moore,  200. 

(/)  Cox  V.  Brain,  3  Taunt.  95;  Hunt- 
ington V.  American  Bank,  6  Pick.  340 ; 
Bennett  v.  Francis,  2  B.  &  P,  550 ;  Sea- 
ton  V.  Benedict,  5  Bing.  31  ;  Jones  v. 
Hoar,  5  Pick.  291  ;  Bulwer  v.  Home,  4 
B.  &  Ad.  132  ;  Stafford  v.  Clark,  2  Bing. 
377. — The  authorities  and  prac'tice  have 
not  been  entirely  uniform  as  to  the  effect 
of  a  payment  of  money  into  court,  either 
in  actions  of  assumpsit  or  tort.  In  as- 
sumpsit the  modei'n  doctrine  is  that  pay- 
ment into  court,  when  the  counts  are 
general,  and  there  is  no  special  count,  is 
an  admission  that  the  amount  paid  in  is 
due  in  respect  of  some  contract,  but  not 
that  the  defendant  is  liable  on  any  par- 
ticular contract  upon  which  the  plaintiff 
may  choose  to  rely.  Kingham  v.  Robins, 
5  M.  &  W.  94  (1839)  ;  St'apleton  v.  Now- 
ell,  6  M.  &  W.  9  (1840)  ;  Archer  v.  Eng- 
lish, 1  Man.  &  G.  873  (1840)  ;  Charles  v. 
Branker,  12  IM.  &  W.  743  (1844)  ;  Edan 
?'.  Dudfield,  5  Jur.  317  (1841).  On  the 
other  hand,  if  the  declaration  is  on  a 
special  contract,  and  it  seems  on  the  same 
principle,  if  there  are  general  counts  and 
also  a  special  count,  the  payment  admits 
the  cause  of  action  as  set  forth  in  such 
special  count,  but  docs  not  admit  the 
amount  of  damages  therein  stated.  Sto- 
veld  V.  Brewin,  2  B.  &  Aid.  116  (1818) ; 
Guillod  V.  Nock,  1  Esp.  347  (1795); 
Wright  V.  Goddard,  8  A.  &  E.  144  ( 1 838) ; 
Yate  V.  Wilan,  2  East,  134  (1801); 
Bulwer  v.  Home,  4  B.  &  Ad.  132  (1832) ; 
Bennett  v.  Erancis,  2  B.  &  P.  550  (1801). 
la  Jones  v.  Hoar,  5  Pick.   285  (1827), 

13* 


there  were  three  counts,  one  upon  a  prom- 
issory note,  one  for  goods  sold  and  deliv- 
ered, and  a  third  for  money  had  and  re- 
ceived. The  defendant  brought  in  money 
generally,  "  on  account  of,  and  in  satisfac- 
tion of  the  plaintiff's  damages  in  the  suit." 
The  court  tliought  this  an  admission  of  all 
the  contracts  set  forth  in  the  declaration, 
but  under  the  circumstances  the  defend- 
ant had  leave  to  amend  and  specify  that 
the  money  was  intended  to  be  paid  la 
upon  the  promissory  note.  So  in  Hunt- 
ington V.  American  Bank,  6  Pick.  340 
(1828),  there  were  two  counts,  first,  on 
an  account  annexed  to  the  writ,  for  the 
plaintirt"s  services,  claiming  a  specific 
sum ;  and  second,  a  count  claiming  a 
reasonable  compensation  for  his  services, 
and  alleging  their  value  at  $1,500.  The 
defendant  paid  $300  into  court.  The 
principal  question  was,  whether  the  de- 
fendant l)y  ])aying  the  money  into  court 
generally,  without  designating  the  count 
on  whicli  it  was  paid  in,  admitted  the 
contract  of  hiring,  as  set  out  in  the  second 
count,  thus  leaving  no  question  for  the 
jury,  except  the  value  of  the  plaintiff's 
services.  The  court  held  that  it  did.  la 
Spalding  v.  Vandercook,  2  Wend.  431 
(1829),  the  declaration  contained  a  count 
on  a  promissory  note  for  $131,  and  also 
the  common  money  counts.  The  defend- 
ant paid  in  $89  and  sought  to  reduce  the 
amount  of  the  plaintiff's  demand  to  that 
sum,  by  showmg  tiiat  the  consideration  of 
the  note  failed.  The  court  admitted  evi- 
dence to  that  point,  notwithstanding  the 
plea.  See  Donnell  v.  Columbian  Insur- 
ance Companv,  2  Sumner,  366  (1836). 
In  Elgar  v.  Watson,  1  Car.  &  M.  494 
(1842),  the  action  was  assumpsit  for 
use  and  occupation,  and  for  money  lent. 
Colerkhje,  J.,  held  that  a  general  payment 
by  the  defeudant,  acknowledged  the  plaia- 

[149] 


161* 


THE   LAW   OF   CONTRACTS. 


[part  ir. 


to  accruing  damages,  or  interest  for  delay  in  payment,  and  gives 
the  defendant  costs,  {m)  It  need  not  be  *made  by  the  defend- 
ant personally;  if  made  by  a  third  person,  at. his  request,  it  is 
sufficient ;  (n)  and  if  made  by  a  stranger  without  his  knowledge 
or  request,  it  seems  that  a  subsequent  assent  of  the  debtor 
would  operate  as  a  ratification  of  the  agency  and  make  the 
tender  good,  (o)  Any  person  may  make  a  valid  tender  for  an 
idiot;  and  the  reason  of  this  rule  has  been  held  applicable  to  a 
tender  for  an  infant  by  a  relative  not  his  guardian,  [p)  And  if 
an  agent  furnished  with  money  to  make  a  tender,  at  his  own 
risk  tenders  more,  it  is  good,  [q)  So  a  tender  need  not  be 
made  to  a  creditor  personally ;  but  it  must  be  made  to  an 
agent  actually  authorized  to  receive  the  money,  (r)  If  the 
money  be  due  to  several  jointly,  it  may  be  tendered  to  either. 


tiff's  riglit  to  recover  sometlung  on  every 
item  ill  liis  bill  of  particulars,  and  it  was 
for  tiio  jury  to  assess  the  amount. — In 
actions  of  tort  the  same  general  principles 
seem  to  be  applied.  If  tlie  declaration  is 
special,  payment  into  court  operates  as  an 
admission  of  the  cause  of  action,  as  set 
out  in  the  declaration.  Thus,  in  actions 
against  railways  for  injuries  received  by 
the  negligence  of  the  company,  or  in  an 
action  against  a  town  for  a  defect  in  the 
liighway,  payment  into  court  admits  the 
di-fcudant's  liability  as  set  out,  and  leaves 
the  (juestion  of  damages  for  the  jury. 
Bacon  v.  Ciiarlton,  7  Ciish.  581  ;  Pcrren 
V.  Motnnouthshire  Railway  Co.  C.  B. 
18r)3,  20  Eng.  L.  &  Eq.  258.  And  see 
Lloyd  V.  Walkey,  9  C.  &  P.  771.  On 
the  otiier  hand,  if  a  declaration  in  tort  is 
f/merul,  as  in  trover  for  a  number  of  arti- 
cles, payment  into  court  would  admit  a 
liability  on  some  cause  of  action,  but  not 
any  j)articular  article  mentioned  in  the 
declaration.  Schrcgcr  v.  (^arden,  11  C. 
B.  5H1,  10  Eng.  L.  &  Eq.  513;  Cook  v. 
Ilartlc,  8  C.  &  P.  508;  Story  v.  Finnis, 
C  Excii.  lli.'J,  3  Eng.  L.  &  Eq.  548. 

(/«)  Dixon  V.  Clark,  5  C.  B.  3G5 ; 
Waislcll  r.  Atkinson,  3  Hing.  290;  Law 
V.  .Jackson,  '.)  ('owcn,  041  ;  C/Oit  i\  Hous- 
ton, .'i  .Johns.  Cas.  243;  Carli-y  v.  Vance, 
17  Mass.  389  ;  Baymond  v.  Bcarnard,  12 
Johns.  274;  Cornell  v.  (ii-ccn,  10  S.  &  K. 
14.  A  Icnilcr  may  bo  snilicicnt  to  slop 
tlic  running  of  interest  although  not  a 
Icr.lininil  tender  so  as  to  give  costs,  (ioff 
V.  Ileiiolioth,  2  Cush.  475  ;  Sullolk  Bank 
r.  Worcester  Hank,  5  J'ick.  lOO. 

[LOO] 


(n)  Cropp  I'.  Hambleton,  Cro.  Eliz.  48; 
1  Eol.  Abr.  421,  (K.)  pi.  2.  A  tender 
may  be  made  by  an  inhabitant  of  a  school 
district,  on  behalf  of  such  district,  without 
any  express  authority,  and  this,  if  ratified 
by  the  district,  is  a  good  tender.  Kincaid 
V.  Brunswick,  2  Fairf.  188. 

(o)  Per  Best,  C.  J.,  in  Harding  v.  Da- 
vies,  2  C.  &  P.  78.  And  see  Kincaid  v. 
Bmnswick,  2  Fairf.  188;  Read  v.  Gold- 
ring,  2  M.  &  S.  86. 

[p)  Co.  Litt.  206  b;  Brown  v.  Dysin- 
ger,  1  Rawle,  408. 

\q)  Read  v.  Goldring,  2  M.  &  S.  86. 

(r)  Kirton  v.  Braithwaite,  1  M.  &  "W. 
313;  Goodland  v.  Blewith,  1  Camp.  477. 
Tender  to  a  merchant's  clerk,  at  the  store, 
for  goods  previously  bought  there,  is  good, 
although  the  claim  had  then  been  lodged 
witii  an  attorney  for  collection.  Hovt  v. 
Byrnes,  2  Fairf.  475  ;  JNIcIneire  r.  Whce- 
lock,  1  Gray,  GOO.  And  this  altliougli  the 
clerk  had  been  forbidden  to  receive  the 
money,  if  tendered.  Moffat  v.  Parsons,  5 
Taunt.  307.  Tender  to  tiie  attorney  of  a 
creditor  who  has  the  claim  left  for  collec- 
tion, is  good.  Watson  r.  Ih'therington,  1 
Car.  &  K.  36  ;  Crozer  ?-.  I'iliing,  4  B.  & 
C.  28,  6  Dowl.  &  R.  132.  And  tender  to 
such  attorney's  clerk,  at  his  olKce,  the 
principal  being  absent,  may  be  good. 
Jvirton  i\  Braithwaite,  sii/iiv.  And  sec 
AVilmot  r.  Sniitii,  3  (-.  &  P.  453  ;  Barrett 
V.  Deere,  Moodv  &  M.  200.  See  Bing- 
ham r.  Allport,'l  Nev.  &  M.  398.  The 
debtor  is  not  obliged  to  teinler  for  such 
attorney's  Idler,  Kirton  v.  Braithwaite, 
siipni. 


en.  III.] 


DEFENCES. 


-151 


but  must  be  pleaded  as  made  to  all.  (s)  Tt  perhaps  is  good 
if  made  to  one  appointed  executor,  if  he  afterwards  prove  the 
will.  (0 

The  whole  sum  due  must  be  tendered,  (ii)  as  the  creditor  is 


(s)  Douglas  V.  Patrick,  3  T.  R.  G83. 
So  a  tender  of  a  deed  to  one  of  two  joint 
purchasers  is  sufficient.  Dawson  v.  Ew- 
iag,  16  S.  &  R.  371. 

(t)  1  Eq.  Cas.  Abr.  319.  But  sec  Todd 
V.  Parker,  Coxc,  45. 

(m)  Dixon  V.  Clark,  5  C.  B.  365.  In 
this  case  a  declaration  in  debt  on  simple 
contract  contained  two  counts,  in  each 
of  which  £26  were  demanded.  The  de- 
fendants pleaded  as  to  the  causes  of  ac- 
tion, as  to  jC5,  parcel,  &c.,  a  tender.  The 
plaintiff  I'eplied  that  before  and  at  the 
time  of  the  tender,  and  of  the  request  and 
refusal  after  mentioned,  and  until,  and  at 
the  commencement  of  the  action,  a  larger 
sum  than  ,£5,  namely,  £13,  15s.,  part 
of  the  money  in  the  declaration  demanded, 
was  due  from  the  defendants  to  the  plain- 
tiff as  one  entire  .mm,  and  on  one  entire  con- 
tract and  liabiliti/,  and  inclusive  of,  and 
not  separate  or  divisible  from  the  said 
sum  of  £5,  and  the  same  being  a  contract 
and  liability  by  which  the  defendants  were 
liable  to  pay  to  the  plaintiff  the  whole  of 
the  said  larger  sum,  in  one  entire  sum 
upon  request ;  and  that,  after  the  last- 
mentioned  and  larger  sum  had  become  so 
due,  and  while  the  same  remained  unpaid, 
the  plaintiff  requested  of  the  defendants 
payment  of  the  last-mentioned  and  larger 
sum,  of  which  the  said  £5  in  the  plea 
mentioned  was  then  such  indivisible  parcel 
as  aforesaid,  yet  that  the  defendants  re- 
fused to  pay  the  said  larger  sum  ;  where- 
fore the  plaintiff  i-efused  the  said  £5. 
Held,  on  special  demurrer,  that  the  repli- 
cation was  a  good  answer  to  the  plea,  and 
that,  if  there  was  any  set-off  or  other  just 
cause  for  not  paying  the  larger  sum,  it 
should  have  come  by  way  of  rejoinder. 
So  in  Boyden  v.  Moore,  5  Mass.  365, 
where  the  defendant  had  brought  into 
court  what  she  supposed  justly  due  on  the 
action,  and  the  costs  up  to  the  time,  but 
upon  the  trial  it  appeared  that  she  had 
brought  in  too  little  by  forty-one  cents, 
and  the  judge  directed  the  jury  that  they 
might  still  tind  a  verdict  for  the  defendant, 
if  the  balance  appeared  to  them  a  mere 
trifle,  and  they  found  accordingly,  a  new 
trial  was  granted  for  the  misdirection  of 
the  judge.     And  Parsons,    C.  J.,  said  : 


"It  is  a  well-known  rule  that  the  defend 
ant  must  take  care  at  his  peril,  to  tender 
enough,  and  if  he  does  not,  and  if  the 
plaintiff  replies  that  there  is  more  due 
than  is  tendered,  which  is  traversed,  the 
issue  will  be  against  the  defendant,  and 
it  will  be  the  duty  of  the  jury  to  assess  for 
the  plaintiff'  the  sum  due  on  the  promise  ; 
and  if  it  be  not  covered  by  the  money  ten- 
dered, he  will  have  judgment  for  the  bal- 
ance. If  the  present  direction  of  the 
judge  had  jjeen  in  tiie  trial  of  such  an 
issue  arising  on  a  plea  of  tender,  we  can- 
not think  the  direction  to  be  right.  The 
defendant  cannot  lawfully  withhold  from 
the  plaintiff  any  money  due  to  him,  how- 
ever small  the  sum,  and  if  the  defendant 
intended  to  tender  as  much  money  as  tiie 
plaintiff'  could  claim,  but  made  a  mistake 
in  her  calculation,  she  must  suff'er  for  her 
own  mistake,  and  not  the  plaintiff,  al- 
though tlie  injury  to  him  may  be  very 
small,  and  such  as  most  men  would  disre- 
gard. From  the  calculation  made  by  the 
judge  in  the  hurry  of  the  trial  the  de- 
ficiency was  about  fourteen  cents,  but  on 
a  more  correct  calculation  it  amounts  to 
about  forty-one  cents.  And  if  at  the  time 
the  money  was  brought  in,  no  action  had 
been  pending,  and  the  plaintiff'  had  then 
received  and  indorsed  the  payment,  ho 
might  afterwards  have  commenced  and 
maintained  an  action  to  recover  the  bal- 
ance then  due.  That  the  law  will  not  re- 
gard trifles  is,  when  properly  applied,  a 
correct  maxim.  But  to  this  point  it  is 
not  applicable.  In  calculating  interest 
there  may  and  probably  must  arise  frac- 
tions not  to  be  expressed  in  the  legal 
money  of  account ;  these  fractions  are 
trifles,  and  may  be  rejected.  In  making 
payments  it  is  sometimes  not  possible, 
from  the  value  and  divisions  of  the  cur- 
rent coin,  to  make  the  exact  sum ;  — if  the 
])ayment  be  made  as  nearly  as  it  can  con- 
veniently be  made,  the  fractional  part  of  a 
small  coin  may  be  neglected ;  it  is  a  trifle. 
But  the  present  case  is  not  one  of  these 
trifles.  A  man  may  sue  and  recover  on  a 
note  given  for  forty  cents ;  also  on  a 
larger  note  where  forty  cents  remain  un- 
paid. It  is  therefore  our  opinion  that  the 
jury  ought  to  have  been  directed  to  ealcu- 

[151] 


152*-153* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


not  bound  to  receive  a  part  of  his  debt.  But  this  does  not 
mean  the  whole  that  the  debtor  owes  to  the  creditor ;  for  he 
may  owe  him  many  distinct  debts  ;  and  if  they  are  perfectly 
separable,  as  so  many  notes,  or  sums  of  money  *  otherwise  dis- 
tinct, the  debtor  has  a  right  to  elect  such  as  he  is  willing  to  ac- 
knowledge and  pay,  and  make  a  tender  of  them.  And  if  the 
tender  be  for  more  than  the  whole  debt,  *it  is  valid  ;  (y)  unless 
it  be  accompanied  with  a  demand  of  the  balance,  and  the  cred- 
itor objects  for  that  reason.  If  the  obligation  be  in  the  alterna- 
tive, one  thing  or  another  as  the  creditor  may  choose,  the  tender 
should  be  of  both,  that  he  may  make  his  choice,  (lo) 

A  tender  must  be  made  at  common  law,  on  the  very  day  the 


late  the  interest  on  the  second  note,  and 
deducting  the  payments,  if  a  balance  re- 
mained unpaid,  to  find  that  balance  for 
the  plaintiti'.  If  any  sum  large  enough  to 
be  discharged  in  the  current  coin  of  tlie 
country  is  a  trifle,  -wliich  although  due, 
tlie  jury  are  not  obliged  by  law  to  award 
to  the  'plaintiff,  the  creditor ;  it  will  be 
difficult  to  draw  a  line  and  say  how  large 
a  sum  must  be,  not  to  be  a  trifle.  The 
law  gives  us  no  rule."  But  a  tender  of 
the  sum  justli/  due  by  the  condition  of  a 
bond,  is  good,  although  less  tliau  the  pen- 
alty.    Tracy  v.  Strong,  2  Conn.  659. 

(v)  Astley  v.  Reynolds,  2  Stra.  916; 
"Wade's  case,  5  Rep.  115  ;  Dean  v.  James, 
4  B.  &  Ad.  546  ;  Douglas  v.  Patrick,  3 
T.  R.  683;  Black  v.  Smith,  Peakc,  88; 
Cadman  v.  Lubbock,  5  D.  &  R.  289  ; 
Bevans  v.  Rees,  5  M.  &  W.  306.  In  tliis 
last  case  the  defendant,  wlio  owed  the 
plaintiff  .CI 08  for  ])rincipal  and  interest 
on  two  promissory  notes,  in  consequence 
of  an  application  from  tlie  jilaintiff 's  at- 
torney for  tlie  amount,  sent  a  person  to 
tlie  attorney,  who  told  him  he  came  to 
settle  tlic  amount  due  on  the  notes,  and 
desired  lo  be  iidormed  what  was  due,  and 
laid  down  150  sovereigns,  out  of  which  he 
desired  the  attorney  to  take  the  principal 
and  interest,  l)Ut  tlie  attorney  rifusud  to 
do  so,  unless  a  siiop  account,  diu'  from  the 
phiintiff  to  tlie  dci'cndant  were  fixed  at  a 
certain  amount:  —  //dd,  that  this  was  a 
pooil  tender  of  the;  .£108,  the  li.xing  of  tlie 
shop  account  being  a  coMateral  matter, 
whidi  the  attorney  liad  no  right  to  rciiuire. 
And  Lord  Ahiiiijcr  said  :  "  1  am  not 
disposed  to  lay  down  general  projiosilions, 
unless  wluic  it  is  necessary  to  the  decision 

[102] 


of  the  case ;  but  I  am  prepared  to  say, 
that  if  the  creditor  knows  tlie  amount  due 
to  him,  and  is  offered  a  larger  sum,  and, 
without  any  objection  on  the  ground  of 
want  of  change,  makes  quite  a  collateral 
objection,  that  will  be  a  good  tender." 
But  the  tender  of  a  .£5  bank-note  in  pay- 
ment of  a  debt  of  £3  10s.,  and  requesting 
the  creditor  to  make  the  change,  and  re- 
turn the  balance,  has  been  lield  a  bad 
tender.  Betterbee  v.  Davis,  3  Camp. 
70.  And  see  Robinson  v.  Cook,  6  Taunt. 
336 ;  Blow  v.  Russell,  1  C.  &  P.  365.  If 
however  the  creditor  does  not  object  to  the 
request  for  change,  but  claims  that  more 
is  due  than  the  ichoh  amount  tendered,  and 
therefore  refuses  to  receive  the  tender,  the 
tender  is  good.  Black  v.  Smith,  Peake, 
88 ;  Cadman  v.  Lubbock,  5  D.  &  R.  289  ; 
Saunders  v.  Graham,  Gow,  121.  And  so 
if  he  refuses  the  tender  merely  on  tlie 
ground  that  the  debtor  will  not  pay  with 
the  surplus,  another  and  distinct  debt,  or 
unless  the  debtor  will  fix  his  own  counter 
claim  against  the  creditor  at  a  certain 
sum.  Bevans  v.  Rees,  5  M.  &  W.  306. 
If  a  creditor  has  sejiarate  claims  against 
divers  persons  for  different  amounts,  a 
tender  of  one  gross  sum  for  the  debts  of 
all,  will  not  sujiport  a  plea  of  tender, 
stating  that  a  certain  portion  of  the  whole 
sum  was  tendered  for  the  debt  of  one. 
Strong  V.  Harvey,  3  Bing.  304.  But  a 
tender  of  one  gross  sum  upon  several  de- 
mands from  the  same  debtor,  without 
designating  the  amount  tendered  upon 
each,  is  good.  Thetford  v.  Hubbard,  22 
Vt.  440. 

(w)  Fordley's  Case,  1  Leon.  68. 


CH.  III.] 


DEFENCES. 


*154-*155 


money  is  due,  if  that  day  be  made  certain  by  the  contract,  (x) 
But  the  statutes  and  usages  of  our  States  (y)  generally  permit 
the  tender  to  be  made  after  that  day,  but  before  the  action  is 
brought ;  and  in  some  it  may  be  made  *  after  the  action  is 
brought.  It  cannot  generally  be  made  before  the  debt  is  due, 
as  the  creditor  is  not  then  obliged  to  accept  it,  even  if  it  does 
not  draw  interest,  (c) 

To  make  a  tender  of  money  valid,  the  money  must  be  act- 
ually produced  and  proffered,  (a)  unless  the  creditor  expressly 
or  impliedly  waives  this  production,  {b^j    And  it  seems  *  that  the 


(x)  City  Bank  v.  Cutter,  5  Pick.  414; 
Dewey  v.  Humphrey,  5  Pick.  187  ;  May- 
nard  v.  Hunt,  id.  240;  Gould  v.  Banks, 
8  Wend.  5(52;  Day  v.  Latfcrty,  4  Pike, 
450 ;  and  see  ante,  p.  148,  n.  (r/).  Perhaps 
on  a  contract  for  the  payment  of  money, 
simply,  when  interest  would  be  the  only 
damages  to  be  recovered,  a  tender  of  the 
principal  a7id  interest,  to  the  day  of  tender, 
might  be  sufficient,  if  made  before  action 
brought.     But  see  aiite,  p.  148,  n.  (r/). 

(y)  This  is  the  rule  in  Connecticut  from 
usage.     Tracy  v.  Strong,  2  Conn.  659. 

(z)  There  can  be  no  doubt  that  a  tender 
of  a  debt  due  at  a  certain  day,  before  such 
daj',  without  tendering  also  interest  up  to 
the  day  of  maturity,  is  bad,  where  the 
debt  is  drawing  interest.  Tillou  v.  Brit- 
ton,  4  Halst.  120;  Saunders  v.  Frost, 
5  Pick.  2()7,  per  Parker,  C.  J.  It  is  not 
so  clear  that  if  a  debt  is  not  draAving  in- 
terest, tender  of  the  debt  before  the  day  it 
is  due  and  payable,  is  not  good;  and  one 
case  has  expressly  held  it  valid.  M'Hard 
V.  AVhctcroft,  3  Harris  &  McH.  85. 

(a)  Sucklinge  r.  Coney,  Noy,  74.  This 
case  is  stated  in  the  book  as  follows  :  — 
"  Upon  a  special  verdict,  upon  payment 
for  a  redemption  of  a  mortgage,  the  mort- 
gagor comes  at  the  day  and  place  of  pay- 
ment, and  said  to  the  said  mortgagee, 
'  Here,  I  am  ready  to  pay  you  the  £200,' 
which  was  of  due  money,  and  yet  held  it 
all  the  time  upon  his  arm  in  bags ;  and 
adjudged  no  tender,  for  it  might  be  coun- 
ters or  base  coin  for  any  thing  that  ap- 
peared." And  Mr.  Justice  Anderson 
said  :  "  It  is  no  good  tender  to  say,  I  am 
ready,  &c."  So  in  Comyn's  Digest, 
Pleader  (2  W.)  28,  it  is  said,  "  If  issue  be 
upon  the  tender,  there  must  be  an  actual 
offer.  The  tender  alleged  must  be  legal, 
and  therefore  it  is  not  sufficient  to  say 
paratusfuit  solvere,  without  saying,  et  obtu- 


lit."  See  also,  Thomas  v.  Evans,  10  East, 
101  ;  Dickinson  v.  Shee,  4  Esp.  68  ;  Kraus 
V.  Arnold,  7  J.  B.  Moore,  59  ;  Lcathcrdale 
V.  Sweepstone,  3  C.  &  P.  342 ;  Finch  v. 
Brook,  1  Scott,  70 ;  Glasscott  v.  Day,  5 
Esp.  48  ;  Brown  v.  Gilmore,  8  Greenl. 
107.  It  is  at  all  events  essential,  that  the 
debtor  have  the  money  ready  to  deliver. 
It  is  not  sufficient  that  a  third  person  on 
the  spot  has  the  money  which  he  would 
lend  the  debtor,  unless  he  actually  con- 
sents to  lend  it.  Sargent  i\  Graham,  5 
N.  H.  440 ;  Fuller  v.  Little,  7  N.  H.  535. 
The  rule  is  thus  laid  down  in  Bakcman  v. 
Pooler,  15  Wend.  637  ;  —  to  prove  a  plea 
of  tender,  it  must  appear  that  there  was  a 
production  and  manual  offer  of  the  money 
unless  the  same  be  dispensed  with  by 
some  positive  act  or  declaration  on  the 
part  of  the  creditor  ;  it  is  not  enough  that 
the  party  has  the  money  in  his  pocket,  and 
says  to  the  creditor  that  he  has  it  ready 
for  him,  and  asks  him  to  take  it,  without 
showing  the  money.  A  tender  of  the 
creditor's  own  overdue  notes  is  equivalent 
to  a  tender  in  cash.  Foley  v.  Mason,  6 
Md.  37. 

{b)  The  decisions  are  nice,  and  perhaps 
not  altogether  harmonious  upon  the  point 
of  what  constitutes  a  waiver  of  the  pro- 
duction and  ofler  of  the  money,  so  as  to 
render  a  tender  valid.  In  Read  i'.  Gold- 
ring,  2  M.  &  S.  86,  the  agent  of  the  debtor 
pulled  out  his  pocketliook,  and  told  the 
plaintiff  if  he  would  go  to  a  neighboring 
public  house,  he  would  pay  the  debt. 
The  agent  had  the  necessary  amount  in 
his  pockctbook,  but  no  money  was  pro- 
duced. The  creditor  refused  to  take  the 
amount.  Yet  this  was  held  a  good  tender. 
On  the  other  hand,  in  Finch  v.  Brook,  1 
Scott,  70,  the  defendant's  attorney  called 
at  the  plaintifif's  shop  to  pay  him  the  debt, 
having  the  money  in  his  pocket  for  that 

[153] 


155- 


TIIE   LAW   OF   CONTRACTS. 


[part  II. 


creditor  may  not  only  waive  the  actual  production  of  the  money, 
but  the  actual  possession  of  it  in  hand  by  the  debtor.  But  it 
has  been  held,  in  one  case,  that  if  a  debtor  has  offered  to  pay 
and  is  about  producing  the  money  and  is  prevented  by  the  cred- 
itor's leaving  him,  this  is  not  a  tender,  (c)  The  creditor  is  not 
bound  to  count  out  the  money,  if  he  has  it,  and  offers  it.  (d) 

The  tender  must  be  unconditional ;  so,  at  least,  it  is  some- 
times said  ;  but  the  reasonable,  and  we  think  the  true  rule  is, 
that  no  condition  must  be  annexed  to  the  tender,  (e)  which  the 
creditor  can  have  any  good  reason  whatever  for  objecting  to  ; 
as,  for  instance,  that  he  should  give  a  receipt  in  full  of  all  de- 
mands. (/)     It  may  not  perhaps  be  quite  settled  that  if  the 


purpose,  and  mentioned  the  precise  sum, 
and  at  tlie  same  time  put  his  hand  into  his 
pocket  for  the  purpose  of  taking  out  the 
mono}',  hut  did  not  actually  produce  it, 
the  phiintitF  sayino:  he  could  not  take  it : 
And,  semble,  that  tliis  was  a  sufficient  ten- 
der, the  plaintitf  having  dispensed  with 
the  actual  production  of  the  money ;  but 
quare  whether  such  dispensation  ought 
not  to  have  been  specially  pleaded.  And 
in  Breed  v.  Hurd,  6  Pick.  356,  a  witness 
told  the  plaintiff  that  the  defendant  had 
left  money  with  him  to  pay  the  plaintiff's 
bill,  and  that  if  the  plaintiff  would  make 
it  right,  liy  deducting  a  certain  sum,  he 
would  pay  it,  at  the  same  time  making  a 
motion  with  his  hand  towards  his  desk,  at 
which  he  was  then  standing ;  and  he 
swore  that  he  believed,  but  did  not  know, 
that  there  was  money  enough  in  his  desk, 
but  if  there  was  not,  he  would  have 
obtained  it  in  five  minutes,  if  the  plaintiff 
would  have  made  the  deduction,  but  the 
plaintiff  replied  that  he  would  deduct 
nothing:  —  Held,  that  this  was  not  a 
tender.  And,  per  Cnrium,  "  To  our  sur- 
prise there  arc  cases  very  nearly  like  this, 
where  the  offer  was  held  to  1)C  a  valid 
tender,  as  in  Harding  v.  ])avies,  2  Car. 
&  r.  77,  where  a  woman  stated  '  that  she 
had  the  money  up  stairs.'  Here  the  wit- 
ness said  he  could  get  the  money  iu  five 
minutes.  We  all  think  this  was  not  a 
tender.  The  ])arty  must  have  the  money 
aiiout  him,  wherewith  to  make  the  tender, 
though  it  is  not  necessary  to  count  it. 
We  tliiiik  there  was  not  a  tender  here, 
even  on  iIk;  broad  ciLses  in  Knglaiid." 

(<•)  I^eatherdalc  v.  Sweepstnne,  3  C  & 
P.  .342.  In  this  case  in  order  to  prove 
tho  tender    ii   witness    was    called,    who 

[154] 


stated  that  he  heard  the  defendant  offer  to 
pay  the  plaintiff  the  amount  of  his  de- 
mand, deducting  14.5.  0|f/.,  which  balance 
was  the  sum  stated  in  the  plea ;  that  the 
defendant  then  put  his  hand  into  his 
pocket,  but  before  he  could  take  out  the 
money  the  plaintiff  left  the  room  and  the 
money  was  therefore  not  produced  till  the 
plaintiff  had  gone.  Lord  Tenterden  held 
this  no  tender.  But  this  was  only  a  Nisi 
Prills  case  and  may  perhaps  be  question- 
able. For  if  a  tender  be  designedly 
avoided  by  the  creditor,  he  ought  not  to 
object  that  no  tender  was  made.  Gilmore 
V.  Holt,  4  Pick.  258 ;  Southworth  v.  Smith, 
7  Cush.  391. 

(d)  Wheeler  v.  Knaggs,  8  Ohio,  169, 
172;  Behaly  v.  Hatch,  Walker,  Miss. 
369 ;  Breed  v.  Hurd,  6  Pick.  356. 

(e)  In  Bevans  v.  Recs,  cited,  supra,  n. 
[v),  Maule,  B.,  said  :  "No  doubt  a  tender 
must  be  of  a  specific  sum,  on  a  specific 
account ;  and  if  it  be  upon  a  condition 
which  the  creditor  has  a  right  to  object 
to,  it  is  not  a  good  tender.  But  if  the 
only  condition  be  one  which  he  has  no 
right  to  object  to,  and  he  has  still  ])ower 
to  take  the  money  due  —  as  if  the  condi- 
tion were,  '  I  will  pay  the  money  if  you 
will  take  it  up,'  or  the  like  —  that  does  not 
invalidate  the  tender.  Here  the  defend- 
ant offers  the  plaintiff  the  ojjtion  of  tak- 
ing any  amount  which  he  says  is  due,  and 
only  offers  it  in  satisfaction  of  that  amount ; 
there  is  no  condition  therefore  which  the 
plaintiff  has  a  right  to  object  to." 

(/)  It  has  been  often  adjuilged  that  if 
the  debtor  demand  a  receipt  in  full  this 
vitiates  his  tender.  Glasscott  r.  Day,  5 
Esp.  48,  seems  to  1)C  a  leading  case  on 
this  point.     The  sum  claimed  iu  tho  ac- 


en.  III.] 


DEFENCES. 


156 


debtor  demands  a  receipt  for  the  sum  which  he  pays,  and  if 
this  be  refused,  retains  the  money,  he  will  thereby  (though 
always  ready  to  pay  it  on  those  terms),  lose  the  benefit  of  his 
tender.     But  the  authorities  seem  to  go  in  this  direction.     If, 


tion  was  £20.  Tlie  defendant  pleaded  non 
assumpsit,  except  as  to  £18,  and  as  to 
that  a  tender.  The  witness  for  the  de- 
fendant, who  proved  the  tender,  stated, 
that  he  went  to  the  phiintitf  with  the 
money,  which  he  offered  to  pay  on  the 
plaintiff  giving  him  a  receipt  in  full. 
The  plaintiff  refused  to  receive  it.  And 
Lord  EllcnboroiKjh  held  this  not  to  be  a 
good  tender.  Thayer  v.  Brackett,  12 
Mass.  430,  is  also  in  point.  The  real 
debt  was  SI 90.2.5.  Part  of  this  debt  had 
been  paid  by  the  note  of  a  third  person, 
which  was  indorsed  by  the  debtor  to  the 
plaintiff.  If  this  note  had  been  paid  at 
maturity,  tlie  defendant  would  still  have 
been  indebted  to  the  plaintiff  in  the  sum 
of  $40,  wiiich  he  tendered,  but  required  a 
receipt  in  full  of  all  demands.  The  credi- 
tor refused  to  give  this,  as  the  note  was 
still  unpaid,  but  offered  to  give  a  receipt 
in  full  of  all  accounts ;  whereupon  the  ten- 
der was  withdrawn.  Parker,  C.  J.,  said  : 
"  The  defendant  lost  the  benefit  of  his 
tender  by  insisting  on  a  receipt  in  full  of 
all  demands,  which  the  plaintiff  was  not 
obliged  to  give  him.  The  defendant 
should  have  relied  on  his  tender  and  upon 
proof  at  tlie  trial  that  no  more  was  due. 
But  he  witiidrew  the  tender,  because  the 
plaintiff  would  not  comply  with  the  terms 
which  accompanied  it.  This  cannot  be 
deemed  a  lawful  tender,  and  according  to 
the  agreement  of  the  parties,  judgment 
must  be  entered  for  the  plaintiff  for  the 
balance  of  his  account  and  for  his  costs." 
And  see  Loring  v.  Cooke,  3  Pick.  48. 
"Wood  V.  Hitchcock,  20  Wend.  47,  is  a 
strong  case  to  this  point.  It  is  there  held 
that  a  tender  of  money  in  payment  of  a 
debt  to  be  available  must  be  without 
qualification,  i.  e.,  there  must  not  be  any 
thing  raising  the  implication  that  the 
debtor  intended  to  cut  off  or  bar  a  claim 
for  any  amount  beyond  the  sum  tendered  ; 
and  it  was  accordingly  held  in  this  case 
that  the  tender  of  a  sum  of  money  in  full 
discharge  of  all  demands  of  the  creditor 
was  not  good.  And  Cowen,  J.,  said : 
"  Very  likely  the  defendant  when  he 
made  the  tender  owed  the  plaintiff  in  the 
whole  more  than  eighty-five  dollars,  but 
has  succeeded,  by  raising  technical  diffi- 


culties, in  reducing  the  report  to  that  sum. 
Independent  of  that,  however,  the  tender 
was  defective.  It  was  clearly  a  tender  to 
be  accepted  as  the  whole  balance  due, 
which  is  liolden  bad  by  all  the  books. 
The  tender  was  also  bad,  because  the  de- 
fendant would  not  allow  that  he  was  even 
liable  to  the  full  amount  of  what  he  ten- 
dered. His  act  was  within  the  rule  which 
says  he  shall  not  make  a  protest  against 
his  liability.  He  must  also  avoid  all 
counter  claim,  as  of  a  set-off  against  part 
of  the  debt  due.  That  this  defendant  in- 
tended to  impose  the  terms  or  raise  the 
inference  that  the  acceptance  of  the  money 
should  be  in  full,  and  thus  conclude  the 
plaintiff  against  litiirating  all  further  or 
other  claim,  the  referees  were  certainly 
entitled  to  say.  That  the  defendant  in- 
tended to  question  his  lialiility  to  part  of 
the  amount  tendered  is  equally  olivious, 
and  his  object  was  at  the  same  time  to 
adjust  his  counter  claim.  It  is  not  of  the 
nature  of  a  tender  to  make  conditions, 
terms,  or  qualifications,  but  simply  to 
pay  the  sum  tendered,  as  for  an  admitted 
debt.  Intcrlading  any  other  object  will 
always  defeat  the  effect  of  the  act  as  a 
tender.  Even  demanding  a  receipt,  or  an 
intimation  that  it  is  expected,  as  by  ask- 
ing, '  Have  you  got  a  receipt,'  will  vitiate. 
The  demand  of  a  receipt  in  full  would  of 
course  be  inadmissilile."  The  reason  of 
this  rule  is  obvious  where  the  debtor  does 
not  in  fact  tender  all  that  is  due ;  for  if  a 
debtor  tenders  a  certain  sum  as  all  that  is 
duo,  and  the  creditor  receives  it,  under 
these  circumstances  it  might  compromise 
his  rigiits  in  seeking  to  recover  more  ;  but 
if  the  same  sum  was  tendered  uncondition- 
aJlij,  no  such  effect  could  follow.  Sutton 
V.  Hawkins,  8  C.  &  P.  259.  The  reason 
why  a  tender  has  so  often  been  held  in- 
valid, when  a  receipt  in  full  was  demand- 
ed, seems  not  to  have  been  merely  because 
a  receipt  was  asked  for,  but  rather  because 
a  part  was  offered  in  f^uU  payment.  See 
Cheminant  v.  Thornton,  2  C.  &  P.  50; 
Peacock  v.  Dickerson,  2  C.  &  P.  51,  n. 
It  is  believed  tliat  no  case  has  gone  so  far 
as  to  hold  that  a  tender  would  be  bad 
because  a  receipt  for  the  sum  tendered  was 
requested. 

[155] 


157*  THE   LAW   OF   CONTRACTS.    '  [PART  II. 

however,  a  tender  be  refused  on  some  objection  quite  distinct 
from  the  manner  in  which  it  was  made,  as  for  the  insufficiency 
of  the  sum  or  any  similar  ground  ;  objections  arising  from  the 
form  of  the  tender  are  considered  as  waived,  and  cannot  after- 
wards be  insisted  upon,  (g) 

*The  tender  should  be  in  money  made  lawful  by  the  State  in 
which  it  is  offered,  (h)  But  if  it  be  offered  in  bank-bills  which 
are  current  and  good,  and  there  is  no  objection  to  them  at  the 
time  on  the  ground  that  they  are  not  money,  it  will  be  consid- 
ered so  far  an  objection  of  form,  that  it  cannot  afterwards  be 
advanced,  (i) 

It  has  been  said  in  England,  that  by  a  tender  is  meant,  not 
merely  that  the  debtor  was  once  ready  and  willing  to  pay,  but 
that  he  has  always  been  so  and  still  is ;  and  that  the  effect  of  it 
will  therefore  be  destroyed  if  the  creditor  can  show  a  demand 
by  him  of  the  proper  fulfilment  of  the  contract,  at  the  proper 
time,  and  a  refusal  by  the  debtor,  (j)  It  is  possible  that  a  de- 
mand and  refusal  may  in  some  cases  have  the  effect  of  annul- 
ling a  tender,  even  if  they  take  place  before  the  tender  was 
made;  although,  as  has  been  said,  generally,  if  not  universally, 
in  this  country,  a  tender  is  valid  and  effectual  if  made  at  any 
time  after  a  debt  is  due  ;  and  a  demand  made  after  the  tender, 
if  for  more  than  the  sum  tendered,  will  not  avoid  the  tender,  [k) 


2.    Of  the  tender  of  chattels. 

The  thing  to  be  tendered  may  not  be  money,  but  some  spe- 
cific article  ;  and  the  law  in  relation  to  the  delivery  of  these 
under  a  contract  has  been  much  discussed,  and  is  not  perhaps 

(7)  Cole  V.  Blake,  Pcakc,  179  ;    Eich-         ( /)  Dixon  v.  Clark,  5  C.  B.  3G5  ;  and 

anlsoi)  r.  Jackson,  8  M.  &  W.  298  ;  Bull  sSce  Cotton  v.  Godwin,  7  M.  &  W.  147. 
V.  Tarker,  2  Dowl.  N.  S.  345.  (/.)   Thctford   v.  Htibhard,  22  Vt.  440. 

(/()    Wade's   case,  5   llcp.  114;  Hallo-  Certainly  not,  if  the  demand  is  for  more 

well  V.  Howard,  13  Mass.  235  ;  Moody  v.  than  the  real  deht,   althonL^h  the  excess 

Malnirin,  4  N.  M.  290.  was  for  another  deht  truly  dne.     Dixon 

(/)  Tliis  may  he  fairly  infeiTcd  from  the  v.  Clark,  5  C.  B.  378.     And  see  Brandon 

case  of   Warren  r.  Mains,  7  Johns.  470  ;  ?'.  Newin^ton,  3    Q.   B.   915;  llcsketh  r. 

and  HOC    Ball    v.   Stanley,  5   Yerf^.   199;  Fawectt,   11   M.   &  W.   350;  apparently 

WhCclerv.  Knn<,';:s,  8  Ohio,  172;  Brown  overruling  Tyler  v.  Bland,  9  M.  &W. 

V.   Dysiiiirer,    1     Itawle,   408;    Know   v.  338. 
I'crry,  9  J'ick.  542  ;  Towson  v.  Ilavre-do- 
Gracc  Bank,  0  Harris  ^^  J.  53. 

[lOG] 


CH.  III.] 


DEFENCES. 


158 


yet  quite  settled.  We  have  alluded  to  some  of  the  questions 
which  this  topic  presents,  when  speaking  of  sales  of  chattels. 
Others  remain  to  be  considered. 

It  may  be  considered  as  settled,  that  acts  which  would  con- 
stitute a  sufficient  tender  of  money,  will  not  always  have  *this 
effect  in  relation  to  chattels.  Thus,  if  one  who  is  bound  to  pay 
money  to  another  at  a  certain  time  and  place,  is  there  with  the 
money  in  his  pocket  for  the  purpose  of  paying  it,  and  is  pre- 
vented from  paying  it  only  by  the  absence  of  the  payee,  this 
has  the  full  effect  of  a  tender,  (l)  But  if  he  is  bound  to  deliver 
chattels  at  a  particular  time  and  place,  it  may  not  be  enough  if 
he  has  them  there.  They  may  be  mingled  with  others  of  the 
like  kind  which  he  is  not  to  deliver.  Or  they  may  need  some 
act  of  separation,  or  identification,  or  completion,  before  they 
could  become  the  property  of  the  other  party,  (m)     As  in  sales, 


(/)  Gilmore  v.  Holt,  4  Pick.  258; 
Soutlnvorth  v.  Smith,  7  Cush.  391. 

(in)  Veazy  v.  Harmony,  7  Greenl.  91  ; 
Wyman  v.  Wiiislow,  2  Fairf.  398  ;  Leb- 
allister  v.  Nash,  24  Me.  316;  Bates  v. 
Churchill,  32  Me.  31  ;  Bates  v.  Bates, 
Walker,  401  ;  Newton  v.  Galbraith,  5 
Johns.  119.  In  this  last  case  a  note  was 
payable  in  produce  at  the  maker's  house. 
The  defendant  pleaded  payment,  and 
proved  that  he  had  hay  in  his  barn,  and 
was  there  ready  to  ])ay,  and  the  plaintiff' 
did  not  come  for  it.  He  did  not  prove 
how  much  he  had,  nor  its  value.  Held 
no  payment,  nor  tender.  So  in  Barney  w. 
Bliss,  1  D.  Chip.  399,  the  Supreme  Court 
of  Vermont  held  that  a  plea  that  the 
debtor  had  the  property  ready  at  the  time 
and  place,  and  there  remained  through 
the  day,  i-eady  to  deliver  it,  but  that  the 
creditor  did  not  attend  to  receive  it,  and 
that  the  property  is  still  ready  for  the 
creditor,  if  he  will  receive  it,  was  not  suffi- 
cient to  discharge  the  contract,  and  vest 
the  property  in  the  payee.  The  debtor 
ought  to  have  gone  further,  and  set  apart 
the  chattels  (boards)  so  that  the  payee 
could  have  identified  and  taken  them. 
See  also.  Barns  v.  Graham,  4  Cowen, 
452;  Smith  v.  Loorais,  7  Conn.  110. 
This  last  case  denies  to  be  sound  law  the 
case  of  Robbins  v.  Luce,  4  Mass.  474,  in 
which  the  defendant  had  contracted  to 
deliver  the  plaintiff  27  ash  barrels,  at  the 
defendant's  dwelling-house,  on  the  20th 
Sept.  1804.     Being  sued  on  the  contract, 

VOL.  II.  14 


the  defendant  pleaded  in  bar  that  on  the 
day  he  had  the  27  barrels  at  his  dwelling- 
house  readi/  to  be  delivered,  and  had  al- 
ways had  the  same  ready  for  delivery. 
The  plea  did  not  aver  that  the  plaintiff 
was  not  there  to  receive  them,  but  the 
plea  was  still  held  good  on  special  demur- 
rer. See  also,  Robinson  v.  Batcheldcr, 
4  N.  H.  40;  and  Brown  v.  Berry,  14  N. 
H.  459,  which  tends  to  support  Robbins 
V.  Luce.  In  M'Connel  v.  Hall,  Brayton, 
223,  the  Supreme  Court  of  Vermont  held 
that  the  promise  to  pay  the  plaintiff  a 
wagon  to  be  delivered  at  the  defendant's 
store,  was  not  complied  with  by  the  fact 
that  the  defendant  had  the  wagon  at  the 
time  and  place  ready  to  be  delivered,  ac- 
cording to  the  contract.  But  the  question 
here  arose  under  the  general  issue,  and 
the  court  held  that  the  fact  of  readiness 
and  willingness  did  not  support  the  fact 
of  paijment  or  discharge  of  the  contract, 
but  the  case  does  not  decide  that  the  de- 
fendant, had  he  pleaded  in  bar,  that  he 
was  ready  at  the  time  and  place  to  deliver 
the  wagon,  and  that  the  plaintiff  was  not 
there  to  receive  it,  must  have  also  proved 
that  he  so  designated  and  set  apart  the 
wagon  as  to  vest  the  property  in  the 
plaintiff.  The  same  distinction  between 
the  defence  of  payment,  and  a  defence 
founded  upon  special  matter  pleaded  in 
bar,  was  recognized  in  the  subsequent 
case  of  Dow.ner  v.  Sinclair,  15  Vt.  495. 
There  the  clefendant  had  agreed  to  de- 
liver  at  his  shop,  and  the  jilaintiff  had 

[157] 


159*  THE   LAW   OF   CONTRACTS.  [PART  II. 

the  property  in  chattels  does  not  pass  *  while  any  such  act 
remains  to  be  clone,  so,  if  there  be  an  obligation  to  deliver 
these  articles,  it  may  be  said,  as  a  general  rule,  that  the  obliga- 
tion is  not  discharged  so  long  as  any  thing  is  left  undone  which 
would  prevent  the  property  from  passing  under  a  sale.  That 
is,  it  is  no  tender,  unless  so  much  is  done  that  the  other  party 
has  nothing  to  do  but  signify  his  acceptance  in  order  to  make 
the  property  in  the  chattels  vest  at  once  in  him.  An  exception 
would  doubtless  be  made  to  this  rule,  in  reference  to  chattels 
which  could  be  ascertained  and  specified  by  weight,  measure,  or 
number.  If  one  bound  to  deliver  twenty  bushels  of  wheat  at  a 
certain  time  and  place,  came  there  with  fifty  bushels  in  his 
wagon,  all  of  the  same  quality,  and  in  one  mass,  with  the  pur- 
pose of  measuring  out  twenty  bushels  ;  and  was  prevented  from 
doing  so  only  by  the  absence  of  the  promisee,  this  must  be  a 
sufficient  tender.  It  is  not  necessary  that  the  chattels  should 
be  so  discriminated  that  they  might  be  described  and  identified 
with  the  accuracy  necessary  for  a  declaration  in  trover,  because, 
except  in  some  instances  to  be  spoken  of  presently,  the  prom- 
isee does  not  acquire  property  in  the  chattels  by  a  tender  of 
them  which  he  does  not  accept.  He  may  still  sue  on  the  con- 
tract ;  and  to  this  action  the  promisor  may  plead  a  tender,  and 
"  that  he  always  has  been  and  now  is  ready  "  to  deliver  the 
same ;  and  then  the  promisee  may  take  the  goods  and  they  be- 

agrccfl  to  receive  certain  "  winnowing  defendant.  See  Mattison  v.  Wescott,  13 
mills"  in  discharge  of  a  debt.  A  part  Vt.  258  ;  Gilinan  v.  Moore,  14  Vt.  457. 
had  been  delivered  and  received  at  said  But  if  a  plea  of  readiness  and  willingness 
shop,  and  their  value  indorsed  on  the  to  perform,  amounts  to  a  defence,  the  plea 
claim.  On  the  day  the  remainder  were  should  be  full  and  positive ;  it  should 
due  the  plaintiff  called  at  the  defendant's  leave  nothing  open  to  inference.  Thus  in 
shop  for  them,  but  did  not  find  the  dc-  Savary  v.  Goe,  .'?  Wash.  C.  C.  140,  the 
fendant  at  home,  and  went  away  without  contract  was  to  deliver  to  the  ])laintitr  a 
making  any  demand.  On  the  same  dui/  quantity  of  whiskey  in  the  month  of  May, 
the  dcfendatit  returned,  and  being  in-  1809.  The  defendant  being  sued  on  the 
formed  what  had  taken  place,  set  apart  contract,  pleaded  that  he  was  ready  and 
for  the  plaintiff  the  number  of  mills  willing  at  the  time  and  place  agreed  upon 
requisite  to  complete  tlie  contract.  These  to  deliver  the  whiskey,  according  to  the 
mills  Iiad  ever  since  remained  so  set  terms  of  the  contract ;  but  that  the  plain- 
apart ;  the  plaintiir  never  called  again,  tilf  was  not  then  and  there  icady  to  ac- 
but  brought  suit  upon  his  original  claim,  cept  the  same  ;  but  the  jilea  did  not  state 
The  court  Jwld  that  these  facts  would  not  that  the  defendant  was  at  the  ])lace,  in  per- 
pupport  ft  pica  of  pdi/mcnt,  since  they  son  or  by  agent,  ready  and  ]ireparcd  to 
were  nf)t  given  and  nn.ii'Cd  by  the  creditor,  deliver  the  whiskey,  and  for  this  omission 
but  that  they  would  lie  a  special  defence  the  plea  was  held  insullicient. 
to  the  action,  and   gave  judgment  for  the 

[15b] 


CII.  Iir.]  DEFENCES.  *160 

come  his  property,  and  the  contract  is  discharged.  But  the 
promisor  need  not  plead  the  tender  unless  he  choose  to  do  so. 
He  may  waive  it,  and  then  the  promisee  recovers  *only  damages 
for  the  breach  of  the  contract,  and  acquires  no  property  in  the 
chattels. 

When  a  tender  is  pleaded  with  a  profert,  the  defendant  sJiould 
have  the  article  with  him  in  court.  But  this  would  be  some- 
times inconvenient,  in  the  case  of  very  bulky  articles,  and 
sometimes  impossible.  A  reasonable  construction  is  therefore 
given  to  this  requirement ;  and  it  is  sufficient  if  the  defendant 
be  in  actual  possession  of  the  article,  and  ready  to  make  imme- 
diate delivery  to  the  plaintiff,  in  a  manner  reasonably  convenient 
to  him.  (n)  In  such  case,  however,  it  was  a  rule  of  the  old  law, 
and  the  reason  would  seem  to  exist  now,  that  it  should  be 
averred  in  the  plea  that  the  thing  cannot,  by  reason  of  its 
weight,  conveniently  be  brought  into  court,  (o) 

The  tender  must  be  equally  unconditional  as  if  of  money. 
It  may  be  made  to  an  agent,  or  by  an  agent;  but  if  the  agent  of 
the  deliverer  has  orders  to  deliver  the  chattels  to  the  receiver, 
only  if  he  will  cancel  and  deliver  up  the  contract,  this  is  not  a 
tender,  although  such  agent  had  the  chattels  at  the  proper  time 
and  place,  (p) 

It  is  a  good  defence  pro  tanto  to  such  a  contract,  that  the 
plaintiff  accepted  a  part  of  the  articles  before  the  day  specified 
in  the  contract  ;(^)  or  that  there  was  an  agreement  between 
the  parties,  which  may  be  by  parol,  that  the  chattels  should  be 
'  delivered  at  another  time  and  place,  and  that  the  plaintiff  was 
there,  wholly  ready  to  deliver  them,  (r)  Or  that  the  defendant 
knew  that  the  articles  were  delivered  at  another  time  and  place, 
and  did  not  dissent  or  object,  {s) 

Generally,  if  no  time  or  place  be  specified,  the  articles  are  to 
be  delivered  where  they  are  at  the  time  of  the   contract,  [t) 

(n)  Bro.  Ahr.  tit.  Tout  temps  prist,  pi.  Barr  v.  Myers,  3  Watts  &  S.  295,  a  sale 

^  ;  2  Rol.  Abr.  524.  of  2,000  mulberry  trees.     The  reason  is 

(o)  Id.  that  the  party  to  receive  is  to  be  the  actor, 

(p)  Robinson  v.  Batchelder,  4  N.  H.  40.  by  going  to  demand  the  articles  ;  and  until 

(q)  Id.  then,  the  other  party  is  not  in  default  by 

(r)  Id.  omitting  to  tender  them.    See  also,  Thax- 

(s)  Flagg  V.  Dryden,  7  Pick.  53.  ton  v.  Edwards,  1   Stew.  524  ;  McWurry 

{<)  Bronson  v.   Glcason,  7  Barb.  472 ;  v.    The    State,    6   Ala.    326;    Minor    v. 

[159] 


161 


THE  LAW   OF   CONTRACTS. 


[part  II. 


unless  collateral  circumstances  designate  a  different  place,  (m) 
If  the  time  be  fixed,  (v)  but  not  the  place,  then  it  will  be  pre- 
sumed that  the  deliverer  was  to  bring  the  articles  to  the  receiver 
at  that  time,  and  for  that  purpose  he  must  go  with  the  chattels 
to  the  residence  of  the  receiver,  (iv)  unless  something  in  their 
very  nature  or  use,  or  some  other  circumstances  of  equivalent 
force,  distinctly  implies  that  they  are  to  be  left  at  some  other 
place,  [x)  And  it  may  happen,  from  the  cumbrousness  of  the 
chattels,  or  other  circumstances,  that  it  is  obviously  reasonable 
and  just  for  the  deliverer  to  ascertain  from  the  receiver,  long 


Michie,  Walker,  24  ;  Chambers  v.  Winn, 
Hardin,  80,  n. ;  Dandridge  v.  Harris,  1 
Wash.  Vii.  326.  A  note  payable  in  spe- 
cific articles,  without  mentioning  time  or 
place,  is  payable  only  on  demand,  and 
shottld  be  demanded  at  the  place  where 
the  property  is.  Lobdell  v.  Hopkins,  5 
Co  wen,  518.  Vance  v.  Bloomer,  20 
Wend.  196.  In  Kice  v.  Churchill,  2  De- 
nio,  145,  a  note  was  given  by  the  owner 
of  a  saw-mill,  payable  in  luml)er,  when 
called  for.  It  was  held  to  be  payable  at 
the  maker's  mill,  and  tliat  a  special  de- 
mand there  was  necessary  to  fix  the 
maker,  unless  he  had  waived  the  necessity 
thereof. 

(m)  Thus  in  Bronson  v.  Gleason,  7 
Barb.  4T2,  while  the  general  rule  was  ad- 
mitted, tb.at  the  store  of  the  merchant,  the 
shop  of  the  mechanic,  or  manufacturer, 
and  the  farm  or  granary  of  tlie  farmer,  is 
the  place  of  delivery  when  the  contract  is 
silent  on  the  subject ;  tliis  i-ule  was  held 
inapplicable  when  the  collateral  circum- 
stances indicated  a  d ilferent  place.  It  was 
there  held  tiiat  where  goods  are  a  suliject 
of  general  commerce,  and  are  purchased 
in  large  (juantitics  for  reshipment,  and 
tlic  purcliaser  resides  at  the  place  of  re- 
shijimi'iit,  and  has  tiierc  a  storeiiousc  and 
dock  for  tiiat  purpose,  a  contract  to  deliver 
such  purchaser  "  400  barrels  of  salt  in 
good  order,  i)eforc  the  first  of  Novemlier," 
meant  a  delivery  at  tlie  jiurchascr's  jjlace 
of  rcsid(;ncc. 

(i^)  If  the  time  fall  on  Sunday,  t(Midcr 
on  Monday  is  good.  Barrett  v.  Allen,  10 
Ohio,  420  ;  Stcbbins  v.  l^eowolf,  .')  Chish. 
137  ;  Sands  v.  Lyon,  18  (>jnn.  18;  Avery 
V.  Stewart,  2  id.  09  ;  Salter  v.  Burt,  20 
Wend.  205.  — Questions  often  arise  as  to 
the  timo.  of  dnij  at  which  a  tender  may,  or 
miLst  lie  made.      It  seems  that  tlie  debtor 

[IGOJ 


must  have  the  property  at  the  place  agreed 
upon,  at  the  last  convenient  hour  of  that 
day.  See  Tiernan  v.  Napier,  5  Yerg. 
410;  Aldrich  v.  Albee,  1  Greenl.  120; 
Savary  v.  Goe,  3  Wash.  C.  C.  140.  Un- 
less by  the  acts  of  the  parties  this  is 
waived.  In  Sweet  v.  Harding,  19  Vt. 
587,  a  note  was  payable  in  grain,  "in  Jan- 
uarij."  Tender  was  made  early  in  the 
evening  of  the  last  day  of  that  month, 
bat  the  payee  was  absent.  The  tender  or 
separation  of  the  grain  was  at  the  debtor's 
own  dwelling-house  (where  by  the  con- 
tract it  was  to  be  delivered),  and  the  payee 
did  not  know  of  it.  The  tender  was  held 
to  be  too  late,  and  no  defence  to  the  con- 
tract. But  rent  may  be  tendered  to  the 
lessor  personally  on  the  evening  it  falls 
due.  Id.  And  see  Startup  v.  Macdon- 
ald,  2  Scott,  N.  R.  485. 

(tv)  Barr  v.  Myers,  3  Watts  &  S.  295 ; 
Roberts  v.  Beatty,  2  Penn.  63.  In  such 
cases  the  creditor  has  the  right  to  appoint 
the  place  of  delivery.  Aldrich  v.  Albee, 
1  Greenl.  120. 

(.r)  If  the  time  be  fixed,  and  by  the  con- 
tract, the  payee  has  his  election  of  the 
place,  he  must  notify  the  payor  of  his  elec- 
tion in  a  reasonable  time  before  the  day  of 
payment,  or  the  payor  may  tender  the  ar- 
ticles at  any  reasonable  place,  aiul  notify 
the  payee  thereof.  The  right  of  the  payee 
to  elect  the  ])lacc  of  delivery  in  such  cases, 
is  not  a  condition  precedent,  but  a  mere 
privilege,  wliich  lie  may  waive  by  a  neg- 
lect to  exercise  it.  Peck  r.  Hubbard,  11 
Yt.  612;  overruling  Bassctt  v.  Kerne,  1 
Leon.  09;  and  see  Taylor  v.  Gallup,  8 
Vt.  340  ;  Townsend  v.  Wells,  3  Day, 
327;  Russell  v.  Ormsbce,  10  Vt.  274; 
Livingston  v.  Miller,  1  Kern.  80.  And 
see  Gilbert  v.  Danforth,  2  Seld.  585. 


CH.  III.]  DEFENCES.  *162-*163 

enough  beforehand,  where  they  shall  be  delivered  ;  and  then  he 
will  be  held  to  this  as  a  legal  obligation,  (t/)  So  too,  in  such  a 
case,  the  receiver  would  *have  the  right  to  designate  to  the  de- 
liverer, a  reasonable  time  beforehand,  a  place  of  delivery  reason- 
ably convenient  to  both  parties,  and  the  deliverer  would  be 
bound  by  such  direction,  (z)  If  no  place  is  indicated,  and  the 
deliverer  is  not  in  fault  in  this,  he  may  deliver  the  chattels  to 
the  receiver,  in  person,  at  any  place  which  is  reasonably  con- 
venient, (a)  And  if  the  deliverer  be  under  an  obligation  to 
seek  or  notify  the  receiver,  he  need  not  follow  him  out  of  the 
State  for  this  purpose,  for  he  is  only  bound  to  reasonable  dili- 
gence and  efforts,  (b)  And  if  the  receiver  refuses  or  neglects  to 
appoint  a  place,  or  purposely  avoids  receiving  notice  of  a  place, 
the  deliverer  may  appoint  any  place,  with  a  reasonable  regard 
to  the  convenience  of  the  other  party,  and  there  deliver  the 
articles,  (c)  But  though  he  is  not  obliged  to  follow  the  receiver 
out  of  the  State,  yet  if  the  receiver  live  out  of  the  State,  or  even 
out  of  the  United  States,  this  perhaps  does  not  exempt  him 
from  the  obligation  of  inquiring  from  him  where  the  chattels 
shall  be  delivered ;  (d)  and  the  same  rule  seems  to  hold  if  the 
promisor  lives  out  of  the  United  States  and  the  promisee 
within,  (e) 

If  no  expression  used  by  the  parties,  and  nothing  in  the  nature 
of  the  goods  or  the  circumstances  of  the  case  controls  the  pre- 
sumption, then  the  place  where  the  promise  is  made  is  the  place 
where  it  should  be  performed.  Nor  will  an  action  be  maintain- 
able upon  such  a  promise,  without  evidence  that  the  promisee 
was  ready  at  that  place  and  at  the  proper  time  to  receive  the 
chattel,  or  that  the  promisor  was  unable  to  deliver  it  at  that 
place  and  time.  (/)     The  plaintiff  must  *show  a  demand  or  a 


(?/)  Co.  Litt.  210,  b. ;  Barr  v.  Myers,  3  Wend.  405, 2  Hill,  351 ;  Howard  v.  Miner, 

Watts  &  S.  295 ;    Howard  v.  Miner,  20  20  Me.  325. 

Me.  325;   Bixliy  v.  AVhitney,  5  Greenl.  (c)  Id. 

192  ;  Bean  v.  Simpson,  16  Me.  49 ;  Min-  {d)  Bixby  v.  Whitney,  5  Greenl.  192. 

gus  V.  Pritchett,  3  Dev.  78;  Roberts  v.  (e)  White  v.  Perley,  15  Me.  470.     But 

Beatty,  2  Penn.  63.  qucere  if  the  two  preceding  cases  can  be 

(2)  Howard  z\  Miner,  20  Me.  325;  Aldrich  reconciled  with  the  cases  and  authorities 

V.  Albee,  1  Greenl.  120.  cited  supra,  n.  (b). 

(a)  Howard  v.  Miner,  20  Me.  325.  (/)  But  in  a  note  payable  in  specific  ar- 

(b)  Co.  Litt.  210;  Smith  v.  Smith,  25  tides  &t  a  certain  time  and  place,  it  has  hcQQ. 

14*  [161] 


163- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


readiness  to  receive,  and  notice  equivalent  to  a  demand,  or  else 
that  the  demand  must  have  been  nugatory,  because  the  defend- 
ant could  not  have  complied  with  it. 

If  the  promise  be  to  pay  money  at  a  certain  time,  or  deliver 
certain  chattels,  it  is  a  promise  in  the  alternativ.e ;  and  the  al- 
ternative belongs  to  the  promisor.  (^)  He  may  do  either  the 
one  or  the  other,  at  his  election ;  nor  need  he  make  his  election 
until  the  time  when  the  promise  is  to  be  performed ;  but  after 
that  day  has  passed  without  election  on  his  part,  the  promisee 
has  an  absolute  right  to  the  money,  and  may  bring  his  action 
for  it.  (h) 

A  contract  to  deliver  a  certain  quantity  of  merchandise  at  9, 
certain  time,  means,  of  course,  to  deliver  the  whole  then  ;  (i) 
and  such  is  its  meaning,  though  the  delivery  is  to  be  made  on 
an  event  which  may  happen  at  one  time  as  to  one  part,  and  at 


held  the  plaintiff  may  maintain  his  action 
without  proving  a  demand  at  the  time  and 
place.  If  the  defendant  was  there  ready 
and  willing  to  comply  with  the  contract, 
that  might  be  a  good  defence  to  the  action ; 
but  that  nuist  come  in  by  way  of  defence; 
and  on  failure  of  such  proof,  the  plaintiff 
may  recover  the  amount  of  his  note  in 
money.  Fleming  v.  Potter,  7  Watts,  380. 
And  see  Thomas  v.  Roosa,  7  Johns.  461  ; 
Townsend  v.  Wells,  3  Day,  327  ;  White 
V.  Perley,  15  Me.  470;  Games  v.  Man- 
ning, 2  Greene,  251. 

{U)  A  promise  to  pay  a  certain  sum  in 
money,  at  a  certain  time,  hut  "which  may 
be  discharged  in  good  leather,"  is  a  condi- 
tional contract,  leaving  the  debtor  thcoptlon 
of  paying  in  tliat  manner  if  he  elect,  at  the 
time  of  jKiijment.  It  is  a  condition  for  the 
debtor's  benefit,  and  he  should  notify  the 
other  party  of  his  desire  to  pay  in  leatiier, 
or  the  ri^iit  to  the  money  becomes  al)so- 
lutc.  I'lowman  v.  McLane,  7  Ala.  775. 
If  the  leather  rises  in  value,  the  debtor  is 
not  Ijoii/ifl  to  pay  in  tliat  article.  lb.  If 
the  specific  |)ropcrty  is  not  delivered  attlio 
time  and  place  agreed  upon,  and  this 
witliout  the  fault  of  the  payee,  his  right  to 
recover  the  money  is  ai)solute.  Stewart 
V.  Doiiclly,  4  Verg.  177.  And  the  ])ayee 
is  not  bound  to  receive  the  [)ropei'ty  lif/bn; 
the  (lay  of  ftayiiient.  Orr  r>.  Williams,  5 
llumidi.  423.  In  Gilrnan  r.  Moore,  14 
Vt.  457,  the  note  was  payable  "  in  tlio 
montii  of  February ; "  the  property  was 
Bet  apart  on  the,  last  day  of  January,  and 

[1G2] 


kept  there  in  a  suitable  condition  from  that 
time  through  the  month  of  February. 
The  tender  was  adjudged  sufficient  to  pass 
the  property  and  extinguish  the  debt. 

(h)  Townsend  v.  Wells,  3  Day,  327. 
This  was  an  action  on  a  note  for  $80,  pay- 
able in  rum,  sugar,  or  molasses,  at  the 
election  of  the  pa/jee,  within  eight  days 
after  date.  It  was  held  not  necessary  to 
prove  that  the  payee  made  his  election  and 
gave  notice  thereof  to  the  maker,  but  that 
if  the  defendant  did  not  tender  e/^Aer  of  the 
articles  within  eight  days,  he  became  im- 
mediately liable  on  his  note,  and  the 
amount  might  be  recovered  in  money. 
And  sec  Roberts  v.  Beatty,  2  Penn.  63 ; 
Wiley  V.  Shocmak,  2  Greene,  205  ;  Church 
V.  Feterow,  2  Penn.  301  ;  Vanhooser  v. 
Logan,  3  Scam.  389  ;  Elkins  v.  Parkhurst, 

17  Vt.  105.  If  a  promise  be  in  the  alter- 
native to  deliver  one  article  at  one  place, 
or  another  article  at  another  place,  at  the 
election  of  tiie  debtor,  he  ought  to  give  the 
creditor  reasonable  notice  of  his  election. 
Aldrich  v.  Albee,  1  Greenl.  120. 

(/)  Roberts  v.  Beatty,  2  Penn.  63.  If 
however  the  party  accepts  a  part  without 
objection,  he  thereby  disaffirms  the  entirety 
of  the  contract,  and' is  liable  to  ]M\y  for  so 
much  as  he  receives,  id. ;  Oxcndale  v. 
Wetherell,  9  B.  &  C  386;  Booth  v. 
'J'yson,    15   Vt.   515;    Bowkcr  v.    Iloyt, 

18  I'ick.  555.  Deducting,  it  seems,  any 
damage  sustained  by  the  non-fulfilment  of 
the  contract.  lb.  And  see  ante,  i).  32, 
ct  Htq. 


CH.  III.]  DEFENCES.  *164 

another  time  as  to  another ;  as  on  its  arrival  at  a  certain  port ; 
for  if  a  part  only  arrives  there,  the  promisor  *i3  not  bound  to 
deliver,  (j)  nor  if  he  tenders  is  the  promisee  bound  to  receive, 
such  part.  The  contract  is  entire,  and  the  obligation  of  each 
party  is  entire.  But  as  it  is  certainly  competent  for  them  to 
contract  that  a  part  shall  be  delivered  at  one  time,  and  a  part 
at  another,  so  this  construction  may  be  given  to  a  contract, 
either  by  its  express  terms,  or  by  such  facts  and  circumstances 
in  the  transaction,  or  in  the  nature  of  the  chattels  to  be  deliv- 
ered, as  would  distinctly  indicate  this  as  the  meaning  and  in- 
tention of  the  parties. 

Whenever  chattels  are  deliverable  by  contract  on  a  demand, 
this  demand  must  be  reasonable  ;  that  is,  reasonable  in  time, 
and  place,  and  manner,  [k)  And  the  conduct  of  the  promisor 
will  always  receive  a  reasonable  construction.  Thus,  in  gen- 
eral, if  a  proper  demand  be  made  upon  him,  his  silence  will  be 
held  equivalent  to  a  refusal  to  deliver  the  chattels,  (l)  And  by 
application  of  the  same  universal  principle,  all  the  obligations 
of  both  parties  receive  a  reasonable-  construction.  Thus,  if  the 
promise  be  to  do  within  a  certain  time  a  certain  amount  of 
labor  on  materials  furnished,  they  must  be  furnished  in  season 
to  permit  that  work  to  be  done  within  that  time,  by  reasonable 
exertions,  (m)  And  if  certain  work  is  to  be  done,  that  certain 
other  work  may  be  done,  all  to  be  completed  and  the  whole 
delivered  within  a  certain  period,  the  work  first  to  be  done, 
must  be  finished  early  enough  to  permit  the  other  work  to  be 
done  in  season,  (n) 

If  by  the  terms  of  the  contract,  certain  specific  articles  are  to 
be  delivered  at  a  certain  time  and  place,  in  payment  of  an  ex- 
isting debt,  this  contract  is  fully  discharged,  and  the  debt  is 
paid,  by  a  complete  and  legal  tender  of  the  articles  at  the  time 

(  /)  Russell  V.  Nicoll,  3  Wend.  112.  which  was  not  clone  in  due  time,  the  court 

(1)  Iliggins  V.  Emmons,  5  Conn.  76.  held  that  the  debtor  was  not  bound  to  de- 

(0  Higgins  V.  Emmons,   5   Conn.   76.  liver  the  salt /m  6i///r,  at  least,  not  unless  he 

And  see  Dunlap  v.  Hunting,   2   Denio,  had  received  notice  that  the  creditor  waived 

643.      '  the  packing  of  the  salt,  and  would  receive 

(m)  Clement  v.  Clement,  8  N.  H.  210.  the  salt  in  bulletin  full  discharge  of  the 

So  where  the  debtor  was  to  deliver  at  his  contract.     Goodwin  v.  Holbrook,  4  Wend. 

factory  a  certain  quantity  of  salt,  to   be  377. 

packed  in  barrels  ;  which  were  to  be  de-         {n)  Clement  v.  Clement,  8  N.  H.  210. 

livered  at  the  factory  by  the  creditor,  but 

[163] 


165*-166' 


THE   LAW   OP   CONTRACTS. 


[part  ir. 


and  place,  although  the  promisee  was  not  there  to  receive  them, 
and  no  action  can  be  thereafter  maintained  on  *the  contract,  (o) 
But  the  property  in  the  goods  has  passed  to  the  creditor,  and 
he  may  retain  them  as   his   own.  (p) 


These  two  things  go 


(o)  Mitchell  V.  Merrill,  2  Blackf.  87 ; 
Slingerland  v.  Morse,  8  Johns.  474.  In 
this  last  case  the  time  of  the  delivery  was 
rendered  certain  by  the  contract,  but  no 
place.  The  debtor  tendered  tlie  property 
at  the  place  where  it  was  (it  being  cum- 
brous articles),  but  the  creditor  refused  to 
receive  it  there,  and  then  appointed  an- 
other place,  but  the  same  not  being  deliv- 
ered, he  hronglit  his  action  on  the  contract, 
which  was  either  to  deliver  the  property  or 
pay  a  certain  sum  of  moncjy.  The  tender 
was  held  to  be  a  bar  to  the  action,  and  the 
creditor  was  held  bound  to  resort  to  the 
specific  articles  tendered,  and  to  the  per- 
son in  whose  possession  they  were.  See 
also,  Curtiss  v.  Greenbanks,  24  Vt.  536 ; 
Zinn  V.  Rowley,  4  Barr,  169;  Games  v. 
Manning,  2  Greene,  254.  Garrard  v.  Zach- 
ariah,  1  Stew.  272,  is  to  the  same  effect. 
Case  V.  Green,  5  Watts,  262,  is  a  strong 
case  to  the  same  point.  There  the  credi- 
tor was  prevented  by  sickness  from  at- 
tending at  the  time  and  place  designated 
to  receive  the  articles.  The  debtor  had 
the  property  there,  and  left  it  on  the 
ground.  The  creditor  afterwards  brought 
suit  on  the  contract,  and  the  tender  was 
held  a  good  bar.  See  also,  Lamb  v.  La- 
throj),  13  Wend.  95,  whicii  also  holds,  that 
if  the  tender  be  not  accepted,  the  cred- 
itor cannot,  by  a  subsequent  demand  and 
refusal,  revive  his  right  to  sue  upon  the 
contnict  ;  for  tlie  debtor  is  not  bound,  as 
in  tender  of  money,  to  keep  his  tender  al- 
ways ready.  After  such  tender  he  is  but 
a  hdilce  of  the  property  for  tiie  creditor,  and 
liis  rights  and  duties  arc  the  same  as  those 
of  otiier  iiailees.  Some  cases  hold  that  a 
tender  under  the  circumstances  stated  in 
the  te.\t,  must  always  l)e  kept  good,  and 
that  a  plea  averring  tliat  the  debtor  was 
ready  at  the  time  and  place  to  deliver  the 
articles,  but  tliat  the  payee  did  not  come 
to  receive  tliem,  is  bad,  for  not  averring 
that  the  d<;l)tor  was  always  and  still  is 
ready  to  rleliver  the  same.  Nixon  ^^  Bul- 
lock, 9  Ycrg.  414;  'J'iernan  v.  Napier, 
Beck,  212;  Miller  v.  McClain,  10  Yerg. 
245  ;  and  iliria  in  Boberts  v.  Beatty,  2 
I'enn.  03.  But  this,  as  we  liavc  seen,  is 
not  the  gcncrnlly  recogni/.ed  rule.  Tho 
tender,  however,  must  be  such  as  to  vest 
the  property  in  the  creditor.    The  articles 

[1G4J 


should  be  so  set  apart,  and  designated,  as 
to  enable  the  payee  to  distinguish  and 
know  them  from  all  others.  The  absence 
of  the  payee  alone  will  not  dispense  with 
such  designation  and  separation  by  the 
debtor.  The  fact  that  the  latter  had  the 
articles  at  the  time  and  place,  ready  to  be 
delivered  if  the  other  party  had  been  pres- 
ent, is  not  alone  a  sufficient  tender  to  vest 
the  propeity  in  the  other  party,  or  to  bar 
an  action  on  the  contract.  Smith  v. 
Loomis,  7  Conn.  110.  In  this  case  Peters, 
J.,  said  :  "  Though  we  find  much  confu- 
sion and  contradiction  in  the  books  on  this 
subject,  our  own  practice  seems  to  have 
been  uniform  for  nearly  sixty  years,  and 
establishes  these  propositions,  —  1 .  That 
a  debt  payable  in  specific  articles,  may  be 
discharged  by  a  tender  of  these  articles,  at 
the  proper  time  and  place.  2.  That  the 
articles  must  be  set  apart  and  designated 
so  as  to  enable  the  creditor  to  distinguish 
them  from  others.  3.  That  the  property 
so  tendered  vests  in  the  creditor,  and  is  at 
his  risk.  4.  That  a  tender  may  be  made 
in  the  absence  of  the  creditor."  And  see 
M'ConncU  v.  Hall,  Brayton,  223 ;  New- 
ton i:.  Galbraith,  5  Johns.  119  ;  Barns  v. 
Graham,  4  Cowen,  452;  Nichols  v.  Whit- 
ing, 1  Root,  443.  After  such  tender,  the 
property  vests  in  the  creditor,  and  he  may 
maintain  trover  for  the  same.  Rix  v. 
Strong,  1  Root,  55. 

(;))  See  preceding  note.  In  the  cele- 
brated case  of  Weld  v.  Hadley,  1  N.  H. 
295,  a  dirt'erent  doctrine  was  declared.  It 
was  there  held  that  when  a  creditor,  to 
whom  a  tender  of  specific  articles  is  made 
in  pursuance  of  a  contract,  refuses  to  ac- 
cept the  tender,  he  acquires  no  property  in 
the  articles  tendered,  though  the  contract 
is  discharged  by  such  tender.  That  was 
an  action  of  tiovcr  for  leather.  It  ap- 
peared that  Iladley  gave  Weld  a  note, 
dated  August  9,  1808,  for  300  dollars, 
payable  in  good  merchantable  leather  at 
cash  price,  in  two  years  from  January  1, 
1809.  When  tlie  liote  became  due,  Ilad- 
ley tendered  to  the  plaintifi'  a  ([uantity  of 
leather,  but  a  dispute  .arose  as  to  the  price 
of  leather,  and  Weld  thinking  the  quantity 
not  suilicient  to  pay  the  note,  rci'used  to 
receive  it,  and  Iladley  took  it  away  and 
used  it.     Weld  then  brought  a  suit  upon 


CH.  III.] 


DEFENCES. 


*167 


together.     If  the  contract  and  its  obligation  are  discharged  by 
the  tender,  the  property  in  the  chattels  *  passes  by  the  tender ; 


the  note;  IlaiUcy  pleaded  the  tender  in 
bar,  and  issue  being  joined  upon  tlie  ten- 
der, the  jury  found  tliat  a  sufficient  quan- 
tity was  tendered,  and  judgment  was  ren- 
dered in  favor  of  Iladley.  After  that  suit 
was  determined,  Weld  demanded  the 
leather  of  the  defendant,  and  tendered  the 
expenses  of  keeping.  Hadley  refused  to 
deliver  tlie  leather,  and  tliereupon  this  suit 
was  brought.  The  case  was  argued  with 
great  ability  on  both  sides.  And  EicJiard- 
son,  C.  J.,  in  delivering  the  judgment  of 
the  court,  said  :  "  The  plaintiff  cannot  pre- 
vail in  tliis  action,  unless  he  has  sliown  a 
legal  title  to  the  leather,  which  is  the  sub- 
ject of  contest,  vested  in  himself.  The 
question  then  to  be  decided  is,  whether 
upon  the  tender  of  the  leather  by  the  de- 
fendant in  pursuance  of  his  contract,  the 
property  vested  in  the  plaintiff,  notwith- 
standing his  refusal  to  accept  it.  It  there- 
fore becomes  necessary  to  look  into  the 
nature  and  consequences  of  a  tender  and 
refusal.  In  some  cases  the  debt  or  duty  is 
discharged  by  a  tender  and  refusal ;  and 

in  other  cases  it  is  not In 

an  obligation  with  condition  for  the  deliv- 
ery of  specific  articles,  a  tender  and  refusal 
of  the  articles  is  a  perpetual  discharge. 
Thus  if  a  man  make  an  obligation  of  £100, 
with  condition  for  the  delivery  of  corn, 
timber,  &c.,  or  for  the  performance  of  an 
award,  or  the  doing  of  any  act,  &c.,  this  is 
collateral  to  the  obligation,  and  a  tender 
and  refusal  is  a  perpetual  bar.  Co.  Litt. 
207  ;  9  Co.  79,  H.  Pcytoe's  case.  So  if  a 
man  be  bound  in  200  quarters  of  wheat  for 
delivery  of  100  quarters  of  wheat,  if  the 
obligor  tender  at  tlie  day  the  100  quarters, 
he  shall  not  plead  iincore  prist,  because 
albeit  it  be  parcel  of  the  condition,  yet 
they  be  bona  peritura,  and  it  is  a  charge  for 
the  obligor  to  keep  them.  Co.  Litt.  207. 
Trom  a  remark  of  Coke  upon  this  exam- 
ple of  an  obligation  for  the  delivery  of 
wheat,  it  is  very  clear,  that  he  was  of  opin- 
ion that  the  obligee  had  no  remedy  to  re- 
cover the  wheat  tendered.  For  he  says, 
'  and  the  reason  wherefore  in  the  case  of 
an  obligation  for  the  payment  of  money, 
the  sum  mentioned  in  the  condition  is  not 
lost  by  the  tender  and  refusal,  is  not  only 
for  tliat  it  is  a  duty  and  parcel  of  the  oliii- 
gation,  and  therefore  is  not  lost  by  the  ten- 
der and  refusal,  "but  also  for  that  the  ob- 
ligee hath  remedy  by  law  for  the  same.' 
This  remark  has  no  point  whatever,  unless 


the  wheat  is  to  be  considered  as  lost  by  the 
tender  and  refusal.  In  the  case  of  an  obli- 
gation or  contract  for  the  delivery  of  spe- 
cific articles,  &c.,  the  duty  is  not  dis- 
charged by  a  tender  or  refusal,  because  any 
title  to  the  thing  tendered  vests  in  him  who 
refuses  it,  for  in  that  case  the  condition  or 
contract  must  be  considered  as  performed, 
and  should  be  so  pleaded,  but  because  the 
defendant  having  done  all  in  his  power  to 
perform  the  condition  or  contract,  and 
having  been  prevented  by  the  fault  of 
the  other  party,  the  non-performance  is  by 
law  excused.  This  is  evident  from  many 
cases  that  are  to  be  found  in  the  books." 
The  learned  judge  then  cites  and  com- 
ments on  several  cases  and  continues,  "It 
is  believed,  that  it  may  with  great  safety 
be  affirmed  that  there  is  nothing  in  the 
EiujUsh  books,  nor  in  the  decisions  of  our 
own  courts,  that  gives  the  least  counte- 
nance to  the  supposition  that  when  specific 
articles  are  tendered  and  refused,  tlie  prop- 
erty still  passes.  It  seems,  however,  that 
a  different  opinion  formerly  prevailed  in 
Connecticut.  1  Eoot,  5.5  and  443 ;  1 
Swift's  Syst.  404.  But  it  seems  to  have 
been  formed  without  due  consideration, 
and  stands  wholly  unsupported  by  author- 
ity. Nor  are  we  able  to  learn  either  from 
Swift  or  Root,  the  grounds  of  the  decision. 
It  also  seems  from  some  remarks  made  by 
individual  judges  in  the  case  of  Slinger- 
land  V.  ]\Iorse,  8  Johns.  474  ;  and  in  Coit 
et  al.  V.  Houston,  3  Johns.  Cas.  243,  that 
an  opinion  is  entertained  in  Neiu  York  that 
property  may  pass  upon  a  tender  and  re- 
fusal. But  in  neither  of  those  cases  was 
that  the  point  before  the  court,  and  al- 
though we  entertain  the  highest  respect 
for  the  talents  and  legal  learning  of  the 
judges  who  seem  to  have  intimated  such 
an  opinion,  we  cannot  rely  upon  their 
obiter  dicta  on  points  not  before  them,  in 
opposition  to  the  whole  current  of  author- 
ities from  the  earliest  times Had 

the  plaintiff'  been  well  advised,  he  would 
not  have  rejected  the  tender  at  the  risk  of 
his  debt,  but  would  have  received  the 
leather  and  indorsed  the  quantity  upon 
the  note.  He  might  then  have  brought 
an  action  upon  the  note  to  recover  the 
balance,  and  have  settled  the  question 
without  incurring  any  hazard  but  that  of 
costs.  But  he  saw  fit  to  take  a  difi'erent 
course.  This  was  probably  done  through 
an  innocent  mistake,  and  if  so,  it  was  his 

[165] 


168*  THE   LAW   OF   CONTRACTS.  [PART  II. 

and  on  the  other  hand,  if  the  property  passes  by  the  tender,  the 
contract  is  discharged.  And  therefore,  whenever  a  tender  would 
discharge  the  contract,  *it  must  be  so  complete  and  perfect,  as 
to  vest  the  property  in  the  promisee,  and  give  him  instead  of 
the  jus  ad  rem  which  he  loses,  an  absolute  ^ms  in  re. 

If  there  be  a  contract  to  deliver  wares  or  goods  which  are 
merchandise,  and  belong  to  a  certain  trade,  this  means  wares  or 
goods  of  the  kind,  fashion,  and  quality  in  common  use  in  that 
trade,  and  not  such  as  are  antiquated  and  unsalable,  [q]  And 
the  kind  and  quality  of  the  goods  should  be  such  as  would  be 
necessary  to  make  a  sale  of  them  legal,  [qa) 

3.    Of  the  kind  of  performance. 

When  the  defence  against  an  action  on  a  contract  is  per- 
formance, the  question  sometimes  arises  whether  the  perform- 
ance relied  upon  has  been  of  such  a  kind  as  the  law  requires. 
The  only  general  rule  upon  this  point  is,  that  the  performance 
must  be  such  as  is  required  by  the  true  spirit  and  meaning  of 
the  contract,  and  the  intention  of  the  parties  as  expressed 
therein.  A  mere  literally  accurate  performance  may  wholly  fail 
to  satisfy  the  true  purpose  of  the  contract ;  and  such  ja.  per- 
formance is  not  enough,  if  the  true  purpose  of  the  contract  can 
be  gathered  from  it,  according  to  the  established  rules  of  con- 
struction. Thus  a  contract  for  the  conveyance  of  real  estate,  is 
satisfied  only  by  a  valid  conveyance  with  good  title,  (r)     But  if 

misfortune,  lint  cannot  alter  tlic  law.    IIow-  Vt.  105.     So  if  the  law  requires  the  arti- 

evcr  innocent  the  mistake  may  have  been  clc   to   be   packed   in  a  certain  manner, 

he  has  no  ri;;lit  to  ask  an  indemnit}'  from  Clark  v.  Pinney,  7  Cowen,  681.     A  con- 

tlic  defcnilant,  who   seems  to  have  been  tract  to  deliver  r/ootZ  coarse  salt  is  fulfilled 

in  all  tlun;;s  e(|ually  innocent.      And  as  by  a  delivery  of  coarse  salt  of  a  medium 

he  chose  to  exact  of  the  defendant  a  rigid  (juality,  of  the  kind  fjcnerally  used  at  the 

compliance  with  the  terms  of  tlie  contract,  place  and  time  of  delivery.     Goss  v.  Tur- 

hc  must  not   complain    if   tlic  defendant  ncr,  21  Vt.  4.'37.     In  Crane  v.  llobcrts,  5 

now  chooses  tf)  shield  himself  under  tlic  Greenl.  419,  there  was  a  contract  to  de- 

rifjid  rules  of  the  law."     15ut  this   decis-  liver  such  hay  as  15.  should  say  was  "??ier- 

ion    has    not    been    ajiproved    of,    and    it  c/itnikihlc."     That  which  he  did  deliver,  I?. 

probaliiy  would  not  now  be  considered  as  called  "a  fair  lot,  say  merchantable,  not 

law  in  any  jurisdiction.  quite  so  good  as  I  expected  ;  the  outside 

(7)  Dennett  V.  Short,  7  Greenl.  l.'iO.  of  tlie  bundles  some  damaged  by  the  wea- 

(ijii)  'j'hus  when  a  statute  required  all  tlicr."  —  Jltld,   no    compliance   with   tho 

leather  od't  i<'d  for  sah^  to  b(^  stamped  G.  contract. 

or  15.,  a  tiiidcr  of  uiistainpcd    h  atiicr  is  (/)  Smith    v.   Ilaynes,   9    Greenl.    128. 

not   Bullicieut.     Elkins   c.   I'aikhurst,  17  Here  the  agreement  was  "to  sell  certain 

[IGG] 


en.  III.] 


DEFENCES. 


'J  69 


the  contract  expresses  and  defines  the  exact  method  of  convey- 
ance, and  that  method  is  accurately  followed,  although  no 
good  title  passes,  this  is  a  sufficient  *performance.  (s)  But  if 
the  expression  is,  "a  good  and  sufficient  deed,"  the  deed  must 
not  only  be  good  and  sufficient  of  itself,  but  it  must  in  fact  con- 
vey a  good  title  to  the  land,  because  otherwise  it  would  not  be 
sufficient  for  the  purpose  of  the  contract.  (/) 

If  the  contract  be  in  the  alternative,  as  to  do  a  thing  on  one 
day  or  another,  or  in  one  way  or  another,  the  right  of  election 
is  with  the  promisor,  if  there  be  nothing  in  the  contract  to  con- 
trol the  presumption,  (w)     It  is  an  ancient  rule,  that  "  in  case 


land."  It  was  held  to  be  an  agreement 
also  to  "  convey  "  the  land  ;  but  it  was  not 
determined  whether  the  deed  should  con- 
tain a  warranty  or  not.  In  Brown  v. 
Gammon,  14  Me.  276,  the  contract  was 
"to  convey  a  certain  tract  of  land,  the 
title  to  be  a  good  and  sufficient  deed ; " 
and  this  was  held  to  be  a  contract  to  give 
a  good  title  by  deed.  Lawrence  v.  Dole, 
11  Vt.  549,  bears  upon  the  same  point. 
It  was  there  held  tliat  if  the  contract  be 
"to  convey  the  land  by  a  deed  of  convej-- 
ance,"  for  a  stipulated  price,  this  is  not 
fulfilled  by  executing  a  deed  of  convey- 
ance merely.  The  party  must  be  able  to 
convey  such  a  title  as  the  other  party  had 
a  right  to  expect,  and  this  is  to  be  deter- 
mined by  the  fair  import  of  the  terms  used 
with  reference  to  the  sulyect-matter.  Bed- 
Jield,  J.,  said  :  "  The  contract  is,  not  to 
execute  a  deed  merely,  but  to  convey,  by  a 
deed,  &c.,  a  certain  tract  of  land.  Could 
language  be  more  explicit  ■?  What  is  im- 
plied in  conveying  land  1  Surely,  that 
the  title  shall  be  conveyed."  But  it  has 
been  held  in  Ohio  that  a  contract  for  a 
good  title  was  discharged  by  a  tender  of  a 
quitclaim  deed,  the  grantor  liaving  the 
■whole  title.  Pugh  v.  Chesseldine,  11 
Ohio,  109. 

(s)  Hill  V.  Hobart,  16  Me.  164;  per 
Redjield,  J.,  in  Lawrence  v.  Dole,  ll  Vt. 
554.  In  Tinney  v.  Ashley,  15  Pick.  546, 
the  obligors  undertook  to  execute  and 
deliver  a  "good  and  sufficient  warranty 
deed"  of  certain  land  ;  and  the  court  AeW 
that  the  words  "good  and  sufficient" 
were  to  be  applied  to  the  deed  and  not  to 
the  title,  and  that  the  condition  was  per- 
formed by  making  and  delivering  a  deed 
good  and  sufficient  in  point  of  form  to  con- 
vey a  good  title,  the  remedy  for  any  defect, 


being  upon  the  covenant  of  warranty  in 
the  deed  ;  but  see  next  note. 

(t)  Treniain  r.  Liming,  Wright,  644. 
It  was  held  that  the  words  "good  and 
sufficient  deed  "  meant  a  deed  of  warranty 
conveying  a  fee-simple;  and  a  deed  witli- 
out  warranty,  and  not  signed  by  the  obli- 
gor's wife,  was  held  no  compliance  with 
the  contract.  In  Hill  v.  Hobart,  16  Me. 
164,  the  contract  was  to  make  and  execute 
"a  good  and  sufficient  deed  to  convetj  the 
title ; "  this  was  held  not  to  be  performed 
unless  a  good  title  passed  by  the  deed.  In 
this  case  also  the  distinction  in  the  text 
was  recognized,  that  if  the  contract  is  for 
the  conveyance  of  land,  or  for  a  title  to  it, 
performance  can  be  made  only  by  the  con- 
veyance of  a  good  title.  But  when  it  stip- 
ulates only  for  a  deed,  or  for  a  conveyance 
by  a  deed  described,  it;  is  performed  by 
giving  such  a  deed  as  is  described,  how- 
ever defective  the  title  may  be.  That  the 
words  "good  and  sufficient,"  when  used 
as  descriptive  of  a  deed,  have  reference  to 
the  title  to  be  conveyed,  and  not  to  the 
mere  form  of  the  deed,  see  Fletcher  v. 
Button,  4  Comst.  .396  ;  Clute  v.  Pobinson, 
2  Johns.  595;  Judson  v.  Wass,  11  Johns. 
525  ;  Stow  V.  Stevens,  7  Vt.  27.  But  see 
Aiken  v.  Sanford,  5  Mass.  494  ;  Gazlev  v. 
Price,  16  Johns.  268;  Parker  v.  Parmcle, 
20  id.  130;  Stone  v.  Fowle,  22  Pick.  166. 
See  also,  Tinney  v.  Ashley,  15  Pick.  546, 
cited  in  preceding  note.  In  this  last  case 
the  court  lay  considerable  stress  on  the 
fact  that  the  deed  was  to  contain  a  cove- 
nant of  warranty,  which  showed  that  the 
party  intended  to  look  at  that  as  his  mu- 
niment of  title. 

(;()  Smith  v.  Sanborn,  11  Johns.  59  ; 
Lay  ton  v.  Pcarcc,  Doug.  16,  per  Lord 
Mansfield;  Small  v.    Quincy,   4    Greenl. 

[167] 


170*-17L* 


THE   LAAV   OF   CONTRACTS. 


[part  II. 


an  election  be  given  of  two  several  things,  *aWays  he  that  is 
the  first  agent,  and  which  ought  to  do  the  first  act,  shall  have 
the  election."  (v)  But  this  same  rule  may  give  the  election  to 
the  promisee,  if  something  must  first  be  done  by  him  to  create 
the  alternative,  (ic)  If  one  branch  of  the  alternative  becomes 
impossible,  so  that  the  promisor  has  no  longer  an  election,  this 
does  not  destroy  his  obligation,  unless  the  contract  expressly  so 
provide ;  but  he  is  now  bound  to  perform  the  other  alterna- 
tive, (x)  An  agreement  may  be  altogether  optional  with  one 
party,  and  yet  binding  on  the  other,  (i/) 

4.    Of  jJctrt  pe7-formance. 

A  partial  performance  may  be  a  defence,  pro  tanto.,  or  it  may 
sustain  an  action,  pro  tanto ;  but  this  can  be  only  in  cases 
where  the  duty  to  be  done  consists  of  parts  which  are  distinct 
and  severable  in  their  own   nature,  [z)   and   are   not   *bound 


497.  In  this  case  A  contracted  to  deliver 
"  from  one  to  three  thousand  bushels  of 
potatoes,"  and  he  was  allowed  the  right  to 
deliver  any  quantity  he  chose  within  the 
limits  of  the  contract.  And  see  JNI'Nitt 
V.  Clark,  7  Johns.  4G5  ;  13  Edw.  IV.,  4 
pi.  12.  If  the  contract  is  to  do  one  of  two 
things  by  a  given  day,  the  debtor  has  un- 
til that  day  to  make  his  election ;  but  if 
he  sutler  that  day  to  pass  without  perform- 
ing either,  his  contract  is  broken  and  his 
right  of  election  gone.  Choice  v.  Mose- 
ley,  1  Bailey,  136;  M'Nitt  v.  Clark,  7 
Johns.  465. 

(v)  Co.  Litt.  145,  a.  And  see  Norton 
V.  Webb,  36  Me.  270. 

(w)  Chippendale  v.  Thurston,  4  C.  & 
P.  98. 

(x)  Stevens  v.  Webb,  7  C.  &  P.  60. 

(y)  Thus,  where  A  agreed  to  deliver  to 
B  by  the  first  of  May,  from  700  to  1,000 
barrels  of  meal,  for  wiiich  11  agreed  to 
pay  on  delivery  at  the  rate  of  six  dollars 
per  iiarrel,  and  A  delivered  700  barrels, 
and  also  bcfure  the  day  tendered  to  15  300 
barrels  more,  to  make  up  the  1 ,000  barrals, 
which  B  refused  ;  it  was  held  tliat  B  was 
bound  to  receive  and  \y.\\  for  the  whole 
1,000  barr(ds  ;  the  delivery  of  any  (pian- 
tity  i)et\vecn  700  and  1,000  barrels,  licing 
at  the  option  of  A  only,  and  fur  bis  Ixne- 
fit.  ])i.sborough  v.  Ncilson,  3  Johns.  Cas. 
81. 

[1C8] 


{z)  Thus  in  an  entire  contract  of  sale, 
or  manufacture  of  a  largo  quantity  of  an 
article  or  articles,  at  an  agreed  price  for 
each,  the  current  of  authorities  holds  that 
a  delivery  and  acceptance  of  i)art,  gives  a 
right  to  recover  for  that  part,  deducting 
whatever  damages  the  other  party  sus- 
tained by  the  non-fultilment  of  the  con- 
tract. Bowker  z'.  Hoyt,  18  Pick.  555,  a 
sale  of  1,000  bushels  of  corn  at  85  cents 
per  bushel.  The  plaintiff  delivered  only 
410  bushels,  and  refused  to  deliver  the  re- 
mainder ;  the  vendee  kept  what  he  had 
received,  and  was  held  bound  to  pay  for 
it,  deducting  his  damages.  O.Kcndale  i\ 
Wetherell,  9  B.  &  C.  386,  was  a  sale  of 
250  bushels  of  wheat  at  85  cents  per 
bushel.  The  vendor  delivered  Only  130 
bushels,  when  corn  liaving  advanced,  he 
refused  to  deliver  the  remainder.  The 
Jarij  found  the  contract  to  he  entire,  but  as 
the  vendee  had  retained  the  corn  delivered, 
until  after  the  expiration  of  the  time  for 
the  completion  of  the  contract,  the  whole 
Court  of  King's  Bench  held  him  liable 
for  the  same.  Champion  v.  Short,  1 
Camp.  53,  is  to  the  same  effect.  There 
tlie  defendant,  who  resided  at  Salisbury, 
ordered  from  the  i)laiiitiir,  a  wliolesalo 
grocer  in  London,  "  half  a  chest  of  French 
l)lums,  two  hogsheads  of  raw  sugar,  and 
100  lumps  of  white  sugar;  to  be  all  sent 
down  without  delay."     The   plums   and 


CH.  III.] 


DEFENCES. 


-171 


together  by  expressions  giving  entirety  to  the  contract.  It  is  not 
enough  that  the  duty  to  be  dons  is  in  itself  severable,  if  the  con- 
tract contemplates  it  only  as  a  whole,  (a) 


raw  sugar  arrived  nearly  as  soon  as  the 
course  of  conveyance  would  permit ;  but 
the  white  sugar  not  coming  to  hand,  the 
defendant  countermanded  it,  and  gave 
notice  to  the  plaintiff  that  as  he  had 
wished  to  have  the  two  sorts  of  sugar  to- 
gether, or  not  at  all,  he  would  not  accept 
of  the  raw.  The  plums  the  defendant 
used,  and  this  action  having  been  brought 
to  recover  the  price  of  the  plums  and  the 
raw  sugar,  he  tendered  the  price  of  the 
plums;  and  at  tlie  trial  the  question 
was  whether  he  was  liable  to  pay  for  the 
sugar.  And,  per  Lord  Elleiilmvugh, 
"  Where  several  articles  are  ordered  at 
the  same  time,  it  does  not  follow,  although 
there  be  a  separate  price  fixed  for  each, 
that  they  do  not  form  one  gross  contract. 
I  may  wish  to  have  articles  A,  B,  C,  and 
D,  ail  of  different  sorts  and  of  different 
values ;  but  without  having  every  one  of 
them  as  I  direct,  the  rest  may  be  useless 
to  me.  I  therefore  bargain  for  them 
jointly.  Here  had  the  defendant  given 
notice  that  he  would  accept  neither  the 
plums  nor  the  raw  sugar,  as  without  the 
white  sugar  they  did  not  form  a  proper  as- 
sortment of  goods  for  his  shop,  he  might 
not  have  been  liable  in  the  present  action; 
but  he  has  completely  rebutted  the  pre- 
sumption of  a  joint  contract,  including  all 
the  articles  ordered,  by  accepting  the 
plums,  and  tendering  payment  for  them. 
Therefore,  if  the  raw  sugar  was  of  the 
quality  agreed  on,  and  was  delivered  in 
reasonable  time,  he  is  liable  to  the  plain- 
tiff for  the  price  of  it."  And  see  Barker 
V.  Sutton,  1  Camp.  55,  n. ;  Bragg  v.  Cole, 
6  J.  B.  Moore,  114;  Shaw  v.  Badger,  12 
S.  &  R.  275,  recognize  the  same  rule.  In 
Booth  V.  Tyson,  15  Vt.  515,  the  con- 
tract was  to  mould  for  the  defendant  two 
hundred  stove  patterns  ;  only  a  part  was 
ever  made,  which  the  defendant  used  and 
disposed  of,  as  they  were  made.  The  plain- 
tiff gave  up  the  contract  without  complet- 
ing it ;  but  he  was  allowed  to  recover  on 
a  quantum  meruit,  deducting  the  damages 
to  the  other  party.  In  Mavor  v.  Pyne,  3 
Bing.  235,  also,  it  was  held  that  a  con- 
tract to  publish  a  work  in  numbers,  at  so 
much  a  number,  meant  that  each  number 
should  be  paid  for  as  delivered.  Shipton 
V.  Casson,  5  B.  &  C.  378,  holds  also  that 
an  acceptance  of  part  under  an  entire 
VOL.  II.  15 


contract,  gives  a  right  of  action  for  such 
part,  although  in  accordance  with  the  sug 
gestions  in  that  case  it  may  be  questioned 
whether  the  plaintiff  can  sustain  an  action 
for  part,  until  after  the  expiration  of  the 
time  for  the  delivery  of  the  whole;  for 
perhaps  the  vendee  may  conclude  to  re- 
turn what  he  has  received  unless  the 
whole  is  delivered,  which  cannot  be  known 
until  the  time  has  expired.  See  Wad- 
dington  v.  Oliver,  5  B.  &  P.  61.  The 
New  York  Courts  adopt  a  different  doc- 
trine, and  hold  that  part  performance, 
although  accepted,  furnishes  no  gi'ound  of 
recovery  pro  tanto,  and  repudiate  the  doc- 
trine of  Oxendale  v.  Wetherell,  supra. 
Champlin  v.  Rowley,  13  Wend.  258,  18 
id.  187;  Mead  v.  Degolyer,  16  Wend. 
632 ;  Paige  v.  Ott,  5  Denio,  406  ;  Mc- 
Knight  V.  Dunlop,  4  Barb.  36 ;  and  see 
a}tte,  p.  35,  n.  (d). 

(a)  The  most  frequent  cases  where  the 
entirety  of  a  contract  is  sustained  as  a 
good  defence  in  law  to  an  action  for  part 
performance,  are,  perhaps,  contracts  of 
labor  and  service  for  a  fixed  time.  Here 
the  current  of  authorities  agrees  that  part 
performance  gives  no  riglit  to  part  com- 
pensation, unless  the  fulfilment  of  the  con- 
tract is  prevented  by  the  act  of  the  obli- 
gee. Cutter  V.  Powell,  6  T.  R.  320,  is 
well  known  as  the  leading  case  on  this 
subject.  There  a  sailor  had  taken  a  note 
from  the  master  of  a  vessel  to  pay  him  30 
guineas,  "  provided  he  proceeded,  continued, 
and  did  his  duty  as  second  mate  from  Ja- 
maica  to  Liverpool."  The  sailor  died  on 
the  voyage,  and  his  administrator  was  not 
allowed  to  recover  any  thing  for  the  ser- 
vice actually  performed.  But  as  the  sailor 
was  by  the  contract  to  receive  about  four 
times  as  much  provided  he  completed  the 
voyage  as  was  generally  paid  for  the  same 
service  without  any  special  contract,  this 
fact  might  have  had  much  influence  upon 
the  court  in  determining  this  contract  to 
be  entire  and  not  apportionable.  But  in 
this  country,  sickness  or  death  of  the 
laborer  has  been  frequently  held  a  sufli- 
cient  excuse  for  non-performance  of  the 
whole  contract,  and  the  laborer,  or  his  ad- 
ministrator may  recover  for  the  service  act- 
ually rendered.  Fenton  v.  Clark,  11 
Vt.  557 ;  Dickey  v.  Linscott,  20  Me. 
453  ;  Puller  v.  Brown,  11  Met.  440.    The 

[169] 


172 


THE    LAW    OF    CONTRACTS. 


[part  II. 


If  money  is  to  be  paid  when  work  is  done,  and  an  action  be 
brought  for  the  money,  non-performance  of  the  work  is  of 
course  a  good  defence  ;  but  if  there  is  a  part  performance,  and 
this  is  a  performance  of  the  whole  substance  of  the  contract, 
and  an  omission  only  of  what  is  incidental  and  unimportant,  (b) 
it  is  a  sufficient  performance ;  but  the  contract  may  expressly 
and  in  especial  terms,  provide  that  these  formal,  incidental,  and 
non-essential  parts  shall  be  done,  and  then  they  are  made  by 
the  parties,  matters  of  substance.  Thus,  if  the  time  be  set  in 
which  certain  work  is  to  be  done,  it  is  not  in  general  so  far  of 
the  substance  of  the  contract,  that  if  the  work  be  done,  but  not 
until  some  days  later,  no  compensation  will  be  recovered  ;  but 
an  action  for  the  price  will  be  sustained,  leaving  the  defendant 
to  show  an  injury  he  has  sustained  by  the  delay,  and  use  it  in 
reduction  of  damages,  by  way  of  set-off,  or  to  sustain  a  cross 
action,  according  to  the  circumstances  of  the  case,  (c)  But  if 
the  parties  see  fit  to  stipulate  in  unequivocal  language  that  no 
money  shall  be  paid  for  the  work  unless  it  is  done  within  a 
fixed  time,  both  parties  will  be  bound  by  their  agreement,  (d) 


same  rule  has  been  applied  where  the 
non-performance  was  caused  by  the  act  of 
law.  Jones  v.  Judd,  4  Comst.  412.  See 
ante,  vol.  1,  p.  524,  n.  (o).  Although  in 
the  same  courts  the  general  rule  is  fully 
recognized,  and  constantly  acted  upon, 
that  part  performance  of  such  a  contract 
gives  no  right  to  ])art  payment,  if  tlie  non- 
performance is  voluntary  on  tlie  part  of 
the  plaintiff,  and  not  caused  l)y  the  de- 
fendant or  by  an  act  of  God.  See  St.  Al- 
bans St.  Co.  V.  Wilkins,  8  Vt.  .54  ;  Hair 
V.  Bell,  6  Vt.  sr) ;  ri)ill)rook  r.  Belknap, 
6  Vt.  383  ;  Brown  v.  Kimball,  12  Vt. 
617;  Ripley  v.  Cliii)man,  13  Vt.  2G8  ; 
Stark  V.  Parker,  2  Tick.  2G7  ;  Olmstead 
V.  Beale,  19  Tick.  528.  And  see  ante, 
vol.  1,  p.  522,  n.  (/),  and  unlc,  p.  35,  n. 
{(l).  So  if  rent  is  to  be  paid  quarterly, 
and  during  a  quarter  the  lessee  delivers 
up,  and  the  lessor  accejjts  possession  of 
the  premi-ses,  without  any  thing  said  about 
rent  ])ro  raUi,  none  is  itayablc.  (irimman 
V.  Legge,  8  B.  &  C.  324,  and  see  Madeley 
V.  Vigurs,  4  Ellis  &  B.  71,  20  Eng.  L.  & 
Eq.  144. 

(I,)  Thus,  in  Oilman  r.  Hall,  11  Vt. 
510,  A  contracted  to  build  SOO  worth  of 
stone  wall  for  B  of  u  given  leixjllt,  liciyhl, 

[170] 


and  tluchiess.  He  built  a  wall  worth  $60, 
but  in  some  parts  it  was  not  of  the  given 
heif/ht,  the  deficiency  being  made  up  in 
extra  length.  He  was  allowed  to  recover 
on  a  quantum  meruit,  on  the  ground  that 
there  had  been  a  substantial  compliance. 
See  also.  Chambers  v.  Jaynes,  4  Barr,  39, 
that  a  substantial,  bona  fide  compliance  is 
all  that  is  necessary.  And  see  ante,  p.  35, 
n.  {d). 

(c)  Thus  in  Lucas  o.  Godwin,  3  Bing. 
N.  C.  737,  A  contracted  to  finish  some 
cottages  by  the  10th  of  October.  They 
were  not  finished  until  the  15th.  The 
defendant  then  accepted  them,  and  he  was 
held  bound  to  pay  on  a  quantum  valebant. 
See  also,  Porter  v.  Stewart,  2  Aik.  417  ; 
Warren  v.  Mains,  7  Johns.  476  ;  Lind- 
sey  V.  Gordon,  13  Me.  60 ;  Smith  v. 
Gugcrty,  4  Barb.  614.  But  in  most  or 
all  of  tiiesc  cases  it  is  to  be  noted  that 
there  had  been  an  acceptance  by  the  de- 
fendant after  the  time  stipulated  in  the 
contract.     See  ante,  p.  35,  n.  (</). 

((/)  Kent  V.  Humphreys,  13  111.  573  ; 
Wcstcrman  v.  Means,  12  reini.  St.  97; 
Liddell  V.  Sims,  9  Smedes  &  M.  596; 
TyliT  V.  McCardle,  id.  2,30.  In  Sliced  v. 
\Viggins,   3   Ga.   94,   A    recovered    two 


en.  III.] 


DEFENCES. 


173 


Although  we  should  say  that  even  then  the  promisee  would 
not  be  permitted  to  receive  and  retain  the  work  after  the  due 
time  of  delivery,  and  make  no  compensation.  Either  his  accept- 
ance would  amount  to  a  waiver  of  the  condition  of  time,  or 
the  other  party  might  have  his  action  on  a  quantum  meruit. 

5.    Of  the  time  of  performance. 

If  the  contract  specifies  no  time,  the  law  implies  that  it  shall 
be  performed  within  a  reasonable  time  ;  (e)  and  will  not  permit 
this  implication  to  be  rebutted  by  extrinsic  testimony  going  to 
fix  a  definite  term,  because  this  varies  the  contract.  (/)  What 
is  a  reasonable  time  is  a  question  of  law.  {g)     And  if  the  con- 


judgments  against  B,  who  being  about 
to  appeal,  A  agreed  in  writing  that  if  he 
would  not  appeal,  he,  A,  would  give  cer- 
tain time  for  the  payment  of  the  amount 
due  by  instalments,  "  provided  that  if  any 
of  the  instalments  should  not  be  paid  at 
the  time  specified,  then  A  should  proceed 
with  his  execution."  Htlil,  that  time  was 
of  the  essence  of  the  contract;  and  that 
B  having  failed  to  pay  one  of  the  instal- 
ments when  due,  was  not  entitled  to  relief 
in  equity. 

(e)  Sansora  v.  Rhodes,  8  Scott,  544. 
In  this  case  the  defendant  put  up  property 
for  sale  by  public  auction  on  the  ISth 
September,  subject  (amongst  others)  to 
the  following  conditions  —  that  the  pur- 
chaser should  pay  down  a  deposit  of  10 
per  cent,  and  sign  an  agreement  for  pay- 
ment of  the  remainder  of  the  purchase- 
money  on  or  before  the  28th  November ; 
that  a  proper  abstract  should  be  delivered 
within  fourteen  days  from  the  day  of  the 
sale,  and  a  good  title  deduced  at  "the  ven- 
dor's expense,  having  regard  to  the  condi- 
tions ;  the  conveyance  to  be  prepared  by 
and  at  the  expense  of  the  purchaser,  and 
left  at  the  office  of  the  vendor's  solicitors 
for  execution  on  or  before  the  10th  No- 
vember ;  and  that  all  objections  to  the 
title  should  be  communicated  to  the  ven- 
dor's solicitors  within  twenty-eight  days 
after  the  delivery  of  the  abstract.  In  an 
action  by  the  purchaser  to  recover  back 
the  deposit  on  the  ground  tliat  the  vendor 
had  not  deduced  a  good  title  by  the  28th 
of  November:  —  Held,  on  special  demur- 
rer, that  the  declaration  was  bad  for  not 
averring  that  a  reasonable  time  for  deduc- 


ing a  good  title  had  elapsed  before  the 
commencement  of  the  action,  the  condi- 
tions of  sale  naming  no  specitic  time  for 
tliat  purpose.  Tiiidal,  C.  J.,  said  :  "  There 
does  not  appear  on  the  face  of  the  decla- 
ration to  have  been  any  express  stipulation 
that  the  vendor  should  deduce  a  good  title 
by  any  specific  time ;  and,  if  no  express 
time  was  stipulated,  the  law  will  in  this, 
as  in  every  other  case,  imply  that  a  rea- 
sonable time  was  intended.  Inasmuch, 
however,  as  it  is  not  alleged  in  the  decla- 
ration that  a  reasonable  time  for  deducing 
a  good  title  had  elapsed,  I  think  the  de- 
murrer must  prevail,  and  consequently 
that  the  defendant  is  entitled  to  judg- 
ment." Atwood  V.  Cobb,  16  Pick.  227  ; 
Roberts  v.  Beatty,  2  Penn.  63  ;  Philips 
V.  Morrison,  3  Bibb,  10.5;  Cocker  v. 
Franklin  Man.  Co.  3  Sumner,  530;  At- 
kinson V.  Brown,  20  Me.  67.  And  see 
ante,  p.  47,  n.  (w). 

( f)  Shaw,  C.  J.,  in  Atwood  v.  Cobb, 
16  Pick.  227.  Unless  it  be  in  connection 
with  other  facts  as  tending  to  show  what 
is  a  reasonable  time  under  the  circum- 
stances of  the  case.  Cocker  v.  Franklin 
Man.  Co.  3  Sumner,  530  ;  Davis  v.  Tall- 
cot,  2  Kern.  184;  Ellis  v.  Thompson,  3 
M.  &  W.  445.     And  see  ante,  p.  65,  n. 

{IV). 

(9)  Stodden  v.  Harvey,  Cro.  Jac.  204, 
where  the  court  held  that  the  executor  of 
a  lessee  for  life  had  a  reasonable  time  after 
his  death  to  remove  his  goods,  and  that 
six  days  was  reasonable.  So  in  Ellis  v. 
Paige,  1  Pick.  43,  it  was  considered  as  a 
question  for  the  court,  what  was  a  reason- 
able time  for  a  tenant  at  will  to  quit  after 

[171] 


174*-175*  THE   LAW   OF    CONTRACTS.  [PART  II. 

tract  specify  a  place  in  which  articles  *shall  be  delivered,  but  not 
a  time,  this  means  that  they  are  deliverable  on  demand ;  but  the 
demand  must  be  sufficient  to  enable  the  promisor  to  have  the 
articles  at  the  appointed  place  with  reasonable  convenience,  (h) 
If  any  period,  as  a  month,  be  expressed,  the  promisor  has  a 
right  to  the  whole  of  it.  There  is,  perhaps,  no  exact  definition, 
and  no  precise  standard  of  reasonable  time.  The  true  rule 
must  be,  that  that  is  a  reasonable  time  which  preserves  to  each 
party  the  rights  and  advantages  he  possesses,  and  protects  each 
party  from  losses  that  he  ought  not  to  suffer.  Thus,  in  a  case  of 
guaranty,  if  the  principal  fails  to  pay  when  he  should,  the 
guarantor  must  be  informed  of  the  failure  within  a  reasonable 
time;  that  is  to  say,  soon  enough  to  give  him  such  opportuni- 
ties as  he  ought  to  have  to  save  himself  from  loss.  If  therefore 
the  notice  be  delayed  but  a  very  short  time,  but  by  reason  of 
the  delay  the  guarantor  loses  the  opportunity  of  obtaining  in- 
demnity, and  is  irreparably  damaged,  he  would  be  discharged 
from  his  obligation.  But  if  the  delay  were  for  a  long  period, 
for  months,  and  possibly  for  years,  and  it  was  nevertheless  clear 
that  the  guarantor  could  have  derived  no  benefit  from  an  earlier 
notice,  the  delay  would  not  impair  his  *  obligation.  (/)     And  if 


receiving  notice,  and  that  ten  days  were  sonable  time.  See  also,  Murry  v.  Smith, 
not  enough.  And  wliere  the  maker  of  a  1  Hawks,  41  ;  Kingsleyi'.  Wallis,  14  JMe. 
note  deposited  goods  with  the  holder  to  be  57.  It  is  not  alwuijs  a  question  for  the 
sold  to  pay  it,  the  court  held  that  a  sale  court  what  is  reasonable  time ;  for  if  the 
several  years  afterwards  was  not  within  facts  are  not  clearly  estal)lished,  or  if  the 
a  reasonable  time.  I'orter  v.  Blood,  5  question  of  time  depends  upon  other  con- 
Pick.  54.  Likewise  in  Doe  v.  Smith,  2  trovcrtcd  facts,  or  where  the  motives  of 
T.  K.  436,  where  a  lessor  reserved  in  the  the  party  enter  into  the  question,  it  has 
lease  a  right  for  his  son  to  terminate  the  been  said  that  the  whole  must  necessarily 
lease,  and  to  take  possession  upon  coming  be  submitted  to  a  jury.  Hill  v.  Hobart, 
of  age,  the  court  determined  that  a  week  IG  Me.  164;  Greene  v.  Dingley,  24  Me. 
or  a  fortnight  after  coming  of  age,  would  1.31.  See  also.  Cocker  r.  Franklin  Man. 
have  been  a  reasonalile  time,  but  that  a  Co.  3  Sumner,  530,  and  Ellis  v.  Tliomp- 
year  was  not.  On  the  same  ])rinciple  it  son,  3  M.  &  W.  445,  for  instances  of  rea- 
nas  been  held  to  be  a  question  for  the  sonable  time  decided  by  the  jury.  In 
court  whether  notice  of  abandonment  was  Howe  v.  Huntington,  15  Me.  S50,  Shephy, 
given  witiiiii  a  reasonable  time  after  intel-  J.,  enumerates  several  cases  where  this 
ligence  of  the  loss,  and  that  five  days  was  question  is  for  the  jury.  And  sec  ante,  p. 
an  unreasonable  delay.      Hunt  r.   Hoval  47,  n.  (r). 

Ex.  Ass.  Co.  5  M.  &  S.  47.     In  Atlwocxl         (//)  Russell   v.   Ormsbcc,   10  Vt.    274. 

V,  Clark,  2  OrecnI.  249,  the  purchaser  of  And  see  Bailey  v.  Simonds,  6  N.  H.  159. 
a  cnite  of  ware  was  to  furnish  the  vendor         (/)  Clark  v.  Ilemington,  11   Met.  361  ; 

with  a  list  of  the  broken  articles  ;  and  it  Craft  v.  Isham,  13  Conn.  28  ;  Thomas  v. 

was   held    that    the    com't    must    decide  Davis,  14  Tick.  353 ;  Talbot  u.  Gray,  18 

whether  it  was  or  was  not  done  in  a  rea-  I'ick.  534. 

[172] 


CII. 


III.] 


DEFENCES. 


176 


the  time  be  fixed  by  reference  to  a  future  event,  the  promisor 
has  a  right  to  all  the  time  requisite  for  the  happening  of  that 
event  in  the  fullest  and  most  perfect  manner.  (J) 

Whether  in  computing  time,  the  day  when  the  contract  is 
made  shall  be  included  or  excluded,  has  been  much  disputed. 
It  has  been  thought  that  this  might  be  made  to  depend  on  the 
very  words,  as  that  "  in  ten  days  "  includes  the  day  of  the  mak- 
ing, and  "  in  ten  days  from  the  day  of  the  date "  excludes  it, 
while  "  ten  days  from  the  date  "  is  uncertain.  The  later  cases, 
however,  seem  to  establish  the  principle  thatii  computation  of 
this  kind  shall  always  conform  to  the  intention  of  the  parties, 
so  far  as  that  can  be  ascertained  from  the  contract,  aided  by 
admissible  evidence,  (k)     If,  however,  *  there  is  nothing  in  the 


(/)  Ilowe  V.  Huntington,  15  Me.  350. 

(/l)  Piigli  V.  Leeds,  Cowp.  714,  is  the 
leading  case  upon  this  point.  There,  one 
Godolphin  Edwards,  under  a  power  re- 
served in  his  marriage  settlement  to  lease 
for  21  years  in  possession,  hut  not  in  rever- 
sion, granted  a  lease  to  his  only  daughter 
for  21  years,  to  commence /roK  the  day  of 
the  date;  and  the  question  was  whether 
this  was  a  lease  in  possession  or  in  rever- 
sion. The  court  held  that  the  word  "  from  " 
may  mean  either  inclusive  or  exclusive,  ac- 
cording to  the  context  and  subject-matter; 
and  should  be  so  construed  as  to  effectuate 
the  deeds  of  parties,  and  not  destroy  them, 
and  therefore  that  in  this  case  it  should  be 
construed  as  inclusive.  Lord  Mansfield,  in 
delivering  the  judgment  of  the  court,  said  : 
"  Tlie  question  is, '  whether  this  be  a  lease 
in  possession  ? '  And  it  turns  upon  this  : 
'  Whether  to  commence  froin  the  daj/  of 
the  date  in  this  deed,  is  to  be  construed 
inclusive  or  exclusive  of  the  day  it  bears 
date  1 '  I  will  first  consider  it  as  suppos- 
ing this  a  new  question,  and  that  there 
never  had  existed  any  litigation  concerning 
it.  In  that  light,  the  whole  will  turn  upon 
a  point  of  construction  of  the  particle 
'from.'  The  power  requires  no  precise 
form  to  describe  the  commencement  of  the 
lease  ;  the  law  requires  no  technical  form. 
All  that  is  required  is  only  enough  to  show 
that  it  is  a  lease  in  possession,  and  not  in 
reversion  ;  and  therefore  if  the  words  used 
are  sufficient  for  that  purpose,  the  lease 
will  be  a  good  and  valid  lease.  Li  gram- 
matical strictness,  and  in  the  nicest  pi"opri- 
ety  of  speech  that  the  English  language 
admits  of,  the  sense  of  the  word  'from' 

15* 


must  always  depend  upon  the  context  and 
subject-matter,  whether  it  shall  be  construed 
inclusive  or  exclusive  of  the  terminus  a  quo : 
and  whilst  the  gentlemen  at  the  bar  were 
arguing  this  case,  a  hundred  instances  and 
more  occurred  to  me,  both  in  verse  and 
prose,  where  it  is  used  both  inclusively  and 
exclusively.  If  the  parties  in  the  present 
case  had  added  the  word  '  inclusive,'  or 
'  exclusive,'  the  matter  would  have  been, 
very  clear.  If  they  had  said  '  from  the 
day  of  the  date  inclusive,'  the  term  would 
have  commenced  immediately ;  if  they  had 
said,  '  from  the  day  of  the  date  exclusive,' 
it  would  have  commenced  the  next  day. 
But  let  us  see  whether  the  context  and 
subject-matter  in  this  case  do  not  show 
that  the  construction  here  should  be  inclu- 
sive, as  demonstrably  as  if  the  word  'in- 
clusive '  had  been  added.  This  is  a  lease 
made  under  a  power  :  the  lease  refers  to 
the  power,  and  the  power  requires  that  the 
lease  should  be  a  lease  in  possession.  The 
validity  of  it  depends  upon  its  being  in 
possession  ;  and  it  is  made  as  a  provision 
for  an  only  daughter.  He  must  therefore 
intend  to  make  a  good  lease.  The  expres- 
sion then, compared  with  the  circumstances, 
is  as  strong  in  respect  of  what  his  intention 
was,  as  if  he  had  said  in  express  words, 
'  I  mean  it  as  a  lease  in  possession.'  '  I 
mean  it  shall  be  so  construed.'  If  it  is  so 
construed,  the  word  'from  '  must  be  inclu- 
sive. This  construction  is  to  support  the 
deed  of  parties,  to  give  effect  to  their 
intention,  and  to  protect  property.  The 
other  is  a  subtlety  to  overturn  property, 
and  to  defeat  the  intention  of  parties,  with- 
out answering  any  one  good  end  or  pur- 

[173] 


176- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


language  or  subject-matter  of  the  contract  which  clearly  indi- 
cates the  intention  of  the  parties,  time  should  be  computed  ex- 
clusive of  the  day  when  the  contract  was  made,  (l) 


pose  -whatsoever.  And  though  courts  of 
justice  are  sometimes  obliged  to  decide 
against  the  convenience,  and  even  against 
the  seeming  right  of  private  persons,  yet  it 
is  always  in  favor  of  some  great  public 
benefit.  But  here,  to  construe  '  from  the 
day  of  the  date,'  to  be  exclusive,  can  only 
be  to  defeat  the  intention  of  the  parties. 
If  such  a  construction  were  right,  it  would 
hold  good,  supposing  the  lessee  had  laid 
out  ever  so  much  money  upon  the  estate ; 
and  all  would  be  alike  defeated  by  a  mere 
blunder  of  the  attorney  or  his  clerk. 
Therefore,  if  the  case  stood  clear  of  every 
question  or  decision  which  has  existed,  it 
could  not  bear  a  moment's  argument." 
His  lordship  then  proceeded  to  a  minute 
examination  of  the  cases  in  their  chrono- 
logical order ;  and  concluded  that  they 
were  "  i/es  and  no,  and  a  medium  between 
them,"  and  stood  little  in  the  way,  "  as 
binding  authorities,  against  justice,  reason, 
and  common  sense."  So  in  Lester  v.  Gar- 
land, 15  Ves.  248,  it  was  said  to  depend 
upon  the  reason  of  the  thing,  according  to 
circumstances,  whether  the  day  should  be 
included  or  excluded.  And  see  Phelan  v. 
Douglass,  11  How.  Pr.  Rep.  193. 

(/)  Bigelow  V.  Willson,  1  Pick.  485.  In 
this  case  it  was  held  that  in  computing  the 
time  allowed  by  St.  1815,  c.  137,  §  1,  for 
redeeming  a  right  in  e(iuity,  sold  on  exe- 
cution, which  is  "  within  one  year  from  the 
time  of  executing,  by  the  officer  to  the 
purchaser,  the  deed  thereof,"  the  day  on 
which  the  deed  is  executed  is  to  be  exclu- 
ded. And  Wilde,  J.,  in  delivering  the 
opinion  of  the  court,  said,  "  Before  the 
case  of  Pugii  v.  The  Duke  of  Leeds,  all 
the  cases  agree  that  the  words,  '  from  the 
day  of  the  date,'  are  words  of  exclusion. 
So  plain  wa.s  this  meaning  thought  to  be, 
that  leases  depending  on  this  rule  of  con- 
struction were  uniformly  declared  void, 
against  the  manifest  intention  of  the  par- 
ties. Of  this  doctrine,  thus  applied,  Lord 
Mansjie/d  very  justly  complains,  lujt,  iiow- 
ever,  on  the  ground  that  the  general  mean- 
ing of  the  words  had  been  misunderstood, 
but  because  the  plain  intention  of  tin;  i)ar- 
tios  to  the  contract  had  been  disrcgJinled. 
Ail  that  was  decided  in  tliateasc  was,  that 
'  from  the  day  of  the  date'  might  iiiciiide 
the  ilay,  if  HU<'h  was  the  clear  iiiteiili(jii  of 
the  contracting  j)arties  ;  and  not  that  such 

[174] 


was  the  usual  signification  of  the  words. 

I  think,  therefore,  we  are  warranted  by  the 
authorities  to  say,  that  when  time  is  to  be 
computed  from  or  after  the  day  of  a  given 
date,  the  day  is  to  be  excluded  in  the  com- 
putation ;  and  that  this  rule  of  construc- 
tion is  never  to  be  rejected,  unless  it  ap- 
pears that  a  different  computation  was 
intended.  So  also  if  we  consider  the 
question  independent  of  the  authorities,  it 
seems  to  be  impossible  to  raise  a  doubt. 
No  moment  of  time  can  be  said  to  be  after 
any  given  day,  until  that  day  is  expired." 
See  also,  Peflew  v.  Wonford,  9  B.  &  C. 
134,  where  the  clause  "two  days  after" 
a  certain  day  was  held  to  exclude  that  day. 
A  sensible  criterion  seems  to  be  to  reduce 
the  time  to  one  day,  and  see  whether  you 
do  not  obtain  an  absurdity,  unless  you  ex- 
clude the  first  day;  and  you  must  have 
the  same  rule  whatever  be  the  number  of 
days.  This  was  the  rule  adopted  in  Webb 
V.  Fairmaner,  3  M.  &  W.  473,  where  goods 
were  sold  on  the  5th  of  October  to  be  paid 

fur  in  two  months.  It  was  held  that  no  suit 
could  be  sustained  until  after  the  expiration 
of  the  5th  of  December  following.  And 
see  to  the  same  effect  Bigelow  v.  Willson, 
supra;  Hardy  v.  Kyle,  9  B.  &  C.  603. 
Rex  V.  Adderley,  2  Doug.  463,  was  de- 
cided on  a  particular  ground,  under  a  stat- 
ute in  fovor  of  sheriffs,  and  cannot  be  con- 
sidered as  laying  down  any  general  rule. 
It  is  true  that  in  Glassington  v.  Rawlins, 
3  East,  407,  the  first  day  seems  to  have 
been  included,  but  there  the  party  lay  in 
prison  on  the  day  he  went  there,  and  also 
a  portion  of  each  of  the  twenty-eight  days 
necessary  under  the  statute  to  amount  to 
an  act  of  bankru])tcy,  and  as  the  law  takes 
no  cognizance  of  a  part  of  a  day,  the  case 
does  not  u])on  careful  examination  conflict 
with  the  rule  in  the  text,  namely,  to  regard 
the  first  day  as  excluded.  Rex  v.  Cum- 
berland, 4  Nev.  &  M.  378,  is  to  the  same 
eflcet.  See  Wilkinson  v.  Gaston,  9  Q. 
B.  141  ;  Gorst  v.  Lowndes,  11  Sim.  434  ; 
Farwell  v.  Rogers,  4  Cush.  460  ;  Judd  v. 
Pulton,  10  Barb.  117;  Bissell  v.  Bissell, 

II  id.  96;  Thomas  v.  AiHick,  16  Penn. 
vSt.  14,  overruling  Goswiler's  Estate,  3 
Penn.  200  ;  4  Kent's  Com.  p.  95,  n.  [a]  ; 
Blake  v.  Crowninshicld,  9  N.  H.  304; 
lowing  V.  Bailey,  4  Scam.  420;  Prosbrey 
V.  Williams,   15   Mass.    193;  Weeks  v. 


CH.  III.]  . 


DEFENCES. 


177 


Generally,  where  the  party  whose  interests  the  computation 
affects,  is  not  the  one  who  may  determine  when  the  event  shall 
happen,  the  longest  time  is  given  him,  and  therefore  the  day  of 
the  making  is  excluded,  (m)  If  the  contract  refers  to  "  the  day 
of  the  date,"  or  "  the  date,"  and  expresses  any  date,  this  day, 
and  not  that  of  the  actual  making,  is' taken.  But  if  there  is  in 
the  contract  no  date,  or  an  impossible  date  —  as  if  a  thing  is 
required  to  be  done  within  "  ten  days  from  the  date,"  and  the 
contract  was  not  made  until  twenty  days  from  the  expressed 
date,  then  the  day  of  the  actual  making  will  be  understood  to 
be  meant  by  the  day  of  the  date,  (w)  The  expression  "  between 
two  days  "  excludes  both,  (o) 


Hull,  19  Conn.  376;  Sands  v.  Lyon,  18 
Conn.  28;  Avery  v.  Stewart,  2  Conn.  69  ; 
Wiggin  V.  Peters,  1  Met.  127  ;  Cornell  v. 
Moulton,  3  Denio,  12. 

(??()  Lester  v.  Garland,  15  Ves.  248, 
256  ;  Pellew  v.  Wonford,  9  B.  &  C.  134, 
144,  per  Lord  Tenterden.  So  the  phrase, 
"until  a  certain  day"  has  been  held  to 
exclude  that  day.  Wicker  v.  Norris,  Cas. 
temp.  Hardw.  108.  But  it  may  admit  of 
a  different  interpretation  according  to  the 
subject-matter  and  context.  Rex  v.  Ste- 
vens, 5  East,  244. 

(n)  Styles  v.  Wardle,  4  B.  &  C.  908. 
This  was  an  action  of  covenant  on  an  in- 
denture, dated  the  24th  December,  1822, 
whereby  the  plaintiff,  in  consideration  of 
£924,  leased  to  the  defendant  a  house  and 
premises  for  ninety-seven  years ;  subject 
to  an  agreement  for  an  underlease  to  A 
for  twenty-one  years ;  and  the  defendant 
covenanted  that  he  would,  within  twenty- 
four  calendar  months  then  next  after  the 
date  of  the  indenture,  procure  A  to  accept 
a  lease  of  the  premises  for  the  term  of 
twenty-one  years  from  Christmas  day,  1 821  ; 
and  that  in  case  A  would  not  accept  the 
lease,  that  he,  the  defendant  would,  within 
one  calendar  month  next  after  the  expi- 
ration of  the  said  twenty-four  calendar 
months,  pay  to  the  plaintiff  a  certain  sum 
of  money.  The  declaration,  after  setting 
foith  the  indenture  as  above,  assigned  as  a 
breach  that  the  defendant  did  not  procure 
A  to  accept  of  said  lease  within  said 
twenty-four  calendar  months,  nor  pay  the 
said  sum  of  money  within  one  calendar 
month  after  the  expiration  of  said  twenty- 

(o)  Therefore,  a  policy  of  insurance  on 
goods  to  be  shipped  between  "  February 


four  calendar  months.  The  defendant 
pleaded  that  the  indenture  was  not  in  fact 
executed  and  delivered  imtil  the  8th  of 
April,  1823;  and  that  at  the  time  of  the 
commencement  of  the  action,  twenty-five 
calendar  months  had  not  elapsed  from  the 
time  of  the  execution  of  the  indenture. 
To  this  pica  the  plaintiff  demurred,  and 
the  court  sustained  the  demurrer.  Baijley, 
J.,  said :  "  The  question  in  this  case  is 
simply  as  to  the  construction  to  be  put 
upon  the  words  of  this  deed.  A  deed  has 
no  operation  until  delivery,  and  there  may 
be  cases  in  which  ut  res  valeat,  it  is  neces- 
sary to  construe  date,  delivery.  When 
there  is  no  date,  or  an  impossible  date, 
that  word  must  mean  delivery.  But  where 
there  is  a  sensible  date,  that  word  in  other 
parts  of  the  deed  means  the  day  of  the 
date,  and  not  of  the  delivery.  This  dis- 
tinction is  noticed  in  Co.  Litt.  46  b,  where 
it  is  said  :  '  If  a  lease  be  made  by  inden- 
ture bearing  date  26th  of  May,  to  hold, 
&c.,  for  twenty-one  years  from  the  date,  or 
from  the  day  of  the  date,  it  shall  begin  on 
the  27th  day  of  May.  If  the  lease  bears 
date  the  26th  of  May,  to  have,  &c.,  from 
the  making  hereof,  or  from  henceforth,  it 
shall  begin  on  the  day  on  which  it  is  de- 
livered, &c.'  And  afterwards  it  is  said  : 
'  If  an  indenture  of  lease  bear  date  which 
is  void  or  impossible,  as  the  30th  of  Feb- 
ruary, &c.,  if  in  this  case  the  term  be 
limited  to  begin  from  the  date,  it  shall 
begin  from  the  delivery,  as  if  there  had 
been  no  date  at  all.'  In  Armitt  v.  Brcame, 
2  Ld.  Raym.  1082,  it  is  said  :  '  If  the 
award  had  no  date,  it  must  be  computed 

1st  and  July  15th"  does  not  cover  goods 
shipped  on  the  15th  of  July.     Atkins  v. 

[175] 


173-179^ 


THE   LAW    OF   CONTRACTS. 


.[PAllT  II. 


The  rule  which  makes  notes  which  become  due  on  Sunday, 
without  grace,  payable  on  the  Monday  following,  applies  *to  all 
contracts ;  thus,  where  a  policy  of  insurance  was  conditioned 
for  payment  on  or  before  Sunday  at  noon,  and  the  party  whose 
life  was  insured  died  in  the  afternoon  of  that  day,  and  the  pre- 
mium was  tendered  on   Monday,  the  insurers  were  held,  (oa) 


from  the  delivery,  and  that  is  one  sense  of 
datus.'  The  question  here  is,  what  in  this 
covenant  is  the  meaning  of  chilus  ?  I  cou- 
sidcr  tliat  a  party  executing  a  deed  agrees 
tliat  the  day  therein  mentioned  shall  be 
the  date  for  jnirposes  of  computation.  It 
would  he  very  dangerous  to  allow  a  differ- 
ent construction  of  the  yvovddnt/',  for  then 
if  a  lease  were  executed  on  the  ;30th  of 
[March,  to  hold  from  the  date,  that  being 
the  2otli,  and  the  tenant  were  to  enter  and 
hold  as  if  from  that  day,  yet,  after  the  ex- 
piration of  the  lease,  he  might  defeat  an 
ejectment  on  the  ground  that  the  lease 
was  executed  on  a  day  subsequent  to  the 
2r)th  of  March,  and  that  he  did  not  hold 
from  that  day.  All  the  authorities  give  a 
definite    meaning   to   the   word    date   in 


general,  but  show  that  it  may  have  a  differ- 
ent meaning  when  that  is  necessary,  ut  res 
i-ulnit.  It  has  been  said  that  the  com- 
putation could  not  have  been  intended  to 
be  made  from  the  date,  if  the  twenty-four 
months  had  elapsed  before  the  execution 
of  the  deed.  That  may  be  true,  for  then 
the  intention  of  the  parties  tliat  the  com- 
putation should  not  be  made  from  the 
date  would  have  been  apparent.  Here  the 
meaning  of  the  deed  is  jjlain,  and  accord- 
ing to  that  a  breach  of  covenant  was  com- 
mitted before  the  commencement  of  the 
action.     Tiic  plea  is  therefore  bad." 

(oa)  Hammond  v.  Am.  Mut.  L.  Ins. 
Co.  S.  J.  C.  Mass.,  1858,  21  Law  Re- 
porter, 36. 


Boylston  Fire  and  Marine  Ins.  Co.  5  Met. 
439.  In  this  case  Wilde,  J.,  said  :  "  The 
construction  of  the  policy  seems  to  depend 
wholly  on  the  true  meaning  of  the  word 
'  between.'  This  preposition,  like  many 
other  words,  has  various  meanings  ;  and 
the  (jucstion  is,  in  what  sense  was  it  used 
in  the  jircsent  policy.  The  most  common 
use  of  the  word  is  to  denote  an  intermedi- 
ate space  of  time  or  place,  and  the  defend- 
ant's counsel  eontends  that  it  was  so  used 
in  the  present  policy,  and  that  the  first 
day  of  February  and  the  fifteenth  day  of 
July  are  to  be  iioth  excluded.  On  the 
ot'.ier  hand,  the  ]ilaintiff 's  counsel  insists 
that  i)Oth  days  arc  to  be  included;  at  least 
I  so  understood  the  argument.  And  wo 
think  it  clear  tlnit  both  days  must  be  in- 
cluded or  excltided  ;  for  tlicre  is  nothing 
in  the  contract  manifesting  the  intention 
of  the  ])artics  to  include  or  cxcliid(^  one 
day  ratlier  than  the  other.  It  is  undoubt- 
edly true  tiiat  the  word  '  between '  is  not 
always  used  to  denote  an  intermedinte 
space  of  lime  or  plac(!,  as  the  jilaintifV's 
counsel  rcniarked.  We  s])eak  of  a  battle 
lietwecn  two  armies,  a  combiit,  a  con- 
troversy, or  a  suit  at  law  lictwccn  two  or 
more  parties,  but  the  woiil  thus  used  refers 
to  the  actions  of  tiic  parties,  and  docs  not 
denote  locality  or  time.     Jiut  if  it  should 

[i7(;] 


be  said  that  there  was  a  combat  between 
two  persons  between  two  buildings,  the 
latter  word  would  undoubtedly  refer  to 
the  intermediate  space  between  the  build- 
ings, while  the  former  word  would  denote 
the  action  of  the  parties.  But  it  was 
argued  that  the  word  '  between '  is  not 
always  used  as  exclusive  of  the  termini, 
when  it  refers  to  locality.  Thus  we  speak 
of  a  road  between  one  town  and  another, 
although  the  road  extends  from  the  centre 
of  one  town  to  the  other,  and  this,  in 
common  parlance,  is  a  description  suf- 
ficiently intelligible,  although  the  road  in 
fact  penetrates  each  town.  But  if  all  the 
land  between  two  buildings,  or  between 
two  other  lots  of  land  be  granted,  then 
certainly  only  the  intermediate  land  be- 
tween the  two  lots  of  land  or  the  two 
buildings  would  pass  by  the  grant.  And 
we  think  the  word  '  between'  has  the 
same  meaning  when  it  refers  to  a  period 
of  time  from  one  day,  month,  or  year,  to 
another.  If  this  policy  had  insured  the 
])h(intilf 's  j)roperty  to  be  ship]ied  between 
Febinary  and  the  next  July,  it  would 
clearly  not  cover  any  i)roj)erty  ship))ed  in 
cither  of  those  months.  So  we  think  the 
days  mc^ntioncd  in  the  policy  are  ex- 
cluded." 


CH.  III.]  DEFENCES.  -179 

No  one  is  bound  to  do  any  work  in  performance  of  his  contract 
on  Sunday,  (p)  unless  the  work  by  its  very  nature,  or  by  express 
agreement,  is  to  be  done  on  that  day,  and  can  be  then  done, 
without  a  breach  of  the  law.  But  if  a  contract  is  to  be  per- 
formed, or  some  act  done  in  a  certain  number  of  days,  and 
Sunday  happens  to  come  between  the  first  and  last  day,  it  must 
be  counted  as  one  day,  unless  the  contrary  be  clearly  ex- 
pressed, (q)  If  a  party,  bound  to  do  a  thing  on  a  certain  day, 
and  therefore  having  the  whole  intermediate  time,  by  some  act 
distinctly  incapacitates  himself  from  doing  that  thing  on  that 
day,  it  seems  that  an  action  may  be  commenced  at  once  with- 
out waiting  for  that  day.  As  if  a  man  promises  to  marry  a 
woman  on  a  future  day,  and  before  that  time  marries  another, 
he  has  been  held  liable  to  an  action  before  the  day  of  perform- 
ance arrives,  (r)  So  if  he  engages  to  lease  or  sell  property  from 
and  after  a  certain  day,  but  before  that  time  conveys  it  to  an- 
other. (,s)  It  might,  however,  seem  more  reasonable  to  permit 
such  an  action  only  where  the  capacity  of  the  promisor  could 
not  be  restored  before  the  day,  or  the  promisee  had  received  a 
present  injury  from  the  act  of  the  promisor,  [t) 

(p)  Sands  V.  Lyon,  18  Conn.  18;  Avery  defendant  agreed  to  employ  the  plaintiff 
V.  Stewart,  2  Conn.  69  ;  Cock  v.  Bunn,  6  as  courier  on  and  from  the  said  1st  of 
Johns.  326,  and  note  (a)  in  2d  edition;  June,  for  three  montlis  certain,  to  travel 
Salter  v.  Burt,  20  Wend.  205  ;  Barrett  v.  with  him  on  the  continent,  and  to  start 
Allen,  10  Ohio,  426  ;  Link  v.  Clemmens,  with  the  plaintiff  on  such  travels  on  the 
7  Blackf.  479.  But  see  contra,  Kilgour  v.  said  day,  and  to  pay  the  plaintiff  during 
Miles,  6  Gill  &  J.  268  ;  and  see  Steady,  such  employment  the  said  monthly  wages. 
Dawber,  10  A.  &  E.  .57.  Averment  of  an  agreement  to  the  said 
(q)  Brown  v.  Johnson,  10  M.  &  W.  331 ;  terms  on  the  part  of  the  plaintiff,  and  of 
King  w.  Dowdall,  2  Sandf.  131.  his  readiness  and  willingness  to  enter 
(?■)  Short  V.  Stone,  8  Q.  B.  358.  upon  the  said  employment,  and  to  per- 
ls) Lovelock  V.  Franklyn,  8  Q.  B.  371 ;  form  the  said  agreement.  Breach,  that 
Ford  V.  Tiley,  6  B.  &  C.  325 ;  Bowdell  v.  the  defendant,  before  the  said  1st  of  June, 
Parsons,  10  East,  359.  wholly  refused  to  employ  the  plaintiff  in 
(t)  See  New  Eng.  Mutual  F.  Lis.  Co.  the  capacity  and  for  the  purpose  aforesaid, 
V.  Butler,  34  Me.  451 .  But  the  recent  case  on  or  from  the  said  1  st  day  of  June  or  any 
of  Hochster  v.  DeLatour,  2  Ellis  &  B.  678,  other  time,  and  wholly  discharged  the 
20  Eng.  L.  &  Eq.  157,  goes  further  in  sus-  plaintiff  from  his  said  agreement,  and 
taining  such  an  action  than  any  previous  from  the  performance  of  the  same,  and 
case.  The  action  was  commenced  on  the  from  being  ready  and  willing  to  perform 
22d  of  May,  1852.  The  declaration  stated  the  same ;  and  the  defendant  wholly  broke 
that  in  consideration  that  the  plaintiff  and  put  an  end  to  his  promise  and  en- 
would  agree  to  enter  the  service  of  the  de-  gagemcnt :  —  Held,  in  arrest  of  judgment, 
fendant  as  a  courier,  on  the  1st  of  June,  that,  after  the  refusal  of  the  defendant  to 
1852,  and  to  serve  the  defendant  in  that  employ,  the  plaintiff  was  entitled  to  bring 
capacity,  and  travel  with  him  as  a  courier,  an  action  immediately,  and  was  not  bound 
for  three  months  certain,  from  the  said  to  wait  until  after  the  day  agreed  upon  for 
Istof  June,  for  certain  monthly  wages,  the  the  commencement  of  performance    had 

[177] 


180-181* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


6.   Of  notice. 

Contracts  sometimes  express  that  they  are  to  be  performed 
"  on  notice"  generally,  or  on  some  specific  notice,  and  notice  *is 


arrived.  And  Lord  Campbell,  in  deliver- 
ing the  judgment  of  the  court,  said  :  "  On 
this  motion  in  arrest  of  judgment  tlie 
question  arises  whether,  if  there  be  an 
agreement  between  A  and  B,  whereby 
B  engages  to  employ  A,  on  and  from  a 
future  day,  for  a  given  period  of  time,  to 
travel  with  him  into  a  foreign  country  as 
a  courier,  and  to  start  with  him  in  tiiat 
capacity  on  that  day,  A  being  to  receive 
a  montlily  salary  during  the  continuance 
of  such  service,  B  may,  before  the  day, 
refuse  to  perform  the  agreement,  and 
break  and  renounce  it,  so  as  to  entitle  A 
before  the  day,  to  commence  an  action 
against  B  to  recover  damages  for  breach 
of  the  agreement ;  A  having  been  ready 
and  willing  to  perform  it  until  it  was 
broken  and  renounced  by  B.  The  de- 
fendant's counsel  very  powerfully  con- 
tended that  if  tiie  plaintiff  was  not  con- 
tented to  dissolve  the  contract,  and  to 
abandon  all  remedy  upon  it,  he  was 
bound  to  remain  ready  and  willing  to  per- 
form it  till  the  day  when  the  actual  em- 
ployment as  courier  in  the  service  of  the 
defendant  was  to  begin,  and  that  there 
could  be  no  breach  of  the  agreement  be- 
fore that  Jay  to  give  a  right  of  action. 
But  it  cannot  be  laid  down  as  a  universal 
rule  tliat  where,  by  agreement,  an  act  is 
to  be  done  on  a  future  day,  no  action  can 
be  brouglit  for  a  breach  of  the  agreement 
till  tlie  day  for  doing  the  act  has  arrived. 
If  a  man  promises  to  marry  a  woman  on  a 
future  day,  and  before  tliat  day  marries 
anotlier  woman,  he  is  instantly  liable  to  an 
action  for  brcacii  of  promise  of  marriage. 
Short  V.  Stone,  8  Q.  B.  .358.  If  a  man 
contracts  to  execute  a  lease  on  and  from  a 
future  day  for  a  certain  term,  and  before 
that  day  executes  a  lease  to  anotlier  for 
the  same  term,  he  may  be  immediately 
sued  for  breaking  tiic  contract.  ]''ord  v. 
Tiley,  G  \\.  &  C.  '32.').  So  if  a  man  con- 
tracts to  sell  and  deliver  sj)eci(ic  goods  on 
a  future  day,  and  before  tlie  day  he  sells 
and  delivers  them  to  another,  he  is  im- 
mediately liable  to  itii  action  at  the  suit  of 
the  person  wilh  wiioni  he  first  contracted 
to  sell  aiirl  deliver  them.  Bowdell  r.  I'ar- 
Kons,  10  lOast,  .'J^'J.  One  reason  alleged 
in  support  of  such  an  action  is,  that  the 

[J78] 


defendant  has  before  the  day,  rendered  it 
impossible  for  him  to  perform  the  con- 
tract at  the  day.  But  this  does  not  neces- 
sarily follow,  for  prior  to  the  day  fixed  for 
doing  the  act,  the  first  wife  may  have  died  ; 
a  surrender  of  the  lease  executed  might 
be  obtained ;  and  the  defendant  might 
have  repurchased  the  goods,  so  as  to  be 
in  a  situation  to  sell  and  deliver  them  to 
the  plaintiff.  Another  reason  may  be, 
that  when  there  is  a  contract  to  do  an  act 
on  a  future  day,  there  is  a  relation  consti- 
tuted between  the  parties  in  the  mean  time 
by  the  contract,  and  that  they  impliedly 
promise  that  in  the  mean  time  neither  will 
do  any  thing  to  the  prejudice  of  the  other, 
inconsistent  with  that  relation.  As  an 
example  :  a  man  and  woman,  engaged  to 
marry,  are  affianced  to  one  another  during 
the  period  between  the  time  of  the  engage- 
ment and  the  celebration  of  the  marriage. 
In  this  very  case  of  traveller  and  courier, 
from  the  day  of  the  hiring  till  the  day 
when  the  employment  was  to  begin,  they 
were  engaged  to  each  other,  and  it  seems 
to  be  a  breach  of  an  implied  contract  if 
either  of  them  renounces  the  engagement. 
This  reasoning  seems  in  accordance  with 
the  unanimous  decision  of  the  Excheciuer 
Chamber,  in  Elderton  v.  Einmcns,  6  C. 
B.  160,  which  we  have  followed  in  sub- 
sequent cases  in  this  court.  The  declara- 
tion in  the  present  case,  in  alleging  a 
breach,  states  a  great  deal  more  than  a 
passing  intention  on  the  part  of  the  de- 
fendant which  he  may  repent  of,  and  could 
only  be  proved  by  evidence  that  he  had 
utterly  renounced  the  contract,  or  done 
some  act  which  rendered  it  impossible  for 
him  to  perform  it.  If  the  plaintiff  has  no 
remedy  for  breach  of  the  contract,  unless 
he  treats  the  contract  as  in  force,  and  acts 
upon  it  down  to  the  first  of  June,  18.'52,  it 
follows  that  till  then  he  must  enter  into 
no  enii)loyment  which  will  interfere  with 
his  promise  '  to  start  on  such  travels 
with  the  plaintiff  on  that  day,'  and  that 
he  must  then  be  properly  ecpiipped  in  all 
res])ects  as  a  courier  for  three  months'  tour 
on  the  continent  of  ICurope.  But  it  is 
surely  much  more  rational,  and  more  for 
the  beiu'iit  of  both  parties,  that  after  the 
renunciation  of  the  agreement  by  the  de- 


en.  III.] 


DEFENCES. 


182-*1S3 


then  indispensable,  (a)  In  some  instances  the  necessity  of  no- 
tice springs  from  the  nature  of  the  contract,  though  nothing  be 
said  about  it.  Generally,  where  any  thing  is  to  be  *done  by  one 
party  on  the  performance  of  some  act  by  the  other,  this  other 
must  give  notice  of  such  act,  (v)  unless  it  *be  one  that  carries 


fendant,  tlie  plaintiff  should  be  at  liberty 
to  consider  himself  absolved  from  any 
future  performance  of  it,  retaining  his 
right  to  sue  for  any  damage  he  has  suf- 
fered from  the  bi-each  of  it.  Thus  instead 
of  remaining  idle  and  laying  out  money 
in  preparations  which  must  be  useless,  he 
is  at  lii)crty  to  seek  service  under  another 
employer,  which  would  go  in  mitigation 
of  the  damages  to  which  he  would  other- 
wise be  entitled  for  a  breach  of  the  con- 
tract. It  seems  strange  that  the  defend- 
ant, after  renouncing  the  contract  and 
absolutely  declaring  that  he  will  never  act 
under  it,  should  be  permitted  to  object 
that  faith  is  given  to  his  assertion,  and 
that  an  opportunity  is  not  left  to  him  of 
changing  his  mind.  If  the  plaintiff  is 
barred  of  any  remedy  by  entering  into  an 
engagement  inconsistent  with  starting  as 
a  courier  with  the  defendant  on  the  tirst  of 
June,  he  is  prejudiced  by  putting  faith  in 
the  defendant's  assertion ;  and  it  would 
be  more  consonant  with  principle,  if  the 
defendant  were  precluded  from  saying  that 
he  had  not  broken  the  contract  when  he 
declared  that  he  entireh*  renounced  it. 
Suppose  that  the  defendant,  at  the  time  of 
his  renunciation,  had  embarked  on  a  voy- 
age to  Australia,  so  as  to  render  it  physi- 
cally impossible  for  him  to  employ  the 
plaintiff  as  a  courier  on  the  continent  of 
Europe,  in  the  months  of  June,  July,  and 
August,  1852,  according  to  decided  cases 
the  action  might  have  been  brought  before 
the  1st  of  June ;  but  the  renunciation 
may  have  been  founded  on  other  facts  to 
be  given  in  evidence,  which  would  ecjually 
have  rendered  the  defendant's  performance 
of  the  contract  impossible.  The  man 
who  wrongfully  renounces  a  contract  into 
which  he  has  deliberately  entered,  cannot 
justly  complain  if  he  is  immediately  sued 
for  a  compensation  in  damages  by  the  man 
whom  he  has  injured ;  and  it  seems  rea- 
sonable to  allow  an  option  to  the  injured 
party  either  to  sue  immediately  or  to  wait 
till  the  time  when  the  act  was  to  be  done, 
still  holding  it  as  prospectively  binding 
for  the  exercise  of  this  option,  which  may 
be  advantageous  to  the  innocent  party,  and 
cannot   be  prejudicial  to  the  wrongdoer. 


An  argument  against  the  action  before  the 
1st  of  June  is  urged,  from  the  difficulty  of 
calculating  the  damages;  but  this  argu- 
ment is  ecjually  strong  against  an  action 
before  the  1st  of  September,  when  the 
three  months  would  expire.  In  either 
case,  the  jury,  in  assessing  the  damages, 
would  be  justified  in  looking  to  all  that 
had  happened,  or  was  likely  to  happen, 
to  increase  or  mitigate  the  loss  of  the 
plaintiff  down  to  the  day  of  trial." 

(u)  Hodsden  v.  Harridge,  2  "Wms. 
Saund.  62,  a.,  n.  (4);  Child  v.  Horden,  2 
Bulstr.  144.  In  Quarles  v.  George,  2.3 
Pick.  400,  by  a  contract  between  the  plain- 
tiff' and  the  defendant  it  was  agreed  that 
the  defendant  should  deliver  to  the  ])laintiff 
one  thousand  barrels  of  flour,  at  the  rate 
of  six  dollars  per  barrel,  at  any  time  with- 
in six  months  from  the  date  of  the  con- 
tract, and  give  him  six  days'  notice  prior 
to  the  time  of  such  delivery,  and  that  the 
plaintiff  should  pay  that  price  therefor  on 
delivery.  In  an  action  by  the  plaintiff 
against  the  defendant  for  not  delivering 
the  flour  within  the  six  months,  it  was 
held,  that  under  the  provisions  of  this  con- 
ti'act  it  was  incumbent  on  the  defendant 
to  do  the  first  act  by  giving  notice  of  his 
readiness  to  deliver  the  flour  ;  but  that  as 
he  had  a  right  to  give  notice  six  days  be- 
fore the  expiration  of  the  six  months,  and 
had  he  then  given  notice  he  would  have 
had  till  the  last  day  of  the  six  months  to 
deliver  the  flour,  the  actual  breach  of  the 
contract  by  non-delivery  must  be  taken  to 
have  occurred  on  such  last  day,  and  the 
damage  computed  accordingly. — In  de- 
claring on  a  promise  to  pay  money  on 
demand,  if  a  third  person  shall  fail  to  do 
a  certain  act,  it  is  not  necessary  to  aver  a 
notice  of  the  failure  to  do  that  act,  or  a 
demand  of  the  money.  Dyer  v.  Rich,  1 
Met.  189. 

(v)  Vyse  V.  Wakefield,  6  M.  &  W.  442, 
8  Dowl.  P.  C.  377,  4  Jur.  509,  affirmed 
on  error,  7  M.  &  W.  126,  is  an  excellent 
case  on  this  subject.  There  the  declara- 
tion stated,  that,  by  indenture,  the  de- 
fendant covenanted  that  he  would,  at  any 
time  or  times  thereafter,  appear  at  an 
office  or  offices  for  the  insurance  of  lives 

[179] 


184* 


THE   LAW   OF    CONTRACTS. 


[part  II. 


notice  of  itself.     And  if  the  thing  is  to  be  *done  on  the  happen- 
ing of  an  ev^ent  not  to  be  caused  by  either  party,  he  who  is  to 


within  London,  or  the  bills  of  mortality, 
and  answer  such  questions  as  might  be 
asked  respecting  his  age,  &c.,  in  order  to 
enable  the  plaintiff  to  insure  his  life,  and 
would  not  afterwards  do  or  permit  to  be 
done  any  act  whereby  such  insurance 
should  be  avoided  or  prejudiced.  It  then 
alleged,  that  the  defendant,  in  part  per- 
formance of  his  covenant,  did,  at  the 
plaintiff's  request,  appear  at  the  office  of 
the  Rock  Life  Insurance  Company,  and 
did  answer  certain  questions  asked  of  him  ; 
and  that  the  plaintiff  insured  the  defend- 
ant's life  with  that  company,  by  a  policy 
containing  a  proviso,  that  if  the  defend- 
ant went  beyond  the  limits  of  Europe,  the 
policy  should  be  null  and  void :  —  Breach, 
that  the  defendant  went  beyond  the  limits 
of  Europe,  namely,  to  the  province  of 
Canada,  in  North  America  :  —  Held,  on 
special  demurrer,  that  the  declaration  was 
bad,  for  not  averring  that  the  defendant 
had  notice  that  the  policy  was  effected. 
Lord  Ahinger  said  :  "  I  am  of  opinion 
that  the  defendant  in  this  case  is  entitled 
to  our  judgment,  on  two  grounds.  The 
plaintiff"  having  reserved  to  himself  the 
liiierty  of  effecting  the  insurance  at  any 
office  within  the  bills  of  moi'tality,  the 
number  of  which  is  limited  only  by  the 
circumscription  of  the  place,  and  having 
also  reserved  to  himself  the  choice  of  time 
for  effecting  the  insurance,  it  appears  to 
me  that  he  ought  to  give  the  defendant 
notice  of  his  having  exercised  his  option, 
and  of  the  insurance  having  been  effected, 
before  an  action  can  lie  maintained.  But 
there  is  also  another  ground,  which  weighs 
strongly  with  me  in  coming  to  this  con- 
clusion. Even  supposing  the  defendant 
were  bound  to  go  to  all  the  insurance  of- 
fices within  the  bills  of  mortality,  to  ascer- 
tain whether  such  a  jiolicy  had  l)een  ef- 
fected, he  would  still  be  obliged  to  do 
somctliing  more ;  namely,  to  learn  what 
were  the  particular  conditions  on  which  it 
was  effected,  because  the  covenant  here  is, 
not  that  the  defendant  shall  not  do  any 
thing  to  evade  the  covenants  or  conditions 
usually  prescribed  by  insurance  offices ; 
Ijut  that  Ik;  shall  not  violate  any  of  the 
conditions  by  whi<'h  such  insurance  might 
be  avoided  or  jircjiidiced ;  i.  e.,  he  is 
bound  to  observe  all  the  stipulations  con- 
tained in  nnv  policy  which  the  j)laintifl' 
may  effect.  Now,  some  conditicms  totally 
distinct    from    the    condili(jns    in    general 

[180] 


use,  might  be  annexed  by  a  particular  in- 
surance office  ;  and  in  such  case  it  would 
be  most  unfair  to  allow  the  plaintiff  to 
keep  the  policy  in  his  pocket,  and  without 
notice  of  them,  to  call  on  the  defendant  to 
pay  for  a  violation  of  the  stipulations  con- 
tained in  it.  Suppose  one  of  the  condi- 
tions imposed  by  the  policy  were,  that  the 
party  whose  life  was  insured  should  live 
on  a  particular  diet,  or  at  a  particular 
place,  or  cease  from  some  particular  prac- 
tice to  which  he  was  addicted,  or  that  he 
should  abandon  some  course  of  exercise 
which  might,  if  persevered  in,  cost  him 
his  life,  and  the  forsaking  of  which  the  in- 
surance office  might  be  fully  justified  in 
making  a  condition  of  insuring  the  life  at  all, 
it  would  be  hard  if  the  plaintiff  could,  with- 
out giving  the  defendant  notice  of  the 
existence  of  such  a  condition,  make  him 
pay  the  amount  of  the  policy  on  its  viola- 
tion. The  rule  to  be  collected  from  the 
cases  seems  to  be  this,  that  where  a  party 
stipulates  to  do  a  certain  thing  in  a  cer- 
tain specific  event  which  may  become 
known  to  him,  or  with  which  he  can  make 
himself  acquainted,  he  is  not  entitled  to 
any  notice,  unless  he  stipulates  for  it ;  but 
when  it  is  to  do  a  thing  which  lies  within 
the  peculiar  knowledge  of  the  opposite 
party,  then  notice  ought  to  be  given 
him.  That  is  the  common  sense  of  the 
matter,  and  is  what  is  laid  down  in  all  the 
cases  on  the  subject ;  and  if  there  are  any 
to  be  found  which  deviate  from  this  prin- 
ciple it  is  quite  time  that  they  should  be 
overruled."  And  Parke,  B.,  said  :  "  The 
general  rule  is,  that  a  party  is  not  entitled 
to  notice,  unless  he  has  stipulated  for  it ; 
but  there  are  certain  cases  where,  from 
the  very  nature  of  the  transaction,  the 
law  requires  notice  to  be  given,  though 
not  expressly  stipulated  for.  There  are 
two  classes  of  cases  on  this  subject,  neither 
of  which,  however,  altogether  resembles 
the  present.  One  of  them  is,  where  a 
party  contracts  to  do  something,  but  the 
act  on  which  the  right  to  demand  per- 
formance is  to  arise  is  perfectly  indefinite, 
as  in  the  case  of  Ilaule  v.  Ilemyng,  Vin. 
Abr.  '  Condition,'  (A.  d.)  pi.  l.'i,  .s.  c.  riovi. 
llenning's  case,  Cro.  Jac.  432,  where  the 
defendant  promised  to  pay  the  ])laintiff 
for  certain  wcys  of  barley  as  much  as  the 
plaintilf  sold  them  for  to  any  other  man  : 
there  the  plaintiff  is  bound  to  aver  notice, 
because  the  jjcrson  to  whom  the  weys  are 


CH.  III.] 


©EFENCES. 


-184 


have  the  benefit  of  the  thing  should  give  notice  to  him  who  is  to 
do  it,  that  the  event  has  occurred,  unless  from  its  own  nature  it 
must  become  known  to  that  party  when  it  happens  ;  or,  per- 
haps, unless  it  is  as  likely  to  be  known  to  the  party  who  is  to  do 
the  act  required  by  the  contract,  as  to  him  for  whose  benefit  it 
is  to  be  done.  The  rule  in  respect  to  demand  rests  upon  the 
same  principle  with  that  in  respect  to  notice.  It  may  be  requi- 
site, either  from  the  stipulations  of  the  parties,  or  from  the  pecul- 
iar nature  of  the  contract ;  but  where  not  so  requisite,  he  who 
has  promised  to  do  any  thing,  must  perform  his  promise  in  the 


to  be  sold  is  perfectly  indefinite,  and  .ilto- 
getlier  at  the  option  of  the  plaintiff,  who 
may  sell  tliem  to  whom  he  pleases;  and, 
in  such  cases,  the  right  of  the  defendant 
to  a  notice  befoi-e  he  can  be  called  on  to 
pay,  is  implied  by  la^v  from  the  construc- 
tion of  the  contract.  So,  where  a  party 
stipulates  to  account  before  such  auditors 
as  the  obligee  shall  assign,  the  obligee  is 
bound  to  give  him  notice  \Yhcn  he  has 
assigned  them  ;  for  that  is  a  fact  which 
depends  entirely  on  the  option  or  choice 
of  the  plaintitT.  On  the  other  hand,  no 
notice  is  requisite  when  a  specific  act  is  to 
be  done  by  a  third  party  named,  or  even 
by  the  obligee  himself;  as,  for  example, 
where  the  defendant  covenants  to  pay 
money  on  the  marriage  of  the  obligee 
with  13,  or  perhaps  on  the  marriage  of  B 
alone  (for  there  are  some  cases  to  that  ef- 
fect), or  to  pay  such  a  sum  to  a  certain 
person,  or  at  such  a  rate  as  A  shall  pay  to 
B.  In  these  cases  there  is  a  particular 
individual  specified,  and  no  option  is»to 
be  exercised  ;  and  the  party  who,  without 
stipulating  for  notice,  has  entered  into  the 
obligation  to  do  those  acts,  is  bound  to  do 
them.  But  there  is  an  intermediate  class 
of  eases  between  these  two.  Let  us  sup- 
pose the  defendant  in  this  case  bound  to 
perforin  such  stipulations  as  shall  be  con- 
tained on  a  policy  to  be  effected  at  some 
office  in  London.  Kovv,  my  present  im- 
pression is,  that  where  any  option  at  all 
remains  to  be  exercised  on  the  part  of  the 
plaintiff,  notice  of  bis  having  determined 
that  option  ought  to  be  given  ;  and  if  this 
had  been  a  covenant  by  the  defendant  to 
perform  the  conditions  to  be  imposed  by 
any  insurance  company  then  existing  in 
London,  I  think  it  would  be  the  duty  of 
the  plaintiff  to  notify  to  the  defendant  the 
exercise  of  his  option,  as  to  which  he  had 

VOL.  II.  IG 


selected.  But  this  principle  holds  even 
more  strongly  in  the  present  ease  ;  for  not 
only  do  tiie  terms  of  the  covenant  ap- 
ply to  all  actually  existing  companies  of 
the  sort,  but  to  all  that  might  at  any  fu- 
ture time,  subsequent  to  the  date  of  the 
deed,  be  established  within  the  bills  of 
mortality.  Now  that  is  a  condition  which 
appears  to  me  so  perfectly  indefinite,  that 
notice  ought  to  be  given  }>y  the  plaintiff 
of  his  having  determined  his  choice  ;  and 
I  think  tlicrefore,  that  he  was  at  least 
bound  to  give  notice  that  a  policy  of  in- 
surance had  been  effected  by  him  at  such 
a  particular  office  ;  it  might  then,  perhaps, 
be  the  duty  of  the  defendant  to  inquire  at 
that  office  into  the  nature  and  terms  of 
the  policy  which  had  been  there  effected." 
See  also,  Haule  r.  Hemyng,  Vin.  Abr. 
Condition,  (A.  d.)  pi.  15,  s.  c.  710771. 
Henning's  case,  Cro.  Jac.  432.  So  in 
Graddon  v.  Price,  2  C.  &  P.  610,  it  was 
held  that  a  performer,  who  is  called  on  to 
resume,  in  consequence  of  the  illness  of 
another,  a  part  in  which  by  previous  per- 
formances she  has  acquired  celebrity,  is 
entitled  to  reasonable  notice  previous  to 
the  time  of  performance,  such  notice  to  be 
proportioned  to  the  reputation  at  stake. 
In  Haverley  z\  Leighton,  1  Bulstr.  12,  the 
defendant  promised  the  plaintiff's  intes- 
tate that  if  he  borrowed  £100  of  B  he 
would  pay  him  the  same  sum,  upon  tlie 
same  conditions,  as  they  between  them 
should  agree  upon,  and  notice  of  such 
agreement  was  held  not  necessary.  So  in 
Bradley  v.  Toder,  Cro.  Jac.  228,  and 
Fletcher  v.  Pynsett,  Cro.  Jac.  102,  where 
the  promise  was  in  consideration  that 
the  plaintiti'  would  marry  such  a  woman, 
the  defendant  would  give  him  £100,  no- 
tice of  the  marriage  was  held  not  neces- 
sary. 

[181] 


184-  THE   LAW   OF   CONTRACTS.  [PART  11. 

prescribed  time  and  in  the  prescribed  way ;  or  if  none  be  pre- 
scribed, in  a  reasonable  time  and  a  reasonable  way,  without 
waiting  to  be  called  upon. 

Notice  to  an  agent  has  been  fully  considered  in  the  first  vol- 
ume. It  may  be  well  to  remark  here,  however,  that  notice, 
whether  directly  to  a  principal,  or  through  an  agent,  may  be 
constructive  only  ;  but  the  construction  which  should  give  effect 
to  a  notice,  would  be  more  closely  restricted,  if  an  agent  inter- 
vened. 

We  apprehend  that  constructive  notice  may  be  of  two  kinds. 
In  one,  some  notice  or  knowledge  of  a  fact  is  proved,  which 
would  imply  to  a  reasonable  man  certain  other  facts,  or  would 
lead  a  person  of  ordinary  caution  into  an  inquiry  which  would 
certainly  disclose  those  facts,  {va)  The  other  kind  of  construc- 
tive notice  exists,  when  actual  notice  was  attempted,  or  when 
sufficient  means  of  knowledge  and  motives  to  inquiry  exist,  and 
the  court  are  satisfied  that  the  party  has  abstained  from  inquiry, 
or  avoided  notice,  with  the  intent  of  remaining  in  igno- 
rance. 

7.    Of  impossihility  of  performance. 

It  has  been  somewhat  questioned  how  far  the  impossibility 
of  doing  what  a  contract  requires,  is  a  good  defence  against 
an  action  for  the  breach  of  it.  If  the  performance  of  a  con- 
tract becomes  impossible  by  the  act  of  God,  that  is,  by  a 
cause  which  could  not  possibly  be  attributed  to  the  promisor, 
and  this  impossibility  was  not  among  the  probable  contin- 
gencies which  a  i)radent  man  should  have  foreseen  and  pro- 
vided for,  it  should  seem  that  this  would  be  a  sufficient  de- 
fence, {w)     But  to  make  the  act  of   God  a  defence,  it  must 

(va)  Jones  v.  Smith,  1  Hare,  4.3,  1  Phil-  that  the  phiintiff  delivered  a  horse  to  the 

lips,  253  ;  Kennedy  v.  (Jreen,  .'J  Myhie  &  dcfuii(huit,  which  tiie  defendant  promised 

K.  71'J,  Su^^den  on  V.  &  J*.    1()52.     It  is  to  redeliver  njion  re(inest;    and  that  al- 

intiniatcd   in  Jones  v.  Smith,  as  reported  thoiij^h  he  was  recjuested  to  redeliver  the 

in   1    J'liiilijjH,    254,  that  courts  of  cipiity  horse,  he  refused.    Tiie  defendant  |)leaded 

arc  now  disposed  to  restrain  rather  than  tliat  the  liorse  was  talcen  sick  and  died, 

cnhirj^e  tlie  law  of  constructive  notice.  and   that  tlie   ])lainti(f  made   tlie    request 

(w)  Williams;;.  IJoyd,  W.  Jones,   171),  after  the   horse   was   dead.     To  this  plea 

8.    C.    iioin.    Williams    v.    Jlide,    I'almcr,  the  plaintiff  demurred,  anil  jud<^ment  was 

548.     In  this  case  the  dcclarali(jn  stated  given  to  the  defendant.     See  also,  Lord  i;. 

[182] 


CH.  III.] 


DEFENCES. 


*185 


amount  to  an  impossibility  of  performance  by  the  promisor ; 
mere  hardship  or  difficulty  will  not  suffice,  (x)  So  the  non- 
*performance  of  a  contract  is  not  excused  by  the  act  of  God, 
where  it  may  still  be  substantially  carried  into  effect,  although 
the  act  of  God  makes  a  literal  and  precise  performance  of  it 
impossible,  (y) 

If  one  for  a  valid  consideration  promises  another  to  do  that 
which  is  in  fact  impossible,  but  the  promise  is  not  obtained  by 
actual  or  constructive  fraud,  and  is  not  on  its  face  obviously 


Wheeler,  1  Gray,  282.  Oakley  v.  Mor- 
ton, 1  Kern.  25  ;  Harmony  v.  Bingham, 
2  id.  99. 

(x)  Thus  in  Bullock  v.  Dommitt,  6 
T.  E.  650,  it  was  held  that  a  lessee  of  a 
house  who  covenants  generally  to  repair, 
is  bound  to  rebuild  it,  if  it  be  burned  by 
an  accidental  fire.  And  Lord  Kenyan  said, 
"  The  cases  cited  on  behalf  of  the  plaintiff 
have  always  been  considered  and  acted 
upon  as  law.  In  the  year  1754  a  great 
fire  broke  out  in  Lincoln's  Inn,  and  con- 
sumed many  of  the  chambers,  and  among 
the  rest  those  rented  by  Mr.  Wilbraham, 
and  he,  after  taking  the  opinions  of  his 
professional  friends,  found  it  necessary  to 
rebuild  them.  On  a  general  covenant  like 
the  present,  there  is  no  doubt  but  that  the 
lessee  is  bound  to  rebuild  in  case  of  an 
accidental  tire  ;  the  common  opinion  of 
mankind  confirms  tliis,  for  in  many  cases 
an  exception  of  accidents  by  fire  is  cau- 
tiously introduced  into  the  lease  to  protect 
the  lessee."  So  in  Brecknock  Co.  i\ 
Pritchard,  6  T.  R.  750,  it  was  held  that  on 
a  covenant  to  build  a  bridge  in  a  substan- 
tial manner  and  to  keep  it  in  repair  for  a 
certain  time,  the  party  is  bound  to  rebuild 
the  bridge  though  broken  down  by  an  un- 
usual and  extraordinary  flood.  So  in 
Atkinson  v.  Kitchie,  10  East,  530,  the 
master  and  the  freighter  of  a  vessel  of  400 
tons  having  mutually  agreed  in  writing, 
that,  the  ship  being  fitted  for  the  voyage, 
should  proceed  to  St.  Petersburg  and  there 
load  from  the  freighter's  factor  a  complete 
cargo  of  hemp  and  iron,  and  proceed 
therewith  to  London,  and  deliver  the  same 
on  being  paid  freight,  &c. ;  it  was  held 
that  the  master,  after  taking  in  at  St.  Pe- 
tersburg about  half  a  cargo,  having  sailed 
away  upon  a  general  rumor  of  a  hostile 
embargo  being  laid  on  British  ships  by 
the  Russian  government,  was  liable  in 
damages   to  the   freighter   for   the   short 


delivery  of  the  cargo,  though  the  jury 
found  that  he  acted  bona  fide  and  under  a 
reasonable  and  well-grounded  apprehen- 
sion at  the  time,  and  a  hostile  embargo 
and  seizure  was  in  fact  laid  on  six  weeks 
afterwards.  And  the  cases  from  6  T.  R. 
above  cited  were  approved.  So  in  Gil- 
pins  V.  Consec[ua,  Pet.  C.  C.  86,  it  was 
held  that  it  is  no  excuse  for  the  non-per- 
formance of  a  contract  to  deliver  "  prime," 
"  first  chop  "  teas,  that  the  season  of  the 
year  when  the  teas  were  to  have  been 
delivered,  was  unfavorable  to  the  best 
teas  being  in  market.  Again,  in  the  lead- 
ing case  of  Paradine  v.  Jane,  Aleyn,  26, 
where  to  an  action  of  debt  for  rent,  the 
defendant  pleaded  that  a  certain  German 
Prince,  by  name  Prince  Rupert,  an  alien 
born,  an  enemy  to  the  king  and  kingdom, 
had  invaded  the  realm  with  a  hostile 
army,  and  with  the  same  force  had  en- 
tered upon  the  defendant's  possession, 
and  him  expelled  and  held  out  of  posses- 
sion, whereby  he  could  not  take  the  prof- 
its ;  upon  demurrer  the  plea  was  held 
bad.  And  this  difference  was  taken, 
"  that  where  the  law  creates  a  duty  or 
charge,  and  the  party  is  disabled  to  per- 
form it  without  any  default  in  him,  and 
hath  no  remedy  over,  there  the  law  will 
excuse  him.  But  when  the  party  by  his 
own  contract  creates  a  duty  or  charge 
upon  himself,  he  is  bound  to  make  it 
good,  if  he  may,  notwithstanding  any  ac- 
cident by  inevitable  necessity,  because  he 
might  have  provided  against  it  by  his  con- 
tract." See  also,  Huling  v.  Craig,  Ad- 
dis. 342  ;  Harmony  v.  Bingham,  2  Kern. 
99  ;  and  Esposito  v.  Bowden,  4  Ellis  &  B. 
963,  30  Eng.  L.  &  Eq.  336,  reversed  in  7 
Ellis  &  B.  763. 

(y)  White  v.  Mann,  26  Me.  361  ;  Chap- 
man V.  Dalton,  Plowden,  284 ;  Holtham 
V.  Ryland,  1  Eq.  Cas.  Abr.  18. 

[183] 


186*  THE   LAW   OF   CONTRACTS.  [PART  II. 

impossible,  there  seems  no  reason  why  the  promisor  should  not 
be  held  to  pay  damages  for  the  breach  of  the  contract ;  not,  in 
fact,  for  not  doing  what  cannot  be  done,  but  for  undertaking 
and  promising  to  do  it.  So  if  it  becomes  impossible  by  con- 
tingencies which  should  have  been  foreseen  and  provided  against 
in  the  contract,  and  still  more  if  they  *  might  have  been  pre- 
vented, the  promisor  should  be  held  answerable.  So  if  the  im- 
possibility applies  to  the  promisor  personally,  there  being  no 
natural  impossibility  in  the  thing,  this  will  not  be  a  sufficient 
excuse,  (c)  But  if  one  promises  to  do  what  cannot  be  done, 
and  the  impossibility  is  not  only  certain  but  perfectly  obvious 
to  the  promisee,  as  if  the  promise  were  to  build  a  common 
dwelling-house  in  one  day,  such  a  contract  must  be  void  for  its 
inherent  absurdity,  (a) 


8.    Of  illegality  of  the  contract. 

That  the  illegality  of  a  contract  is  in  general  a  perfect  de- 
fence, must  be  too  obvious  to  need  illustration.  It  may,  indeed, 
be  regarded  as  an  impossibihty  by  act  of  law;  and  it  is  put 
on  the  same  footing  as  an  impossibility  by  act  of  God  ;  be- 
cause it  would  be  absurd  for  the  law  to  punish  a  man  for  not 
doing,  or,  in  other  words,  to  require  him  to  do,  that  which  it 
forbids  his  doing. 

Therefore  if  one  agrees  to  do  a  thing  which  it  is  lawful  for 
him  to  do,  and  it  becomes  unlawful  by  an  act  of  the  legislature, 
the  act  avoids  the  promise  ;  and  so  if  one  agrees  not  to  do  that 
which  he  may  lawfully  abstain  from  doing,  but  a  subsequent 
act  requires  him  to  do  it,  this  act  also  avoids  the  agreement,  (b) 

{z)  Sec  ante,  vol.    1,   p.   384,   n.    (t).  5  Cowen,  538.     In  that  case-  tlie  corpo- 

And  sec  Potliicr,  Traitc  des  Obligations,  ration  of  the  city  of  New  York  conveyed 

Pt.  1,  di.  1,  sect.  4,  ^  2.  lands   for  tlic  jjnrposes  of  a  cliurcli   and 

(a)  Thus,    in    Faulkner    v.    Lowe,    2  cemetery,  with  a  covenant  for  a  quiet  cn- 

Exch.  .')!).'),  there  was  a  covenant  l)y  C  joyincnt,  and   afterwards,  pursuant  to  a 

to  pay  a  sum  of  money  to  A,  B,  and  to  po\vcr  f;i-anted  hy  the  lcf;ishitnre,  jiassed 

himself,  C,  or  tlie  survivors  or  survivor  of  a  hy-law  prohil)itini;  tlie  use  of  these  lands 

them    on    their  joint  account.  •  C    hciiijj;  as  a  cemetery  ;  held,  tiiat  tiiis  was  not  a 

sued   upon  this  covenant,  tlie  court  licid  l)ieacli  of  the  covenant  whicii  entitled  to 

the    covenant   senseless    and    impossihle,  damages,  I)ut  it  was  a  repeal  of  tlie  covc- 

and  jiidgiiiciit  was  given  for  the  defend-  nant.     And  Savuf/e,  C.  J.,  thus  remarked 

ant.  upon  the  authorities  :  "  There  are  hut  few 

{h)  IVesIi.  (;hurch  v.  City  of  N.  York,  aulhorities  on  this  question,  and  those  few 

[18-1] 


CH.  III.] 


DEFENCES. 


187 


But  if  one  agrees  to  do  what  is  at  the  time  unlawful,  a  subse- 
quent act  making  the  act  lawful,  cannot  give  validity  to  the 
agreement,  because  it  was  void  at  its  beginning.  *A  law  may, 
however,  have  the  effect  of  suspending  an  agreement  that  was 
originally  valid,  and  which  it  makes  impossible  without  viola- 
tion of  law ;  and  yet  leave  the  contract  so  far  subsisting  that 
upon  a  repeal  of  the  law  the  force  and  obligation  of  the  con- 
tract remain,  (c)  It  would  seem  that  a  prevention  by  the  law 
of  a  foreign  country  is  no  excuse,  because  this  does  not  make 
the  act  unlawful  in  the  view  of  the  law  which  determines  the 
obligation  of  the  contract.  The  subject  of  illegal  contracts  is 
again  considered  in  a  subsequent  section  of  this  chapter. 


are  at  variance.  The  case  of  Brason  v. 
Dean,  3  Mod.  39,  decided  in  1683,  was 
covenant  npon  a  charter-party  for  the 
freiirht  of  a  ship.  The  defendant  pleaded 
that  tlie  ship  was  loaded  with  French 
goods  prohibited  by  law  to  be  imported. 
And  upon  demurrer  judgment  was  given 
for  the  ph\intitF,  for  the  court  were  all  of 
opinion  that  if  the  thing  to  be  done  was 
lawful  at  the  time  wlien  the  defendant 
entered  into  the  covenant,  though  it  was 
afterwards  prohibited  by  act  of  parlia- 
ment, yet  the  covenant  was  binding. 
But  in  the  case  of  Brewster  r.  Kitchin,  1 
Ld.  Raym.  317,  321,  a.  d.  1698,  a  differ- 
ent and  a  more  rational  doctrine  is  estab- 
lished. It  is  there  said  :  '  For  the  differ- 
ence when  an  act  of  parliament  will 
amount  to  a  repeal  of  a  covenant  and 
when  not,  is  this ;  when  a  man  covenants 
not  to  do  a  thing  which  was  lawful  for 
him  to  do,  and  an  act  of  parliament  comes 
after  and  compels  him  to  do  it,  then  the 
act  repeals  the  covenant;  and  vice  versa. 
But  when  a  man  covenants  not  to  do  a 
thing  which  was  unlawful  at  the  time  of 
the  covenant,  and  afterwards  an  act  makes 
it  lawful,  the  act  does  not  repeal  the  cov- 
enant.' In  1  Salkeld,  198,  where  the 
same  case  is  reported,  the  proposition  is 
thus  stated  :  '  Where  11.  covenants  not  to 
do  an  act  or  thing  which  was  lawful  to  do, 
and  an  act  of  parliament  comes  after  and 
compels  him  to  do  it,  the  statute  repeals 
the  covenant.     So  if  H.  covenants  to  do  a 

16* 


thing  which  is  lawful,  and  an  act  of  par- 
liament comes  in  and  hinders  him  from 
doing  it,  the  covenant  is  repealed.  But  if 
a  man  covenants  not  to  do  a  thing  which 
then  was  unlawful,  and  an  act  comes  and 
makes  it  lawful  to  do  it,  such  act  of  par- 
liament does  not  repeal  tlie  covenant.'" 
And  see  Bennett  v.  Woolfolk,  1.5  Ga.  213. 
As  to  the  dissolution  of  contracts  by  a 
declaration  of  war,  see  Reid  v.  Hoskins, 
4  Ellis  &  B.  979,  30  Eng.  L.  &  E.  406.  See 
also  same  case,  5  Ellis  &  B.  729,  34  Eng. 
L.  &  Eq.  .51,  affirmed  6  Ellis  &  B.  953, 
38  Eng.  L.  &  Eq.  130. 

(c)  Thus  in  Baylies  v.  Fettyplace,  7 
Mass.  325,  it  was  held  that  a  law  of  the 
United  States  laying  an  embargo  for  an 
unlimited  time,  and  afterwards  repealed, 
did  not  extinguisii  a  promise  to  deliver 
debentures,  but  operated  as  a  suspension 
only  during  the  continuance  of  the  law. 
So  in  Hadley  v.  Clarke,  8  T.  R.  259, 
where  the  defendants  contracted  to  carry 
the  plaintiff's  goods  from  Liverpool  to 
Leghorn,  and  on  the  vessel's  arrival  at 
Falmouth  in  the  course  of  her  voyage,  an 
embargo  was  laid  on  her  "  until  the  fur- 
ther order  of  council ; "  it  was  held  that 
such  embargo  only  suspended  the  execu- 
tion, but  did  not  dissolve  the  contract  be- 
tween the  parties,  and  that  even  after  two 
j'cars,  when  the  embargo  was  taken  off,  the 
defendants  were  answerable  to  the  plain- 
tiff in  damages  for  the  non-performance 
of  their  contract. 

[185] 


188*  THE   LAW   OF   CONTRACTS.  [PART  II. 

i 

SECTION    III. 

OF   DEFENCES   RESTING   UPON   THE   ACTS    OR   OMISSIONS    OF    THE 

PLAINTIFF. 

It  is  a  good  defence  to  an  action  on  a  contract,  that  the  obli- 
gation to  perform  the  act  required,  was  dependent  upon  some 
other  thing  which  the  other  party  was  to  do,  and  has  failed  to 
do.  And  if  before  the  one  party  has  done  any  thing,  it  is  ascer- 
tained that  the  other  party  will  not  be  able  to  do  that  wdiich  he 
has  undertaken  to  do,  this  v^^ill  be  a  sufficient  *reason  why  the 
first  party  should  do  nothing,  (d)  And  this  excuse  is  valid 
although  the  omission  by  the  other  party  to  do  the  thing  re- 
quired of  him,  was  produced  by  causes  which  he  could  neither 
foresee  nor  control.  And  if  it  is  provided  that  the  thing  shall 
be  done  "  unless  prevented  by  unavoidable  accident,"  the  acci- 
dent to  excuse  the  not  doing,  must  be  not  only  unavoidable, 
but  must  render  the  act  physically  impossible,  and  not  merely 
unprofitable  and  inexpedient  by  reason  of  an  increase  of  labor 
and  cost,  (e) 

If  one  bound  to  perform  a  future  act,  before  the  time  for 
doing  it  declares  his  intention  not  to  do  it,  this  is  no  breach  of 
his  contract;  (/)  but  if  his  declaration  be  not  withdrawn  when 

(d)  Caines  i'.  Smith,  15  M.  &.  W.  189,  Leigh  v.  Patcrson,  2  J.  B.  Moore,  588. 
where  defendant  had  promised  to  marry  This  principle,  iiowevcr,  is  drawn  in  ques- 
phiintiff,  but  married  another  woman,  tion  hy  the  recent  case  of  Ilochster  v.  De 
To  an  action  for  breach  of  promise,  a  Latour,  2  Ellis  &  B.  G78,  20  Eng.  L.  &  Eq. 
plea  l)y  defendant  that  he  had  never  been  157,  where  it  was  hehl  that  if  A  engages 
requested  by  tlie  ]ilaintiti' to  jicrform  his  to  employ  B  in  his  service,  the  term  to  corn- 
contract  was  held  ill.  Johnston  r.  Caul-  mence  at  a  future  day,  and  before  that 
kins,  1  Johns.  Cas.  IIG,  wliere  in  a  similar  day  A  changes  his  mind  and  refuses  to 
action  it  was  lield  that  if  the  defendant  employ  him,  this  is  a  breach  of  the  con- 
has  ahscondc.d,  the  jilaintilf  need  not  show  tract,  and  B  may  have  his  action  for  such 
an  offer  to  marry  him.  And  see  otiier  breach  inanediatch/,  and  is  not  bound  to 
instances  of  the  same  i)rincij)le  in  Short  wait  until  tlic  day  tlie  service  was  to  com- 
V.  Stone,  8  C^.  B.  ."558;  Jjovclock  v.  mcnce.  A  in  such  case  has  no  right  to  a 
Franklyn,  id.  371  ;  Fori!  v.  'i'ilcy,  0  15.  &  Imiis  jitmilciiliir.  See  the  case  (idly  stated, 
C.  .'J25  ;  Bowdell  v.  I'arsons,  10  East,  aiiU',  p.  I7'i,n.  {I).  So  it  was  held  in  Cort 
35'j.  V.  Aml)ergate,  &c.  Baihvay  Co.  17  Q.  B. 
{(:)  See  a;i/r,  p.  184,  n.  (.r).  127,  0  Eng.  L.  &  E(i.  2;50,  that  where 
{/)  riiilipotts  )>.  Evans,  5  M.  &  AV.  there  is  un  executory  contract  for  the  man- 
477;    Bipley   ?;.    M'Clurc,  4  Exch.  .'545;  nfacturing  and  supply  of  goods  frona  time 

[18G] 


en.  III.]  DEFENCES.  *189 

the  time  comes  for  the  act  to  be  done,  it  constitutes  a  sufficient 
excuse  for  the  default  of  the  other  party.  In  all  cases  what- 
ever, a  promisor  will  be  discharged  from  all  liability  when  the 
non-performance  of  his  obligation  is  caused  by  the  act,  or  the 
fault,  of  the  other  contracting  party,  (g-) 

*Thc  validity  of  many  of  these  defences,  resting  upon  the 
act  or  default  of  the  other  party,  must  depend  upon  the  ques- 
tion, which  is  sometimes  difficult,  whether  the  contracts  are  in 
fact  dependent,  or  independent.  There  are  cases,  and  especially 
some  early  ones,  which  seem  to  be  severe,  and  more  technical 
than  rational ;  but  of  late  the  courts  incline  to  decide  these 
questions  as  good-sense  and  common  justice  require.  But 
there  are  rules  by  which  they  are  guided  in  this  matter,  if  not 
controlled ;  and  we  would  add  to  what  we  have  already  said  on 
this  subject,  that  the  classes  of  engagements  contained  in  a 
contract — dependent,  concurrent,  and  independent  —  may  be,^ 
thus  distinguished.  Where  the  agreements  go  to  the  whole  of 
the  consideration  on  both  sides,  the  promises  are  dependent, 
and  one  of  them  is  a  condition  precedent  to  the  other.  If  the 
agreements  go  to  a  part  only  of  the  consideration  on  both  sides, 
and  a  breach  may  be  paid  for  in  damages,  the  promises  are  so 
far  independent.  If  money  is  to  be  paid  on  a  day  certain,  in 
consideration  of  a  thing  to  be  performed  at  an  earlier  day,  the 
performance  of  this  thing  is  a  condition  precedent  to  the  pay- 
ment; and  if  the  money  is  to  be  paid  in  instalments,  some 
before  a  thing  is  to  be  done,  and  some  when  it  is  done,  the 
doing  of  the  thing  is  not  a  condition  precedent  to  the  former 
paynaents,  but  is  to  the  latter.  And  if  there  is  a  day  for  the 
payment  of  the  money,  and  this  comes  before  the  day  fixed  for 

to  time,  to  bo  paid  for  after  delivery,  if  the  deliver  a  deed  on  a  day  certain,  and  at 

purchaser,  having  accepted  and  paid  for  a  the   day  was   ready  with   the   deed,  and 

portion  of  the  goods  contracted  for,  gives  would  have  tendered  it  but  for  the  eva- 

notice  to  tlie  vendor  not  to  manufacture  sion  of  the  other  party,  this  was  held  to 

any  more,  as  he  has  no  occasion  for  them,  be  equivalent  to  a  tender.     Borden  v.  Bor- 

and  will  not  accept  or  pay  for  them,  the  den,  5  Mass.  67.     And   see   Com.  Dig. 

vendor  having  been  desirous  and  able  to  Condition,  L.  (C) ;  Goodwin  v.  Holbrook, 

complete  the  contract,  he  may,  without  4    Wend.    377  ;    Whitney  v.   Spencer,  4 

manufacturing  and  tendering  the  rest  of  Cowen,   39;  People  v.  Bartlctt,   3  Hill, 

the  goods,  maintain  an  action  against  the  570  ;  Grandy  v.  ]\IcClecse,  2  Jones,  Law, 

purchaser  for  breach  of  the  contract.  142  ;  Warters  v.  Herring,  id.  46. 
('j)    Thus,   where  one   was   bound   to 

[187] 


190*  THE   LAW   OF    CONTRACTS.  [PART  II. 

the  doing  of  the  thing,  or  before  the  time  when  the  thing,  from 
its  nature,  can  be  performed,  then  the  payment  is  at  all  events 
obligatory,  and  an  action  may  be  brought  for  it  independently 
of  the  act  to  be  done.  Concurrent  promises  are  those  where 
the  acts  to  be  performed  are  simultaneous,  and  either  party  may 
sue  the  other  for  a  breach  of  the  contract,  on  showing  either, 
that  he  was  able,  ready,  and  willing  to  do  his  act  at  the  proper 
time  and  in  the  proper  way,  or  that  he  was  prevented  from 
doing  it,  or  being  so  ready  to  do  it,  by  the  act  or  default  of  the 
other  contracting  party.  (A) 

The  defendant  may  rely  on  the  fact  that  the  contract  has 
been  rescinded;  and  this  may  have  been  done  by  mutual  con- 
sent, or  by  the  plaintiff,  who  had  the  right  to  do  so,  or  by  *the 
defendant,  if  he  had  the  right.  Whichever  party  has  the  right 
to  rescind,  must  do  it  within  the  time  specified,  if  there  be  such 
a  time,  or  otherwise  within  a  reasonable  time,  (i)  What  is  a 
reasonable  time,  is  in  this,  as  in  most  other  cases,  a  question  of 
law  for  the  court  only,  [ia)  Generally,  as  a  contract  can  be 
made  only  by  the  consent  of  all  the  contracting  parties,  it  can 
be  rescinded  only  by  the  consent  of  all.  [j)  But  this  consent 
need  not  be  expressed   as   an  agreement,  [k)     If  either  party 

(h)  Sec  this  subject  considered  and  the  of  the  contract  is  a  question  for  the  jury, 

authorities  cited,  ante,  p.  36,  et  seq.  Sec  Fitt  v.  Cassanet,  4  Man.  &  G.  898. 

/(')  Hodgson  V.  Davics,  2  Camp.  530;         (/;)  The  rescission  by  one  party  may  be 

Okcll,  V.  Smitli,  1   Starkie,  107;  Prosser  as  strongly  expressed  by  acts  as  by  words. 

V.  Hooper,  1  J.  13.  Moore,  106.  Thus  in  Goodrich  v.  Lafflin,  1  Pick.  57, 

(ill)  Kin;:siey  f.  Waiiis,  14  Me.  57;  A  agreed  to  deliver  to  B  some  step  stones 
Holbrook  i\  I5urt,  22  Pick.  546.  One  which  were  to  be  paid  for,  one  half  in 
party  may  have  a  right  to  rescind  a  con-  money  and  one  half  in  goods.  The  stones 
tract,  which  may  yet  be  binding  u])on  the  were  delivered,  and  B  delivered  some  of 
other,  and  although  the  contract  was,  in  the  goods  ujion  the  special  contract.  B 
a  cci-tain  event,  by  its  terms  to  be  "  null  having  sued  A  and  recovered  judgment 
and  void."  Thus,  where  by  stat.  17  Geo.  for  the  value  of  the  goods  delivered,  dc- 
3,  c.  50,  §  8,  the  vendor  at  an  auction  was  daring  upon  the  common  counts  only,  it 
empowered  to  make  it  a  condition  of  sale  Avas  held  that  A  might,  iipou  the  common 
that  the  purcliascr  should  pay  the  auction-  counts  oii/i/,  recover  the  value  of  the  stones. 
duty  in  adflition  to  the  purchase-money.  So  in  Ilill  !\  Green,  4  Pick.  114,  by  a 
and  it  was  declared  that  upon  his  neglect  contract  imdcr  seal  the  jihiintiif  agreed 
or  refusal  to  pay  the  same,  tlic  bidditig  that  his  son,  a  minor,  should  work  for  the 
"shouhl  lie  mill  and  void  to  all  intents  defendant  nine  months,  and  the  defendant 
and  purposes  ;  "  it  was  /wld  that  the  con-  agreed  to  give  hiiu  therefore  certain  chat- 
tract  is  not  by  reason  of  such  neglect  or  tels,  which  were  delivered  fortliwith,  but 
refusal  al)Sf)lntcly  raid,  but  voidnlJt;  only,  were  to  remain  tlic  ])roperty  of  tiie  de- 
nt the  O|)tion  of  the  vendor.  Malins  i\  feiulant  until  tlie  service  should  be  per- 
Frecmaii,  6  Scott,  187.  foriued.     The   plaintiff  sold  the  chattels 

(j)  Whether  there  ha.s  been  a  rescission  to  a  stranger,  and  tlie  boy  was  afterwards 

[188] 


CII.  III.] 


DEFENCES. 


*191 


without  right,  claims  to  rescind  the  contract,  the  other  party 
need  not  object,  and  if  he  permit  it  to  be  rescinded,  *  it  will  be 
done  by  mutual  consent.  Nor  need  this  purpose  of  rescind- 
ing be  expressly  declared  by  the  one  party,  in  order  td)  give  to 
the  other  the  right  of  consenting,  and  so  rescinding.  There  may 
be  many  acts  from  which  the  opposite  party  has  a  right  to  infer 
that  the  party  doing  them  would  rescind ;  (/)  and  generally 
where  one  fails  to  perform  his  part  of  the  contract,  or  disables 
himself  from  performing  it,  (m)  the  other  party  may  treat  the 
contract  as  rescinded.  (7?)     But  not  if  he  has  been  guilty  of  a 


wrongfully  turned  away  by  the  defendant 
before  the  expiration  of  the  term.  The 
defendant  reclaimed  the  chattels,  and  the 
vendee,  knowing  all  the  facts,  settled  the 
demand  by  paying  him  a  sum  of  money. 
Held,  that  the  written  contract  was  re- 
scinded and  that  the  plaintiif  was  entitled 
to  recover  on  a  quantum  meruit,  for  the 
service  performed,  but  that  neither  the 
plaintiff  nor  his  vendee  could  recover 
back  the  money  paid  to  the  defendant. 
In  Quincy  v.  Tilton,  5  Greenl.  277,  it  was 
lidd  that  where  parties  agree  to  rescind  a 
sale  once  made  and  perfected  without 
fraud,  the  same  formalities  of  delivery, 
&c.,  are  necessary  to  revest  the  property 
in  the  original  vendor  which  were  neces- 
sary to  pass  it  from  him  to  the  vendee. 
In  James  v.  .Cotton,  7  Bing.  266,  the 
plaintiff  engaged  to  let  land  to  the  defend- 
ant on  building  leases,  and  to  lend  him 
£6,000  to  assist  him  in  the  erection  of  20 
houses  on  the  land.  Defendant  agreed  to 
build  the  houses,  and  convey  them  as 
security  for  the  loan,  which  was  to  be  paid 
at  a  time  fixed.  When  six  houses  had  been 
built,  and  part  of  the  £6,000  had  been 
advanced,  plaintiff  requested  .defendant 
not  to  go  on  with  the  other  fourteen  houses. 
Defendant  desisted.  Held,  that  this 
amounted  to  a  rescission  of  the  contract 
by  mutual  consent,  and  the  plaintiff'  was 
allowed  to  recover  the  amount  advanced 
on  a  count  for  money  lent. — If  by  the 
terms  of  the  x-ontract  it  is  left  in  the 
power  of  the  plaintiff'  to  rescind  by  any 
act  of  his,  and  he  does  it,  or  if  the  defend- 
ant afterwards  consents  to  its  being  re- 
scinded, the  plaintiff  may  treat  the  con- 
tract as  rescinded.  Towers  v.  Barrett,  1 
T.  R.  1.33. 

(I)  See  preceding  note. 

(m)  Thus  in  Keys  v.  Harwood,  2  C.  B. 
905,  A  agreed   to   board  B    and  to  re- 


ceive pay  in  certain  goods.  Before  the 
time  of  payment  arrived,  B  allowed 
those  goods  to  be  seized  and  sold  on  ex- 
ecution against  liim.  This  was  held  a 
rescission  of  the  contract,  and  A  was  al- 
lowed to  recover  on  a  general  count,  and 
without  reference  to  the  special  contract. 
So  in  Planche  v.  Colburn,  8  Bing.  14, 
where  A  agreed  to  write  a  treatise  for  a 
periodical  publication,  which,  before  the 
treatise  was  completed,  the  defendant  dis- 
continued, this  was  considered  an  aban- 
donment of  the  contract  by  the  defendant, 
and  the  plaintiff  was  allowed  to  recover 
on  a  quantum  meruit,  without  completing 
the  treatise.  See  Shaw  v.  The  Turnpike 
Co.  2  Penn.  454,  3  id.  445  ;  King  v. 
Ilutciiins,  8  Foster,  561,  also  Warden  of 
the  Church  of  St.  Louis  v.  Kerwan,  9 
La.  Ann.  31.  In  Dubois  v.  Delaware 
Canal  Co.  4  Wend.  285,  Maraj,  J., 
said  :  "  Every  breach  of  a  special  agree- 
ment by  one  party  does  not  authorize  the 
other  to  treat  it  as  rescinded ;  but  there 
are  some  breaches  that  do  amount  to  an 
abandonment  of  it.  There  is  not,  per- 
haps, any  precise  rule,  which,  when  ap- 
plied to  the  breach  of  a  contract,  certainly 
settles  the  question  whether  it  is  thereby 
abandoned  or  not;  but  if  the  act  of  one 
party  be  such  as  necessarily  to  prevent  the 
other  from  performing  on  liis  part  accord- 
ing to  the  terms  of  his  agreement,  the 
contract  may,  I  think,  be  considered  as 
rescinded." 

[n]  But  this  is  not  always  the  case. 
Thus  in  Weaver  v.  Sessions,  6  Taunt. 
154,  the  plaintiff  covenanted  to  furnish 
the  defendant  all  the  malt  he  should  want 
for  a  certain  specified  period,  which  siiould 
be  "good,  well  dried,  and  marketable." 
The  defendant  covenanted  to  buy  all  his 
malt  of  the  plaintiff,  and  not  to  buy  else- 
where, unless   the  plaintiff  neglected  or 

[189] 


192* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


default  in  his  engagement,  for  he  cannot  take  advantage  of  his 
own  wrong  to  defeat  the  contract.  Nor  if  the  failure  of  the 
other  party  be  but  partial,  leaving  a  distinct  part  as  a  subsisting 
and  executed  consideration,  and  leaving  also  to  the  other  party 
his  action  for  damages  for  the  part  not  performed,  {na)  Gener- 
ally, no  contract  can  be  rescinded  by  one  of  the  parties,  unless 
both  can  be  restored  to  the  condition  in  which  they  were  before 
the  contract  *  was  made,  (o)    If,  therefore,  one  of  the  parties  has 


refused  to  deliver  him  frood  malt  on  request. 
The  plaintiff  having  delivered  bad  malt, 
the  defendant  bought  of  others,  without 
having  first  requested  the  plaintiff  to 
furnish  better.  The  court  held  that  the 
non-compliance  by  the  plaintiff,  merely  in 
delivering  bad  malt  for  good,  did  not  au- 
thorize a  rescission  of  the  contract,  and 
that  the  defendant  was  liable  for  purchas- 
ing of  others,  before  the  plaintiff  had 
refused  or  ne(]lccted  on  request  to  furnish 
better. 

(na)  In  Franklin  v.  Miller,  4  A.  &  E. 
599,  Litlledale,  J.,  says:  "It  is  a  clearly 
recognized  princi]ile  that,  if  there  is  only 
a  partial  failure  of  performance  by  one 
party  to  a  contract,  for  which  there  may 
be  a  compensation  in  damages,  the  con- 
tract is  not  put  an  end  to."  See  ante,  p. 
43,  n. 

(o)  Hunt  V.  Silk,  5  East,  449,  the  lead- 
ing case  upon  this  point.  There  A  agreed, 
in  consideration  of  .£10,  to  let  a  house  to 
B,  which  A  was  to  repair  and  execute  a 
lease  of  within  ten  days,  but  B  was  to  have 
immediate  possession,  and  in  consideration 
of  the  aforesaid  was  to  execute  a  counter- 
part and  pay  the  rent.  B  took  jiossession 
and  ])aid  .£10  immediately,  but  A  neg- 
lected to  execute  the  lease'  and  make  the 
repairs  beyond  the  period  of  the  ten  days, 
notwithstanding  which  H  still  continued  in 
possession  :  J/eld,  that  B  could  not,  by 
quitting  the  iionsc  /(</■  (ha  default  of  A,  re- 
scind the  contract  and  recover  back  the  .£10 
in  an  action  for  money  had  and  received, 
but  could  only  declare  for  a  breach  of  the 
special  con  tract  ;  for  a  contract  cannot  be 
rescinded  by  one  j)arty  for  the  default  of 
the  other,  unless  both  can  be  jitit  in  statu 
quo  as  before!  the  contract;  and  here  B 
liad  bad  an  intcrincdiate  ])ossessioii  of  the 
premises  uinler  the  agreement.  And 
horil  Kllenljoroiii/h  «aid  :  "  Where  a  con- 
tract is  to  be  rescinded  at  all,  it  must  lie 
rescinded  in  lolo,  and  the  parties  jnit  in 
s/iilu  quo.     Hut  here  was  an  intcrmcdiato 

[I'JO] 


occupation,  a  part  execution  of  the  agree- 
ment, which  was  incapable  of  being  re- 
scinded. If  the  plaintiff  might  occupy 
the  premises  two  days  beyond  the  time 
when  the  repairs  were  to  have  been 
done  and  the  lease  executed,  and  yet 
rescind  the  contract,  why  might  he  not 
rescind  it  after  a  twelvemonth  on  the  same 
account  1  This  objection  cannot  be  got- 
ten rid  of:  the  parties  cannot  be  put  in 
statu  quo."  So  in  Beed  r.  Blandford,  2 
Young  &  J.  278,  where  the  master  and 
part-owner  of  a  vessel  agreed  to  purchase 
the  moiety  of  his  partner,  and  having  paid 
the  purchase-money  and  received  the  title 
deeds,  which  he  deposited  as  a  security 
with  a  third  person,  had  the  entire  posses- 
sion of  the  vessel  given  uyt  to  aim,  but  his 
partner  afterwards  refused  to  execute  a 
bill  of  sale,  or  refund  the  money ;  it  was 
held  that  an  action  for  money  had  and  re- 
ceived would  not  lie  to  recover  the  pur- 
chase-money, as  the  parties  could  not  be 
restored  to  their  original  situation.  Alex- 
ander, C.  B.,  said  :  "In  order  to  sustain 
an  action  in  this  forin,  it  is  necessary  that 
the  parties  should,  by  the  plaintiff's  re- 
covering the  verdict,  be  ])laced  in  the 
same  situation  in  which  they  originally 
were  before  the  contract  was  entered  into. 
The  plaintiff  has,  by  his  intermediate  oc- 
cupation, derived  the  profits  of  the  vessel; 
if  be  has  not,  he  might  have  done  so  ; 
and  it  is  impossible  to  say  what  the  de- 
fendant might  have  made  bad  he,  during 
the  time,  had  any  control  over  it.  Under 
these  circumstances,  it  cannot  be  said,  that 
the  situation  of  the  parties  has  not  been 
altered  ;  and  that,  by  the  ))laintiff 's  re- 
covering in  this  action,  their  original  jiosi- 
tion  may  be  restored.  Besides  this,  the 
defendant's  title  deeds  have  been  deposited 
by  the  ]ilaintiff  as  a  security  for  the 
money  advanced  to  him.  How  could  tho 
flefcndant,  in  this  respect,  be  restored  to 
his  original  situation  by  this  action  ?  IIo 
is  at  the  mercy  of  the  defendant  for  his 


CH.  III.] 


DEFENCES. 


193 


derived  an  advantage  from  a  partial  performance,  he  cannot 
hold  *this  and  consider  the  contract  as  rescinded  because  of  the 
non-performance  of  the  residue ;  (p)  but  must  do  all  that  the 
contract  obliges  him  to  do,  and  seek  his  remedy  in  damages. 

If  the  thing  to  be  done  on  the  one  side  as  the  consideration 
of  the  agreement  on  the  other  side,  is  to  be  done  at  several 
times,  a  failure  at  one  time  will  not  generally  authorize  the  other 
party  to  treat  the  whole  contract  as  rescinded ;  although,  even 
in  such  continuing  cases,  this  partial  failure  may  be  so  destruc- 
tive of  the  contract  as  to  give  the  other  party  the  right  to  con- 
sider it  as  wholly  rescinded,  (q) 

A  defendant,  who  is  a  wrongdoer,  cannot  set  up  the  ri^ht  of 
a  third  person,  to  bar  the  claim  of  the  plaintiff,  (qa) 


title  deeds,  and  cannot  recover  them  by 
any  process  in  this  cause.  I  thinic  the 
objection  is  unanswerable,  and  that  the 
rule  for  a  nonsuit  must  be  made  absolute." 
And  Vaughan,  B.,  said :  "  The  decision 
in  Hunt  v.  Silk  lays  down  a  very  clear 
and  just  rule  in  these  cases  :  if  the  cir- 
cumstances be  such,  that,  by  rescinding 
the  contract,  the  rights  of  neither  party 
are  injured,  in  that  case,  if  one  contract- 
ing party  will  not  fulfil  his  part  of  the 
engagement,  the  other  may  rescind  the 
contract,  and  maintain  his  action  for 
money  had  and  received,  to  recover  back 
Avhat  he  may  have  paid  upon  the  faith  of 
it."  —  And  wliere  one  party  elects  to  re- 
scind a  contract  for  fraud,  he  must  return 
the  consideration  received  before  any  right 
of  action  accrues,  and  it  is  not  enough  to 
notify  the  party  defrauding,  and  call  upon 
him  to  come  and  receive  the  goods.  Nor- 
ton V.  Young,  3  Grecnl.  30.  But  in  the 
case  of  Masson  v.  Bovet,  1  Denio,  69,  it 
was  said  that  though  the  general  rule  is, 
that  the  party  who  would  rescind  a  con- 
tract on  the  ground  of  fraud,  for  the  pur- 
pose of  recovering  what  he  has  advanced 
upon  it,  must  restore  the  other  party  to 
the  condition  in  which  he  stood  before  the 
contract  was  made ;  yet,  where  the  party 
who  practised  the  fraud  has  entangled 
and  complicated  the  subject  of  the  con- 
tract in  such  a  manner  as  to  render  it  im- 
possible that  he  should  be  restored  to  his 
former  condition,  the  party  injured,  upon 


restoring,  or  offering  to  restore  what  he 
has  received,  and  doing  whatever  is  in  his 
power  to  undo  what  has  been  done  in  the 
execution  of  the  contract,  may  rescind  it 
and  recover  what  he  has  advanced.  See 
further  upon  this  point,  per  Tindal,  C.  J., 
in  Fitt  V.  Cassanet,  4  Man.  &  G.  903  ; 
Blackburn  v.  Smith,  2  Exch.  783  ;  Junk- 
ins  V.  Simpson,  14  Me.  364  ;  Coolidge  v. 
Brigham,  1  Met.  547;  Peters  v.  Gooch,  4 
Blackf.  b\a  ;  Turnpike  Co.  v.  Common- 
wealth, 2  Watts,  433  ;  Brown  v.  Witter, 
10  Ohio,  142;  Johnson  v.  Jackson,  27 
Missis.  498 ;  Allen  v.  Edgerton,  3  Vt.  442  ; 
Luey  V.  Bundy,  9  N.  H.  298 ;  Stevens  v. 
Gushing,  1  N.  II.  17  ;  Perley  v.  Balch, 
22  Pick.  283. 

{p)  And  if  one  party  has  derived  all 
the  intended  benefit  from  a  contract,  the 
agreement  to  rescind  the  contract  will  not 
bar  the  plaintiflf'from  some  remedy.  Thus 
to  an  action  for  goods  sold  and  delivered, 
it  is  no  defence  that  the  goods  were  sold 
in  pursuance  of  a  special  contract  which 
was  afterwards  rescinded  and  annulled  by 
both  parties.  Edwards  v.  Chapman,  I 
M.  &.  W.  231;  Parke,  B.,  saying: 
"  A  duty  arises  from  the  contract  of  sale, 
which  cannot  be  got  rid  of  without  an 
accord  and  satisfaction." 

(q)  See  supra,  n.  (n).  And  see  Battle 
V.  Rochester  City  Bank,  3  Comst.  88. 

{ga)  Jefferies  v.  Great  Western  Railway 
Co.  5  Ellis  &  B.  802. 

[191] 


194* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


SECTION  IV. 


accord  and  satisfaction. 


Another  sufficient  defence  is  accord  and  satisfaction  ;  which 
is  substantially  another  agreement  between  the  parties  in  satis- 
faction of  the  former  one;  and  also  an  execution  of  the  latter 
agreement.  This  is  the  meaning  of  the  ancient  rule,,  that  accord 
without  satisfaction  is  no  bar  to  an  action  ;  and  it  used  to  be 
laid  down  in  the  earlier  books  with  great  exactness,  that  the 
execution  of  the  accord  must  be  complete  and  perfect,  (r)  So, 
indeed,  it  must  be  now,  except  where  the  *new  promise  itself  is 
by  the  accord  or  agreement  the  satisfaction  for  the  debt  or 
broken  contract.  The  party  holding  the  claim  may  agree  to 
take  a  new  promise  of  the  other  in  satisfaction  of  it;  or 
he  may  agree  to  receive  a  new  undertaking  when  the  same  shall 
be  executed,  as  a  satisfaction.  In  either  case  he  will  be  held  to 
his  bargain,  and  only  to  that,  (s)     Whether  the  new  promise 


(?)  Cock  V.  Honychurch,  T.  Raym. 
203,  2  Keble,  690.  Trespass  for  an"  as- 
sault, rica,  a  concord  between  the  parties, 
that  the  defendant  should  pay  ])laintiff  £.3, 
and  his  attorney's  hill,  and  that  he  had 
paid  tlie  .£3,  and  was  ready  to  pay  tlie 
attorney's  hill,  hut  he  never  showed  him 
any.  This  was  held  no  defence,  because 
the  accord  was  not  tcholh/  executed.  Sec 
also,  Tcytoe's  case,  9  Kcp.  79  h;  Anony- 
mous, Cro.  Eliz.  46  ;  Case  v.  Barber,  T. 
Rayin.  4.>0,  T.  Jones,  158;  Bree  v.  Say- 
Icr,  2  Kcble,  332;  Hall  ?•.  Seabri{rlit,'2 
Keble,  534  ;  Brown  v.  Wade,  2  Keblc, 
851  ;  Frentrcss  v.  Marklc,  2  Iowa,  553 ; 
Coit  )'.  Houston,  3  Jolins.  Cas.  243 ; 
Watkinson  v.  In<rlesby,  5  Johns.  380 ; 
Frost  V.  Johnson,  8  Oiiio,  393;  Woodruff 
V.  Dobbins,  7  Blackf.  .582;  Ballard  r. 
Noaks,  2  I'ikc,  45  ;  Brooklyn  15ank  /•. 
I)e  Grauw,  23  Wend.  342 ;  Bryant  /-.  I'roc- 
tor,  14  B.  Mon.  457;  Bigelow  v.  Bald- 
win, 1  (iray,  245. 

(s)  Babcock  V.  Hawkins,  23  Vt.  501. 
Thin  was  nil  action  of  l)ook  account.  Jt 
appcnnil  that  after  the  cominenccniciit  of 
the  suit,  the  parties  met,  and  the  defend- 

[192] 


ant  agreed  to  give  a  note  for  thirty  dol- 
lars to  the  plaintiff,  and  pay  all  the  plain- 
tiff's costs  in  the  suit,  except  the  writ 
and  service.  The  defendant  executed  the 
note  and. agreed  to  pay  the  costs,  as  above 
stated ;  and  the  plaintiff  then  executed 
and  delivered  to  him  a  receipt  in  these 
words :  "  Bcceivcd  of  Peter  Hawkins 
thirty  dollars  by  note  given  jier  this  date, 
in  full  to  settle  all  book  accounts  up  to 
this  date;"  and  the  suit,  as  well  as  the 
subject-matter  of  the  suit,  was  considered 
as  settled  by  the  ])artics.  The  defendant 
never  paid  any  jwrtion  of  the  costs,  but 
paid  ])art  of  the  note  ;  and  for  the  reason 
that  the  defendant  had  not  jiaid  the  costs 
the  plaintilF  refused  to  discontinue  the 
suit.  U])on  these  facts,  found  by  an  audi- 
tor, the  county  court  i-cndcred  judgment 
for  the  (U:fendant,  which  was  alHrmed  by 
the  supreme  court.  JicdJIchJ,  J.,  in  de- 
livering the  opinion  of  the  court,  said  : 
"  Wc  think  it  must  be  regarded  as  fully 
settled,  that  an  agreement  upon  sutlicient 
consideration,  fully  executed,  so  as  to 
have  operated  in  the  minds  of  the  parties, 
as  a  full  satisfaction  and  settlement  of  a 


CH.  III.] 


DEFENCES. 


*195 


shall  have  by  itself  the  *effect  of  satisfying  the  original  claim 
must  be  determined  by  a  construction  of  the  new  agreement. 


preexisting  contract  or  account  between 
the  parties,  is  to  be  regarded  as  a  valid 
settlement,  whether  the  new  contract  be 
ever  paid  or  not,  and  that  the  party  is 
bound  to  sue  upon  tlie  new  contract,  if 
such  were  the  agreement  of  the  parties. 
This  is  certainly  the  common  understand- 
ing of  the  matter.  It  is  reasonable,  and 
we  think  it  is  in  accordance  with  the 
strictest  principles  of  technical  law.  1. 
There  is  no  want  of  consideration  in  any 
such  case,  wlicre  one  contract  is  substi- 
tuted for  another,  and  especially  so  where 
the  amount  due  upon  the  former  contract 
or  account  is  matter  of  dispute.  The 
liquidating  a  disputed  claim  is  always  a 
sufficient  consideration  for  a  new  promise. 
Ilolcomb  V.  Stimpson,  8  Vt.  141.  2.  The 
accord  is  sufficiently  executed,  when  all  is 
done  which  the  party  agrees  to  accept  in 
satisfaction  of  the  preexisting  obligation. 
This  is  ordinarily  a  matter  of  intention, 
and  should  he  evidenced  by  some  express 
agreement  to  that  effect,  or  by  some  un- 
equivocal act  evidencing  such  a  purpose. 
This  may  be  done  by  surrender  of  former 
securities,  by  release  or  receipt  in  full,  or 
in  any  other  mode.  All  that  is  requisite 
is,  that  the  debtor  should  have  executed 
the  new  contract  to  that  point  whence  it 
was  to  operate  as  satisfaction  of  the  pre- 
existing liability,  in  the  present  tense. 
That  is  shown  in  the  present  case,  by 
executing  a  receipt  in  full,  the  same  as  if 
the  old  contract  had  been  upon  note,  or 
bill,  and  the  papers  had  been  surrendered. 
3.  In  every  case  where  one  security  or 
contract  is  agreed  to  be  received  in  lieu 
of  another,  whether  the  substituted  con- 
tract be  of  the  same  or  a  higher  grade,  the 
action,  in  case  of  failure  to  perform,  must 
be  upon  the  substituted  contract.  And  in 
the  present  case,  as  it  is  obvious  to  us, 
that  the  plaintitfs  agreed  to  accept  the 
note,  and  the  defendant's  promise  to  pay 
the  costs  in  full  satisfaction,  and  in  the 
place  of  the  former  liability,  the  defendant 
remained  liable  only  upon  the  new  con- 
tract. 4.  In  all  cases  where  the  party 
intends  to  retain  his  former  remedy  he 
will  neither  surrender  or  release  it ;  and 
whether  the  party  shall  be  permitted  to 
sue  upon  his  original  contract  is  matter  of 
intention  always,  unless  the  new  contract 
be  of  a  higher  grade  of  contract,  in  which 
case  it  will  always  merge  the  former  con- 

VOL.  II.  17 


tract,  notwithstanding  the  agreement  of 
the  debtor  to  still  remain  liable  upon  the 
original  contract."  So  in  Com.  Dig.  tit. 
Accord  (B.  4),  it  is  said  that  "an  accord, 
trith  mutual  pnnnhcs  to  perform,  is  good  ; 
though  the  thing  be  not  performed  at  the 
time  of  the  action,  for  the  party  has  a 
remedy  to  compel  the  performance.  Yet 
the  remedy  ought  to  be  such  that  the 
party  might  have  taken  it  upon  the  mutual 
jironiise  at  the  time  of  the  agreement." 
And  in  Sard  v.  Jlhodes,  1  M.  &  W.  1.53, 
which  was  assumpsit  by  the  indorsee 
against  the  acceptor  of  a  bill  of  exchange 
for  £43,  the  defendant  pleaded  that,  after 
the  bill  Ijccame  due,  one  G.  P.,  the  drawer 
of  the  bill,  made  his  promissory  note  for 
£44,  and  delivered  the  same  to  the  ])lain- 
tiff  in  full  satisfaction  and  discb.arge  of 
the  bill.  Replication,  that  althouph  he, 
the  plaintiff,  accepted  the  note  in  full  sat- 
isfaction and  discharge  of  the  bill,  yet  that 
the  note  was  not  paid  when  due,  and  still 
remained  unpaid  :  —  Ilekl,  that  the  repli- 
cation was  bad,  and  that  the  plaintiff, 
having  accepted  the  note  in  full  satisfac- 
tion and  discharge  of  the  l)ill,  could  not 
sue  upon  the  latter.  Held,  also,  that  the 
plea  was  sufficient.  And  see  to  the  same 
effect  Good  v.  Cheesman,  2  B.  &  Ad. 
328  ;  Evans  v.  Powis,  1  Exch.  001.  But 
the  rule  established  by  these  cases  has 
made  no  material  change  in  the  form  of 
the  plea.  It  is  still  true  that  an  accord 
without  satisfaction  is  not  good.  There- 
fore if  a  defendant  intends  to  set  up  a 
new  promise  without  performance  in  bar 
of  an  action,  he  must  take  care  to  aver 
distinctly  that  it  was  agreed  that  the  new 
promise  should  be  received  in  satisfaction. 
If  he  sets  forth  the  agreement  in  such  a 
manner  that  it  appears  upon  the  face  of 
the  plea  that  performance,  and  not  the 
promise  to  perform,  was  to  be  received  in 
satisfaction,  and  does  not  aver  perform- 
ance, the  ]:)lea  will  of  course  be  bad. 
This  will  explain  several  recent  English 
cases,  which  might  seem  at  first  sight  to 
be  at  variance  with  what  is  stated  in  the 
text.  See  Reeves  v.  Hcarne,  1  M.  &  W. 
323;  CoUingbourne  v.  Mantell,  b  M.  & 
W.  289  ;  Carter  v.  Wormald,  1  Exch. 
81  ;  Giftbrd  v.  Whittaker,  6  Q.  B.  249  ; 
Griffiths  r.  Owen,  13  M.  &  W.  58  ;  Har- 
ris V.  Revnolds,  7  Q.  B.  71  ;  Gabriel 
V.  Dresser',  5  C.  B.  G22,  29  Eng.  L.  &  Eq. 

[193] 


196*  THE   LA  AY   OP   CONTRACTS.  [PART  II. 

Generally,  but  not  universally,  if  the  new  promise  be  founded 
upon  a  new  consid:?ration,  and  is  clearly  binding  on  the  original 
promisor,  this  is  a  satisfaction  of  the  former  claim  ;  (/)    and 
otherwise  it  is  no  satisfaction,  {u)     But  even  a  promise,  which 
would  not  itself  be  a  satisfaction,  may,  if  it  be  fully  performed, 
at  the  right  time  and  in  the   right  way  (and  not  merely  ten- 
dered), become  then  a  satisfaction,  (v)     *If  the  new  promise  is 
executory,  and  is  not  binding,  it  is  no  satisfaction  until  it  be 
executed,  and  although  it  is  to  be  performed  on  a  future  day 
certain,  the   promisee  may  have  his  original  action  before  the 
new  promise  becomes  due.  (iv)     But  if  it  be  a  binding  promise, 
for  a  new  consideration,  performable  at  a  future  day  certain, 
then  the  original  right  of  action  is   suspended  until  that  day 
comes  ;  if  the  promise  is  then  duly  performed,  this  right  is  de- 
stroyed ;   but  if  the  promise  is  not  then  duly  performed  this 
right  revives,  and  the  promisee  has  his  election  to  sue  on  the 
original  cause  of  action  or  on  the  new  promise,  unless  by  the 
terms  or  the  legal  effect  of  the  new  contract,  the  new  promise  is 
itself  a  satisfaction  and  an  extinction  of  the  old  one.  (x)     This 
may  be  illustrated  by  the  case  of  one  who  takes  a  promissory 
negotiable  note,  on  time,  for  money  which  is  due  or  to  become 
due.     This  note  is  conclusive  evidence  of  an  agreement  for  de- 
lay or  credit,  and  no  action  can  be  maintained  on  the  original 
cause  of  action  until  the  maturity  of  the  note ;  (y)  if  then  the 

266  ;    Bayley  v.  Iloman,  3  Bing.  N.  C.  ccptcd  an  order  of  the  defendant  on   a 

920 ;  James  v.  David,  5  T.  K.  141  ;  AI-  third  person  for  a  given  sum,  in  satisfac- 

lics  V.  Prohyn,  5  Tyrwli.  1079.  tion   of  the  promises,    is   no   bar  to   an 

(t)  Com.  Dig.  Accord  (B.   4);   Good  action  for  the  original  cause  of  indebted- 

V.  Chccsman,  2  B.  &  Ad.  328,  ))cr  Parke,  ness,  nor  is  a  plea  good  as  an  accord  and 

J.  ;    Cartwright   v.   CooivC,  3    15.   &  Ad.  satisfaction    that   tiio   ]ilaintiff  agreed   to 

701  ;    Evans   v.   Powis,    1     Exch.    607  ;  accept  tlie  note  of  a  third  person,  wliich, 

Bayley  v.  Iloinan,  3   Biiig.  N.   C.   921  ;  on  being  tendered,  he  refused  to  accept. 

Wentwortii  v.  Builen,  9  B.  &  C.  850.    In  llawlcy  v.  Footc,  19  AVend.  516. 
Pope  V.  Tunstali,  2  Pike,  209,  it  was  held        (c)  Com.  Dig.  tit.  Accord  (B.  4). 
that  in  debt  on  a  bond,  a  plea  averring         («•)  Com.  Dig.  tit.  Accord  (B.  4). 
tliat  before  suit  lirought,  the  obligees   in         (.r)  If  sucli  is  tlie   intent  and  eflect  of 

tlie  bond   liad   taken   a  third   ]ierson  into  the   new  agreement,   the  remedy  on    the 

partncrsiii]),  and  tliat  the  defendant,  witii  original  cause  is  wholly  gone,     i^ca  supra, 

two  securities,  executed  to  tiie  new  jiart-  n.  (.s).     And  see  further,  Lewis  ii.  Lystcr, 

nersliip  a  bond  on  longer  time  which  was  2  Cromj).  J\l.  &  W.  704  ;  Kearslakc  v.  Mor- 

aecepted  and  received  in  full  satisfaction  gan,   5   T.    K.    513  ;  Kicliardson  v.  Ivick- 

nnd   discharge  of  the  bond   sued  on,   is  man,  cited  in  Kearslakc  v.  Morgan,  5  T. 

good  in  l)ar  as  a  plea  of  accord  and  satis-  B.    513  ;    Griftitiis    v.    Owen,    13    M.    & 

fuelioM.  W.  63. 

(i<)  Tims,  a  jilca  tliut  the  plaintiff  ac-         (y)  Kendrick  v.  Lomax,  2   Cromp.  & 

[194] 


CII.  III.] 


DEFENCES. 


197 


note  is  not  paid,  an  action  may  be  brought  upon  the  note,  or  on 
the  original  cause  of  action,  unless  the  facts  show  that  the 
promisee  took  the  note  in  payment,  or  the  law  implies  it,  as  in 
Massachusetts  and  Maine,  (z)  Thus,  if  A  covenants  to  pay  B 
for  property  bought,  "  in  manner  and  at  the  times  following," 
that  is,  to  give  some  cash  and  the  rest  in  certain  promissory 
notes,  all  which  are  given,  if  the  notes  are  not  paid,  an  action 
may  be  brought  on  the  covenant,  although  it  have  been  literally 
complied  with,  (za) 

It  seems  that  a  suit  on  a  written  contract,  as  a  note  of  hand, 
may  be  barred  by  a  proof  of  the  execution  of  a  parol  contract, 
entered  into  concurrently  with  the  written  contract  and  agreed 
to  be  taken  in  satisfaction  of  it.  (a) 

*An  agreement  to  cancel  and  release  mutual  claims,  or  to 
discontinue  mutual  suits,  is  a  mutual  accord  and  satisfaction  ; 
and  either  party  may  rely  on  it  as  a  bar  against  the  further  pros- 
ecution of  the  suit  or  claim  by  the  other ;  (b)   but  to  make  this 


J.  405.  In  this  case  after  a  bill  of  ex- 
change became  due,  and  whilst  it  was 
in  London,  where  it  had  l)een  sent  to  be 
presented  for  payment,  the  person  who 
had  indorsed  it  to  the  plaintiff  came  to 
him  with  another  bill  for  the  same  amount, 
and  prevailed  on  him  to  take  it  for  and  on 
account  of  and  in  renewal  of  the  first  bill. 
Before  the  second  bill  became  due,  and 
without  delivering  it  back,  the  plaintiff 
brought  an  action  on  the  first  bill  against 
the  acceptor.  Held,  that  he  was  not  enti- 
tled to  recover.  And  see  Sayer  i\  Wag- 
staff,  5  Beav.  415;  Simon  v.  Lloyd,  2 
Cromp.  M.  &  R.  187. 

(z)  See  ante,  p.  136,  nn.  (o),  {/)). 

(sa)  Dixon  v.  Dixon,  7  Ellis  &  B.  903. 
See  also,  Leake  v.  Young,  5  Ellis  &  B.  955. 

(a)  Thus,  where  upon  the  indorsement 
of  a  note  it  was  agreed  by  parol  be- 
tween the  indorser  and  the  indorsee,  that  if 
the  former  would  execute  to  the  latter  a 
deed  for  a  tract  of  land  the  latter  would 
strike  out  the  indorsement  and  release  the 
indorser  from  all  liability  thereon,  and 
the  indorser  did  afterwards  execute  a  deed 
for  the  tract  of  land,  which  was  accepted 
by  the  indorsee  ;  Held,  that  proof  of  these 
facts  was  not  evidence  tending  to  estab- 
lish a  contract  variant  from  tliat  contain- 
ed in  the  written  indorsement,  and  was 
competent  to  establish  an  accord  and  sat- 


isfaction. Smitherman  v.  Smith,  3  Dev. 
&  Bat.  89.  So  where  P.  and  the  defend- 
ant agreed  to  purchase  a  vessel  together, 
and  the  defendant  having  received  $190 
of  P.,  for  w-hich  he  gave  his  note  on  de- 
mand, purchased  the  vessel  in  his  own 
name,  and  afterwards  signed  a  writing 
which  set  forth  that  a  portion  of  the  ves- 
sel was  to  belong  to  P.  upon  his  paying 
tlierefor,  and  acknowledged  the  receipt  of 
$190  towards  such  payment,  which  was 
admitted  to  be  the  same  money  for  whicli 
the  note  was  given,  and  such  writing  was 
accepted  b}'  P. ;  it  was  held  that  this  was 
an  accord  and  satisfaction  of  the  note,  al- 
though it  was  not  cancelled.  Peck  v. 
Davis,  19  Pick.  490. 

(b)  Thus  in  Veddery.  Vedder,  1  Denio, 
257,  A  and  B  having  mutual  causes  of 
action  in  tort  against  each  other  had  an 
interview  to  adjust  the  demands  of  B  ; 
and  for  the  satisfaction  of  such  demands, 
A  paid  him  a  sum  of  money  and  took  his 
receipt;  but  B  insisted  as  a  condition  to 
such  adjustment  that  A  should  execute 
to  him  a  receipt  in  "  full  of  all  demands  " 
on  his  part,  to  which  A  consented,  and 
such  receipt  was  given,  nothing  being  said 
respecting  the  particular  demand  of  A. 
Held,  notwithstanding,  that  it  was  a  good 
accord  and  satisfaction  of  A's  cause  of 
action  against  B.     So  in  Foster  v.  Trull, 

[195] 


IDS'* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


effectual  as  to  mutual  suits,  the  mutual  release  should  be  under 
seal. 

Nor  is  it  necessary,  as  we  have  seen,  that  the  accord  and  sat- 
isfaction should  go  so  far  as  to  extinguish  the  original  claim. 
If  there  be  a  new  agreement,  resting  on  sufficient  consideration 
and  otherwise  valid,  to  suspend  a  previous  claim  or  cause  of  ac- 
tion, until  the  doing  of  a  certain  thing,  or  the  happening  of  a 
specified  event,  an  action  cannot  be  maintained  on  that  claim 
in  the  mean  time.  But  such  agreement  to  suspend  or  delay 
will  not  be  inferred  from  the  mere  giving  of  collateral  security 
with  power  to  sell  the  same  at  a  certain  time  if  the  debt  be  not 
previously  paid,  (c) 

To  show  that  the  accord  and  satisfaction  were  simultaneous, 
and  consisted  of  the  delivery  of  a  certain  thing,  it  must  be  proved 
not  only  that  the  thing  was  delivered,  but  that  it  was  received 
in  satisfaction,  (d)  This  delivery  need  *not  have  been  voluntary, 
or  intended  by  way  of  satisfaction.  But  if  the  property  of  the 
debtor  come  lawfully  into  possession  of  the  creditor,  and  they 
then  agree  that  it  may  be  retained  by  him  and  shall  be  in  satis- 
faction of  the  debt,  this  would  be  regarded  as  a  good  accord  and 
satisfaction,  (e) 


12  Joliiis,  450,  it  was  held  that  an  agree- 
ment by  two,  having  each  an  action  for 
false  imprisonment  pending  against  the 
other,  to  discontinue  their  respective  ac- 
tions, and  an  actual  discontinuance  ac- 
cordingly, are  a  good  accord  and  satisfac- 
tion. So  an  agreement  to  refer  mutual 
causes  of  action  to  arbitration,  and  a  i)er- 
formance  of  the  agreement  is  a  good  ac- 
cord and  satisfaction  in  respect  of  such 
causes  of  action.  Williams  v.  The  Lon- 
don Commercial  Exchange  Co.  10  Exch. 
5G'J,  2'J  Eng.  L.  &  Et[.  429. 

(c)  Ernes  v.  Widdowson,  4  C.  &  P. 
151. 

(d)  Maze  V.  Miller,  1  Wash.  C.  C.  328  ; 
Sinard  r.  Patterson,  .'{  Blackf.  .3r)4  ;  Hall 
r.  Flockton,  10  (.1  P.  4.'i'J,  4  Eng.  L.  & 
Eq.  If*.');  State  IJank  /•.  Littlejohn,  1 
I)ev.  &  I'lit.  .'JO.').  And  it  is  entirely  a 
question  for  the  jury,  wiietlier  there  was 
an  ftccepluiiee.  JCvery  rrrripl  is  not  an 
ncce|itaii('e.  To  constitute  an  acceiitance 
there  must  be  an  net  of  the  will.  Ilard- 
nian  /•.  lidilioii-r,  o  .M.  &  W.  OOO.     Pren- 

[I'JGJ 


ner  v.  Herr,  8  Penn.  St.  106.  So  whether 
a  note  or  bond  is  accepted  in  satisfaction 
of  an  original  claim,  or  only  as  collateral 
security,  is  for  the  jury.  Stone  v.  Miller, 
16  Penn.  St.  450. 

(e)  Thus  in  Jones  v.  Sawkins,  5  C.  B. 
142,  in  an  action  of  debt  for  use  and  oc- 
cupation of  certain  rooms  and  apartments 
of  the  plaintiff,  the  defendant  pleaded : 
1st.  That  the  plaintiff"  during  the  demise, 
and  before  the  commencement  of  the  suit, 
took  the  defendant's  gooils  as  a  distress, 
they  being  of  sufficient  value  to  satisfy  the 
rent  and  costs  of  the  distress,  &:c. ;  that  the 
plaintiff  never  sold  the  goods  but  retained 
them  until  just  before  the  commencement 
of  the  suit,  when  he,  with  the  assent  of 
the  (U'fendant  received  and  accc|)ted  them, 
and  still  retained  them  in  satisfaction,  &c. 
2d.  Tiiat  after  the  accruing  of  the  causes 
of  action  and  before  the  comnumcement 
of  the  suit,  the  plaintiff  wrongfully  seized 
the  defendant's  goods,  being  of  value 
more  than  sufficient  to  satisfy  the  causes 
of  action,  and   retained  them  for  an  un- 


CII.  III.] 


DEFENCES. 


^99 


The  accord  and  satisfaction   must  be  advantageous  to  the 
creditor.  (/)     He  must  receive  from  it  a  distinct  benefit,  *vvhich 


reasonable  time,  namely,  &c.,  and  con- 
verted them  ;  that  it  was  before  the  com- 
mencement of  the  suit  nj^rced  Ijctween  the 
plaintiff  and  the  defendant  that,  for  the 
termination  of  disputes  between  them  con- 
cerning the  causes  of  action  in  the  decla- 
ration, and  claims  made  by  the  defendant 
in  respect  to  the  seizure  and  conversion, 
such  demands  and  rights  of  action  should 
be  mutually  relinquished,  and  that  the 
plaintiff  should  retain  the  goods  as  a  final 
settlement  in  full  satisfaction  and  dis- 
charge of  the  said  causes  of  action ;  and 
that  the  plaintiff  accepted  and  received, 
and  still  retained  the  said  goods  in  such 
full  satisfaction  and  discharge.  3d.  That 
the  plaintiff  wrongfully  seized  the  defend- 
ant's goods  to  the  value  of  all  the  moneys 
in  the  declaration  mentioned,  and  de- 
tained the  goods  for  an  unreasonable  time, 
and  converted  them,  and  wrongfully  dis- 
turbed the  defendant  in  the  peaceable  pos- 
session of  the  rooms ;  that  the  plaintift' 
was  desirous  of  regaining  possession  of  the 
rooms ;  that  after  the  accruing  of  the 
causes  of  action,  and  before  the  com- 
mencement of  the  suit,  it  was  agreed  be- 
tween the  plaintiff  and  the  defendant  that, 
to  put  an  end  to  disputes  in  respect  of  the 
causes  of  action  in  that  plea  mentioned, 
and  other  alleged  causes  of  action  on  the 
part  of  the  defendant,  they  should  mutu- 
ally relinquish  their  claims,  that  the  plain- 
tiff should  retain  the  goods  in  full  satis- 
faction and  discharge  of  his  claim,  and 
that  the  defendant  should  relinquish  her 
right  to,  and  give  up  possession  of  the 
rooms,  and  should  be  discharged  by  plain- 
tiff from  all  claims,  and  that  the  defend- 
ant accordingly  relinquished  her  claims 
to,  and  gave  up  possession  during  the 
tenancy,  and  the  plaintiff  resumed,  and 
still  retained  possession  of  the  rooms,  and 
retained  the  goods  so  seized,  in  satisfac- 
tion and  discharge  of  the  causes  of  action  : 
Held,  that  the  pleas  were  good  pleas  of 
accord  and  satisfaction.  Held,  also,  that 
the  replications,  —  which  in  substance  al- 
leged that  the  plaintiff  did  not  seize  or 
detain  any  goods  of  the  defendant  of  suf- 
ficient value  to  satisfy  the  rents  and  costs, 
or,  of  value  sufficient  for  a  full  satisfac- 
tion and  discharge  of  the  causes  of  ac- 
tion,—  were  bad,  as  raising  an  immaterial 
issue. 

(/)   Thus,  it  is  settled  that  a  mei-e  re- 
ceipt by  a  creditor  of  part  of  his  debt  then 

17* 


due,  is  not  a  good  defence  by  way  of  ac- 
cord and  satisfaction,  to  an  action  for  the 
remainder,  although  the  creditor  agreed 
to  receive  it  in  full  satisfaction.  See  ante, 
pp.  1.jO,  131,  and  notes.  And  see  further, 
Warren  v.  Skinner,  20  Conn.  559,  an  ex- 
cellent case ;  Daniels  v.  Hatch,  1  N.  J. 
391;  Adams  v.  Tapling,  4  Mod.  88; 
Worthington  v.  Wigley,  3  Bing.  N.  C. 
454  ;  Smith  v.  Bartholomew,  1  Met.  276  ; 
Mitchell  V.  Cragg,  10  M.  &  W.  367  ; 
Greenwood  v.  Lidbetter,  12  Price,  183; 
Hinckley  v.  Arev,  27  Jle.  362;  Hardcy 
V.  Coe,  5  Gill,  189;  White  v.  Jordan, 
27  Me.  370  ;  Eve  v.  Moseley,  2  Strobh. 
203.  But  this  rule  applies  only  when  the 
claim  thus  settled  is  a  liquidated  and  un- 
disputed one.  Longridge  v.  Dorville,  5 
B.  &  Aid.  117;  Wilkinson  v.  Byers,  1  A. 
&  E.  106  ;  Reynolds  v.  Pinhowe,  Cro. 
Eliz.  429  ;  Atlee  v.  Backhouse,  3  M.  & 
W.  651  ;  McDaniels  v.  Lapham,  21  Vt. 
223  ;  Stockton  v.  Frey,  4  Gill,  406  ;  Palm- 
erton  v.  Huxford,  4  Denio,  166;  Tuttle 
V.  Tuttle,  12  Met.  551.  And  if  the  debtor 
give  his  vegofiubte  note  for  part  of  an  un- 
disputed debt,  and  this  be  accepted  in  full 
satisfaction,  the  right  to  sue  for  the  bal- 
ance is  gone.  See  ante,  p.  131,  n.  (x). 
Or  the  note  of  a  third  person.  See  ante,  p. 
131,  n.  (//);  Booth  v.  Smith,  3  Wend. 
66.  In  iiruce  v.  Bruce,  4  Dana,  530,  the 
defendant  pleaded  that  the  plaintiff  had 
agreed  to  accept  the  promise  of  a  third 
person,  in  full  satisfaction  of  the  note  sued 
on.  The  only  evidence  in  support  of  the 
plea  was  an  indorsement  signed  by  the 
third  party,  and  in  these  words  :  "  I  am  to 
pay  the  within  note  ;  "  and  a  credit  of  the 
same  date,  still  legible,  though  lines  had 
been  drawn  through  it,  for  a  sum  paid  by 
the  third  party.  Held,  that  this  was  no  evi- 
dence of  an  accord  and  satisfaction  of  the 
note  which  remained  in  the  plaintiff's,  pos- 
session. So  if  the  creditor  derives  any  bene- 
fit from  the  part  payment,  to  which  he  was 
not  entitled,  and  he  accepts  this  additional 
benefit,  together  with  the  part  payment, 
as  a  full  satisfaction,  this  is  a  good  dis- 
charge of  his  whole  claim.  Douglass  v. 
White,  3  Barb.  Ch.  621  ;  Hinckley  v. 
Arey,  27  INIe.  362.  As  if  part  is  paid 
and  received  in  full  satisfaction  before  the 
whole  is  due.  Brooks  v.  White,  2  Met. 
283;  Goodnow  v.  Smith,  18  Pick.  414; 
Smith  V.  Brown,  3  Hawks,  580.  And  if 
the  creditor  receives  any  specific  property, 

[197] 


200* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


otherwise  he  would  not  have  had.  (g)  Thus,  to  an  action  for 
wrongfnlly  taking  cattle,  it  is  no  plea  that  it  was  agreed  that 
plaintitr  might  have  them  again  ;  for  this  the  law  would  have 
given  him  ;  and  the  return  of  the  cattle  is  not  a  satisfaction  for 
the  injury  caused  by  the  detention  of  them,  (h)  But  although 
it  has  been  held  that  the  thing  given  in  satisfaction  must  have 
a  distinct  value  at  laic,  and  therefore  the  release  of  equities  of 
redemption  could  not  be  a  satisfaction  for  want  of  such  value,  {i) 
it  cannot  be  doubted,  that  if  the  satisfaction  be  actual,  and 
have  a  real  value  in  fact,  either  at  law  or  in  equity,  it  would  be 
held  sufficient. 

We  have  seen  that  a  promise,  without  execution,  is  no  satis- 
faction, unless  it  has  this  effect  by  express  agreement.  And  on 
the  same  principle,  if  the  promise  be  executed  literally,  or  in 
form,  but  is  rendered  inoperative  or  worthless  to  the  creditor  by 
the  debtor's  act  or  omission,  this  has  no  eflect  as  an  accord  and 
satisfaction,  {j) 

*  If  the  accord  and  satisfaction  be  made  by  a  third  party,  and 
is  accepted  as  satisfaction,  it  would  seem  to  be  sufficient,  if  the 
actual  debtor  consent  to  look  upon  it  as  such,  [k) 

At  least  this  must  be  the  case  where  the  debtor  and  the 


either  from  the  debtor  or  a  third  person, 
in  full  satisfaction,  this  is  a  good  dis- 
charge whatever  be  the  value  of  the 
thing  thus  received,  there  being  no  fraud. 
Keed  v.  Bartlett,  19  Pick.  273;  Blinn  v.  . 
Chester,  5  Day,  360.  And  sec  ante,  p. 
131,  n.  (.r). 

(q)  See  preceding  note. 

(h)  Kceler  v.  Neal,  2  Watts,  424.  A 
plea  of  accord,  &c.,  must  show  that  the 
plaintiff  received  something  valuable. 
JDavis  V.  Noaks,  3  J.  J.  Marsh.  497  ;  Lo- 
gans. Austin,  1  Stew.  476. 

(i)  Preston  v.  Cliristmas,  2  Wils.  86. 

( /)  Tlius  in  'J'unicr  v.  Browne,  3  C.  B. 
1.57,  in  debt  for  nioiioy  bud  and  received, 
&(•.,  the  defendant  pleaded,  that  after  the 
accruing  of  the  debts  and  causes  of  action, 
the  defendant  executed  a  deed,  securing  to 
the  plaintiff  a  certain  annuity,  and  tliat 
the  plaintilf  tlien  accc[)ted  and  received  the 
Banic  of  and  from  the  defendant  in  full 
Batisfactioii  and  discharge  of  all  the  said 
Fcveral  tlebts  and  causes  of  action.  The 
plaintifl'  replied  that  no  memorial  of  the 
annuity  deed  was  enrolled  pursuant  to  the 

[198] 


statute ;  that  the  annuity  being  in  arrear, 
the  plaintiff  brought  an  action  to  recover 
the  amount  of  the  arrears,  that  the  defend- 
ant pleaded  in  bar  of  that  action  the  non- 
enrolment  of  the  memorial,  and  that  there- 
upon the  plaintiff  elected  and  agreed  tliat 
the  indenture  should  be  null  and  void,  as 
pleaded  by  the  defendant,  and  discontinued 
the  action  :  —  Held,  a  good  answer  to  the 
plea,  inasmuch  as  it  showed  that  the  ac- 
cord and  satisfaction  thereby  set  up  had 
been  rendered  nugatory  and  unavailing  by 
the  act  of  the  defendant  himself.  Upon 
the  same  ]n'inciple  it  was  held  in  Ilall  v. 
Smalhvood,  Peakc's  Add.  C.ns.  13,  that  if 
a  bill  of  sale  of  goods  is  given  in  satisfac- 
tion of  a  bond  debt,  and  it  is  afterwards 
discovered  that  the  obligor  had  jireviously 
committed  an  act  of  l)ankru])tcy,  the 
obligee  may  abandon  the  1)111  of  sale  and 
sue  out  a  commission  against  the  oliligor, 
ami  a  co-obligor  cannot  plead  tlic  bill  of 
sale  as  an  accord  and  satisfaction,  in  an 
action  agaitist  him  on  the  bimd. 

(/.•)  Booth  V.  Smith,  3  Wend.  66 ;  Web- 
ster V.  Wyscr,  1  Stew.  184. 


en.  III.]  DEFENCES.  -200 

stranger  are  principal  and  agent,  or  the  transaction  is  such  that 
the  debtor  may  make  it  the  act  of  the  stranger  as  his  agent,  by 
his  subsequent  adoption  and  ratification. 

An  accord  and  satisfaction  made  before  breach  of  covenant 
or  contract,  is  not  a  bar  to  an  action  for  a  subsequent  breach.  (/) 


SECTION    V. 


OP  ARBITRAMENT   AND   AWARD. 

Somewhat  analogous  to  the  defence  of  accord  and  satisfac- 
tion, is  that  of  arbitrament  and  award.  By  the  first  the  parties 
have  agreed  as  to  what  shall  be  done  by  one  to  satisfy  the  claim 
of  the  other.  By  the  second  they  have  agreed  to  submit  this 
question  to  third  persons,  [m) 

This  agreement  may  be  made  by  the  parties  directly,  or 
through  their  agency ;  and  the  authority  to  make  this  agree- 
ment may  be  express  or  implied.  The  authority  of  an  agent  to 
submit  the  claims  of  his  principal  to  arbitration,  has  been  much 
considered.  No  general  authority  to  collect  claims,  or  even  to 
compromise  them,  carries  with  it  the  power  to  submit  them  to 
arbitration,  {ma)  unless  the  power  arises  from  a  general  usage, 
or  is  given  by  a  rule  of  court,  {mh)  Bvit  an  attorney  at  law  has 
this  power  by  his  office,  (/wc)  limited,  as  some  courts  hold,  to 
claims  already  put  in  suit,  [md)     No  officer  of  the  United  States 

(I)  And  it  is  immaterial  whether  the  Stewart  v.  Cass,  16  Vt.  663  ;  Valentine 

covenant  is  to  pay  at  a  time  certain,  or  v.  Valentine,  2   Barb.  Ch.  430.     And  a 

upon  a  contingency.     Healey  v.  Spence,  submission  is  valid  and  binding,  altliough 

8  Exch.  668,  20  Eng.  L.  &  Eq.  476 ;  May-  there  is  no  agreement  that  judgment  may 

or  of  Berwick  v.  Oswald,  I  Ellis  &  B.  29.5,  be  entered  on  the  award.    Howard  r.  Sex- 

16  Eng.  L.  &  Eq.  236  ;  Snow  v.  Eranklin,  ton,  4  Comst.  1.57. 

1  Lutw.  358;  Alden  v.  Blague,  Cro.  Jac.  (ma)  Alexandria  Canal  Co.  v.  Swann, 

99  ;  Neal  v.   Sheffield,  id.  254  ;  Kayo  v.  5  How.  83. 

Waghorne,    1     Taunt.    428  ;    Smith    i'.  [mh]  Buckland   v.  Conway,    16    Mass. 

Brown,  3  Hawks,  580;  Harper  v.  Hamp-  396  ;  Henley  v.  Sopcr,  8  B.  &  C.  16. 

ton,  1  Harris  &  J.  673.  (mc)  Filnier  v.  Uelbcr,  3  Taunt.  486  ; 

(m)  The  submission  is,  in  fact,  a  con-  Wilson  v.  Young,  9  Barr,  101  ;  Holker  v. 

tract ;  a  contract  to  refer  the  subject  in  Parker,  7  Cranch,  436  ;  Talbot  v.  M'Gee, 

dispute  to  others,  and  to   be  bound  by  4  T.B.  Mon.  377. 

their  award.     And  the  submission  itself  (md)  Jenkins  v.  Gillespie,  10    Smedes 

implies  an  agreement  to  abide  the  result,  &  M.  31  ;   Scarborough  v.  Ileynolds,  12 

although  no  such  agreement  be  expressed.  Ala.  252. 

[199] 


201* 


THE   LAAV   OF   CONTRACTS. 


[part  II. 


has  authority,  by  virtue  of  his  office,  to  enter  into  a  submission 
on  their  behalf,  which  shall  be  binding  on  them,  (me) 

The  first  essential  *of  an  award,  without  which  it  has  no  force 
whatever,  is,  that  it  be  conformable  to  the  terms  of  the  submis- 
sion, (w)  The  authority  given  to  the  arbitrators  should  not  be 
exceeded,  and  the  precise  question  submitted  to  them,  and  neither 
more  nor  less  should  be  answered.  Neither  can  the  award  affect 
strangers;  and  if  one  part  of  it  is  that  a  stranger  shall  do  some 
act,  it  is  not  only  of  no  force  as  to  the  stranger,  but  of  no  force 
as  to  the  parties,  if  this  unauthorized  part  of  the  award  cannot 
be  severed  from  the  rest,  (o)  Nor  can  it  require  that  one  of  the 
parties  should  make  a  payment  or  do  any  similar  act  to  a  stran- 
ger, (p)  But  if  the  stranger  is  mentioned  in  an  award  only  as 
agent  of  one  of  the  parties,  which  he  actually  is,  or  as  trustee, 
or  as  in  any  way  paying  for,  or  receiving  for  one  of  the  parties, 
this  does  not  invalidate  the  award,  (q)      And  in  favor  of  awards, 


(me)  United  States  v.  Ames,  1  Woodb. 
&  M.  76. 

(??)  1  Rol.  Abr.  tit.  Arbitrament  (E.) ; 
Hide  i\  Petit,  1  Cli.  Cas.  185  ;  Solomons 
V.  M'Kinstr}',  13  Johns.  27.  Neither  ar- 
bitrators nor  courts  can  substitute  anotlier 
afrrcement  for  the  one  actually  made  by 
the  parties.     Howard  v.  Edgell,  17  Vt.  9. 

(o)  1  Rol.  Abr.  tit.  Arbitrament  (E). 
An  award  directing  a  qui  tarn  action  to 
cease,  is  therefore  bad.  Philips  v.  Knight- 
ley,  2  Stra.  903.  So  an  award  that  a 
stranger  to  the  submission  should  give 
bond  as  a  security,  for  the  performance  of 
the  award  ;  or  that  one  jiarty's  wife  and 
son  should  join  in  a  conveyance,  is  invalid. 
Com.  Dig.  Arbit.  (E.  1 ) ;  Pits  v.  Wordal, 
GodI).  165;  Kcilwcv,  43  a,  pi.  10.  And 
sec  Bra/ill  v.  Ishani,  1  E.  D.  Smith,  437. 
So,  that  an  action  by  one  party  and  bis 
iri/ii,  against  the  other  part}'  should  be  dis- 
continued. C!om.  Dig.  Arbit.  (D.  4) ;  that 
the  scrvdnt  of  one  party  should  ]iay  a  cer- 
tain sum.  Dudley  v.  INIallery,  cited  in 
Norwich  V.  Norwich,  3  Leon.  62.  Or 
an  award  that  one  party  should  hecoma 
lifjund  with  surctirs  for  the  ]i('iformancc  of 
any  [larticidar  act.  Olilfieid  r.  Wiliners, 
1  Leon.  140;  Coke  r.  Whorwood,  2  Lev. 
6  ;  tiiat  the  parly  and  one  vIid  IkkI  limnne 
surety  in  the  siilimission  iioinl,  should  pay 
the  sum  awarded.  ]{ichar(Is  v.  JJi-ockcn- 
broiiu'h,  1  Itand.  44'.l.  And  an  award 
against  one  company  will  not  iiiiid  another 
company,  consisting  ('/(  jiarl  of  liic  same 

[200] 


persons.  Kratzer  v.  Lyon,  5  Penn.  St. 
274.  Strangers  to  the  submission  may  in 
some  instances  be  bound  by  silently  ac- 
quiescing in  an  award.  Govett  v.  llich- 
mond,  7  Simons,  1.  And  see  Humphreys 
V.  Gardner,  11  Johns.  61;  Downs  v. 
Cooper,  2  Q.  B.  2.'36.  An  award  that  one 
party  shall  cause  a  stranger  to  do  a  cer- 
tain act,  as  to  deliver  possession  of  land, 
is  void.  Martin  v.  Williams,  13  Johns.  264. 
Or  that  one  party  should  erect  a  stile  and 
bridge  on  the  premises  of  a  stranger. 
Turner  v.  Swainson,  1  M.  &  W.  572. 
But  an  award  directing  one  party  and 
others  to  convey  certain  premises  to  the 
other,  or  that  he  alone  should  pay  a  cer- 
tain sum  in  money  is  not  invalid  as  to 
the  last  part.  Thornton  v.  Carson,  7 
Cranch,  596. 

(/))  Breton  v.  Prat,  Cro.  Eliz.  758;  1* 
Rol.   Abr.    tit.  Arbitrament  (B),   pi.    7; 
Adams  v.  Statham,  2  Lev.  235  ;     In   re 
Laing  and  Todd,  13  C.  B.  276,  24  Eng. 
L.  &  Eq.  349. 

(<l)  Com.  Dig.  Arb.  (E.  7) ;  Dudley  v. 
Mallery,  cited  in  Norwich  i\  Norwich,  3 
Leon.  62;  Bird  v.  Bird,  Salk.  74  ;  Bcdam 
r.  Clcrkson,  Ld.  Kiiym.  123;  Snook  v. 
Hellyor,  2  Cliitty,  43;  Gale  r.  Mottram, 
W.  kcl.  127;  Lynch  v.  Clemencc,  1  Lutw. 
571  ;  Macon  r.  Crump,  1  Call,  500;  Inh. 
of  Boston  r.  Hra/cr,  11  .Mass.  447;  Beck- 
ett V.  Taylor,  1  Mod.  9,  2  Kcb.  546; 
Bradsay  v.  Clyston,  Cio.  Car.  541. 


en.  HI.] 


DEFENCES. 


*202-*203 


it  has  been  *said  that  this  will  be  supposed,  where  the  contrary 
is  not  indicated,  (r) 

If  the  award  embrace  matters  not  included  in  the  submission 
it  is  fatal,  [s)  If,  however,  the  portion  of  the  award  which 
exceeds  the  submission  can  be  separated  from  the  rest  without 
affecting  the  merits  of  the  award,  it  may  be  rejected  as  surplus- 
age, and  the  rest  will  stand  ;  otherwise  the  whole  is  void,  (t)  If 
the  submission  specify  the  particulars  to  which  it  refers,  or  if, 
after  general  words  it  make  specific  exceptions,  its  words  must 
be  strictly  followed,  (u)  But  if  these  words  are  very  general, 
they  will  be  construed  liberally,  but  yet  *without  extending 
them   beyond  their  fair  meaning,  (v)     On  the  other  hand,  all 


()•)  Bird  V.  Bird,  I  Salk.  74.  But  see 
Wood  V.  AdcocI^,  7  Exch.  468,  9  Eng.  L. 
&  Eq.  524,  that  the  onus  of  showing  that 
a  payment  to  a  third  person  is  for  the  ben- 
efit of  a  party  to  the  submission,  lies  on 
the  party  seeking  to  enforce  the  award. 
And  sec'/H  re  Mackav,  2  A.  &  E.  356  ; 
Snook  V.  Ilellyer,  2  Chitty,  43. 

(s)  Brown  v.  Savage,  Cas.  tern.  Finch, 
485;  Warren  v.  Green,  id.  141  ;  Lynch  r. 
Clemence,  1  Lutw.  571  ;  Waters  ;■.  Bridge, 
Cro.  Jac.  639 ;  Hill  i:  Thorn,  2  Mod.  309  ; 
Dovley  v.  Burton,  Ld.  Rayni.  533  ;  Bonner 
V.  Liddcll,  1  Brod.  &  B.  80  ;  Culver  v. 
Ashley,  1 7  Pick.  98.  In  this  last  case  all  de- 
mands between  the  parties  were  submitted 
to  arbitration,  and  the  arbitrators  were  au- 
thorized, in  case  they  should  find  the  plain- 
tiff indebted  to  the  defendant,  to  estimate 
the  value  of  certain  chattels  of  the  plaintifi^, 
and  the  defendant  was  to  take  them  in 
part  payment.  The  arbitrators  found  the 
plaintiff'  indebted  to  a  less  amount  than 
the  value  of  the  chattels,  but,  instead  of 
appraising  so  much  only  of  the  chattels  as 
would  pay  the  debt,  they  awarded  that  the 
defendant  should  take  them  and  pay  the 
plaintiff"  in  money  the  excess  of  their 
value  beyond  the  amount  of  the  debt. 
Held,  that  the  arbitrators  had  exceeded 
their  authority  and  that  the  award  was 
invalid.  See  also,  Shearer  r.  Handy,  22 
Pick.  417  ;  In  re  Williams,  4  Dcnio,"l94  ; 
Thrasher  v.  Haynes,  2  N.  H.  429  ;  Pratt 
V.  Hackett,  6  Johns.  14. 

(t)  Taylor  v.  Nicolson,  1  Hen.  &  Mun. 
67  ;  Richards  v.  Brpckenbrouch,  1  Rand. 
449;  McBride  v.  Hagan,  1  Wend.  326; 
Clement  v.  Durgin,  1  Greenl.  300  ;  Phil- 
brick  V.  Preble,  18  Me.  255;  Banks  v. 
Adams,  23  id.  259;  Lyle  v.  Eodgers,  5 


Wheat.  394  ;  Walker  r.  Merrill,  13  Me. 
1 73  ;  Gordon  r.  Tucker,  6  Greenl.  247 ; 
Pope  I'.  Brett,  2  Saund.  293,  and  note  1  ; 
Addison  v.  Gray,  2  Wilson,  293 ;  Crom- 
well V.  Owings,  6  Harris  &  J.  10  ;  Martin 
V.  Williams,  13  Johns.  264;  Cox  r.  Jag- 
gcr,  2  Cowen,  638;  Gomez  v.  Garr,  6 
Wend.  583,  9  id.  649;  Brown  r.  War- 
nock,  5  Dana,  492.  For  it  is  well  settled 
that  an  award  may  be  good  in  part,  and 
bad  in  part.  Rixford  i'.  Nye,  20  Vt.  132; 
Fox  V.  Smith,  2  Wilson,  '267  ;  Addison 
V.  Gray,  id.  293.  The  objection  that  the 
award  does  not  follow  the  submission  is 
one  that  may  be  waived  by  the  parties, 
and  their  promise  to  abide  by  it,  or  other 
acquiescence,  ma}'  render  it  valid.  M'Cul- 
lough  V.  Myers,  Hardin,  197 ;  McDaniell  v. 
Bell,  3  Hayes,  258  ;  Culver  v.  Ashley,  19 
Pick.  300  ;"Frothingham  v.  Haley,  3  Mass. 
70;  Cairnes  v.  Bleecker,  12  Johns.  300. 
And  the  party  in  whose  favor  an  award  is 
made,  cannot  object  that  a  certain  particu- 
lar found  for  him  was  not  authorized  by 
the  submission.  Galvin  r.  Thompson,  13 
Me.  367.  A  fortiori  third  persons  can- 
not impeach  an  award  because  it  does  not 
follow  the  submission,  if  the  parties  them- 
selves do  not  object.  Penniman  v.  Pat- 
chin,  6  Vt.  325. 

(a)  Scott  V.  Barnes,  7  Penn.  St.  134. 

(v)  Munro  v.  Alaire,  2  Caines,  320.  A 
submission  of  all  demands  extends  to  real, 
as  well  as  personal  property.  Byers  v. 
Van  Deuscn,  5  Wend.  268.  A  submis- 
sion of  "all  business  of  whatever  kind  in 
dispute  between  the  parties,"  includes  a 
prosecution  for  an  assault  and  battery, 
pending.  Noble  v.  Peebles,  13  S.  &  R. 
319.  A  submission  of  "all  causes  of 
action,"  includes  a  charge  of  fraud  in  a 

[201] 


204* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


questions  submitted  must  be  decided,  unless  the  submission 
provides  otherwise ;  (w)  and  either  party  may  object  to  an 
award  that  it  omits  the  decision  of  some  question  submitted ; 
but  the  objection  is  invalid  if  it  be  shown  that  the  party  object- 
ing himself  withheld  that  question  from  the  arbitrators,  (x) 
Nor  is  it  necessary  that  the  award  embrace  all  the  topics  which 
might  be  considered  within  the  terms  of  a  general  submission. 
It  is  enough  if  it  pass  upon  those  questions  brought  before  the 
arbitrators,  and  they  are  so  far  distinct  and  independent  that 
the  omission  of  others  leaves  no  uncertainty  in  the  award.  (//) 
If  the  award  does  not  embrace  all  of  the  matters  within  the 
submission  *which  were  brought  to  the  notice  of  the  arbitrators, 
it  is  altogether  void,  (z) 


sale  of  certain  property.  De  Long  v. 
Stanton,  9  Johns.  38.  But  a  submission 
of  "all  unsettled  accounts"  tloes  not  au- 
thorize an  award  dividing  all  the  personal 
property  owned  in  common  by  the  two 
parties,  and  that  each  should  pay  one  half 
the  debts  contracted  by  either,  and  that 
one  should  pay  the  other  $2.')0.  Shearer 
V.  Handy,  22  Pick.  417.  Under  a  submis- 
sion of  all  demands,  prospective  damages 
on  a  bond  of  indemnity  then  outstanding 
may  be  taken  into  consideration.  Cheshire 
Bank  v.  Robinson,  2  N.  H.  126. 

(«')  Browne  v.  INIevcrell,  Dyer,  216,  b. ; 
Cockson  V.  Ogle,  I  Lutw.  550 ;  Freeman 
V.  Baspoulc,  2  Brownl.  &  G.  309  ;  Bean 
V.  Xewljurv,  1  Lev.  139;  Winter  v.  Mun- 
ton,  2  J.  B.' Moore,  729  ;  Richards  v.  Drink- 
er, 1  Ilalst.  307  ;  Jackson  v.  Ambler,  14 
Johns.  96 ;  Wright  v.  Wright,  5  Cowen, 
197.  If,  however,  after  the  making  of  the 
suliinission,  some  portion  of  the  claims 
cmliraced  in  it  be  v.'ithdrawn  from  tlie 
consideration  of  the  ai'bitrators,  by  an 
agreement  of  the  jiartics,  and  an  award 
be  published,  with  their  assent,  embracing 
only  llie  remaining  claims,  such  an  award 
will  be  valid.  Varney  r.  Brewster,  14  N. 
II.  49.  If  the  award  docs  not,  in  terms, 
decide  all  the  matters  submitted,  yet  if  the 
thing  awarded  necessarily  includes  all 
Other  things  and  matters  inentione(l  in  the 
submission,  this  is  sufHcicnt.  Smith  v. 
Demarest,  3  Ilalst.  195.  The  omission  of 
some  items  must  clearly  a])pcar.  I\l 'Kins- 
try  r.  Solomons,  2  .IoImh.  57,  13  id.  27  ; 
Jvlciue  V.  (,'atara,  2  (jallis.  Ol  ;  Karthaus 
V.  Ferrer,  1  I'et.  222.  See  further,  Win- 
ter V.  White,  3  J.  B.  Moore,  674,  1  Brod. 

[202] 


&  B.  350 ;  Afhelston  v.  Moon,  Comyns, 
547;  Plarris  i'.  Wilson,  1  Wend.  511; 
Kilburn  v.  Kilburn,  13  M.  &  W.  671. 

(x)  Page  I'.  Foster,  7  N.  II.  392.  And 
see  Smith  v.  Johnson,  15  East,  213  ;  Met- 
calf  V.  Ives,  Cas.  temp.  Hard.  369.  Un- 
der a  sealed  submission,  the  parties  cannot, 
at  the  hearing,  by  a  parol  agreement, 
withdraw  one  item  embraced  in  the  sub- 
mission.    Howard  v.  Cooper,  1  Hill,  44. 

(j/)  McXear  r.  Bailey,  18  I\Ie.  251  ; 
Pinkerton  v.  Caslon,  2  'B.  &  Aid.  704  ; 
Garland  v.  Noble,  1  J.  B.  Moore,  187; 
Biggs  V.  Hansel,  16  C.  B.  562.  Arbitra- 
tors are  presumed  to  have  acted  upon  all 
matters  submitted,  until  the  contrary  is 
shown.  Parsons  v.  Aklrich,  6  N.  II.  264  ; 
Emery  v.  Hitchcock,  12  AV'eud.  156.  But 
see  King  v.  Bowen,  8  M.  &  W.  625. 

(c)  In  Houston  v.  Pollard,  9  Met.  164, 
by  an  agreement  of  submission  to  arbitra- 
tion, the  arbitrators  were  to  determine  be- 
tween A  and  B,  1st,  whether  A  had  fin- 
ished a  certain  dwelling-house  according' 
to  his  contract  with  B,  and  what,  if  any 
thing,  remained  to  be  done  upon  the  house 
by  A,  and  how  much,  if  any  thing,  re- 
mained to  be  paid  by  B  to  A,  and  what 
damage,  if  any,  should  be  deducted  and 
allowed  to  B  for  the  failure  of  A  to  per- 
form the  agreement  to  build  the  house  ; 
2d,  to  determine  and  decide  what  amount, 
if  any,  remaiTicd  to  be  advanced  by  B  to 
A,  and  what  remained  to  be  done,  if  any 
thing,  by  A,  upon  a  certain  other  dwell- 
iug-honse,  to  linish  it,  coul'ornialily  to  an- 
other contract  between  him  and  B  ;  and 
the  parlies  agreed  to  do  and  jjcrform  to 
each  other  whatever  might  bo  ordered  by 


en.  III.] 


DEFENCES. 


*205 


In  the  next  ])lace,  an  award  must  be  certain;  that  is,  it  must 
be  so  expressed  that  no  reasonable  doubt  can  be  entertained 
as  to  the  meaning  of  the  arbitrators,  the  effect  of  the  award,  or 
the  rights  and  duties  of  the  parties  under  it.  (a)     *For  the  very 


the  arbitrators  to  be  done  by  them  respec- 
tively. The  arbitrators  awarded  that  B 
shoukl  pay  a  certain  sum  to  A  in  fulfil- 
ment of  the  contract  for  building  the  first- 
mentioned  house,  and  that  another  certain 
sum  remained  to  be  advanced  by  B  to  A, 
in  fulfilment  of  the  contract  for  building 
the  other  house.  TMd,  that  the  arbitra- 
tors had  not  decided  all  the  matters  sub- 
mitted to  them,  and  that  their  award  was 
therefore  bad.  See  also.  In  re  Rider  and 
Fisher,  3  Bing.  N.  C.  874,  where,  in  a 
dispute  upon  a  building  contract,  arbitra- 
tors were  to  award  on  alleged  defects  in 
the  building,  on  claims  for  extra  work,  and 
deductions  for  omissions,  and  to  ascertain 
what  balance,  if  any,  might  be  due  to  the 
builder.  An  award,  ordering  a  gross  sura 
to  be  paid  to  the  builder,  witiiout  any  de- 
cision on  the  alleged  defects,  was  held  ill. 
(a)  Hawkins  v.  Colclough,  1  Burr.  274  ; 
Schuyler  v.  Van  Dcr  Veer,  2  Caines,  2.35, 
an  excellent  case  on  this  subject.  And  it 
is  not  sufficient  mei-ely  that  the  parties 
and  the  arbitrators  could  understand  it. 
The  award  should  be  in  terms  so  clear 
and  intelligible  that  every  one  who  reads 
it  may  comprehend  it.  Gratz  v.  Gratz,  4 
Rawle,  411.  A  few  instances  of  a  fatal 
uncertainty  in  awards  are  given  below. 
Thus,  an  award  directing  one  party  to 
gi\-«  a  bond,  without  saying  in  what  sum. 
Samon's  case,  5  Rep.  77.  And  see  Ba- 
con v.  Dubarry,  1  Ld.  Raym.  246.  To 
give  "good  security"  for  a  certain  sum, 
without  saying  what  security.  Jackson  v. 
De  Long,  9  Johns.  43 ;  Thinne  i\  Rig- 
by,  Cro.  Jac.  314;  Tipping  v.  Smith,  2 
Su-a.  1024;  Duport  v.  Wildgoose,  2 
Bulstr.  260 ;  Barnet  v.  Gilson,  3  S.  &  R. 
340.  But  see  Peck  r.  AVakely,  2  McCord, 
279,  where  an  award  to  give  "  sufficient 
indemnity"  was  held  not  uncertain,  these 
words  being  construed  to  mean,  the  cfe- 
fendant's  own  personal  obligation.  So  to 
convey  the  right  of  one  party  to  said 
farm,  where  no  farm  had  been  mentioned. 
Brown  v.  Hankerson,  3  Cowen,  70;  or 
that  one  party  should  pay  £5,  and  other 
small  things.  Rudston  v.  Yates,  March, 
144  ;  or  much  as  should  be  due  in  con- 
science. AVatson  v.  "Watson,  Styles,  28  ; 
or  as  much  as  certain  land  should  be 
worth.     Titus  v.  Perkins,  Skinner,  248; 


or  as  much  as  a  cjuarter  of  malt  should  be 
worth.  Hurst  v.  Bambridge,  1  Roll.  Abr. 
tit.  Arb.  (Q.)  ])1.  7  ;  that  one  party  should 
give  up  a  certain  obligation,  dated  of  a 
given  date,  but  not  otherwise  identifying 
it.  Sheppard  v.  Stites,  2  Halst.  90.  And 
see  McKeen  v.  Allen,  2  Harrison,  506  ;  Be- 
dam  V.  Clerkson,  Ld.  Raym.  124.  Or  to 
give  up  "  several  books."  Cockson  i'. 
Ogle,  1  Lutw.  550 ;  or  an  award  of  three 
fourths  of  the  whole  land  purchased  of 
C.  r.,  to  be  taken  off  the  upjier  part  of 
said  land.  Duncan  v.  Duncan,  1  Ircd. 
466.  Contra,  of  an  award  that  one  party 
should  convey  to  the  other  all  the  lands 
he  held  by  a  certain  deed  from  A.  Whit- 
comb  V.  "Preston,  13  Vt.  53.  See  other 
instances  in  Clark  v.  Burt,  4  Cush.  396; 
Calvert  v.  Carter,  6  ]\Id.  135  ;  Thomas  v. 
Holier,  3  Ohio,  266;  Waite  v.  Barrv,  12 
Wend.  377  ;  Young  v.  Reuben,  1  Dall.'l  1 9  ; 
Hazen  v.  Addis,  2  Green,  333  ;  Hopcraft 
V.  Hickman,  2  Simons  &  S.  130;  Walsh 
V.  Gilmor,  3  Harris  &  J.  383;  Lyle  v. 
Rodgers,  5  Wheat.  394;  Stonehewer  v. 
Farrar,  9  Jur.  203  ;  Kendal  v.  Symonds, 
Exch.  1855, 30  Eng.  L.  &  Eq.  552 ";  Parker 
V.  Eggleston,  5  Blackf.  128  ;  McDonald  v. 
Bacon,  3  Scam.  428  ;  Callahan  v.  M'Al- 
exander,  1  Ala.  366  ;  Williams  ?•.  Wilson, 
9  Exch.  90.  In  Lincoln  r.  Whittenton 
Mills,  12  Met.  31,  an  oral  agreement  was 
made  by  L.,  a  land-ownei-,  and  the  owners 
of  mills,  who  flowed  his  lands,  to  submit 
to  referees  the  question,  what  damages  lie 
should  receive.  The  referees  made  a 
written  award,  "  that  the  Taunton  Manu- 
factnring  Compan}',  and  the  owners  of 
mills,  or  their  assigns,  shall  pay  to  L."  a 
certain  sum  annually,  "  so  long  as  said 
company  and  others  keep  up  their  dam, 
and  flow  as  heretofore ;  with  the  under- 
standing and  agreement,  that  if  said  com- 
pany and  others  shall  discontinue  their 
dam,  the  said  L.,  his  heirs  or  assigns, 
shall  be  entitled  to  such  damages  as  it 
appears  his  land  sustains  in  consequence 
of  former  flowing,  until  they  amve  at  their 
primitive  goodness."  The  words  "ac- 
cepted and  agreed  to  "  were  written  on  the 
award,  and  signed  by  L.,  and  by  "  C.  R. 
by  authority  of  the  flowers,"  and  L.  was 
paid,  for  several  years,  the  amount  men- 
tioned in  the  award ;  but  it  did  not  ap- 

[  203  ] 


206'' 


THE   LAAV   OF   CONTRACTS. 


[part  II. 


purpose  of  the  submission,  and  the  end  for  which  the  law  favors 
arbitration,  is  the  final  settlement  of  all  questions  *and  disputes; 
and  this  is  inconsistent  with  uncertainty.  But  this  certainty  is 
not  required  to  an  unreasonable  or  impracticable  degree  ;  it 
should  be  a  certainty  to  a  common  intent;  and  the  nature  of 
the  subject  should  be  considered ;  and  if  that  which  is  left  un- 
certain by  the  words  of  the  award,  can  be  made  perfectly  cer- 
tain by  a  reference  to  a  standard  which  the  award  presents, 
this  is  sufficient,  [b)     An  award  may  be  in  the  alternative,  (c) 


pear  by  whom  tlie  payment  was  made. 
C.  R.  was  not,  at  tlie  time  of  his  accept- 
ing the  award,  the  agent  of  the  Taunton 
Manufacturing  Company,  nor  appointed 
by  them  for  that  purpose.  The  said  com- 
pany afterwards  ceased  to  do  business, 
and  their  mills  passed  to  other  owners, 
who  continued  to  ilow  L.'s  h;nds,  but  re- 
fused to  pay  the  full  amount  of  damages 
awarded  by  the  referees,  and  offered  him 
a  less  amount.  L.  refused  to  receive  the 
amount  so  offered,  and  filed  a  complaint, 
in  common  form,  under  the  Rev.  Stats,  c. 
116,  praying  for  a  jury  to  estimate  the 
damages  caused  by  flowing  his  lands. 
Held,  that  the  award  was  void,  because  it 
was  neither  certain  nor  final ;  that  if  the 
award  had  been  valid,  it  would  not  have 
bound  the  respondents,  on  the  facts  of  the 
case  ;  and  that  L.  was  entitled  to  proceed 
on  his  complaint.  And  ]Vilde,  J.,  said  : 
"  This  case  turns  on  the  question  whether 
the  award  of  arbitrators,  relied  on  in  the 
defence,  is  valid  and  binding  on  the  par- 
tie?;  to  the  present  suit.  An  award  is  in 
the  nature  of  a  judgment,  and,  to  be  valid, 
must  be  certain  and  decisive  as  to  the 
matter  submitted,  so  that  it  shall  not  l)e  a 
cause  of  a  new  controversy.  Samon's 
case,  5  Co.  77 ;  Bac.  Abr.  Arbitrament  and 
Award,  E.  2.  And  altiiongh  an  award 
may  be  good  in  jiart,  and  in  part  void, 
yet  this  rule  a|)])lies  only  to  awards  in 
which  tlie  parts  of  tlie  award  arc  distinct 
and  independent  of  each  other.  So  an 
award  nniy  lie  conditional;  but  if  tlic  con- 
dition leads  to  a  new  contnjvei-s}',  the  award 
is  void.  According  to  tiiese  principles,  wc 
arc  of  o])inion  that  the  award  in  (piestion 
is  void,  as  being  vague  and  luiccrtain,  and 
not  final  as  to  the  matter  submitted  to  the 
arbitrators.     The  award  i.s  sullicientlv  cer- 


tain as  to  the  annual  payment  to  be  made 
by  the  owners  of  the  reservoir  dam  to  the 
complainant;  but  it  is  expressly  on  the 
understanding  and  agreement,  that  if  the 
Taunton  Manufactuiing  Comjiany  and 
others  shall  discontinue  said  dam,  the 
complainant,  his  heirs  and  assigns,  '  shall 
be  entitled  to  such  damage  as  it  appears 
his  lands  sustained  in  consequence  of 
former  flowing,  until  they  sliall  arrive  at 
their  primitive  goodness.'  It  is  clear,  we 
think,  by  the  part  of  the  award,  that  it  is 
not  final  and  certain  between  the  parties, 
but  that  the  matter  submitted  is  left  open 
to  a  future  controversy  on  the  contingency 
of  the  discontinuance  of  the  dam."  In 
Johnson  v.  Latham,  1  Prac.  Rep.  348,  4 
Eng.  L.  &  Eq.  203,  an  arbitrator  had  to 
decide  upon  the  depth  at  which  the  de- 
fendant was  entitled  to  keep  a  weir  which 
])enncd  back  the  water  of  a  river,  so  as  to 
interfere  with  the  plaintiff's  mill  Iiigher  up 
the  stream,  and  to  determine  all  manner 
of  rights  of  water  between  the  parties. 
The  arbitrator  awarded  that  the  defend- 
ant was  entitled  to  maintain  his  weir  to 
the  dejitli  of  fourteen  incites,  and  no  more, 
and  added  that  he  had  caused  marks  to  be 
placed,  which  marks  pointed  out  the  depth 
the  defendant  was  to  keep  his  weir,  and 
that  a  ]ilan  annexed  to  the  award  correctly 
defined  and  described  the  depth  of  the 
weir  and  the  marks  :  —  Held,  that  the 
award  sufiicicntly  pointed  out  the  depth 
of  the  weir,  and  was  sufiicicntly  precise, 
although  it  made  no  provision  for  the  case 
of  Hoods,  or  for  regulating  the  dejUh  of 
the  ])a(ldle  in  the  defendant's  weir,  by 
which  the  water  could  be  let  off.  And 
•see  I'iko  ik  Gage,  9  Foster,  401. 

{!>)  That  certainty,  to  a  common  intent 
is  sufficient,  sec  Wood  v.  Earle,  H  Ravvle, 


(r)  Oldficld  V.  Wilmcr,  1    Leon.   I4<);  ?-.    IVjepscut   Proprietors,    7  Mass.  399: 

Lcc  r.  Klkins,   12  Mod.  .')8.')  ;   Simmonds  Wharton    r.     King,    2    P..    &   Ad.    528; 

V.  Swainc,  I  Taunt.  549 ;  Commonwealth  Thornton  v.  Carson,  7  Crauch,  59G. 

[  204  ] 


CII.  III.] 


DEFENCES. 


'207 


If  it  be  that  one  party  shall  pay  the  other  a  certain  sum,  but  no 
time  of  payment  be  fixed,  the  award  is  not  uncertain,  because 
the  sura  awarded  becomes  payable  immediately,  or  within  a 
reasonable  time,  (d) 

In  the  next  place,  the  award  must  be  possible ;  (e)  for  an 
award  requiring  that  to  be  done  which  cannot  be  done,  is 
senseless  and  useless.  But  the  impossibility  which  vitiates  an 
award  is  one  which  belongs  to  the  nature  of  the  thing,  and  not 
to  the  accidental  disability  of  the  party  at  the  time.  (/)  Thus, 
if  he  be  ordered  to  pay  money  on  a  day  that  is  past,  this  is 
void  ;  (g-)  so  if  he  be  required  to  give  up  a  deed  which  he 
neither  has  nor  may  expect  to  have  ;  (A)  but  if  he  be  directed  to 
pay  money,  the  award  is  good,  although  he  has  no  money,  *for 
it  creates  a  valid  debt  against  him.  (i)  Nor  can  a  party  avoid 
an  award  on  the  ground  of  an  impossibility  created  by  himself, 
after  the  award,  or,  perhaps,  beforehand,  if  for  the  purpose  of 
evading  an  expected  award,  (j) 

This  impossibility  may  be  actual,  or  it  may  be  that  created 
by  law  ;  for  an  award  which  requires  that  a  party  should  do 
what  the  law  forbids  him  to  do,  is  void,  either  in  the  whole,  or 
for  so  much  as  is  thus  against  the  law,  if  that  can  be  severed 
from  the  rest,  (k) 

4    Hen.   &   Mun.  363;  Coxe   v.  Lundy, 
Coxe,  255. 

(d)  Freeman  v.  Baspoule,  2  Brownl. 
309 ;  Imlay  r.  Wikoff,  1  South.  U32 ; 
Blood  V.  Shine,  2  Fla.  127.  An  award  of 
"taxable  costs  "  to  be  paid  by  one  party 
is  not  void  for  uncertainty.  That  is 
certain  which  can  be  rendered  certain. 
Wright  V.  Smith,  19  Vt.  110. 

(e)  Colwel  V.  Child,  1  Ch.  Cas.  87  ; 
Kunckle  v.  Kunckle,  1  Dall.  364. 

(/)  1  Rol.  Abr.  tit.  Arb.  (B.),  pi.  16; 
and  see  Wharton  v.  King,  2  B.  &  Ad. 
528. 

(fj)  1  Rol.  Abr.  tit.  Arb.  (B.),  pi.  17. 

('/()  Lee  V.  Elkins,  12  Mod.  585. 

((■)  Brooke,  Abr.  tit.  Arb.  pi.  39;  1  Eol. 
Abr.  tit.  Arb.  (F.),  pi.  2. 

(/)  Com.  Dig.  tit.  Arb.  (E.  12). 

(k)  1  Rol.  Abr.  tit.  Arb.  (G.),  pi.  1. 
See  Alder  v.  Savill,  5  Taunt.  454  ;  May- 
bin  V.  Coulon,  4  Dall.  298;  Harris  v. 
Curnow,  2  Chittv,  594;  Turner  v.  Swain- 
son,  1  M.  &  W.  572. 

[205] 


44  ;  Brown  v.  Warnock,  5  Dana,  492 ; 
Case  I'.  Ferris,  2  Hill,  75 ;  Doolittle  v. 
Malcom,  8  Leigh,  608  ;  Coxe  v.  Gent,  1 
McMullan,  302;  1  Rol.  Abr.  tit.  Arb. 
(H.),  pi.  14  ;  Cargcy  v.  Aitcheson,  2  B.  & 
C.  170;  Doe  f/.  Williams  v.  Richardson, 
8  Taunt.  697  ;  Caymc  v.  Watts,  3  D.  & 
R.  224;  Grier  v.  Grier,  1  Dall.  173; 
Kingston  v.  Kincaid,  1  Wash.  C.  C.  448. 
Thus  an  award  to  pay  the  "  taxable  cost," 
is  sufficiently  certain.  Nichols  v.  Rensse- 
laer Mut.  Lis.  Co.  22  Wend.  125  ;  Macon 
V.  Crump,  1  Call,  575  ;  Brown  v.  War- 
nock, 5  Dana,  492.  So  to  pay  a  certain 
sum  in  90  days,  and  interest.  Skcels  v. 
Chickering,  7"  Met.  316.  See  Beale  v. 
Bcale.  Cro.  Car.  383 ;  Furnis  v.  Hallom, 
Barnes,  166;  Fox  v.  Smith,  2  Wilson, 
267;  Bigelow  v.  Maynard,  4  Cush.  317; 
Pearson  v.  Archbold,  11  M.  &  W.  477  ; 
Bourke  v.  Lloyd,  10  M.  &  W.  550  ;  Eng- 
land W.Davidson,  9  Dowl.  P.  C.  1052; 
Mortin  v.  Burge,  4  A.  &  E.  973;  Purdy 
V.  Delavan,  1  -Caines,  304  ;  Lutz  v.  Linthi- 
cum,  8  Pet.  165;  Brickhouse  v.  Hunter, 

VOL.  II.  18 


208^ 


THE   LAW   OF   CONTRACTS. 


[part  II. 


An  award  must  be  reasonable  ;  (l)  if  it  be  of  things  in  them- 
selves of  no  value  or  advantage  to  the  parties  or  out  of  all  pro- 
portion to  the  justice  and  requirements  of  the  case,  or  if  it  un- 
dertake to  determine  for  the  parties  what  they  should  determine 
for  themselves,  as  that  the  parties  should  intermarry,  it  is  void. 
It  is  not  unreasonable,  however,  merely  because  it  lays  a  bur- 
den on  one  party  only,  and  requires  nothing  of  the  other.  It 
used  to  be  said,  that  mutuality  was  essential  to  an  award,  (m) 
It  is  certain  now  that  this  mutuality  need  not  appear  upon  the 
face  of  the  award  ;  and  indeed  it  can  hardly  be  supposed  neces- 
sary at  all.  [n)  If  A  and  B  refer  only  a  *  claim  which  A  has  on 
B,  and  the  award  is  simply  that  B  pay  A  a  certain  sum  of 
money,  it  would  be  good,  but  it  would  have  no  element  of  mu- 
tuality that  did  not  belong  to  it  necessarily,  (o) 

Lastly,  the  award  must  be  final  and  coticlusive.  (p)      This 


(/)  See  1   Rol.  Abr.  tit.  Arb.  (B.),pl. 

12,  13  ;    Cooper  v.  ,  3    Ch.   Hep. 

76,  cited  in  1  Vern.  157  ;  Earl  v.  Stocker, 

2  Vern.  251  ;  Cavendish  v. ,  1  Ch. 

Cas.  279.  But  a  strong  case  of  unreason- 
ableness must  be  made  out  in  order  to  in- 
duce courts  to  set  aside  an  award  ;  since 
the  parties  made  choice  of  their  own  judge. 
See  Wood  v.  Griffith,  1  Swanst.  43; 
Brown  v.  Brown,  1  Vern.  157,2  Ch.  Cas. 
140  ;  Waller  I'.  King,  9  Mod.  63  ;  Hardy 
V.  Innes,  6  J.  B.  Moore,  574.  As  to  the 
consistency  required  in  an  award,  see 
Ames  V.  Millward,  2  J.  B.  Moore,  713. 

(w)  1  Kol.  Abr.  tit.  Arl)it.  (K).  And 
sec  (oribson  i\  Powell,  5  Smedes  &  M.  712  ; 
McKeen  v.  Oliphant,  3  Harrison,  442. 

(n)  The  doctrine  of  mutuality  is  not 
now  applied  in  tlic  strict  sense  in  which  it 
was  formerly  taken.  Horrel  v.  M'Ale.xan- 
dcr,  3  Hand.  94.  It  is  not  necessary  that 
the  satnc  acts  shoulil  be  done  by  cadi  party. 
MuTiro  '-.  Alaire,  2  Caines,  320  ;  Kuiicklc 
r.  Kuiickle,  1  Dall.  3G4.  The  ductriiieof 
mutuality  is  fully  expounded  in  I'unly  v. 
l^clavan,  I  Caines,  31.'),  by  Ktnl,  J.,  and 
in  Jones  v.  Boston  Mill  Corporation,  6 
I'ick.  148.  In  Onion  v.  l{obinson,  15 
Vt.  510,  (}.  and  W.  having  a  claim 
against  ]{.  for  money  received,  to  their 
use,  and  1{.  alleging  that  he  hail  paid  it  to 
().,  tliey  Ruhmittcd  the  matter  to  arbitra- 
tors with  authority  to  award  costs  and 
damages,  who  awarded  that  \l.  account 
to  O.  for  n  ccrlairi  sum,  in  (hiimiges  and 
costs,     in  a  suit  on  the  award  in  favor  of 

[  200  ] 


0.,  it  was  held  that  there  was  no  mutuali- 
ty in  the  submission  between  O.  and  R., 
and  that  neither  the  rights  nor  liabilities 
of  either,  were  affected  by  the  award. 
Held,  also,  that  the  submission  and  award, 
though  legally  invalid,  might  be  given  in 
evidence  under  a  declaration  setting  forth 
the  above  facts. 

(o)  Weed  v.  Ellis,  3  Caines,  255  ;  Gor- 
don V.  Tucker,  6  Greenl.  247 ;  Gaylord 

v.  Gaylord,  4  Day,  422 ;  v.  rainier, 

12  Mod.  234;  Horton  v.  Benson,  Free- 
man, 204  ;  Doolittle  v.  Malcom,  8  Leigh, 
608. 

ip)  See  Goode  v.  Waters,  20  Law  J. 
N.  s.  Ch.  72,  1  Eng.  L.  &  Eq.  181  ;  Wood 
V.  The  Companvof  Copper  ^liners,  15  C. 
B.  464,  28  Eng'  L.  &  Eq.  369;  Mays  v. 
Cannell,  15  C.  B.  107,  28  Eng.  L.  &  Eq. 
328 ;  Carnochan  v.  Christie,  1 1  Wheat.  446. 
An  award,  whicli,  after  disposing  of  the 
claims  of  saiiic  of  the  ])artics,  declared 
that  as  to  the  claims  of  certain  other  par- 
tics,  they  should  be  at  liberty  to  prosecute 
the  same,  cither  at  law  or  equity,  in  like 
manner  as  if  the  order  of  reference  had 
never  been  made,  is  not  fimil.  Turner  i\ 
Turner,  3  Uuss.  Ch.  494.  But  an  award 
directing  tlie  execution  of  mutual  and 
general  releases  is  (inal.  Bell  r.  (ii]ips,  2 
Ld.  Kaym.  1141;  Birks  v.  Trii)pet,  1 
Saund.  32  ;  Wharton  v.  King,  2  B.  &  Ad. 
528.  So  of  an  award  that  plaintilf  has  no 
good  cause  of  action.  Dibben  r.  Marquis 
of  Anglesca,  4  Tyrwii.  926;  M'Dcrmott 
V.  V.  S.  Ins.  Co.  3  S.  &  K.  004;  Craven 


CH.  III.] 


DEFENCES. 


*209 


necessity  springs  also  from  the  very  purpose  for  which  the  law 
favors  arbitration,  namely,  the  settlement  and  closing  of  dis- 
putes, (q)  But  here,  too,  as  on  other  points,  the  law  is  now 
more  rational  and  less  technical  than  it  was  formerly.  Thus, 
it  was  once  a  rule  that  an  award  of  nonsuit  was  not  *  good, 
because  not  final,  as  the  plaintiff  might  immediately  renew  his 
action  ;  (r)  but  this  would  hardly  be  held  now.  An  award  of 
discontinuance  of  a  suit  has  always  been  held  sufficient,  (.s*)  It 
is  not  a  valid  objection  to  an  award,  that  it  is  upon  a  condition, 


V.  Craven,  1  J.  B.  Moore,  403 ;  Jaekson 
V.  Yabsley,  5  B.  &  Aid.  849;  Angus  v. 
Bedford,  11  M.  &  W.  69. 

(q)  An  award  settling  the  costs  on  both 
sides,  without  saying  more,  is  final  and 
conclusive.  Buckland  i'.  Conway,  16 
Mass.  396 ;  Stickles  v.  Arnold,  1  Gray, 
418  ;  Tarquair  v.  Bedinger,  4  Yeatos, 
282 ;  Hartnell  ;;.  Hill,  Forest,  73.  An 
award  that  defendant  should  pay  costs, 
without  saving  to  whom,  is  not  uncertain. 
Baily  v.  Curling,  20  Law  J.  n.  s.  Q.  B. 
235,  4  Eng.  L.  &  Eq.  201  ;  and  see  Drew 
V.  Woolcock,  Bail  Court,  1854,  28  Eng. 
L.  &  Eq.  223.  In  Hancock  v.  Bcede,  15 
Jur.  1036,  6  Eng.  L.  &  Eq.  368,  H.  &  M. 
being  partners,  had  covered  wires  with 
gutta  percha  for  11.,  in  pursuance  of  a  con- 
tract. They  afterwards  assigned  the  part- 
nership business  to  C.  H.,  with  power  to 
him  to  take  proceedings  in  their  name  for 
the  recovery  of  debts  due  to  them,  to  en- 
force existing  contracts,  and  to  deal  in  re- 
spect thereof  as  they  themselves  might 
have  done.  C.  H.,  after  the  assignment, 
also  covered  wires  for  K.  on  his  own  ac- 
count, and  brought  two  actions  against 
him,  one  in  his  own  name,  the  other  in  the 
name  of  H.  &  M.  It  had  been  agreed  be- 
tween C.  H.  &  R.  to  refer  both  actions, 
and  all  matters  in  dift'erence,  as  well  be- 
tween H.  &  M.  and  R.  as  between  C.  H. 
and  R.,  to  arbitration  ;  whereupon  an  or- 
der of  reference  was  drawn  up,  and  an 
award  had  been  made: — Held,  that  the 
award  was  not  bad  for  want  of  tinality 
in  awarding  a  discontinuance  of  H.  &  M.'s 
action  without  determining  the  cause  of 
action,  as  it  appeared  that  the  discontin- 
uance had  been  entered  before  or  at  the 
time  of  making  the  order  of  reference, 
and  that  it  was  left  to  the  arbitrator  to 
decide  whether  the  discontinuance  should 
remain,  and  it  was  intended  that  he  should 
not  proceed  further  in  that  action.     And 


see  Nicholson  v.  Svkes,  9  Exch.  357,  25 
Eng.  L.  &  Eq.  490'.  —  Where  several  is- 
sues are  involved  in  the  pleadings,  and 
the  whole  case  is  referred,  the  costs  to 
abide  the  result,  it  ought  to  appear  that 
each  issue  was  disposed  of.  See  Pearson 
V.  Archbold,  11  M.  &  W.  477  ;  Bourke  v. 
Lloyd,  10  M.  &  W.  550  ;  Stonehewer  v. 
Farrer,  6  Q.  B.  730  ;  Phillips  v.  Higgins, 
20  Law  J.  N.  s.  Q.  B.  357,  5  Eng.  L.  & 
Eq.  295  ;■  Wilcox  v.  Wilcox,  4  Exch.  500  ; 
Kilburn  v.  Kilburn,  13  M.  &  W.  671. 
So  where  a  cause,  and  all  matters  in  dif- 
ference, are  referred,  the  costs  to  abide  the 
re^lt,  the  award  ought  to  distinguish  be- 
tween the  matters  in  the  cause  and  other 
matters  of  difference.  See  Mortin  v. 
Burge,  4  A.  &  E.  973. 

(r)  Knight  v.  Burton,  Salk.  75  ;  1  Eel. 
Abr.  tit.  Arb.  (L),  pi.  16;  Philips  v. 
Knightley,  1  Barnard.  463.  But  in  Mil- 
ler^^y.  Miller,  5  Binn.  62,  it  was  said  that 
arbitrators  had  no  power  to  award  a  non- 
suit. Nor  have  they  to  arrest  judgment, 
if  their  power  be  only  to  direct  how  a  ver- 
dict shall  be  entered.  Angus  v.  Bedford, 
11  M.  &  W.  69. 

(s)  Blanehard  v.  Lilley,  9  East,  497  ; 
Philips  V.  Knightley,  1  Barnard.  463  ; 
Linsey  v.  Ashton,  Godb.  255  ;  Ingram  i'. 
Webb,  1  Rolle,  362.  Or  that  plaintiff 
should  enter  a  retraxit.  1  Rol.  Abr.  tit. 
Arb.  (F.),  pi.  7,  (L),  pi.  18.  Or  that  no 
suit  should  be  brought  by  one  party 
against  the  other  on  a  certain  bond.  1 
Rol.  Abr.  tit.  Arb.  (0.),  pi.  7.  Or  that 
all  suits  then  pending  between  the  parties 
should  cease.  Squire  v.  Grevell,  6  Mod. 
33,  Ld.  Raym.  961,  Salk.  74.  Or  that  a 
chancery  suit  should  be  dismissed.  Knight 
V.  Burton,  6  Mod.  232,  Salk.  75.  See 
Purdy  V.  Delavan,  1  Caines,  304,  for  an 
able  statement  of  the  law  upon  this  point 
by  Mr.  Justice  Kent. 

[207] 


210* 


THE   LAW   OF   CONTRACTS. 


[part  IL 


if  the  condition  be  clear  and  certain,  consistent  with  the  rest  of 
the  award,  in  itself  reasonable,  and  such  as  to  cause  no  doubt 
whether  it  were  performed  or  not,  or  what  were  the  rights  or 
objections  de}3endent  upon  it.  (/) 

Any  delegation  or  reservation  of  their  authority  by  the  arbi- 
trators, which  would  have  the  effect  of  leaving  any  thing  to  the 
future  judgment  or  power  of  the  arbitrators,  would  vitiate  the 
award,  (u)  But  where  arbitrators  are  unable  to  decide  accu- 
rately upon  some  particular  poiitt,  requiring  some  technical 
knowledge,  they  may  refer  the  settlement  of  the  details  to  some 
third  person  having  such  knowledge,  the  arbitrators,  however, 
accurately  determining  the  principles  by  which  such  person  is 
to  be  governed,  (v) 

*An  award  may  be  open  to  any  or  all  of  these  objections  in 
part,  without  being  necessarily  void  in  the  whole.  So  much  of 
it  as  is  thus  faulty,  is  void;  but  if  this  can  be  severed  distinctly 
from  the  residue,  leaving  a  substantial,  definite,  and  unobjec- 
tionable award  behind,  this  may  be  done,  and  the  award  then 
will  take  effect.  (20)     It  is  therefore  void  in  the  whole  because 


(<)  Collet  V.  Podwell,  2  Kcblc,  670; 
Ivockill  I'.  Witherell,  2  Keble,  838-;  1 
Rol.  Abr.  tit.  Arb.  (II.),  pi.  8  ;  Purser  v. 
Prowd,  Cro.  Jac.  423.  An  award  tbat 
one  party  should  pay  the  other  a  ])artlcu- 
lar  debt,  in  case  it  was  not  collected  from 
another  source,  is  valid.  AVilliams  v. 
Williams,  1 1   Smedcs  &  M.  393. 

(h)  Archer  v.  Williamson,  2  Harris 
&  G.  02  ;  Levezey  v.  Gorgas,  4  Dall. 
71  ;  Lingood  v.  Eade,  2  Atlc.  .'iOl  ;  Emery 
V.  Emery,  Cro.  Eliz.  726 ;  Manser  v. 
Heaver,  3  B.  &  Ad.  295;  Tandy  v. 
Tandy,  9  Dowl.  P.  C.  1044,  5  Jur.*720. 
So  an  award  that  one  party  should 
put  certain  premises  in  good  i-epair,  to 
the  satisfaction  of  a  third  party,  has  been 
held  bad,  in  luto.  Tomlin  v.  Mayor,  &c., 
of  Fordwich,  .5  A.  &,  E.  147.  So  an 
award  that  A  siiouid  i)eg  B's  pardon,  in 
Kucii  form  as  H  should  appoint,  is  an  im- 
I)ro[)cr  dch'gation  of  authority.  Glover 
V.  IJarric,  I  Saik.  71,  2  Lutw.  i.'')97. 

(/;)  See  I'lmcry  v.  Wase,  5  Ves.  846; 
Anderson  r.  Wa'liace,  3  Clark  &  P.  26  ; 
Shar|)  /■.  Nowell,  6  C;.  15.  2.")3  ;  llopcraft 
V.  IlJiktMiiii,  2  Simons  &  S.  130;  Scale 
V.  Polhcr-ill,  8  Ucav.  361  ;  CJhurch  r. 
Koper,  1  ("li.  Ilcp.  140;  Liw^oodv.  Eade, 

[  208  J 


2  Atk.  501  ;  Cater  v.  Startute,  Styles, 
217;  Purnis  v.  llallom,  Barnes,  166; 
Winter  v.  Garlick,  Salk.  75,  6  Mod.  195  ; 
Worral  v.  Akworth,  2  Keble,  331  ;  Hun- 
ter V.  Bennison,  Hardres,  43 ;  Galloway 
V.  Webb,  Hardin,  318.  There  is  no  im- 
propriety in  arbitrators  employing  an  at- 
torney to  prepare  tiieir  award.  Nor  is 
there  necessarily  any  imjiropriety  in  em 
ploying  an  attorney  of  one  of  the  par- 
ties for  that  purpose.  Behrcn  v.  Bremer, 
C.  B.  1854,  30  Eng.  L.  &  Eq.  490. 

(w)  Tliis  is  a  jierfectly  well-settled  doc- 
trine in  the  law  of  arbitrament  and  award  ; 
too  well  settled  to  need  the  citation  of  au- 
thorities. A  few  itistances  of  tlie  appli- 
cation of  the  ])rinciplo  are  given  by  way 
of  illustration.  Thus,  in  an  award  that 
defendant  should  pay  plaintiff  a  certain 
sum,  and  also  t/ic  costs  ofiiiiiitration,  where 
the  arbitrator  had  no  |)owerto  award  costs, 
tbat  ]iart  is  bad,  but  the  rest  is  valid. 
Candler  v.  Puller,  Wilies,  62;  Pox  v. 
Smith,  2  Wilson,  267  ;  Addison  v.  Gray, 
2  Wilson,  293;  Gordon  v.  Tucker,  6 
(iret'ld.  247.  So  in  an  award  directing  a 
lease  for  life  to  one  party,  anil  a  remainder 
orcr  in  fee  to  a  l/iird  j)crsi)n,  the  last  part 
was   rejected,    and    the    first    supported. 


CII.  III.]  DEFENCES.  *211 

bad  in  part,  only  where  this  part  cannot  be  severed  from  the 
residue,  or  where,  if  it  be  severed  and  amended,  leaving  the  res- 
idue in  force,  one  of  the  parties  will  be  held  to  an  obligation 
imposed  upon  him,  but  deprived  of  the  advantage  or  recom- 
pense which  it  was  intended  that  he  should  have,  (x) 

Generally  in  the  construction  of  awards,  they  are  favored  and 
enforced,  wherever  this  can  properly  be  done.  If  the  intention 
of  the  arbitrators  can  be  ascertained  from  the  award  with  rea- 
sonable certainty,  and  this  intention  is  open  to  no  objection,  a 
very  liberal  construction  will  be  allowed  as  to  form,  or  rather, 
a  very  liberal  indulgence  as  to  matters  of  form  and  expres- 
sion. (?/) 

If  it  be  necessary  to  make  a  presumption  on  the  one  side  or 
the  other,  to  give  full  force  and  significance  to  an  award,  *th6 
court  will  incline  to  make  that  presumption  which  gives  effect 
to  the  award,  rather  than  one  which  avoids  it.  (z)  Thus,  it  has 
been  laid  down,  almost  as  a  rule,  and  certainly  as  a  maxim,  that 
where  the  words  of  an  award  extend  beyond  those  of  the  sub- 
mission, it  shall  be  understood  that  they  are  mere  surplusage, 
because  there  is  nothing  between  the  parties  more  than  was 
submitted ;  (a)  and  if  the  words  of  the  award  be  less  compre- 
hensive than  those  of  the  submission,  it  shall  be  understood 
that  what  is  omitted  was  not  controverted,  unless,  in  either 
case,  the  contrary  is  expressly  shown,  (b)     And  if  the  submis- 

Bretton  i\  Prat,  Cro.  Eliz.  758.     And  so  the  whole  is  clearly  void.     See  Pope  v. 

where  part  of  the  sum  awarded  to  one  Brett,  2  Saund.  292,  where  part  was  void 

party,  was  founded  upon  a  claim,  illegal  in  for  uncertainty ;  Winch  v.  Sanders,  Cro. 

its  nature,  the  other  portion  being  separa-  Jac.  584,  where  part  was  void  because  the 

ble.    Aubert  v.  Maze,  2  B.  &  P.  371.    So  arbitrator  had  reserved  to  himself  a  future 

if  an  award  directs  one  party  to  deliver  authority.      See   further    Storke    v.    De 

up  a  deed  not  in  his  possession,  or  pay  a  Smeth,  Willes,  66  ;   Johnson  v.  Wilson, 

sum  of  money,  the  last  is  good  and  die  Willes,  248;  Clement  u.  Durgin,  1  Greenl. 

first  bad,  and  the  award  is  not  invalid.  300. 

Lee  ?;.  Elkins,  12  Mod.  SS.'i;  Simmonds  w.         (ij)  Spear  v.   Hooper,   22   Pick.    144; 

Swaine,  1  Taunt.  549;  and  see  Wharton  Rixford  i-.  Nye,  20  Vt.  132;  Kendrick  v. 

V.  King,  2  B.  &  Ad.  528;  Thornton   v.  Turbell,    26   id.    416;  Ebert   v.  Ebert,  5 

Carson,  7  Cranch,  596 ;  Skillings  v.  Coo-  Md.  Ch.  353. 

lidge,  14  Mass.   43.     See  also  Ebert  v.        (~)  Armit  v.  Breame,   2  Ld.    Ravm. 

Ebert,  5  Md.  Ch.  353.  1076 ;  Booth  y.  Garnett,    2    Stra.    1082; 

(x)  If  the  void  part  of  the  award  was  Rose  v.  Spark,  Aleyn,  51. 
apparently  intended  by  the  arbitrators  as         (a)  Alder  v.  Savill,  5  Taunt.  454;  Sol- 

the  consideration,  in  whole  or  in  part,  of  omons  ?'.  M'Kinstry,  13  Johns.  27. 
that  portion  which  is  good,  or  if  the  void         (b)  Knight   i\   Burton,    6   Mod.   231  ; 

part  manifestly  affected  the  judgment  of  Middleton   v.    Weeks,    Cro.    Jac.    200; 

the  arbitrators,  in  respect  to  other  matters,  Vanvive'e  i;.  Vanvive'e,  Cro.   Eliz.   177; 

18  *  [  209  ] 


212*  THE   LAW   OF   CONTRACTS.  [PART  11. 

sion  be  in  the  most  general  terms,  and  the  award  equally  so, 
covering  "all  demands  and  questions,"  &c.,  between  the  parties, 
yet  either  party  may  show  that  a  particular  demand  either  did 
not  exist,  or  was  not  known  to  exist,  when  the  submission  was 
entered  into,  or  that  it  was  not  brought  before  the  notice  of  the 
arbitrators,  or  considered  by  them,  (c) 

There  are  certain  words  and  phrases  often  used  in  awards, 
which  seem  to  have  acquired  from  practice  a  legal  signification. 
Thus,  "  costs,"  will  mean  only  the  legal  costs  of  court ;  and 
even  "charges  and  expenses"  mean  no  more,  unless  more  be 
specially  indicated,  (d)  Such  at  least  is  the  English  authority; 
but  it  might,  perhaps,  be  expected  that  the  courts  of  this 
country  would  execute  the  intention  of  the  parties,  and  con- 
strue such  very  general  words  as  these  accordingly.  So  "re- 
leases'' mean  to  the  time  of  the  submission,  and  have  been  so 
construed  *even  when  the  words  used  were  "  of  all  claims  to 
the  time  of  the  award;"  for  the  arbitrators  had  no  authority  to 
go  beyond  this  limit,  (e)  And  if  by  an  award  money  is  to  be 
paid  in  satisfaction  of  a  debt,  this  implies  an  award  of  a  release 
on  the  other  side,  and  makes  this  a  condition  to  the  pay- 
ment. (/) 

There  is  no  especial  form  of  an  award  necessary  in  this  coun- 
try, (g-)  If  the  submission  requires  that  it  should  be  sealed,  it 
must  be  so.  (A)     And  if  the  submission  was  made  under  a 

Webb  »■.  Inf?ram,  Cro.  Jac.  664 ;  Lewis  gins  v.  Gordon,  3  Q.  B.  466 ;  Wright  v. 

V.  Burgess,  5  Gill,  129;  Roberts  v.  Ma-  Smith,  19  Vt.  110;  Safford  v.  Stevens,  2 

riett,  2  Saund.  188;  Cable  v.  llogers,  3  Wend.  158  ;  Barnes  r.  Parker,  8  Met.  134. 

Bulstr.  311;  Ward  r.  Uncorn,  Cro.  Car.  (e)  IMaking  r.  AVelstrop,  Freeni.  462; 

216;    Bussfield   v.   Bussfield,    Cro.    Jac.  White  r.  Holford,  Styles,  170;  Hooper  v. 

577.  Tierce,  12  Mod.  116;  Squire  v.  Grevell, 

(f.)  Kavee  v.   Farmer,   4   T.    R.    146;  6  Mod.  34  ;  Al)raliat  r.  Brandon,  10  Mod. 

Goligiitly  r.  Jellicoe,  id.  147,  n. ;  Thorpe  201  ;    Ilerrick  r.  llerrick,  2  Keble,  431; 

V.  Cooper,  .5  Bing.  12'J  ;  Seddon  r.  Tutop,  Robinet  v.  Cobb,  3  Lev.  188  ;  Nicholas  v. 

6  T.  R.  607 ;  Martin  r.  Thornton,  4  Esp.  Chapman,  3  id.  344. 

180.     But  sec  .Jones  v.  Bennett,  1  Bro.         (  /")  Mawe  v.  Samuel,  2  Rollc,  1  ; 

V.  C.  411  ;   Shelling  v.  Farmer,  1   Stra.  v.  Talnier,  12  Mod.  234;  Brown  v.  Sav- 

646;    Smiili  r.  Johnson,    15    Fast,   213;  age,  Cas.  temp.  Finch,  184. 

Dunn  V.  Murray,  9  B.  &  C.  780.  (.'/)  It  may  lie  under  seal,  or  in  writing, 

{(l)  Fox  (•.  Smith,  2  Wilson,  267.     And  or  oral,  if  tiierc  is  nothing  in  the  submis- 

an  award  of  costs  (/oicnillij,  is  understooil  sion  to  the  contrary.     Cable  v.  Rogers,  3 

to  be  costs  to  be  taxed  by  the  proper  oili-  Bulstr.  311;    Marsh   i'.    Backer,   20  Vt. 

cer.     See  Dudley  i;.  Neti'lefold,  Stra.  737.  198  ;  Gates  r.  Bromell,  Holt,  82. 

An  award  that  the  costs  be  jiaid  immedi-  (A)  Stanton  i\  Henry,  11   Johns.   133; 

atciy  by  one  parly,  means  that  they  arc  Rea  i'.  tiilibons,  7  S.  &  R.  204.     And  see 

payublc  upon  notice  to  sucli  jiarty.     Hog-  French  v.  IS'evv,  20  Barb.  481. 

[210] 


cir.  III.] 


DEFENCES. 


*213 


statute,  or  under  a  rule  of  court,  the  requirements  of  the  statute 
or  the  rule  should  be  followed.  But  even  here  mere  formal  in- 
accuracies would  seldom  be  permitted  to  vitiate  the  award.  If 
the  submission  contains  other  directions  or  conditions,  as  that 
it  should  be  delivered  to  the  parties  in  writing,  or  to  each  of  the 
parties,  such  directions  must  be  substantially  followed.  Thus, 
in  the  latter  case,  it  has  been  held  that  it  is  not  enough  that  a 
copy  be  delivered  to  one  of  the  parties  on  each  side,  but  each 
individual  party  must  have  one.  {i) 

*If  an  award  be  relied  on  in  defence,  the  execution  of  the 
submission  by  each  party,  or  the  agreement  and  promise  by 
each,  if  there  was  no  submission  in  writing,  must  of  course  be 
proved,  because  the  promise  of  the  one  party  is  the  consideration 
for  the  promise  of  the  others,  (j) 

An  award  is  so  far  like  a  judgment  that  an  attorney  has  been 
held  to  hav.e  a  lien  upon  it  for  his  fees ;  but  it  is  not  the  same 
thing  in  all  respects,  {k) 


(i)  Huntgate  v.  Mease,  Cro.  Eliz.  885. 
Sed  qiuETc.  See  Pratt  v.  Hackett,  6 
Johns.  14.  So,  if  by  the  submission,  the 
award  is  to  be  indorsed  on  the  submission, 
an  award  annexed  to  the  submission  by  a 
wafer,  is  not  valid.  Montague  v.  Smith, 
1.3  Mass.  396.  And  in  Wade  r.  Dowling, 
4  Ellis  &  B.  44,  28  Eng.  L.  &  Eq.  104, 
it  was  held  that  where  the  submission  re- 
quired that  the  award  should  be  made  by 
more  than  one  arbitrator,  the  award  must 
be  the  joint  act  of  the  arbitrators  and  ex- 
ecuted in  the  presence  of  each  other.  See 
also,  Henderson  v.  Buckley,  14  B.  Mon. 
294.  But  this  seems  too  much  like  for- 
saking the  substance,  and  clinging  to  the 
shadow.  Perhaps  the  fact  proved  in  that 
case,  that  the  arbitrators  by  mistake  an- 
nexed the  wrong  paper  to  the  submission, 
was  the  real  cause  of  the  decision.  If  the 
submission  require  the  award  to  be  at- 
tested by  witnesses,  such  attestation  is 
necessary,  and  the  submission  may  be  re- 
voked at  any  time  before  such  attestation, 
although  the  arbitrators  have  done  all 
their  duty.  Bloomer  v.  Sherman,  5  Paige, 
575  ;  see  Newman  v.  Labeaune,  9  Mo. 
30.  —  If  by  the  suimiission  the  award 
must  be  ready  for  delivery  at  a  day  cer- 
tain, the  award  is  complete,  if  it  be  in  fact 
ready  on  that  day,  although  not  delivered, 
and  although  some  accident  should  occur, 


by  which  it  should  never  be  delivered  at 
all.  Brown  v.  Vawser,  4  East,  584  ;  and 
see  Henfree  v.  Bromley,  6  East,  309  ; 
Macarthur  v.  Campbell, "5  B.  &  Ad.  518. 
In  Brooke  v.  Mitchell,  6  M.  .&  W.  473, 
where  an  order  of  reference  required  that 
the  arbitrator  should  make  and  publish  his 
award  in  writing,  ready  to  be  delivered  to 
the  parties,  or  such  of  them  as  should  re- 
quire the  same,  on  or  before  a  certain  day, 
it  was  held  that  the  award  was  "  published 
and  ready  to  be  delivcied,"  within  the 
meaning  of  the  order,  when  it  was  exe- 
cuted by  the  arbitrator  in  the  presence  of, 
and  attested  by  witnesses,  and  that  it 
could  not  be  set  aside,  although  the  plain- 
tiff' died  on  the  following  day,  and  before 
he  had  notice  that  the  award  was  ready. 
In  Sellick  v.  Addams,  15  Johns.  197,  it 
was  held  that  where  sworn  copies  of  an 
award  are  delivered  to  the  parties  by  the 
arbitrators,  and  received  without  objection, 
this  is  a  waiver  of  their  right  to  receive 
the  original  award. 

(7)  Antram  v.  Chace,  15  East,  209; 
Houghton  V.  Houghton,  37  Me.  72. 

(/.)  Ormerod  v.  Tate,  1  East,  464; 
Cowell  r.  Betteley,  4  Moore  &  S.  265, 
s.  c.  not  as  well  reported  upon  this  point  in 
10  Bing.  432.  But  see  Dunn  v.  West,  10 
C.  B.  420,  1  Eng.  L.  &  Eq.  325  ;  Brearey 
V.  Kemp,  Bail  Court,  1855,  32  Eng.  L.  & 

[211] 


213- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


It  may  happen,  where  an  award  is  offered  in  defence,  or  as 
the  ground  of  an  action,  that  it  is  open  to  no  objection  what- 
ever for  any  thing  which  it  contains  or  which  it  omits ;  and  yet 
it  may  be  set  aside  for  impropriety  or  irregularity  in  the  con- 
duct of  the  arbitrators,  or  in  the  proceedings  before  them. 
Awards  are  thus  set  aside  if  "  procured  by  corruption  or  un- 
due means,"  as  is  said  in  that  stat.  9  and  10  Wm.  3,  ch.  15, 
which  is  held  as  only  declaratory  of  the  law  as  it  was  before. 
This  rule  rests,  indeed,  on  the  common  principle  that  fraud 
vitiates  and  avoids  every  transaction.  So  too,  it  may  well  be 
set  aside  if  it  be  apparent  on  its  face  that  the  arbitrator  has 
made  a  material  mistake  of  fact  or  of  law.  (/)  It  must,  how- 
ever, be  a  strong  case  in  which  the  court  would  receive  evidence 
of  a  mistake,  either  in  fact  or  in  law,  which  did  not  appear  in 
the  award,  and  was  not  supposed  to  spring  from,  or  indicate 
corruption,  and  was  not  made  out  to  the  arbitrator's  satisfac- 
tion, (m)      And  while  an  award  obtained  by  fraud   in  either 


Eq.  147.  See  also,  Collins  v.  Powell,  2 
T.  R.  756,  that  there  is  a  difference  be- 
tween money  awarded,  and  money  re- 
covered by  a  judgment. 

(/)  See  Aubert  v.  Maze,  2  B.  &  P.  371  ; 
Pringle  v.  M'Clenachan,  1  Dall.  487 ; 
Nance  i\  Thomi)Son,  1  Sneed,  321. 

(m)  Tliis  subject  was  very  fully  consid- 
ered in  the  Boston  Water  Power  Co.  v. 
Gray,  6  Met.  131.  From  the  able  opinion 
of  J^haw,  C.  J.,  we  quote  the  following : 
"  It  is  clearly  settled  that  an  award  is 
prima  fiicie  binding  upon  the  ])artics,  and 
the  burden  of  proof  is  upon  the  party  who 
would  avoid  it.  In  general,  arbitrators 
have  full  power  to  decide  u]ion  (piestions 
of  law  and  fact,  whicli  directly  or  inciden- 
tally arise  in  considering  and  deciding  the 
questions  embraced  in  t!ie  submission. 
As  incident  to  the  decision  of  the  (pies- 
tions of  fact,  they  have  power  to  decide 
all  (piestions  as  to  the  admission  and  re- 
jection of  evidence,  as  well  as  the  credit 
due  to  evidence,  and  the  inferences  of  fact 
to  l)C  drawn  from  it.  So,  when  not  lim- 
ited by  the,  terms  of  the  submission,  they 
liavc  aiitliority  to  ilccidt;  (piestions  of  law, 
necessary  to  the  decision  of  tlie  matters 
Kubmitted  ;  because  they  are  judges  of  the 
jmrtics'own  choosing.  Their  decision  upon 
matters  of  fact  and  law,  thus  acting  witli- 
in  the  sco|)<'  of  their  authority,  is  conclu- 
sive, ujton  the  same  ]iriii(iplc  that  a  linal 

[212] 


judgment  of  a  court  of  last  resort  is  con- 
clusive ;  which  is,  that  the  party  against 
whom  it  is  rendered  can  no  longer  be 
heard  to  question  it.  It  is  within  the  prin- 
ciple of  7-es  judicata  ;  it  is  the  final  judg- 
ment for  that  case,  and  between  those  par- 
ties. It  is  amongst  the  rudiments  of  the 
law,  that  a  party  cannot,  when  a  judgment 
is  relied  on  to  support  or  to  bar  an  action, 
avoid  the  effect  of  it  by  proving,  even  if 
he  could  prove  to  perfect  demonstration, 
that  there  was  a  mistake  of  the  facts  or  of 
the  law.  But  this  general  rule  is  to  be  taken 
with  some  exce])tions  and  limitations,  aris- 
ing either  from  the  submission,  or  from 
the  award  itself,  or  from  matter  distinct 
from  either.  If  the  submission  be  of  a 
certain  controversy,  expressing  that  it  is 
to  be  decided  conformably  to  the  princi- 
ples of  law,  then  both  parties  procee(l  upon 
the  assumption  that  their  case  is  to  be  de- 
cided by  the  true  rules  of  law,  which  are 
presumed  to  be  known  to  the  arbitrators, 
who  are  then  only  to  iiujuire  into  the  facts, 
and  a])])ly  the  rules  of  law  to  tliem,  and 
decide  accordingly.  Then  if  it  appears  by 
the  award,  to  a  court  of  ct)nipeteiit  juiis- 
dielion,  that  the  arbitrators  have  decided 
contrary  to  law,  of  which  the  judgment  of 
such  a  court,  when  the  parties  have  not 
submitted  to  another  tribunal,  is  the  stand- 
ard, the  necessary  couelusion  is,  tliat  the 
arbitrators  have  mistaken  the  law,  which 


en  III.] 


DEFENCES. 


-213 


party,  would   undoubtedly  be  set  aside,  it  lias  been  held  that 
a  fraudulent  representation  to  an  arbitrator  by  means  of  which 


they  were  presumed  to  understand ;  the 
decision  is  not  within  the  scope  of  their 
autiiority,  as  determined  by  the  submis- 
sion, and  is  for  tliat  reason  void.  But 
when  the  parties  iiave  cxjircssiy  or  by 
reasona1)Ic  implication,  submitted  tiic  ques- 
tions of  hiw,  as  well  as  the  questions  of 
fact,  arising  out  of  the  matter  of  contro- 
versy, the  decision  of  the  arbitrators  on 
both  subjects  is  final.  It  is  upon  the  prin- 
ciple of  res  judicata,  on  the  ground  that 
the  matter  has  been  adjudged  by  a  tribu- 
nal wiiich  the  parties  have  agreed  to  make 
final,  and  a  tribunal  of  last  resort  for 
that  controversy ;  and  tiiercfore  it  would 
be  as  contrary  to  principle,  for  a  court  of 
law  or  equity  to  rcjudge  the  same  question, 
as  for  an  inferior  court  to  rcjudge  the  de- 
cision of  a  superior,  or  for  one  court  to 
overrule  the  judgment  of  anotlier,  where 
the  law  has  not  given  an  appellate  juris- 
diction, or  a  revising  power  acting  directly 
upon  the  judgment  alleged  to  be  errone- 
ous. —  It  has  sometimes  been  made  a 
question  whether  the  court  will  not  set 
aside  an  award,  on  the  ground  of  mistake 
of  tlic  law,  when  the  arbitrator  is  not  a 
professional  man,  and  decline  inquiry  into 
such  mistake,  when  he  was  understood, 
from  his  profession,  to  lie  well  acquainted 
with  the  law.  Some  of  the  earlier  cases 
may  have  countenanced  this  distinction. 
But  the  prolnibility  is,  that  this  distinction 
was  taken  rather  liy  way  of  instance  to 
illustrate  the  position,  that  when  the  par- 
ties intended  to  submit  the  questions  of 
law  as  well  as  of  fact,  the  award  should 
be  final,  but  otherwise  not ;  which  we  take 
to  be  the  true  principle.  But  we  think 
the  more  modern  cases  adojit  the  princi- 
ple, that  inasmuch  as  a  judicial  decision 
upon  a  question  of  right,  by  whatever 
forum  it  is  made,  must  almost  necessarily 
involve  an  application  of  certain  rules  of 
law  to  a  particular  statement  of  facts,  and 
as  the  great  purpose  of  a  sultmission  to 
arbitration  usuallv  is  to  obtain  a  speedy 
determination  of  the  controversy,  a  suIj- 
mission  to  arbitration  embraces  the  power 
to  decide  questions  of  law,  unless  that  pre- 
sumption is  rebutted  by  some  exception  or 
limitation  in  the  submission.  We  are  not 
aware  that  there  is  any  thing  contrary  to 
the  policy  of  the  law  in  permitting  parties 
thus  to  substitute  a  domestic  forum  for  the 
courts  of  law,  for  anj'  good  reason  satis- 
factory to  themselves;  and  having  done 


so,  there  is  no  hardship  in  holding  them 
bound  by  the  result.  Volenti  non  fit  Inju- 
ria. On  the  contrary,  there  are  obvious 
cases  in  which  it  is  highly  beneficial. 
There  are  many  cases  where  the  parties 
have  an  election  of  forum  ;  sometimes  it 
is  allowed  to  the  plaintiff,  and  sometimes 
to  the  defendant.  It  may  depend  upon 
the  amount  or  the  nature  of  the  contro- 
versy, or  the  personal  relations  of  one  or 
other  of  the  parties.  As  familiar  instan- 
ces in  our  own  practice,  one  may  elect  to 
proceed  in  the  courts  of  the  United  States, 
or  in  a  State  court ;  at  law  or  in  equity  ; 
in  a  higher  or  lower  court.  In  either  case, 
a  judgment  in  one  is,  in  general,  conclu- 
sive against  proceeding  in  another.  A 
very  common  instance  of  making  a  judg- 
ment conclusive  .by  consent,  is  where  a 
party  agrees  in  consideration  of  delay,  or 
some  advantage  to  himself,  to  make  the 
judgment  of  the  court  of  common  pleas 
conclusive,  where,  but  for  such  consent, 
he  would  have  a  right  to  the  judgment  of 
the  higher  court.  But  where  the  whole 
matter  of  law  and  fact  is  submitted,  it  may 
be  open  for  the  court  to  inquire  into  a 
mistake  of  law,  arising  from  matter  appar- 
ent on  the  award  itself;  as  where  the  ar- 
bitrator has,  in  his  award,  raised  the  ques- 
tion of  law,  and  made  his  award  in  the 
alternative,  without  expressing  his  own 
opinion  ;  or  what  is  perhajis  more  com- 
mon, where  the  arbitrator  expresses  his 
opinion,  and  conformably  to  that  opinion, 
finds  in  favor  of  one  of  the  parties  ;  but 
if  the  law  is  otherwise,  in  the  case  stated, 
then  his  award  is  to  be  for  the  other  party. 
In  such  case,  there  is  no  doubt,  the  court 
will  consider  the  award  conclusive  as  to 
the  fact,  and  decide  the  question  of  law 
thus  presented.  Another  case,  somewhat 
analogous,  is  where  it  is  manifest,  upon 
the  award  itself,  that  the  arbitrator  in- 
tended to  decide  according  to  law,  but  has 
mistaken  the  law.  Then  it  is  set  aside, 
because  it  is  manifest  that  the  result  does 
not  conform  to  the  real  judgment  of  the 
arbitrator.  For  then,  wliatever  his  author- 
ity was  to  decide  the  questions  of  law,  if 
controverted,  according  to  his  own  judg- 
ment, the  case  supposes  that  he  intended 
to  decide  as  a  court  of  law  would  decide ; 
and  therefore,  if  such  decision  would  be 
otherwise,  it  follows  that  he  intended  to 
decide  the  other  way."  And  see  Burchell 
V.   Marsh,    17   How.  344.     In   this    ease 

[213] 


2U*-215* 


THE   LAW   OF    CONTRACTS. 


[part  II. 


an  award  was  obtained,  will  not  be  the  ground  of  an  action  by 
the  injured  party.  ())ia) 

It  has  been  permitted  to  the  *arbitrators  to  state  a  mistake  of 
fact,  which  they  afterwards  discovered;  but  it  would  seem  that 
the  court  cannot  then  *rectify  the  award,  or  do  any  thing  but 
set  it  aside  if  the  error  be  material,  or,  perhaps,  in  some  cases, 
refer  the  case  back  again  to  the  arbitrators,  (w) 


Mr.  Justice  Gn'er  said  :  "  Arbitrators  are 
judges  chosen  by  tlie  parties  to  decide  the 
matters  submitted  to  them,  finally  and 
without  appeal.  As  a  mode  of  settling 
disputes,  it  should  receive  every  encour- 
agement from  courts  of  equity.  If  the 
award  is  within  the  submission,  and  con- 
tains the  honest  decision  of  the  arbitra- 
tors, after  a  full  and  fair  hearing  of  the 
parties,  a  court  of  equity  will  not  set  it 
aside  for  error,  either  in  law  or  fact.  A 
contrary  course  would  be  a  substitution  of 
the  judgment  of  the  chancellor  in  place  of 
the  judges  chosen  by  the  parties,  and 
would  make  an  award  the  commence- 
ment, not  the  end,  of  litigation."  See 
also,  Jones  v.  Boston  Mill  Corporation,  6 
Pick.  148;  Fuller  v.  Fenwick,  3  C.  B. 
705  ;  Faviell  v.  Eastern  Counties  Railway 
Co.  2  Exch.  344;  Kent  v.  Elstob,  3  East, 
18;  Kleine  v.  Catara,  2  Gallis.  61  ;  Greea- 
ough  V.  Rolfe,  4  N.  H.  357 ;  Johns  v.  Ste- 
vens, 3  Vt.  308 ;  Bliss  v.  Robbins,  6  id. 
.')29;  Root  V.  Renwick,  15  111.  461; 
Wohlenberg  i\  Lageman,  6  Taunt.  254 ; 
Prentice  v.  Reed,  1  Taunt.  152  ;  In  re 
Badger,  2  B.  &  Aid.  691  ;  Bouttilier  v. 
Thick,  1  Dowl.  &  R.  3G6  ;  Ricliardson  v. 
Kourse,  3  B.  &  Aid.  237 ;  Delvcr  v. 
Barnes,  1  Taunt.  48 ;  Cramp  v.  Symoiis, 
1  Bing.  104;  Anonvmous,  1  Ciiittv,  674. 

{ma}  Blagraver.  B.W.  Co.  1  II.&N.369. 

{)))  As  to  the  effect  of  a  mistake  in  fact, 
see  an  ehihorate  review  of  tlie  authorities 
by  Cli.  Kt-nt,  in  Undurliill  i\  Van  Cort- 
landt,  2  Johns.  Ch.  339.  So  also.  The 
Boston  Water  Power  Co.  v.  Gray,  6  Met. 
131,  cited  su/ira,  wJierc  Shaw,  C.  J.,  said: 
"  Anotlier  ground  for  setting  aside  the 
award  is  a  mistake  of  fact,  ap])arcnt  upon 
tlie  award  il-^clC;  and  this  is  held  to  inval- 
idate the  award,  upon  tlic  ])riiu'ii)le  stated 
in  the  [)receding  proposition,  tiuit  the 
award  docis  not  conform  to  tlie  judgment 
of  the  arliitrators,  and  the  mistake,  appar- 
ent in  Home  material  anil  important  jiar- 
ticuhir,  shows  tliat  the  result  is  not  the 
true  jiidgiri'Mit  of  the  arbitrators.  The 
mistake,  ihricf'ori;,  must  be  of  such  a  na- 

[^11] 


ture,  so  affecting  the  principles  upon 
which  the  awaixl  is  based,  that  if  it  had 
been  seasonably  known  and  disclosed  to 
the  arbitrators,  if  the  truth  had  been  known 
and  understood  by  them,  they  would  prob- 
abl}'  have  come  to  a  different  result.  A 
familiar  instance  of  this  class  of  mistakes, 
is  an  obvious  error  in  computation,  by 
which  tlie  apparent  result,  in  sums  or 
times,  or  other  things  of  like  kind,  is 
manifestly  erroneous.  In  sucli  case  it  is 
clear  that  the  result  stated  is  not  that  in- 
tended ;  it  does  not  express  the  real  judg- 
ment of  the  arbitrators.  The  class  of 
cases  in  which  the  court  will  set  aside  au 
award,  upon  matter  not  arising  out  of  the 
submission  or  award,  is,  where  there  is 
some  corruption,  partiality,  or  misconduct 
on  the  part  of  the  arbitrators,  or  some 
fraud  or  imposition  on  tlie  part  of  the  par- 
ty attempting  to  set  up  the  award,  by 
means  of  which  the  arbitrators  were  de- 
ceived or  misled.  In  neither  of  these  cases 
is  the  result  the  deliberate  and  fair  judg- 
ment of  the  judges  chosen  by  the  parties  ; 
the  former  is  the  result  of  prejudice  unin- 
fluenced by  law  and  fact ;  tiie  latter  may 
be  a  true  judgment,  but  upon  a  case  false- 
ly imposed  on  them  by  the  fraud  of  a 
party.  Under  this  class  of  cases,  where 
the  award  may  be  set  aside,  upon  matter 
not  arising  out  of  the  submission  or  award, 
another  was  stated  at  tlie  trial ;  that  is, 
wliere  the  arliitrators  make  a  mistake  in 
matter  of  fact  by  which  they  are  led  to  a 
false  result.  This  would  not  extend  to  a 
case  where  the  arbitrators  come  to  a  con- 
clusion of  fact  erroneously,  njjon  evidence 
submitted  to  and  considered  by  them,  al- 
though tlie  jiarty  impeaching  the  award 
should  pro|i(ise  to  demonstrate  tliat  tlio 
infert'iice  was  wrong.  Tills  would  be  the 
result  of  reasoning  and  judgment,  upon 
facts  and  circumstances  known  and  under- 
stood ;  tlicrefore  a  result  wiiich,  upon  the 
jirincipics  stated,  must  be  dceme<l  conclu- 
sive. IJiit  the  mistake  must  be  of  some 
fact,  inadvertently  assumed  and  believed, 
which  can  now  be  shown  not  to  have  been 


en.  III.] 


DEFENCES. 


*216 


If  the  submission  authorize  the  *  arbitrators  to  refer  questions 
of  law  to  the  court,  this  may  be  done  ;  otherwise,  such  reference 
would,  in  general,  either  be  itself  declared  void,  or  would  have 
the  effect  of  avoiding  the  award,  because  it  prevented  it  from 
being  certain,  or  final  and  conclusive,  (o)  The  arbitrators,  by  a 
general  submission,  are  required  to  determine  the  law ;  and  only 
a  decided  and  important  mistake  could  be  shown  and  have  the 
effect  of  defeating  the  award ;  it  has  been  said  that  only  a  mis- 
take amounting  to  a  perverse  misconstruction  of  the  law  would 
have  this  effect ;  certainly  a  very  great  power  is  given  to  arbi- 
trators in  this  respect,  and  it  has  even  been  expressly  declared 
that  they  have  not  only  all  the  powers  of  equity  as  well  as  of 
law,  but  may  do  what  no  court  could  do,  in  giving  relief  or 
doing  justice.  (/?) 


so  assumed  ;  and  the  principal  illustra- 
tion was  that  of  using  a  false  weight  or 
measure,  believing  it  to  be  correct.  Sup- 
pose, as  a  fiu'ther  illustration,  that  a  com- 
pass had  been  used  to  ascertain  the  bear- 
ings of  points,  and  it  should  be  afterwards 
found,  that  by  accident,  or  the  fraud  of  a 
part)',  a  magnet  had  been  so  placed  as  to 
disturb  the  action  of  the  needle,  and  this 
wholly  unknown  to  the  arbitrators ;  it  is 
not  a  fact,  or  the  inference  of  a  fact,  upon 
which  any  judgment  or  skill  had  been  ex- 
ercised, but  a  pure  mistake,  by  which  their 
judgment,  as  well  as  the  needle,  had  been 
swerved  from  the  true  direction,  which  it 
would  have  taken  had  it  followed  the  true 
law  understood  to  govern  it.  One  test  of 
such  a  mistake  is,  that  it  is  of  such  a  kind, 
and  so  obvious,  that  when  brought  to  the 
notice  of  the  arbitrators,  it  would  induce 
them  to  alter  the  result  to  which  they  had 
come  in  the  particular  specified.  It  is  not 
to  be  understood  that  such  mistake  can  be 
proved  only  by  the  testimony  or  by  the 
admission  of  the  arbitrators.  They  may, 
from  various  causes,  be  unable  to  testify, 
or  may  not  be  able  to  recollect  the  facts 
and  circumstances  sufficiently.  It  is  not, 
therefore,  as  matter  of  law,  confined  to  a 
case  of  mistake  admitted  or  proved  by 
the  arbitrators ;  but  it  must  be  of  a  fact 
upon  which  the  judgment  of  the  arbi- 
trators has  not  passed  as  a  part  of  their 
judicial  investigation,  and  one  of  such  a 
nature,  and  so  proved,  as  to  lead  to  a 
reasonable  belief  that  they  were  misled 
and  deceived  by  it,  and  that  if  they  had 


known  the  truth,  they  would  have  come 
to  a  different  i-esnlt." 

(o)  Sutton  V.  Horn,  7  S.  &  R.  228. 

Ip)  The  power  of  arbitrators  to  disre- 
gard strict  principles  of  law,  and  to  decide 
upon  principles  of  equity  and  good  con- 
science, was  warmly  claimed  by  Slori/,  J., 
in  Klcine  r.  Catara,  2  Gallis.  61  :  "  Un- 
der a  general  submission,"  said  he,  "  the 
arbitrators  have  rightfully  a  power  to 
decide  on  the  law  and  the  fact ;  and  an 
error  in  either  respect  ought  not  to  be  the 
subject  of  complaint  by  cither  party,  for  it 
is  their  own  choice  to  be  concluded  by  the 
judgment  of  the  arbitrators.  Besides,  un- 
der such  a  general  submission,  the  reason- 
able rule  seems  to  be,  that  the  referees  are 
not  bound  to  award  upon  the  mere  dry 
principles  of  law  applicable  to  the  case 
before  them.  They  may  decide  upon  prin- 
ciples of  efjuity  and  good  conscience,  and 
may  make  their  award  ex  aquo  et  bono. 
We  hold,  in  this  respect,  the  doctrine  of 
Lord  Talbot  in  the  South  Sea  Company 
V.  Bumbstead,  of  Lord  Tlmrlow  in  Knox 
V.  Simonds,  of  the  King's  Bench  in  Ains- 
lie  V.  Goff,  and  of  the  Common  Pleas  in 
Dclvcr  V.  Barnes.  If,  therefore,  under  an 
unqualified  submission,  the  referees,  mean- 
ing to  take  upon  themselves  the  whole  re- 
sponsibilit}',  and  not  to  refer  it  to  the 
court,  do  decide  differently  from  what  the 
court  would  on  a  point  of  law,  the  award 
ought  not  to  be  set  aside.  If,  however, 
the  referees  mean  to  decide  according  to 
law,  and  mistake,  and  refer  it  to  the  court, 
to  review  their  decision  (as  in  all  cases, 

[215] 


217-218* 


THE   LAW   OF   CONTRACTS. 


[PAIIT  ir. 


Other  grounds  of  objection  to  an  award,  are  irregularity  of 
proceedings.  Thus,  a  want  of  notice  to  the  parties  furnishes  a 
ground  of  objection  to  the  award,  (q)  And  for  this  purpose 
*it  is  not  necessary  that  the  submission  provide  for  giving  such 
notice,  because  a  right  to  notice  springs  from  the  agreement  to 
submit,  (r)     But  this  rule  is  not  of  universal  application,  for 


where  thc}-  specially  state  the  principles, 
on  which  tliev  have  acted,  they  are  pre- 
sumed to  do),  in  such  cases  tlie  court  will 
set  aside  the  award,  for  it  is  not  tlie  award 
which  the  referees  meant  to  make,  and 
they  acted  under  a  mistake.  On  the  other 
hand,  if  knowing  what  the  law  is,  they 
mean  not  to  be  bound  by  it,  but  to  decide, 
what  in  C(iuityand  good  conscience  ought 
to  be  done  between  the  parties,  their  award 
ought  to  be  supported,  although  the  whole 
proceedings  sliouhl  be  apparent  on  the  face 
of  thc  award.  And  this,  in  our  opinion,  not- 
withstanding some  contrariety,  is  the  good- 
sense  to  be  extracted  from  the  authorities. 
In  iMorgan  i\  Matlier,  Lord  Loiif/hhoroiigh 
lays  it  down  as  clear,  that  corruption, 
misbeiiavior,  or  excess  of  power,  are  the 
only  grounds  for  setting  aside  awards  ; 
and  although  in  the  same  case  Mr.  Com- 
missioner Wilson  says,  that  arbitrators 
cannot  award  contrary  to  law,  because 
that  is  beyond  their  power,  for  t!ie  pai-ties 
intcsd  to  submit  to  them  only  the  legal 
consequences  of  their  transactions  and 
agreements  ;  yet  tliis  reasoning  is  wholly 
unsatisfactory,  not  only  from  its  begging 
thc  question,  but  from  its  being  in  direct 
opposition  to  very  high  authority.  If,  in 
thc  case  before  the  court,  thc  referees  had 
made  a  general  award,  without  any  speci- 
fication of  tiie  reasons  of  their  decision, 
it  would  have  deserved  very  grave  consid- 
eration, whether  we  could,  by  collateral 
evirlence,  iuive  examined  into  the  exist- 
ence of  any  errors  of  law.  We  are  not 
Creparcd  to  say  that  such  a  course  would 
e  proper,  unless  the  submission  were  re- 
strained to  that  effect,  or  misbehavior  were 
justly  imputed  to  the  referees.  But  here 
the  referees  have  expressly  laid  thc  grounds 
of  their  decision  before  us,  and  have  there- 
by submitted  it  for  our  consideration. 
This  course  is  not  much  to  bi;  commend- 
ed. Arbitrators  may  act  with  i)erfect  e(]ui- 
ty  between  the  parties,  and  yet  nniy  not 
alwayH  give  good  reasons  for  their  docis- 
ioiis  ;  and  a  disclosure  of  their  reasons 
may  oCti  ii  enable  a  party  to  take  advan- 
tage of  a  slight  mistake  of  law,  which  may 

[210] 


have  very  little  bearing  on  tlic  merits.  A 
special  award,  therefore,  is  very  perilous  ; 
but  when  it  is  once  before  the  court,  it 
must  stand  or  fall  by  its  intrinsic  correct- 
ness, tested  by  legal  principles." 

(7)  Paschal  v.  Terry,  Kclynge,  1.32; 
Rigden  v.  Martin,  6  Harris  &  J.  403;  Fal- 
coner V.  Montgomery,  4  Dali.  2.32  ;  Lutz 
r.  Linthicum,  8  Pet.  178  ;  Peters  v.  New- 
kirk,  6  Cowcn,  10.3;  Rivers  v.  Walker,  1 
Dall.  81  ;  Webber  v.  Ives,  1  Tyler,  441  ; 
Craig  V.  Hawkins,  Hardin,  46.  In  Crowell 
V.  Davis,  12  Met.  293,  C.  and  D.  agreed  to 
submit  all  disputed  chaims  between  them 
to  the  final  award  of  B.,  and  to  abide  by 
his  decision  ;  and  that  if  B.  should  decline 
to  act  alone  as  referee,  he  might  select  one 
or  two  other  referees  to  act  with  him  ; 
and  that  if  he  should  decline  altogether, 
the  matter  should  be  referred  to  such  per- 
son or  persons  as  he  should  select.  B. 
declined  to  act,  and  appointed  G.,  H., 
and  I.  as  referees,  on  the  23d  of  March, 
of  which  appointment  C.  and  D.  had 
immediate  notice,  and  G.,  as  chairman 
of  said  referees,  called  on  D.,  and  in- 
formed him  that  the  referees  had  agreed 
to  hear  the  parties  in  the  afternoon  of  that 
day.  D.  told  G.  that  he  could  not  attend 
to  the  business  on  that  day  ;  and  G.  told 
]).  that  H.  and  I.  could  not  attend  at  any 
other  time,  and  that  other  referees  would 
have  to  be  appointed  in  their  place,  to 
wliich  D.  ma(le  no  objection  or  reply. 
On  the  next  day,  G.  gave  notice  to  D. 
that  tlic  hearing  would  be  on  thc  27th  of 
March,  at  a  certain  jilace.  On  the  said 
27th  of  March  II.  and  I.  were  not  present 
at  the  appointed  place,  and  B.,  at  the  re- 
quest of  C.  and  G.,  appointed  K.  and  L. 
as  referees  in  their  stead.  G.,  K.,  and  L. 
tlicreupon  proeeeilcd  to  hear  C,  in  the 
absence  of  1).,  and  made  an  award  in  C.'s 
favor.  JIdd,  that  I),  was  not  bound  by 
tlic  award.  And  see  Peterson  v.  Ayrc, 
17  C.  B.  724,  25  Eng.  L.  &  Eq.  .32.5; 
Oswald  V.  Grav,  Bail  Court,  18.5.5,  29 
Eng.  L.  &  E(i.  85. 

(/•)  Elmenilorf  ».  Harris,  23  Wend.  G28; 
Peters  V.  Newkirk,  6  Cowen,  103. 


en.  III.] 


DEFENCES. 


*219 


there  may  be  cases  where  all  the  facts  have  been  agreed  upon 
and  made  known  to  the  arbitrators,  and  where  the  case  does 
not  depend  upon  the  evidence,  and  no  hearing  is  desired,  and 
therefore  notice  would  be  unnecessary,  (.s') 

Another  instance  of  irregularity  is  the  omission  to  examine 
witnesses,  (ss)  or  an  examination  of  them  when  the  parties  were 
not  present,  and  their  absence  was  for  good  cause ;  (t)  but  the 
examination  of  witnesses  without  putting  them  under  oath  or 
affirmation  will  not  set  aside  an  award,  if  the  parties  were  pres- 
ent and  made  no  objection,  (ta)  A  concealment  by  either  of  the 
parties  of  material  circumstances,  would  avoid  an  award,  for 
this  would  be  fraud.  So  if  the  arbitrators,  in  case  of  disagriee- 
ment,  *were  authorized  to  choose  an  umpire,  but  drew  lots  which 
of  them  should  choose  him.  (ti)  But  it  was  in  one  case  held 
enough  that  each  arbitrator  named  an  umpire,  and  lots  were 
drawn  to  decide  which  of  these  two  should  be  taken,  because 
it  might  be  considered  that  both  of  these  men  were  agreed 


(s)  Miller  v.  Kennedy,  3  Eand.  2. 
Notice  to  sureties  on  the  submission  bond 
is  not  necessaiy.  Farmer  v.  Stewart,  2 
N.  H.  97.  In  Ranney  v.  Edwards,  17 
Conn.  309,  A  and  B  having  unsettled 
accounts  between  them,  submitted  such 
accounts  to  the  arbitrament  of  C  and  D ; 
and  in  case  they  should  not  agree,  they 
were  authorized  to  select  a  third  person, 
who,  either  individually,  or  in  conjunction 
with  the  other  two,  should  determine  the 
cause.  C  and  D,  after  hearing  the  par- 
ties, and  examining  their  books  and  ac- 
counts, were  unable  to  agree  upon  a  part 
of  the  matter  in  controversy ;  and  there- 
upon they  selected  E  as  a  third  person  to 
act  with  them  in  making  the  award. 
C  and  D  then  stated  to  E  the  claims,  ac- 
counts, and  evidence  of  the  parties,  rela- 
tive to  the  matters  about  which  they  dis- 
agreed ;  after  which  C,  D,  and  E  made 
their  award  in  f;\vor  of  B.  A  and  B  had 
no  notice  of  the  appointment  of  E,  until 
after  the  publication  of  the  award ;  nor 
had  they,  or  either  of  them,  any  hearing 
before  the  arbitrators,  after  such  appoint- 
ment ;  but  C  and  D  in  omitting  to  give 
such  notice,  and  in  making  their  state- 
ment to  E,  acted  under  a  sense  of  duty, 
and  were  not  guilty  of  any  fraud,  conceal- 
ment, or  partiality.  On"  a  bill  in  chan- 
cery, brought  by  A  against  B^  to  have 

VOL.  II.  19 


the  award  set  aside,  it  was  held,  Church, 
J.,  dissenting,  that  no  sufficient  cause  was 
shown  for  such  an  interference,  and  the  bill 
was  dismissed.  And  semble  that  where 
the  submission  is  to  two  arbitrators,  with 
power,  in  case  of  disagreement,  to  select 
a  third  person  to  act  conjointly  with  them, 
the  necessity  of  a  rehearing,  in  the  absence 
of  any  express  request  by  one  or  both  of 
the  parties,  is  a  matter  resting  in  the 
sound  discretion  of  the  arbitrators  ;  but  if 
such  request  be  made,  it  is  their  duty  to 
comply  with  it.  See  further,  Rigden  v. 
Martin,  6  Harris  &  J.  406 ;  Emery  v. 
Owings,  7  Gill,  488  ;  Bullitt  v.  Musgrave, 

3  Gill,  31 ;  Cobb  v.  Wood,  32  Me.  455  ; 
McKinney  v.  Page,  id.  513.  And  the 
right  to  notice  may  be  waived.  Graham 
V.  Graham,  9  Barr,  254. 

(ss)  This  seems  not  to  be  necessary,  in 
cases  where  the  value  of  property  merely 
is  to  be  determined.     Eads  v.  Williams, 

4  De  G.,  M.  &  G.,  674,  31  Eng.  L.  & 
Eq.  203. 

(t)  So  an  examination  of  the  books  of 
one  party  in  the  absence  of,  and  without 
notice  to  the  other  party,  and  without 
proof  of  the  correctness  of  the  entries 
therein,  will  vitiate  the  award.  Emery  v. 
Owings,  7  Gill,  488. 

(ta)  Biggs  V.  Hansen,  16  C.  B.  562. 

(»)  Harris  v.  Mitchel,  2  Vern.  485. 

[217] 


219  ft 


THE   LAW    OP   CONTRACTS. 


[part  II. 


upon,  (v)  And  if  an  umpire  be  appointed  by  lot,  or  otherwise 
irregularly,  if  the  parties  agree  to  the  appointment,  and  confirm 
it  expressly,  or  impliedly  by  attending  before  him,  with  a  full 
knowledge  of  the  manner  of  the  appointment,  this,  it  seems, 
covers  the  irregularity,  (w)  If  a  reference  be  to  three  arbitra- 
tors, the  award  of  two,  without  consulting  the  third,  although 
he  be  absent,  has  no  force,  [iva) 


2.    Of  an  agreement  to  submit  questions  to  arbitration. 

Both  in  this  country  and  in  England,  it  has  long  been  consid- 
ered that  the  parties  to  a  contract  are  not  bound  by  an  agree- 
ment, whether  in  or  out  of  the  contract,  to  refer  questions  under 
the  same  to  arbitration,  because  they  cannot  oust  the  courts  of 
their  jurisdiction  by  any  agreement  that  these  claims  shall  be 
submitted  to  arbitration,  [a)  Such  a  clause  has  been  held  to 
have  no  effect,  although  the  matters  in  controversy  have  been 
referred  to  arbitrators  and  are  still  pending  at  the  time  of  action 
brought,  {h)  So  courts  of  equity  have  refused  to  enforce  a  bill 
for  the  specific  performance  of  an  agreement  to  refer  to  arbitra- 
tion, or  to  compel  a  party  to  appoint  an  arbitrator  under  such 
an  arrangement,  (c)     In  one  case  where  an  action  was  referred  to 


(!')  Neale  v.  Ledger,  16  East,  51.  But 
see  contra,  In  re  Casell,  9  B.  &  C.  624  ; 
Tunno  r.  Bird,  5  B.  &  Ad.  488;  James 
V.  Attwood,  7  Scott,  841  ;  Ford  v.  Jones, 

3  B.  &  Ad.  248. 

{w)  Taylor  i'.  Backhouse,  Bail  Court,  2 
Eng.  L.  &  Eq.  184 ;  Tunno  v.  Bird,  5  B. 
&  Ad.  488.  The  acquiescence  in  such  a 
mode  of  appointment,  will  not  hind  a 
party,  however,  unless  made  with  full 
knowledge  of  all  the  facts.  AVclls  v. 
Cooke,  2  B.  &  Aid.  218  ;  In  re  Jamieson, 

4  A.  &  E.  945 ;  In  re  Greenwood,  9 
A.  &  E.  G99  ;  In  re  Ilodson,  7  ])owl. 
509.  The  case  of  Ford  v.  Jones,  .3  B.  & 
Ad.  248,  holding  tii'at  the  a|>p()intincnt  of 
an  uirijtire  hy  lot,  even  hy  consent  of 
parties,  is  had,  is  prol)ahly  not  law  ;  con- 
Kensus  tollit  errormn.  See  Clnistnuiu  v. 
Moran,  9  Barr,  487. 

(wa)  In  re  Beck  &  Jackson,  1  ('.  B. 
N.  8.  605.  S(;c  also,  Wade  v.  fowling, 
4  Ellis  &  B.  44. 

(a)  Kill    r.    llollister,  1  Wilson,    129; 


Thompson  v.  Charnock,  8  T.  R.  139  ; 
Goldstone  v.  Osborn,  2  Car.  &  P.  550 ; 
Mitchells.  Harris, 2  Ves.  129;  Wellington 
V.  Mackintosh,  2  Atk.  569  ;  Nichols  v. 
Chalie,  14  Ves.  265;  Eohinson  w.  Georges 
Ins.  Co.  17  Maine,  131 ;  Hill  v.  More,  40 
Maine,  515;  Allegro  r.  Maryland  Ins. 
Co.  6  Harris  &  J.  408 ;  Gray  v.  Wilson, 
4  Watts,  39;  Contee  v.  Dawson,  2  Bland, 
264 ;  Bandcl  v.  Chesapeake  &  Delaware 
Canal  Co.  1  Ilarring.  Del.  233 ;  Horton 
V.  Stanley,  1  Miles,  418  ;  Stone  v.  Dennis, 
3  Porter,  231  ;  Ilaggart  v..  Morgan,  4 
Sandf.  198,  1  Seld.  422. 

(i)  Harris  ?'.  lieynoids,  7  Q.  B.  71. 

(c)  Wellington  v.  Mackintosh,  2  Atk. 
569  ;  Street  r.  Kighy,  6  Ves.  815;  Milncs 
V.  Gery,  14  id.  400;  BlundcU  v.  Brettargh, 
17  id.  2.32  ;  (lourlav  v.  Duke  of  Somerset, 
19  id.  429  ;  Wilks  i'.  Davis,  3  Meriv.  507  ; 
Agar  (.'.  Macklew,  2  Simons  &  S.  418; 
Mcxhorough  v.  Bower,  7  Bcav.  127; 
C()j)pcr  i\  Wells,  Saxton,  10;  Tobey 
V.    County    of    Bristol,    3    Story,    800. 


[218] 


GIL 


IIL] 


DEFENCES. 


219  6 


arbitration  by  consent,  the  court  refused  to  order  the  arbitrators 
to  proceed,  (d)  But  in  England,  the  principles  upon  which 
these  rules  rest,  have  recently  been  much  questioned;  (e)  and  it 
has  been  held  that  an  agreement  that  the  amount  of  damages 
to  be  recovered  in  an  action  at  law,  shall  be  first  determined  by 
arbitrators  is  binding,  and  that  no  action  will  lie  till  such  an 
arbitration  is  had.  (/) 


In  Halfhed  v.  Jenning,  2  Dickens,  702, 
nom.  Halfhide  v.  Fenning,  2  Bro.  Ch. 
336,  a  bill  was  brought  by  one  partner 
against  anotlier  and  the  representative  of 
a  deceased  partner  for  an  account  and  for 
a  production  and  a  discovery.  The  de- 
fendants pleaded  that  there  was  a  clause 
in  the  articles  that  no  bill  or  suit  should 
be  brought  respecting  the  partnership,  un- 
til the  matter  should  have  been  referred  to 
arbitration  and  the  arbitrator  should  have 
made  his  award,  and  the  plea  was  sus- 
tained. This  case  has  generally  been 
considered  to  have  been  incorrectly  de- 
cided, but  it  appears  to  us  not  to  be  op- 
posed to  the  authorities  above  cited,  and 
it  is  sustained  by  Lord  Chancellor  Sufjdeii, 
in  Dimsdale  v.  Robertson,  2  Jones  &  La 
Touche,  58.  In  this  case,  a  submission 
had  been  entered  into  by  the  parties,  the 
arbitrators  were  designated,  and  their  pow- 
ers and  duties  fully  pointed  out.  But  be- 
fore they  had  taken  any  proceedings,  the 
plaintiff  filed  his  bill  alleging  that  the  ar- 
bitrators could  not  do  him  justice  under 
the  powers  conferred  upon  them.  It  is 
provided  in  England  and  Ireland  by  stat- 
ute, that  after  the  arbitrators  are  appointed 
in  pursuance  of  any  submission  to  refer- 
ence, containing  an  agreement  that  such 
submission  shall  be  made  a  rule  of  court, 
etc.,  that  the  submission  cannot  be  re- 
voked by  either  party  without  leave  of 
court.  The  chancellor  held,  that  the  bill 
would  not  lie  in  this  case,  and  the  whole 
subject  of  the  power  of  a  court  of  equity 
in  the  premises  was  considered  at  length, 
and  the  case  of  Halfhide  v.  Fenning,  was 
considered  as  correctly  decided. 

(fZ)  Crawshay  v.  Collins,  1  Swanst.  40. 

(e)  In  Scott  V.  Averv,  .5  H.  L.  Cas.  811, 
36  Eng.  L.  &  Eq.  1,13",  Cressivell,  J.,  said  : 
"  The  whole  of  the  doctrine  as  to  ousting 
the  jurisdiction  of  the  courts,  appears  to 
have  been  based  upon  the  passage  quoted 
by  Parke,  B.,  in  8  Exch.  494,  from  Co. 
Litt.  536  :  'If  a  man  makes  a  lease  for 
life,  and  by  deed  grants  that  if  any  waste 
or   destruction   be   done,   it  shall  be  re- 


dressed by  neighbors,  and  not  by  suit  or 
plea,  notwithstanding,  an  action  of  waste 
shall  lie,  for  the  place  wasted  cannot  be 
recovered  without  plea.'  The  case  is  not 
to  be  found  in  the  Year  Book,  3  Edw.  3, 
referred  to,  but  is  in  Fitz.  Ab.,  '  Waste,' 
pi.  5 ;  and  the  whole  of  it  is  given  in  Co. 
Litt.  536.  It  seems,  that  this  decision 
proceeded  on  the  ground  that  the  neigh- 
bors could  not  redress  the  wrong  done ; 
that  it  could  only  be  done  by  plea;  there- 
fore, notwithstanding  the  deed,  an  action 
of  waste  would  lie.  There  is  not  a  word 
leading  to  the  supposition,  that  an  action 
would  have  been  maintainable,  if  the 
neiglibors  could  have  given  the  appropri- 
ate redress  ;  or  that  it  might  not  have  been 
granted  by  deed,  that  if  a  dispute  arose 
about  waste,  neighbors  should  say  whether 
there  had  been  waste  or  not.  But  in  sub- 
sequent cases,  it  has  been  considered  to 
have  established  that  parties  cannot  by 
agreement,  oust  the  jurisdiction  of  the 
courts  of  the  realm."  And  in  Russell  v. 
Pellegrini,  6  Ellis  &  B.  1020,  38  Eng.  L. 
&  Eq.  99,  Lord  Campbell,  C.  J.,  said: 
"  For  some  time  the  courts  had  a  great 
horror  of  arbitrations,  and  doubts  were 
entertained,  whether  a  clause  for  referring 
matters  in  dispute,  introduced  in  an  agree- 
ment, was  not  illegal.  But  I  cannot 
imagine  why  parties  should  not  be  allowed 
to  settle  their  differences  in  the  manner 
which  they  think  most  convenient.  When 
a  cause  of  action  has  arisen,  the  courts 
are  not  to  be  ousted  of  their  jurisdiction  ; 
but  parties  may  come  to  an  agreement 
that  there  shall  be  no  cause  of  action,  un- 
til their  differences  have  been  referred  to 
arbitration." 

(/)  In  Scott  V.  Avery,  8  Exch.  487, 
20  Eng.  L.  &  Eq.  327,  the  policy  con- 
tained the  clause :  "  that  the  sum  to  be 
paid  to  any  suffering  member  for  any  loss 
or  damage,  shall,  in  the  first  instance,  be 
ascertained  and  settled  by  the  committee ; 
and  the  suflTering  member,  if  he  agrees  to 
accept  such  sum  in  full  satisfaction  of  his 
claim,  shall  be  entitled  to  demand  and  sue 

[219] 


219  c 


THE   LAW   OF   CONTRACTS. 


[part  n. 


Even  if  an  agreement  to  refer  a  case  to  arbitration  is  so  far 
invalid  that  it  cannot  be  pleaded  in  bar  to  a  suit,  an  action  for 
damages  will  lie  for  the  breach,  (g-) 

In  England,  it  is  now  provided  by  statute,  which  probably 
arose  out  of  the  recent  adjudications,  that  whenever  there  is  an 
agreement  in  any  written  instrument,  to  refer  a  cause  to  arbitra- 
tion, and  a  suit  is  brought,  the  court  may  grant  a  rule  to  stay 
proceedings  at  the  request  of  the  defendants.  (A) 


for  the  same,  as  soon  as  the  amount  to  be 
paid  has  been  ascertained  and  settled  and 
not  before,  which  can  only  be  claimed  ac- 
cording to  the  CMStomary  mode  of  pay- 
ment in  use  by  the  society."  The  arbi- 
tration clause  followed  immediately  after 
this,  which  pi-ovided  that  in  case  of  any 
difference  between  the  committee  and  any 
member  relative  to  the  settlement  of  any 
loss  or  damage  or  any  other  matter  relat- 
ing to  the  insurance,  arbitrators  should  be 
appointed,  etc.,  and  it  was  also  provided, 
that  "  the  obtaining  the  decision  of  such 
arbitrators  on  the  matters  and  claims  in 
dispute,  is  hereby  declared  to  be  a  condi- 
tion precedent  to  the  riglit  of  any  member 
to  maintain  any  such  action  or  suit."  The 
'defendants'  plea  set  forth  that  a  difference 
had  arisen  between  the  committee  and  the 
insured  relative  to  the  extent  of  the  loss, 
that  the  amount  had,  therefore,  never  been 
ascertained  and  that  the  defendants  were, 
and  always  had  been  ready  and  willing  to 
have  the  same  decided  by  arbitrators,  but 
tiie  plaintiff'  was  not  ready  and  willing  so 
to  do,  and  that  the  loss  had  not  been  set- 
tled or  ascertained  by  arbitrators.  On  de- 
murrer, the  Court  of  Exchequer  gave 
judgment  for  the  plaituiff.  But  in  the  Ex- 
chequer Chamber  the  judgment  was  re- 
versed, on  t\w  ground,  that  the  provisions 
mentioned  did  not  oust  tiie  courts  of  tlieir 
jurisdiction,  iuit  merely  provided  that  the 
amount  should  be  ascertained  in  a  certain 
way,  before  the  party  was  at  liberty  to 
sue  ;  and  that  this  was  in  the  nature  of  a 
condition  jireccdent.  Avery  v.  Scott,  8 
Kxcii.  4'J7,  I'U  Kng.  L.  6c,  Eip  .3.'34.  Tiiis 
decision  was  aflirmed  in  tiie  House  of 
Lords,  .'>  II.  L.  Cas.  811,  .'3C  Eng.  L.  & 
Eq.  I,  Mniiln,  15.,  Aldirson,  B.,  and 
Cromjtion,  .J.,  dissenting.  Lord  Ciumcel- 
lor  (^niHifiiilh,  stated  tlie  law,  as  folhnvs  : 
"  If  I  covenant  witii  A.  not  to  do  a  par- 
ticular act,  and  it  is  agreed  between  us 
that  any  (|iii-stion  whicii  might  arise, 
shoulil  be  decided  by  an  arbitrator  with- 

[  220  ] 


out  bringing  an  action,  then  a  plea  to 
that  effect  would  be  no  bar  to  an  action  ; 
but  if  we  agreed  that  J.  S.  was  to  award 
the  amount  of  damages  to  be  recoverable 
at  law,  then  if  such  arbitration  did  not 
take  place,  no  action  could  be  brought." 

(ij)  Livingstone  v.  Ealli,  5  Ellis  &  B. 
132,  30  Eng.  L.  &  Eq.  279.  This  doc- 
trine was  doubted  in  Tattersall  v.  Groote, 
2  B.  &P.  13L 

[h)  17  &  18  Vict  c.  12.5,  §  11.  This 
statute  provides,  that  "  Whenever  the 
parties  to  any  deed  or  instrument  in  writ- 
ing to  be  hereafter  made  or  executed,  or 
any  of  them  shall  agree  that  any  then  ex- 
isting or  future  differences  between  them 
or  any  of  them  shall  be  referred  to  arbitra- 
tion, and  any  one  or  more  of  the  parties 
so  agreeing,  or  any  person  or  persons 
claiming  through  or  under  him  or  them 
shall,  nevertheless,  commence  any  action 
at  law  or  suit  in  equity  against  the  other 
party  or  parties  or  any  of  them,  or  against 
any  person  or  persons  claiming  through 
or  under  him  or  them  in  respect  of  the 
matters  so  agreed  to  be  referred  or  any  of 
them,  it  shall  be  lawful  for  the  court  in 
which  such  action  or  suit  is  brought  or  a 
judge  thereof,  on  a])])lication  by  the  de- 
fendants or  any  of  them  after  ajipearance 
and  before  plea  or  answer,  upon  being 
satisfied  that  no  suflicicnt  reason  exists 
why  such  matters  cannot  bo  or  ought  not 
to  he  referred  to  arbitration,  according  to 
such  agreement  as  aforesaid,  and  that  the 
defendant  was,  at  the  time  of  the  bring- 
ing of  such  action  or  suit,  and  still  is 
ready  and  willing  to  join  and  concur  in  all 
acts  necessary  and  )in)|)er  for  causing 
such  matters  so  to  be  decided  by  arbitra- 
tion, to  make  a  rule  or  order  staying  all 
proceedings  in  such  action  or  suit  on  such 
terms  as  to  costs  and  otherwise  as  to  such 
court  or  judge  may  seem  lit;  Provided 
always,  that  any  sucii  rul(!  or  order  may 
at  any  time  afterwards  b(>  discharged,  or 
varied  as  justice  may  require."     yce  Rus- 


CII.  III.]  DEFENCES.  219  d 

111  this  country,  it  has  been  held,  that  if  the  insurance  com- 
pany takes  possession  of  the  vessel  and  proceeds  to  repair  her, 
with  the  view  thus  to  make  good  the  loss,  this  amounts  to  a 
waiver  of  the  submission  to  arbitration.  (Ji) 


3.    Of  the  revocation  of  a  suhmission  to  arbitrators. 

It  is  an  ancient  and  well-established  rule,  that  either  party 
may  revoke  his  submission  at  any  time  before  the  award  is 
made  ;  and  by  this  revocation  render  the  submission  wholly  in- 
effectual, and  of  course  take  from  the  arbitrators  all  power  of 
making  a  binding  award,  [wiv)  The  precise  point  of  time  when 
this  power  of  revocation  ceases,  may  not  be  distinctly  deter- 
mined. But  the  reason  of  the  case,  and  some  of  the  authorities 
cited  in  the  note  to  the  preceding  remarks  (note  ivw),  lead  to 
the  conclusion  that  the  power  exists  until  the  award  is  made. 

In  this  country,  our  courts  have  always  excepted  from  this 
rule,  submissions  made  by  order  or  rule  of  court ;  for  a  kind  of 
jurisdiction  is  held  to  attach  to  the  arbitrators,  and  the  submis-- 
sion  is  quite  irrevocable,  except  for  such  causes  as  make  it 
necessarily  imperative,  {wx)  The  same  exception  is  now 
made  in  England,  certainly  by  the  statute  in  most  cases,  and 
perhaps  by  the  practice  of  courts  in  all.  {ivy)  In  many  of  our 
States,  the  statutes  authorizing  and  regulating  arbitration,  pro- 
vide for  the  revocation  of  the  submission. 

As  an  agreement  to  submit  is  a  valid  contract,  the  promise 
of  each  party  being  the  consideration  for  the  promise  of  the 
other,  a  revocation  of  the  agreement  or  of  the  submission,  is  a 
breach  of  the  contract,  and  the  other  party  has  his  damages. 
The  measure  of  damages  would  generally  include  all  the  ex- 


sell  y.  Pellcfrrini,  6  Ellis  &  B.  1020,  38  (wx)  Freeborn  u.Denman,  3  Halst.  116; 

Eng^.  L.  &  Eq.  99.  Horn  v.  Roberts,  1  Ashm.  45  ;  Huston  v. 

(h)  Cobb  V.  New  England  Mut.  M.  Ins.  Dunwoody,  1  Binn.  42;  Pollock  v.  Hall, 

Co.  6  Gray,  192,  204.  4  Dall.  222;  Tyson  v.  Robinson,  3  Ired. 

{ivw)  Vynior's  case,  8  Co.  81;    War-  333;  Suttons  v.  Tyrrell,  10  Vt.  94;  In- 

burton  V.  "Storr,  4  B.  &  C.  103  ;  Green  hab.  of  Cumberland  v.  Inhab.  of  North 

V.  Pole,  6  Bingj.  443  ;  Marsh  v.  Packer,  Yarmouth,  4  Grecnl.  459. 

20  Vt.  198;  Allen  v.  Watson,  16  Johns.  (icy)  See  Milne  v.  Gratrix,  and  Green 

205;  Milne  v.  Gratrix,  7  East,  608.  v.  Pole,  cited  in  note  (wiu)  supra. 

19  *  [  221  ] 


219  e  THE  LAW  OF  CONTRACTS.  [PART  II. 

penses  the  plaintiff  has  incurred  about  the  submission  and  all 
that  he  has  lost  by  the  revocation,  in  any  way.  [wz] 

If  either  party  exercise  this  power  of  revocation  (for  it  can 
hardly  be  called  a  right),  he  must  give  notice  in  some  way, 
directly  or  indirectly,  to  the  other  party  ;  and  until  such  notice, 
the  revocation  is  inoperative,  {iva) 

The  revocation  may  be  by  parol,  if  the  submissioji  is  by 
parol ;  but  if  the  submission  is  by  deed,  the  revocation  must 
be  by  deed,  [ivb)  It  may  be  implied  as  well  as  express ;  and 
would  be  implied  by  any  act  which  made  it  impossible  for  the 
arbitrators  to  proceed.  So  it  was  held  that  bringing  a  suit  for 
the  claim  submitted,  before  an  award  was  "  conclusively  made," 
operated  a  revocation  of  the  submission,  [wc)  So  the  marriage 
of  a  feme  sole  works  a  revocation  of  her  submission  ;  and  it  is 
held  that  this  is  a  breach  of  an  agreement  to  submit,  on  which 
an  action  may  be  sustained  against  her  and  her  husband,  [wd) 
And  the  lunacy  of  a  party  revokes  his  submission,  {ice)  And 
the  utter  destruction  of  the  subject-matter  of  the  arbitration 
would  be  equivalent  to  a  revocation,  {ivf) 

Whether  the  bankruptcy  or  insolvency  of  either,  or  of  both 
parties,  would  necessarily  operate  as  a  revocation,  is  not  settled 
on  authority.  We  should  say,  however,  that  it  had  no  such 
effect,  unless  the  terms  of  the  agreement  to  refer,  or  the  provis- 
ions of  the  law  required  it.  But  the  assignees  acquire  what- 
ever power  of  revocation  the  bankrupt  or  insolvent  possessed, 
and,  generally,  at  least,  no  further  power,  {ivg^) 

The  death  of  either  party  before  the  award  is  made,  vacates 
the  submission,  {wli)  unless  that  provides  in  terms  for  the  con- 
tinuance and  procedure  of  the  arbitration,  if  such   an  event 

{wz)  So,  if  a  penalty  for  non-pcrforin-         (icd)  Chanilcy  v.   Winstanly,   5   East, 

ancc  be  expressed  in  the  articles  of  sub-  26G.     Sec  also,  Buttons  v.  Tyrrell,  10  Vt. 

mission,  a  revocation  f^ivcs  an  action  for  94 ;  Saccum  v.  Norton,  2  Keble,  865,  3 

tlic  penalty.    Sec  cases  cited  in  note  (inr)  Kcblc,  9  ;  AbI)ott  v.  Keith,  11  Vt.  .528. 
supra,  and"  Ilawley  v.  ]Iod;,'e,  7  Vt.  240.  (wc)  Siittons  v.  Tyrrell,  10  Vt.  94. 

[mi)  Vivior  v.  "Wilde,  2  Urownl.  290,         (wf)  Id. 
8  Coke,  81.  (ini)  IMarsh   v.  Wood,  9  B.  &  C.  659; 

(»•/,)  Wilde   V.    Vinor,   1   IJrownl.  02;  Taylcr   v.   Marlinfj,    2   Man.    &   G.    55; 

Barker  v.   Lees,  2  Keble,  04  ;    Brown  r.  Snook  r\  Ilcllyer,  2  Cliitty,  4.'}. 
liCavilt,  20  Me.  251  ;    Van  Antwerp  v.         (wh)  Toussaint   i\    Ilartop,    7    Taunt. 

Stewart,  8  Johns.  125.  571  ;  Cooper  v.  Jolnison,  2  B.  &  Aid.  394, 

(wc)  I'eter  v.  Craig,  G  Dana,  307.  1  Chitty,  187. 

[222] 


CH.  III.]  DEFENCES.  219/ 

occurs,  (ivi)  Although  the  death  of  a  party  certainly  revokes  a 
submission  out  of  court,  it  seems  to  be  held  in  this  country  that 
a  submission  under  a  rule  of  court  is  not  revoked  or  annulled 
even  by  the  death  of  a  party,  (ivj)  So  the  death  or  refusal  or 
inability  of  an  arbitrator  to  act,  would  annul  a  submission  out 
of  court,  unless  provided  for  in  the  agreement;  but  not,  we 
think,  one  under  a  rule,  unless  for  especial  reasons,  satisfactory 
to  the  court  which  would  have  the  appointment  of  a  substi- 
tute, (ivk) 

It  may  be  well  to  add,  that  after  an  award  is  fully  made, 
neither  of  the  parties  without  the  consent  of  the  other,  nor 
either  nor  all  of  the  arbitrators  without  the  consent  of  all  the 
parties,  have  any  further  control  over  it. 


SECTION    VI. 

OF   A   RELEASE. 

A  release  is  a  good  defence ;  whether  it  be  made  by  the 
creditor  himself,  or  result  from  the  operation  of  law.  (x)  No 
special  form  of  words  is  necessary,  if  it  declare  with  entire  dis- 
tinctness the  purpose  of  the  creditor  to  discharge  the  debt  and 
the  debtor.  And  if  it  have  necessarily  this  effect,  although  the 
purpose  is  not  declared,  it  will  operate  as  a  release  ;  as  in  case 
of  a  covenant  never  to  sue,  (//)  or  not  to  sue  without  any  limi- 

{ivi)  See  cases  in  preceding  note,  and  cause  on  motion.     We  presume  tliat  all 

Tyler  v.  Jones,  3  B.  &  C.  144 ;  Prior  v.  such  questions  would  be  addressed  to  the 

Hembrow,   8  M.   &  W.  873  ;  Dowse  v.  discretion  of  the  court,  and  be  within  their 

Coxe,  3  Bing.  20,  10  J.  B.  Moore,  272.  power. 

(ivj)  Ereeborn  w.  Dennian,3Halst.  116  ;         (x)  A  release  under  seal  is  a  good  dis- 

Bacon  v.  Cranson,   15   Pick.   79;   Price  charge  of  a  judgment.     The  party  is  not 

V.  Tyson,  2  Gill  &  J.  475.     Some  of  our  driven   to   an   audita   querela.     The  rule 

statutes  expressly  provide  that  the  death  that  a  discharge  of  a  contract  must  be  of 

of  a  party  before  the  award  shall  not  annul  as  high  a  nature  as  the  contract  itself,  does 

a  submission  under  a  rule.     See  Turner  not  apply  to  such  cases.     Barker  v.   St. 

u.  Maddox,  3  Gill,  190.  Quintin,    12   M.  &   W.   441;    Co.   Litt. 

[ivk]  In  Price  v.  Tyson,   2    Gill   &  J.  291  a  ;    Shep.   Touch.   Preston's   Ed.   p. 

475,  one  of  the  arbitrators  appointed  un-  322,  323. 

der  a  rule  of  court,  removed   from   the         (y)   Cuyler  v.   Cuyler,   2  Johns.   186; 

State  ;   and  many  years  having   elapsed  Deux  v.  Jefferies,  Cro.  Eliz.  352  ;  2  Wms. 

after  his  appointment  without  any  award  Saund.  47,  s,  n.  (1);  Bac.  Abi-.  tit.  Re- 

being   made,    the    court    reinstated    the  lease  (A),  2;  Jackson  v.  Stackhouse,  1 

[223] 


220* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


tation  of  time ;  (c)  whereas  if  a  covenant  not  to  sue  for  a  cer- 
tain time  be  broken  by  an  action,  *the  covenant  is  no  bar,  and  the 
covenantee  has  no  remedy  but  on  the  covenant,  (a)  By  some 
courts  this  last  rule  is  held  not  to  apply  to  actions  of  assumpsit, 
a  covenant  not  to  sue  for  a  time  certain  being  there  a  bar  dur- 
ing that  time,  (b)  So  if  the  covenant  not  to  sue  for  a  time, 
gives  a  forfeiture  in  case  of  breach,  it  is  said  to  be  a  bar.  (c) 
And  a  bond  or  covenant  to  save  harmless  and  indemnify  the 
debtor  against  his  debt,  is  a  release  of  the  debt,  (d) 

A  release,  strictly  speaking,  can  operate  only  on  a  present 
right,  because  one  can  give  only  what  he  has,  and  can  only 
promise  to  give  what  he  may  have  in  future.  But  where  one  is 
now  possessed  of  a  distinct  right,  which  is  to  come  into  effect 
and  operation  hereafter,  a  release  in  words  of  the  present,  may 
discharge  this  right,  (e) 

The  whole  of  a  release,  as  of  all  legal  instruments,  must  be 


Cowen,  122.  And  see  "White  v.  Dinjjley, 
4- Mass.  433  ;  Sewall  v.  Sparrow,  16  Mas's. 
24  ;  Reed  v.  Shaw,  1  Blackf.  245 ;  Gar- 
nett  V.  Macon,  6  Call,  308. 

(z)  Clark  v.  Russell,  3  Watts,  213 ; 
Hamaker  v.  El)crley,  2  Binn.  510. 

(a)  Thimblcliy  v.  Barron,  3  M.  •&  W. 
210;  Dow  V.  Tattle,  4  Mass.  414;  Chand- 
ler V.  llerrick,  19  Johns.  129  ;  Berry  v. 
Bates,  2  Blackf.  118;  Aloff  v.  Scrimshaw, 
2  Salk.  573;  Bac.  Abr.  tit.  Release  (A), 
2;  Hoft'man  i\  Brown,  1  Halst.  429; 
Deux  V.  Jefferies,  Cro.  Eliz.  352 ;  Per- 
kins V.  Oilman,  8  Pick.  229  ;  Gibson  v. 
Gibson,  15  Mass.  112;  Fullam  ?\  Valen- 
tine, 11  Pick.  159  ;  Winans  r.  Huston,  6 
Wend.  471 .  Sec  Pearl  v.  Wells,  6  Wend. 
291  ;  Guard  v.  Whiteside,  13  111.  7.  And 
where  two  are  jointly  and  severally  bound, 
a  covenant  not  to  sue  one,  does  not 
amount  to  a  release  of  the  other.  Lacy  v. 
Kynaston,  12  Mod.  548,  551;  Ward  v. 
Johnson,  G  Munf.  G  ;  Tuckerman  v.  New- 
liidl,  17  Mass.  581  ;  llutton  v.  Eyre,  6 
Taunt.  289.  And  see  aide,  vol.  1,  p.  24, 
note  ( ]>). 

(I>)  Clopncr  V.  Union  Bank,  7  Harris  & 
.7.  92.  .SV'«  (/iiiKre.  And  see  Dow  v.  Tat- 
tle, 4  Mass.  414,  and  eases  supni. 

(r)  21  II.  7,  30,  ])!.  10  ;  AViiite  r.  Diii^^- 
ley,  4  Mass.  433.  And  see  Kol.  Alir.  tit. 
l^.xtin^'uishment  (L),  jil.  2  ;  Lee  /•.  AVood, 
J.  BridtJ.  117;  J'earl  v.  AVells,  0  Wend. 
295. 

[224] 


(d)  Clark  v.  Bush,  3  Cowen,  151. 

{e)  Pierce  v.  Parker,  4  Met.  80,  where 
the  authorities  on  this  subject  are  critically 
examined  by  Hubbard,  J.,  who  thus  re- 
marks :  "  From  the  best  examination  I 
have  been  able  to  give  to  the  question  be- 
fore us,  I  come  to  this  conclusion,  that 
while  a  possibility  merely  is  not  the  sub- 
ject of  a  release,  yet  that  in  all  cases 
where  there  is  an  existing  obligation  or 
contract  between  parties,  although  such 
obligation  or  contract  is  executory  and 
dependent  also  upon  contingencies  that 
may  never  happen,  still,  if  the  party  in 
whose  favor  such  obligation  or  contract  is 
made,  or  who  is  liable,  by  force  of  it,  to 
sutler  damage  if  it  is  not  performed  by 
the  other  when  the  contingency  hajipcns, 
shall  execute  a  release  of  all  claims  .and 
demands,  actions  and  causes  of  action, 
&e.,  correct  in  point  of  form,  and  having 
at  the  time  of  executing  the  release  such 
obligation  or  contract  in  view,  as  one  of 
the  subjects  upon  which  the  release  shall 
operate,  then  such  release  shall  be  held  as 
a  good  and  valid  bar  to  any  suit  which 
may  I)0  afterwards  brought  ujion  such 
obligation  or  contract,  or  for  money  had, 
received,  or  paid,  upon  the  future  happen- 
ing of  the  contingency,  in  consc([uencc  of 
which  the  jilaintilf  sustains  damage,  and 
but  for  such  release  would  have  had  a 
l)crfcct  right  of  action." 


CH.  III.] 


DEFENCES. 


^221 


considered ;  and  if  it  be  general  in  its  terms,  it  may  be  con- 
trolled and  limited  in  its  effects  by  the  limitation  in  the  *re- 
cital.  (/)  And  it  may  expressly  extend  to  only  a  part  of  a 
claim  or  debt,  (g-)  or  to  the  party  released,  with  express  reserva- 
tion of  rights  against  other  parties  ;  in  which  case  it  will  be 
construed  only  as  a  covenant  not  to  sue.  (g-a)  Bat  if  a  plain- 
tiff is  met  by  a  general  release  under  his  seal  to  the  defendant, 
he  cannot  set  up  an  exception  by  parol.  (A)  And  where  the 
release  is  general  it  cannot  be  limited  or  qualified  by  extrinsic 
evidence,  although  a  receipt  may  be.  (i) 

A  release  of  a  debt  should  be  made  by  him  who  has  a  legal 
interest  in  it ;  and  if  made  by  one  who  has  not  such  an  interest 


(/)  In  Rich  V.  Lord,  18  Pick.  325, 
Shaw,  C.  J.,  said  :  "  It  is  now  a  general 
rule  in  construing  releases,  especially 
where  the  same  instrument  is  to  be  exe- 
cuted by  various  persons,  standing  in 
various  relations,  and  having  various  kinds 
of  claims  and  demands  against  the  re- 
leasee, that  general  words,  though  the 
most  broad  and  comprelicnsive,  are  to  be 
limited  to  particular  demands,  where  it 
manifestly  appears,  by  the  consideration, 
by  tlie  recital,  by  the  nature  and  circum- 
stances of  the  several  demands,  to  one  or 
more  of  which  it  is  proposed  to  apply  the 
release,  that  it  was  so  intended  to  be  limited 
by  the  parties.  And  for  the  purpose 
of  ascertaining  that  intent,  every  part  of 
the  instrument  is  to  be  considered.  As 
where  general  words  of  release  are  im- 
mediately connected  with  a  proviso  re- 
straining tlieir  operation.  Solly  ik  Forbes, 
2  Brod.  &  B.  38.  So  a  release  of  all 
demands,  then  existing,  or  which  should 
thereafter  arise,  was  held  not  to  extend  to 
a  particular  bond,  which  was  considered 
not  to  be  within  tlic  recital  and  considera- 
tion of  the  assignment,  and  not  within  the 
intent  of  the  parties.  Payler  v.  Homer- 
sham,  4  M.  &  S.  423.  So  where  it  is  re- 
cited that  various  controversies  are  sub- 
sisting between  the  parties,  and  actions 
pending,  and  tliat  it  had  been  agreed  that 
one  should  pay  the  other  a  certain  sum  of 
money,  and  that  they  should  mutually  re- 
lease all  actions  and  causes  of  action,  and 
thereupon  such  releases  were  executed, 
it  was  held  that  though  general  in  terms, 
the  releases  were  qualified  by  the  recital 
and  limited  to  actions  pending.  Simons 
V.  Johnson,  3  B.  &  Ad.  175  ;  Jackson  v. 
Stackhouse,   1    Cowen,   126.     So  it  has 


been  held  in  Massachusetts,  that  where 
upon  the  receipt  of  a  proportionate  share 
of  a  legacy  given  to  another,  the  person 
executed  a  release  of  all  demands  under 
the  will,  it  was  held  not  to  apply  to 
another  and  distinct  legacy  to  the  person 
himself.  Lyman  v.  Clark,  9  Mass.  R. 
235."  And  see  Learned  v.  Bellows,  8 
Vt.  79.  See  also,  ante,  p.  13,  14,  and 
notes. 

(g)  2  Rol.  Abr.  413,  tit.  Release  (H), 
pi.  1. 

{ga)  Willis  v.  De  Castro,  C.  B.  1858, 
21  Law  Rep.  376. 

(h)  Brooks  v.  Stuart,  9  A.  &  E.  854. 
This  was  assumpsit  by  indorsees  against 
the  maker  of  a  promissory  note.  Plea, 
that  the  promise  was  a  joint  and  several 
one  by  defendant  and  A.,  to  whom  one  of 
the  plaintiffs  executed  a  release  under  seal. 
Replication,  that  the  release  was  executed 
at  the  request  of  defendant,  who  after- 
wards, and  while  the  note  was  unpaid,  in 
consideration  of  such  release,  ratified  Iiis 
promise,  and  promised  to  remain  liable  to 
plaintiffs  for  the  amount  of  the  note. 
Held,  bad,  because  it  set  up  a  parol  excep- 
tion to  a  release  under  seal.  And  see  ante, 
vol.  1,  p.  23,  and  n.  (/). 

(0  Baker  v.  Dewey,  1  B.  &  C.  704. 
But  an  agreement  under  seal,  which  com- 
promises a  suit,  does  not  prevent  either 
party  from  setting  up  and  proving  a  parol 
undertaking,  that  one  of  the  parties  should 
pay  the  costs  that  had  accrued.  Such  an 
undertaking  does  not  contradict  or  vary 
the  written  agreement,  but  is  distinct  and 
independent  of  it.  jMorancy  v.  Quarles,  1 
McLean,  194.  That  a  simple  receipt  may 
be  contradicted  or  varied  by  extrinsic  evi- 
dence, see  ante,  p.  67,  and  notes. 
[225] 


222* 


THE   LAW   OP   CONTRACTS. 


[part  II. 


but  is  beneficially  interested,  and  is  not  the  plaintiff  of  record, 
though  this  may  for  many  purposes  release  the  debt,  it  has  been 
held  that  it  cannot  defeat  the  action  at  *  law.  (J)  If  the  release 
be  made  by  the  trustee,  or  other  party  having  the  legal  interest, 
it  can  be  set  aside  if  to  the  prejudice  of  the  party  beneficially 
interested,  and  made  without  his  assent.  (-A:) 

The  release  may  be  only  by  operation  of  law ;  but  this  also 
is  grounded  upon  the  presumed  intent  of  the  parties.  Thus,  at 
common  law  (varied  by  statutory  provisions),  a  creditor  who 
appoints  his  debtor  his  executor,  cancels  the  debt;  (/)  unless  the 
debtor  refuses  to  accept  the  office  ;  this  he  may  do,  and  then  he 
does  not  accept  the  release,  (m)  So  if  the  parties  intermarry,  (w) 
Or  if  the  creditor  receive  from  the  debtor  a  higher  security,  as  a 
bond  for  a  simple  contract  debt ;  but  the  higher  security  may  be 
given  only  as  collateral  to  the  original  debt,  which  then  remains 
in  full  force,  (o)  Nor  will  a  specialty  security  extinguish  a  sim- 
ple contract  debt,  unless  it  be  coextensive  therewith,  (p) 


{j)  Quick  V.  Ludborrow,  3  Biilst.  29, 
where  A  covenanted  with  B  that  C  should 
pay  B  and  D  a  certain  sum  per  year,  as 
an  annuity.  D  married,  and  lier  husband 
released  tlie  payment.  This  was  held  no 
bar  to  the  action  by  B  to  enforce  the  cov- 
enant. And  see  Walmesley  v.  Cooper, 
11  A.  &  E.  216,  where  A  covenanted  with 
B  not  to  sue  iiim  for  any  debt  due  from 
B  to  A.  I/eld,  no  bar  to  an  action  against 
B  by  A  and  C,  for  a  debt  due  them. 

(k)  See  ante,  vol.  1,  p.  22,  and  notes, 
and  ante,  p.  129,  n.  (t).  And  sec  further, 
Jones  V.  Herbert,  7  Taunt.  421 ;  Furnival 
V.  Weston,  7  J.  li.  Moore,  356 ;  Arton  v. 
Booth,  4  id.  192;  Herbert  i'.  Pigott,  2 
Cromp.  &  M.  384 ;  Crook  v.  Stephen,  .'5 
Bing.  N.  C.  688 ;  Eastman  v.  Wright,  6 
Pick.  323;  Loring  v.  Brackett,  3  Tick. 
403. 

(/)  Chcetham  v.  Ward,  1  B.  &  P.  630. 
And  sec  20  Edw.  IV.  17,  j)!.  2  ;  21  Edw. 
IV.  3,  pi.  4  ;  Woodward  r.  Darcy, 
Plowd.  184;  Wankfonl  v.  Wankford,  1 
Salk.  299  ;  Co.  Litt.  204,  1).  n.  (1)  ;  l)or- 
cliester  v.  Webb,  Sir  W.  Jones,  .'t4.') ;  Raw- 
linson  v.  Shaw,  3  T.  K.  .'j.')?  ;  l^'rcMkii  y  c. 
Fox,  9  B.  &  C.  130;  Alliii  v.  Sliadbunic, 
1  Dana,  6-<.  But  see  conlrii  in  this  coun- 
try, Wiuriiiip  ;;.  JJass,  12  Mass.  199.   And 

[  2"^'^  ] 


see  Ritchie  v.  Williams,  11  Mass.  .50  ; 
Kinney  v.  Ensign,  18  Pick.  232  ;  Stevens 
V.  Gaylord,  1 1  Mass.  267  ;  Ipswich  Man. 
Co.  V.  Storv,  5  Met.  313  ;  Pusey  v.  Clem- 
son,  9  S.  &  li.  204. 

(m)  Dorchester  v.  Webb,  Sir  W.  Jones, 
345.  And  see  cases  cited  in  preceding 
note. 

(n)  Cage  v.  Acton,  1  Ld.  Baym.  515  ; 
Cannel  v.  Buckle,  2  P.  Wms.  242  ;  Smith 
V.  Stafford,  Noy,  26,  Hob.  216.  But  a 
bond  conditioned  for  the  payment  of 
money  after  the  obligor's  deatli,  made  to 
a  woman  in  contemplation  of  the  obligor's 
marrying  her,  and  intended  for  her  benelit 
if  siic  should  survive,  is  not  released  by 
their  marriage.  And  if  the  marriage  be 
jilcaded  in  Ijar  to  an  action  of  debt  on  the 
bond  against  the  heir  of  tlie  obligor,  a  rep- 
lii'atiou  stating  tlic  i)urposes  for  which  the 
bond  was  made  will  be  good,  for  tbey  arc 
consistent  with  the  bond  and  condition. 
Milliourn  (;.  Ewart,  5  T.  R.  381. 

{<>)  Twopenny  i\  Young,  3  B.  &  C. 
2()S;  Drake  r.  Mitchell,  3  East,  251; 
Solly  V.  Forbes,  2  Brod.  &.  B.  38. 

{ji)  Jones  V.  Johnson,  3  AVatts  &  S. 
276.  And  sec  Twopenny  v.  Young,  3  B. 
&  C.  208. 


en.  III.] 


DEFENCES. 


223-*224 


SECTION  VII. 


OF   ALTERATION. 


An  alteration  of  a  contract  is  said  to  operate  a  discharge  of 
it.  If  the  alteration  be  by  a  stranger,  it  avoids  an  instrument, 
if  it  be  material,  and  the  original  words  cannot  be  certainly 
restored,  on  the  ground  that  it  is  no  longer  the  instrument  of 
the  parties,  (q)     If  the  alteration  be  made  by  a  *  party,  it  is  said 


((/)  Formerly  a  material  alteration  by  a 
stranger  was  held  to  render  the  instrument 
void,  notwithstandinji  the  original  words 
might  be  restored.  Thus,  inPigot's  case, 
11  Rep.  27,  it  was  resolved  that  when  any 
deed  is  altered  in  a  point  material,  by  the 
plaintiff  himself,  or  by  any  stranger,  with- 
out the  privity  of  the  obligee,  be  it  by  in- 
terlineation, addition,  rasing,  or  by  draw- 
ing of  a  pen  through  a  line,  or  through  the 
midst  of  any  material  word,  that  the  deed 
thereby  becomes  void  :  as  if  a  bond  is  to 
be  made  to  the  sheriff  for  appearance,  &e., 
and  in  the  bond  the  sheriff's  name  is 
omitted,  and  after  the  delivery  thereof,  his 
name  is  interlined,  either  by  the  obligee  or 
a  stranger,  witiiout  his  privity,  the  deed  is 
void :  So  if  one  makes  a  bond  of  .£10,  and 
after  the  sealing  of  it  another  £1 0  is  added, 
which  makes  it  .£20,  the  deed  is  void  :  so 
if  a  bond  is  rased,  by  which  the  first  word 
cannot  be  seen,  or  if  it  is  drawn  with  a 
pen  and  ink  through  the  word,  although 
the  first  word  is  legible,  yet  the  deed  is 
void,  and  shall  never  make  an  issue, 
whether  it  was  in  any  of  these  cases  altered 
by  the  obligee  himself,  or  by  a  stranger, 
without  his  privity.  Markham  v.  Gonas- 
ton,  Cro.  Eliz.  626,  is  to  the  same  effect. 
And  such  is  still  held  to  be  the  law  by  all 
the  common  law  courts  in  England,  as 
appears  by  the  case  of  Davidson  i'. 
Cooper,  11  M.  &  W.  778,  13  id.  343. 
That  was  an  action  of  assumpsit  on  a 
guarantee.  The  defendants  pleaded  that 
after  the  guarantee  or  agreement  in  writ- 
ing had  been  made  and  signed,  and  after 
the  defendants  had  promised  as  in  the  dec- 
laration mentioned,  and  after  the  guarantee 
had  been  delivered  to  the  plaintiff,  and 
while  it  was  in  his  hands,  it  was,  witiiout 


the  knowledge  or  consent  of  the  defend- 
ants, altered  in  a  material  particular  by 
some  person  to  the  defendants  unknown, 
and  its  nature  and  effect  materially 
changed,  by  such  unknown  person  affix- 
ing a  seal  by  or  near  to  the  signature  of 
the  defendants,  so  as  to  make  it  purport 
to  be  sealed  by  the  defendants,  and  to  be 
the  deed  of  the  defendants  ;  by  reason  of 
which  alteration  the  said  guarantee  be- 
came void  in  law.  The  plaintiff  took  is- 
sue upon  this  plea,  and  upon  the  trial  a 
verdict  was  found  for  the  defendant.  Af- 
terwards, upon  a  motion  to  enter  judg- 
ment for  the  plaintiff  non  obstante  veredicto, 
on  the  ground  tliat  it  was  not  stated  in  the 
plea  that  the  alteration  was  made  by  the 
plaintiff,  or  with  his  privity.  Lord  Abinger, 
in  delivering  the  judgment  of  the  Court 
of  Exchequer,  said  :  "  There  is  no  doubt, 
but  that,  in  the  case  of  a  deed,  any  mate- 
rial alteration,  whether  made  by  the  party 
holding  it  or  by  a  stranger,  renders  the 
instrument  altogether  void  from  the  time 
when  such  alteration  is  made.  This  was 
so  resolved  in  Pigot's  case,  and  though  it 
was  contended  in  argument,  that  the  rule 
has  been  relaxed  in  modern  times,  we  are 
not  aware  of  anj'  authority  for  such  a  prop- 
osition, when  the  altered  deed  is  relied 
on  as  the  foundation  of  a  right  sought  to 
be  enforced.  The  case  is  different,  where 
the  deed  is  produced  merely  as  proof  of 
some  right  or  title  created  by,  or  resulting 
from,  its  having  been  executed;  as  in  the 
case  of  an  ejectment  to  recover  lands 
which  have  been  conveyed  by  lease  and 
release,  or  now  by  release  only.  There, 
what  the  ]ilaintiff  is  seeking  to  enforce,  is 
not,  in  strictness,  a  right  under  the  lease 
and  release,  but  a  right  to  the  possession 

[227] 


225*-226* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


SO  far  to  avoid  the  instrument  that  he  'cannot  set  it  up,  even  if 
the  alteration  be  in  words  not  *material.  (r)     But  such  a  rule 


of  the  land,  resulting  from  the  fact  of  the 
lease  and  release  having  been  executed. 
The  moment  after  their  execution  the 
deeds  become  valueless,  so  far  as  they  re- 
late to  the  passing  of  the  estate,  except  as 
affording  evidence  of  the  fact  that  they 
were  executed.  If  the  effect  of  the  execu- 
tion of  such  deeds  was  to  create  a  title  to 
the  land  in  question,  that  title  cannot  be 
affected  by  the  subsequent  alteration  of  the 
deeds ;  and  the  principles  laid  down  in 
Pigot's  case  would  not  be  applicable.  But 
if  tlie  party  is  not  proceeding  by  ejectment 
to  recover  the  land  conveyed,  but  is  suing 
the  grantor  under  iiis  covenants  for  title  or 
other  covenants  contained  in  the  release, 
there  the  alteration  of  the  deed  in  any 
material  point,  after  its  execution,  whether 
made  by  the  party  or  by  a  stranger,  would 
certainly  defeat  the  rigiit  of  the  party 
suing  to  recover.  The  principle  tiuis  rec- 
ognized in  Pigot's  case,  with  respect  to 
deeds,  was,  in  the  case  of  Master  v.  Miller, 
4  T.  R.  .320,  and  2  H.  BL  141,  established 
as  to  bills  of  exchange  and  promissory 
notes  ;  and  the  ground  on  which  the  decis- 
ion in  that  case  was  put  by  the  court  of 
error  was,  that  in  all  sucli  instruments  a 
duty  arises  analogous  to  the  duty  arising 
on  deeds.  Tiie  instrument  itself  proves 
the  duty,  witbout  any  further  proof  to 
establish  it,  uhl  eadem  est  ratio,  eadem  est 
lex.  The  law  having  been  long  settled  as 
to  deeds,  was  iield  to  be  also  applicable 
to  these  mercantile  instruments,  which, 
though  not  under  seal,  yet  possess  prop- 
erties, the  existence  of  which  in  the  case 
of  deeds  was,  it  must  be  presumed,  the 
foundation  of  the  rule."  And  sec  Burch- 
fiehl  V.  Moore,  3  Ellis  &  B.  683,  2,5  Eng.  L. 
&  Eq.  123;  Gardner  v.  Walsh,  5  Ellis  & 
B.  82,  32  Eng.  L.  &  Eq.  1C2.  "  But  the 
decisions  do  not  stop  tbere.  In  Powell  v. 
Divett,  1.5  East,  29,  the  Court  of  King's 
Bench  extended  the  doctrine  to  the  case 
of  bought  and  sold  notes,  holding,  that  a 
vendor  who,  after  the  bought  and  sold 
notes  had  been  exchanged,  prevailed  on 
the   broker,   without  the   consent  of  the 


vendee,  to  add  a  term  to  the  bought  note 
for  his  (the  vendor's)  benefit,  thereby  lost 
all  title  to  recover  against  the  vendee. 
The  ground  on  which  the  court  proceeded 
was,  that  the  bought  note,  having  been 
fraudulently  altered  by  the  plaintiff,  could 
not  be  received  in  evidence  for  any  pur- 
pose, and  as  no  other  evidence  was  admis- 
sible, the  plaintiff  had  no  means  of  assert- 
ing any  claim  whatever.  The  court  con- 
sidered that  Master  v.  Miller  expressly 
decided  the  point  before  them,  and  Mr. 
Justice  Le  Blanc,  taking,  it  should  seem, 
his  view  of  that  case,  not  from  the  judges 
in  the  Exchequer  Chamber,  but  from  the 
wider  line  of  argument  adopted  by  Lord 
Kenijon  in  the  court  below,  expressly  stated 
that  Master  v.  Miller  was  not  confined  to 
negotiable  securities.  Now,  the  case  of 
Powell  V.  Divett  was  decided  more  than 
thirty  years  ago,  and  has  ever  since  been 
treated  as  law;  and  therefore,  although 
we  certainly  feel  that  there  arc  difficulties 
in  the  extent  to  which  it  carries  the  doc- 
trine of  Pigot's  case,  yet  we  do  not  feel  it 
open  to  us,  if  we  were  inclined  to  do  so, 
to  act  against  that  authority ;  and  the  only 
question  therefore  is,  whether  there  is  any 
real  distinction  in  principle  between  this 
case  and  that  of  Powell  v.  Divett.  The 
only  difference  is,  that  in  Powell  v.  Divett, 
the  alteration  was  made  by  the  plaintiffs, 
who  held  the  written  instrument ;  whereas, 
in  this  case,  it  i->  not  ascertained  by  whom 
the  alteration  was  made ;  the  jury  finding 
that  the  alteration  was  made  by  some  per- 
son to  them  unknown,  whilst  the  docu- 
ment was  in  the  hands  of  the  ))laintiff. 
After  much  reflection,  we  are  of  opinion 
that  this  does  not  create  any  real  distinc- 
tion between  the  two  cases.  The  case  of 
Powell  V.  Divett  was  decided  on  the 
ground  that  written  instruments,  constitut- 
ing the  evidence  of  contracts,  are  within 
the  doctrine  laid  down  in  Mastery.  Miller, 
as  api)licable  to  negotiable  securities  ;  and 
the  doctrine  established  in  Mastery.  Miller 
was,  that  negotiable  securities  arc  to  be 
considered  no  less  than  deeds,  witliin  the 


(r)  Pigot's  case,  11  Rep.  27  ;  Lewis  v. 
Payn,  8  Cowen,  71  ;  Den  d.  Wright  v. 
Wright,  2  Ilulst.  17.5.  And  sec  Mollett 
V.  Wa<kiTbarth,  .5  C.  B.  181.  But  in 
J'ef|iiawk<a  liriilgc  r.  Mathcs,  8  N.  II. 
13'.i,  it  was  /((/(/  ihut  an  immaterial  ultcra- 

[228] 


tion  of  a  bond,  though  made  liy  the  obli- 
gee, would  not  destroy  the  bond.  And 
see  to  the  same  cll'ect.  Bowers  i\  Jewell,  2 
N.  II.  543;  Nichols  r.  Johnson,  10  Conn. 
192. 


CH.  III.] 


DEFENCES. 


-226 


would  now  be  applied,  if  at  all,  with  great  relaxation.     If  the 
alteration  does  not  vary  the  meaning  of  the  instrument,  or  does 


principle  of  the  law  laid  down  in  Pilot's 
case.     That  law  is,  that  a  material  alter- 
ation in  a  deed,  whether  made  by  a  party 
or  a  stranoer,  is  fatal  to  its  validity  ;  and 
applying  that  ]irinci])le  to  the  present  case, 
it  is  plain  that  there  is  no  real  difference 
between  this  case  and  that  of  Powell  v. 
Divett Considering  it,  there- 
fore, impossible  to  distinguisii  this   case 
from  Powell  i\  Divett,  we  think  that  the 
plea  affords  a  good  defence  to  the  action, 
and   consequently  the  rule  for  judgment 
non  obstante  veredicto  must  be  discharged." 
The  case  was  afterwards  carried  by  writ 
of  error  to  the  Exchequer  Chamber,  where 
the  judgment  of  the  court  below  was  unan- 
imously affirmed.     Lord  Demnan  in  deliv- 
ering the  judgment,  said:    "After  much 
doubt  we  think  the  judgment  right.     The 
strictness  of  the  rule  on  this  subject,  as 
laid  down  in  Pigot's  case,  can  only  be  ex- 
plained on  the  principle  that  a  party  who 
has  the  custody  of  an  instrument  made  for 
his  benefit,  is  bound  to  preserve  it  in  its 
oi'igiual  state.     It  is  highly  important  for 
preserving  the  purity  of  legal  instruments 
that  this  principle  should  be  borne  in  mind, 
and  the  rule  adhered  to.     The  party  who 
may  suffer  has  no  right  to  complain,  since 
there   cannot    be    any  alteration   except 
through  fraud,  or  laches  on  his  part.     To 
say  that  Pigot's  case  lias  been  overruled, 
is  a  mistake  ;  on  the  contrary,  it  has  been 
extended  :  the  authorities  establishing,  as 
common  sense  requires,  that  the  alteration 
of  an  unsealed  paper  will  vitiate  it."   And 
see  Mollett  v.  Wackerbarth,  5  C.  B.  181. 
There  seems,  however,  at  one  time  to  have 
^     been  an  inclination  on  the  part  of  the  Eng- 
lish courts  to  relax  the  rule  declared  in 
Pigot's  case.     Thus,  in  Henfree  v.  Brom- 
ley, 6  East,  309,  it  was  held  that  an  award 
altered  by  the  umpire  after  it  was  made 
up  ready  for  delivery,  and  notice  given  to 
the  parties,  was  not  entirely  vitiated  there- 
by, but  that  the  original  award  being  still 
legible,  was  good,  the  same  as  if  such  al- 
teration had  been  made  by  a  mere  stranger 
without  the  privity  or  consent  of  the  party 
interested.      Lord  Ellenborough,  after  ob- 
serving that  the  umpire  had  no  authority 
to  make  the  alteration,  said  :  "  Still,  how- 
ever, I  see  no  objection  to  the  award  for 
the  original  sum  of  £57  ;  for  the  alteration 
made  by  him  afterwards  was  no  more  than 
a  mere  spoliation   by  a  stranger,  which 
would  not  vacate  the  award."   And  again, 

VOL.  II.  20 


"  I  consider  the  alteration  of  the  award  by 
the  umpire,  after  his  authority  was  at  an 
end,  the  same  as  if  it  had  been  made  by 
a  stranger,  by  a  mere  spoliator.     And  I 
still  read  it  with  the  eyes  of  the  law  as  if 
it  were  an  award  for  £57,  such  as  it  orig- 
inally was.      If  the  alteration  had  been 
made  by  a  person  who  was  interested  in 
the    award,   I   should  have    felt    myself 
pressed  by  the  olyection ;   but  I  can  no 
more  consider  this  as  avoiding  the  instru- 
ment, than  if  it  had  been  obliterated  or  can- 
celled by  accident."     The  same  inference 
may  be  drawn  from  Hutch  ins  v.  Scott,  2 
M.  &  W.  809.     There,  by  an  agreement 
between    the  plaintiff  and  defendant,    a 
house,  No.  38,  was   let   to  the   plaintiff". 
After  the   agreement  was   executed  and 
delivered  to  the  plaintiff,  it  was  altered  (it 
was  not  proved   by  whom)  by  writing  35 
instead  of  38,  on  an  erasure.     The  house 
occupied  by  the  plaintiff  under  the  agree- 
ment was  in  fact  No.  35  : — Held,  that  the 
altered  agreement  might  be  given  in  evi- 
dencein  an  action  for  an  excessive  distress 
(in  which  the  demise  was  admitted  on  the 
I'ecord),  to  show  the  terms  of  the  holding. 
In  the  course  of  the  argument,  Alderson, 
B.,  interrupted  the  counsel  to  say  :  "It  is 
difficult  to  understand  why  an  alteration 
h\  a  stranger  should  in  any  case  avoid  the 
deed  —  wliy  the  tortious  act  of  a  third  per- 
son should  affect  the  rights  of  the  two  par- 
ties to  it,  unless  the   alteration  goes  the 
length  of  making  it  doubtful  what  the  deed 
originally    was,    and    what    the     parties 
meant."     And    Lord    Ahinger  added  :  — 
"  Suppose  the  stranger  destroyed  instead 
of  altering  it  ? "    And  again  Lord  Abinger, 
in  delivering  his  opinion,  said  :  "No  case 
has  gone  the  length  of  saying  that  when 
a  deed  is  altered,  and  thereby  vitiated,  it 
ceases  to  be  evidence  :  it  may  be  so  with 
reference  to  the  stamp  laws:  —  there  is  no 
occasion,  however,  in  the  present  case,  to 
raise  the  general  question.     The  old  law 
was,  no  doubt,  much  more  strict  than  it 
has  been  in  modern  times.     Originally, 
there  could  be  no  such  thing  as  founding 
upon  a  deed  without  making  profert  of  it ; 
and  it  was  but  an  invention  of  the  pleaders, 
growing  out  of  a  decision  of  Lord  Mans- 
field's,   to   allege,   as   an  excuse  for  not 
making  profert,  a  loss  of  the  deed  by  time 
and  accident,  founded  on  the  presumption 
to  be  derived  from  long  possession   and 
enjoyment.     I  can  hardly  see  how  such  a 

[229] 


226- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


not  affect  its  operation,  there  is  no  good  reason  why  it  should 
make  the  instrument  void,  (s)  And  it  seems  that  an  alteration 
in  negotiable  paper,  although  so  material  as  to  change  the  date 
and  time  of  payment,  may  not  avoid  it,  if  it  be  only  a  correction 
of  a  certahi  error,  and  be  made  before  it  is  put  into  circula- 
tion, (sa)  The  reason  given  by  Lord  Kent/on  for  holding  that 
any  alteration  avoided  an  instrument,  that  "  no  man  shall  be 
permitted  to  take  the  chance  of  committing  a  fraud,  without 
running  any  risk  of  losing  by  the  event  when  it  is  detected,"  (t) 
is  neither  very  clear  nor  very  strong,  nor  does  it  apply  to  an 
immaterial  alteration.  We  may  therefore  say,  that  in  this 
country  generally,  no  immaterial  alteration  would  avoid  an  in- 
strument. And  that  alteration  which  only  does  what  the  law 
would  do,  that  is,  only  expresses  what  the  law  implies,  is  not 


course  is  consistent  witli  the  old  author- 
ities which  say  that  any  ahcration,  even 
by  a  stranger,  shall  vitiate  a  deed.  If  it 
be  so  altered  as  to  leave  no  evidence  of 
what  it  originally  was,  tliat  may  prevent 
any  party  from  using  it ;  or  if  it  be  altered 
in  a  material  part  by  a  party  taking  a 
benefit  under  it,  that  may  ]jrcvent  liim 
even  from  showing  what  it  originally  was. 
Here,  however,  it  is  sufficient  to  decide 
that  this  agreement  was  evidence  to  prove 
the  terms  of  the  holding ;  and  there  was 
no  evidence  of  any  other  holding  than 
that  of  the  house  No.  35."  So  Pigot's 
case  has  been  overruled  by  the  Irish 
courts.  Swiney  v.  Barry,  1  Jones,  109, 
where  it  was  held  that  an  alteration  in  a 
material  part  of  a  deed  by  a  stranger  does 
not  avoid  the  deed  ;  and  the  court  will 
look  at  the  deed  as  it  was  before  it  was 
altered  ;  and,  tlierefbre,  if  upon  oyer,  the 
deed  is  set  out  as  it  was  before  it  was 
altered,  it  is  no  variance.  And  in  this 
country  it  is  clearly  settled  that  a  matciial 
alteration  by  a  stranger  will  not  render  an 
instrument  void,  if  it  can  l)e  shown  by 
evidence  .wliat  the  instrument  was  before 
it  was  altered.  Nichols  v.  Johnson,  10 
Conn.  l'J2  ;  llees  v.  Overbaugh,  G  Cowen, 
740;  Lewis  v.  I'ayn,  8  id.  71  ;  Medlin  ;;. 
rialte  County,  8  Mo.  2.'i.5  ;  Davis  v.  Car- 
lisle, 0  Ala.  707  ;  Waring  i;.  Smith,  2 
Uarl).  (Jh.  119;  Smith  v.  McGowan,  :i 
IJarb.  404;  Jackson  v.  Malin,  15  Johns. 
2'J.'{. 

(.s)  Such  seems  toliavcl)ecn  the  opinion 
of  tlie  court  in  I'almouth  v.  Koiicrls,  '.»  I\I. 
&,  W.  4(j'.».     And  it  was  expressly  so  held 

[230] 


in  Smith  v.  Crooker,  5  Mass.  540,  where 
the  name  of  the  obligor  of  a  bond,  was 
inserted  in  the  bodi/  of  the  instrument  by 
the  obligee,  after  it  was  signed.  See  also, 
Hunt  V.  Adams,  6  Mass.  519,  as  to  sup- 
plying words  omitted  by  mistake,  or  which 
the  law  itself  would  supply.  In  Granite 
Eailway  Co.  v.  Bacon,  15  Pick.  239,  a 
promissory  note  in  the  following  words 
was  signed  by  the  defendant :  "  For  value 
received  I  promise  to  pay  to  Quiney  Kail- 
way  Company  "  (who  were  the  plaintiffs), 
"  or  order,  one  thousand  and  thirty  dol- 
lars, in  six  months."  The  note  was  then 
indorsed  by  E.  P.,  and  delivered  to  the 
treasurer  of  the  plaintiffs,  who  without  the 
knowledge  or  consent  of  the  defendant, 
inserted  the  words  "  the  order  of  E.  P." 
above  the  words  "  Quiney  Eailway  Com- 
pany, or  order,"  but  without  erasing  the 
latter  words.  It  was  held,  that,  in  the  ab- 
sence of  fraud,  this  was  not  an  alteration 
affecting  the  validity  of  the  note.  So,  in 
Langdon  r.  Paul,  20  Vt.  217,  where  the 
plaintiff  ofi'ered  in  evidence  a  sealed  in- 
strument, in  which  the  defendant  ac- 
knowledged that  he  had  "  signed  "  certain 
promissory  notes,  and  the  words  "  and 
executed  "  were  interlined  after  the  word 
"  signed,"  it  was  held  that  these  words 
were  immaterial,  and  that  no  explana- 
tion of  the  time  when  tlie  interlineation 
was  made  was  necessary.  See  also, 
llinitington  v.  Pinch,  3  Ohio  State,  445, 
and  cases  cited  in  ])receding  note. 

{sa)  Pitch  V.  Jones,  5  Ellis  &  B.  238. 

(/)  Master  v.  Miller,  4  T.  R.  329. 


en.  HI.] 


DEFENCES. 


*227 


a  material  alteration,  and  therefore  would  not  avoid  an  instru- 
ment, (u)  Whether  the  alteration  is  *material,  is  not  a  question 
of  fact  for  a  jury,  but  of  law  for  the  court;  (v)  and  the  burden 
of  proof  of  the  fact  of  alteration  rests  on  the  party  alleging 
it.  (w) 

If  the  alteration  be  by  tearing  off  a  seal,  the  instrument  can- 
not, in  strict  law,  be  pleaded  with  a  profert,  but  the  facts  should 
be  specially  set  forth  as  the  reason  why  there  is  no  profert.  (x) 
If  a  seal  be  added  to  an  instrument,  this  has  been  held  to  be  a 


(w)  The  sensible  rule  on  tliis  subject 
seems  to  have  been  arrived  at  in  Adams 
V.  Fryo,  3  Met.  103,  where  it  was  iield  tluit 
if  after  the  execution  and  delivery  of  an 
unattested  bond,  the  obligee,  without  the 
knovvledj^o  and  assent  of  tlie  obligor,  fraud- 
ulently, and  with  a  view  to  some  im- 
proper advantage,  procures  a  person  who 
was  not  present  at  the  execution  of  the 
bond,  to  sign  his  name  thereto  as  an  at- 
testing witness,  tlie  bond  is  thereby  avoid- 
ed and  the  obligor  discharged.  The  act 
of  an  obligee  in  procuring  a  person  who 
was  not  present  at  the  execution  of  the 
bond,  nor  duly  authorized  to  attest  its  ex- 
ecution, to  sign  his  name  thereto,  as  an 
attesting  witness,  is  prima  facie  sufficient 
to  authorize  the  jury  to  infer  a  fraudulent 
intent.  15ut  it  is  competent  for  the  obligee 
to  reluit  such  inference  ;  and  if  the  act  be 
shown  to  have  been  done  witliout  any 
fraudulent  purpose,  the  bond  will  not  be 
avoided  by  such  alteration.  And  Dewey, 
J.,  said :  "  There  was,  by  the  alteration 
which  was  made  in  the  case  at  bar,  a  ma- 
terial change  introduced  as  to  the  nature 
and  kind  of  evidence  which  might  be  re- 
lied upon  to  prove  the  facts  necessary  to 
substantiate  the  plaintitl''s  case  in  a  court 
of  law.  By  adding  to  tlie  bond  the  name 
of  an  attesting  witness,  the  obligee  became 
entitled  to  show  the  due  execution  of  the 
same,  by  proving  the  handwriting  of  the 
supposed  attesting  witness,  if  the  witness 
was  out  of  the  jurisdiction  of  the  court. 
It  is  quite  obvious,  therefore,  that  a  fraud- 
ulent party  migiit,  by  means  of  such  an 
alteration  of  a  contract,  furnish  the  legal 
proof  of  the  due  execution  thereof,  by 
honest  witnesses  swearing  truly  as  to  the 
genuineness  of  the  handwriting  of  the 
supposed  attesting  witness ;  and  yet  the 
attestation  might  be  wholly  unauthorized 
and  fraudulent.  It  seems  to  us  that  we 
ought  not  to  sanction  a  principle  which 


would  permit  tlie  holder  of  an  obligation 
thus  to  tamper  with  it  with  entire  impu- 
nity. But  such  would  be  tiie  necessary 
consequence  of  an  adjudication  that  the 
subsequent  addition  of  the  name  of  an  at- 
testing witness,  without  the  privity  or 
consent  of  the  obligee,  is  not  a  material 
alteration  of  the  instrument,  and  would 
under  no  circumstances  affect  its  validity. 
But  we  think  that  it  would  be  too  severe 
a  rule,  and  one  which  miglit  operate  with 
great  hardship  upon  an  innocent  party,  to 
hold  inflexibly  that  such  alteration  would, 
in  all  cases,  discharge  the  obligor  from 
the  performance  of  his  contract  or  obliga- 
tion. If  an  alteration,  like  that  which 
was  made  in  the  present  case,  can  be 
shown  to  have  been  made  honestly,  if  it 
can  be  reasonably  accounted  for,  as  done 
under  some  misapprehension  or  mistake, 
or  with  the  supposed  assent  of  the  obligor ; 
it  should  not  operate  to  avoid  the  obliga- 
tion. But  on  the  other  hand,  if  fraudu- 
lently done,  and  with  a  view  to  gain  any 
improper  advantage,  it  is  right  and  proper 
that  tlie  fraudulent  party  should  lose 
wholly  the  right  to  enforce  his  original 
contract  in  a  court  of  law."  See  also, 
Thornton  v.  Appleton,  29  Me.  298. 

(v)  Hill  V.  Calvin,  4  How.  Miss.  231 ; 
Bowers  v.  Jewell,  2  N.  H.  543 ;  Marten- 
dale  V.  Follet,  1  N.  H.  95,  where  the  in- 
sertion of  the  word  young  in  a  note  for 
"  merchantable  neat  stock  "  was  Inlcl  ma- 
terial;  Wheelock  v.  Freeman,  13  Pick. 
165;  Brackett  v.  Mountfort,  2  Fairf.  115, 
where  a  note  was  attested  some  time  after 
it  was  signed,  and  it  was  held  that  this 
rendered  the  note  void.  But  wliether  the 
alteration  was  made  with  fraudulent  mo- 
tives, or  with  consent,  is  for  the  jury. 
Bowers  v.  Jewell,  2  N.  H.  543. 

[w]  Davis  V.  Jcnney,  1  Met.  221. 

[x)  Powers  v.  Ware,  2  Pick.  451. 

[231] 


228* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


material  alteration ;  (t/)  but  we  think  it  would  generally  be  re- 
garded as  immaterial  and  inoperative.  It  has  *indeed  been  held, 
that  when  a  seal  adds  no  actual  strength  to  the  contract,  and 
interferes  with  the  intention  of  the  parties,  which  is  adequately 
expressed  and  effected  by  the  instrument  regarded  as  a  simple 
contract,  then  the  seal  may  be  treated  as  mere  surplusage,  (z) 

In  the  absence  of  explanation,  evident  alteration  of  any  in- 
strument is  generally  presumed  to  have  been  made  after  the 
execution  of  it;  and  consequently  it  must  be  explained  by  the 
party  who  relies  on  the  instrument,  or  seeks  to  take  advantage 
from  it.  Such  is  the  view  taken  by  many  authorities  of  great 
weight.  But  others  of  perhaps  equal  weight  hold  that  there  is 
no  such  presumption;  or,  at  least,  that  the  question  whether  the 
instrument  was  written  as  it  now  stands  before  it  was  executed, 
or  has  since  been  altered,  and  whether  if  so  altered  it  was  done 
with  or  without  the  authority  or  consent  of  the  other  party,  are 
questions  which  should  go  to  a  jury,  to  be  determined  according 
to  all  the  evidence  in  the  case,  {a) 


(y)  Davidson  r.  Cooper,  11  M.  &  W. 
778,  13  id.  343. 

{z)  Triiett  V.  Wainwright,  4  Gilman, 
411. 

(a)  It  seems  to  have  been  the  rule  of 
the  common  law,  that  if  an  obvious  alter- 
ation, or  interlineation  appeared  in  adeerf, 
it  would,  nevertheless,  in  the  absence  of 
any  op|)Osiri<;  testimony,  be  presumed  to 
have  been  made  before  the  deed  was  finally 
executed,  because  the  law  will  never  ])re- 
sume  fraud  or  forj^ery  in  any  person  ;  om- 
nia pmsumuntitr  rite  esse  acta.  Co.  Litt. 
225  b,  n.  (1 ) ;  Trowel  v.  Castle,  1  Keble, 
22 ;  Den  v.  Farlee,  1  N.  J.  280,  the  alter- 
ation bcin«^  (Kjainst  the  piirty  claimin<;  un- 
der tbe  j);i]icr;  so  in  PuUen  v.  Siiaw,  3 
Dev.  2-'!H.  And  the  same  rule  has  bceti 
adhered  to  in  a  late  "Enfrlish  case.  Doc  d. 
Tatiiam  c.  Catamore,  16  Q.  B.  74.5,  5  Eni^. 
L.  &  Vj(\.  34'J.  And  in  some  cases  the 
same  principle  hiis  been  f(dlowed  in  bills 
of  cxcli;in;,ri.  and  promissory  notes,  (iooch 
V.  Bryant,  l.'J  Me.  .'iSC),  whicli  was  an  ac- 
tion on  a  note,  the  date  of  wliicb  obviously 
had  been  at  some  time  materially  altered, 
but  when  tlicre  was  no  evidence  on  eitlicr 
side.  Tlic  jutlt;e  l)eforc  whom  the  case 
was  tried,  nijiil,  that  alterinj^  it  after  the 
execution  woidd  be  a  fraud  whicli  was 
not  lo  lie  presumed,  but  must  i)e  proved, 

[2)32] 


and  the  plaintiff  had  a  verdict.  On  ex- 
ceptions this  ruling  was  sustained,  Weston, 
C.  J.,  saying:  "  There  was  no  other  evi- 
dence of  the  alteration  of  the  note,  than 
what  arose  from  inspection,  from  which  it 
appeared  that  one  of  the  figures  in  the 
date  had  been  altered.  Of  tlie  fact  there 
could  be  no  doubt;  but  the  more  impor- 
tant inrpiiry  was,  when  it  was  done.  If 
altered  after  the  signing  and  delivery,  it 
would  vitiate  the  note;  if  before,  it  would 
not.  As  to  the  time,  no  evidence  was 
offered  by  either  party.  The  alteration 
was  not  in  itself  proof  that  it  was  done 
after  the  signature ;  it  might  have  been 
made  before.  If  the  alteration  was  prima 
facie  evidence  that  it  was  done  after,  it 
must  be  upon  the  ground  tliat  such  is  the 
presumption  of  law.  But  we  do  not  so 
understand  it.  It  would  be  a  harsh  con- 
struction ;  exposing  the  holder  of  a  note, 
the  date  of  which  had  been  so  altered  as  to 
accelerate  payment,  or  to  increase  the 
amount  of  interest,  to  a  conviction  of 
forgery,  unless  he  could  prove  that  it  was 
done  l)efore  the  signature.  It  would  be  to 
cstablisii  guilt  by  a  rule  of  law,  when 
tlicre  would  be  at  least  an  equal  proba- 
bility of  innocence.  But  sucli  cannot  be 
the  law  ;  it  is  a  (piestion  of  evidence,  to  bo 
submitted  to  the  jury,  as  was  done  in  the 


cii.  in.] 


DEFENCES. 


229-*230 


If  there  are  blanlcs  left  in  a  deed,  affecting  its  meaning  and 
operation  in  a  material  way,  and  they  are  filled  np  after  *execu- 


case  before  us.  And  tlicy  were  properly 
instructed,  that  it  was  a  case  not  within 
the  statute  of  limitations."  Beaman  v. 
Russell,  20  Vt.  20.'j,  adopts  the  same 
rule.  That  also  was  a  case  of  an  altera- 
tion in  the  date  of  a  note,  and  tlie  suliject  is 
there  ably  examined.  Cumberhmd  Bank 
I'.  Hall,  1  llalst.  215,  is  the  same  way. 
In  Wickes  v.  Caulk,  5  Harris  &  J.  36,  the 
names  of  the  witnesses  to  a  deed  had  been 
erased.  The  court  refused  to  ])resume 
that  the  erasure  was  after  execution,  say- 
ing :  "  By  the  inspection  of  the  original 
deed,  tlie  names  of  the  two  persons  are 
written  in  the  place  where  attesting  wit- 
nesses generally  write  their  name,  and 
the  names  are  erased,  but  when  they  were 
erased,  whetlier  before  or  after  the  execu- 
tion of  the  deed,  does  not  appear;  and  it 
is  incumbent  on  the  party  who  wishes  to 
avoid  a  deed  by  its  erasure,  to  prove  that 
the  alteration  was  made  after  its  execution 
and  delivery.  Attesting  witnesses  arc  not 
necessary  to  the  validity  of  a  deed,  and  the 
erasure  of  tbeir  names,  by  a  stranger, 
would  not  avoid  it.  As  the  court,  there- 
fore, were  not  bound  to  presume  that  the 
erasure  was  made  by  the  grantee,  or  those 
claiming  under  him,  after  the  execution 
and  delivery  of  the  deed,  the  lessor  of  the 
plaintitf  could  not  call  on  the  court  to  de- 
clare the  deed  inoperative."  In  Clark  v. 
Rogers,  2  Greenl.  147,  it  is  said  that  in 
such  cases  "  fraud  and  forgery  are  not  to 
be  presumed."  On  the  other  hand  there 
arc  many  able  and  well-considcrcd  decis- 
ions to  the  effect  that  it  is  incumbent 
upon  a  party  offering  an  instrument  which 
has  an  obvious  or  admitted  interlineation 
or  alteration  on  it,  which  is  material,  to 
explain  such  alteration,  and  show  that  it 
was  made  before  execution.  Not  the 
least  of  these  cases  is  that  of  Wilde  v. 
Armsby,  6  Cush.  314.  There,  in  an  ac- 
tion on  a  written  guarantee  of  the  pay- 
ments of  George  Winchester  and  company, 
it  appeared,  on  the  face  of  the  instrument, 
the  signature  to  which  was  admitted,  that 
the  same  had  been  altered  by  an  interline- 
ation of  the  words  "  and  company,"  writ- 
ten in  a  different  handwriting  from  that  of 
the  rest  of  the  instrument,  and  in  a  different 
ink.  It  was  held,  that  the  burden  of  proof 
was  on  the  plaintiff  to  show,  that  the 
interlineation  was  made  before  the  instru- 
ment was  executed.  But  the  court  there 
said  :    "  We   arc  not  prepared  to  decide 

20* 


that  a  material  alteration,  manifest  on  the 
face  of  the  instrument,  is,  in  all  cases ' 
whatsoever,  such  a  suspicious  circumstance 
as  throws  the  burden  of  proof  on  the  party 
claiming  under  the  instrument.  The  effect 
of  such  a  rule  of  law  would  be,  that  if  no 
evidence  is  given  by  a  party  claiming 
under  such  an  instrument,  the  issue  must 
always  be  found  against  him,  tiiis  being 
the  meaning  of  the  '  burden  of  proof.'  1 
Cufteis,  640.  But  we  are  of  opinion, 
upon  the  authorities,  English  and  Ameri- 
can, and  upon  principle,  that  the  burden  of 
proof,  in  explanation  of  the  instrument  in 
suit  in  this  case,  was  on  the  plaintiff.  It 
was  admitted  by  his  counsel,  at  the  argu- 
ment, that  the  words  '  and  Co.'  which 
were  interlined  in  the  guarantee,  were  in  a 
different  handwriting  from  that  of  the  rest 
of  the  instrument,  and  also  in  different 
ink.  In  such  a  case,  the  burden  of  ex- 
planation ought  to  be  on  the  plaintiff;  for 
such  an  alteration  certainly  throws  suspi- 
cion on  the  instrument."  Probably  the 
weight  of  autliority  in  America  is,  that  in 
negotiable  instruments,  the  burden  of  show- 
ing that  an  obvious  and  material  altera- 
tion was  lawfully  made  is  upon  the  party 
claiming  under  it.  Simpson  i'.  Stack- 
house,  9  Barr,  186;  Hills  v.  Barnes,  11 
N.  H.  39.')  ;  McMickcn  v.  Bcauchamp, 
2  La.  290  ;  Warren  v.  Layton,  3  Harring. 
Del.  404  ;  Commercial  Bank  v.  Lum,  7 
How.  Miss.  414;  Wilson  u.  .  Hender- 
son, 9  Smedes  &  M.  375  ;  Humphreys 
V.  Guillow,  13  N.  H.  385;  Walters  v. 
Short,  5  Gilman,  252;  Tillou  v.  Clinton 
Mut.  F.  Ins.  Co.  7  Barb.  564.  And 
in  England  the  current  of  authority  is 
unbroken  that  in  negotiable  instruments 
a  different  rule  prevails  from  that  ap- 
plicable to  deeds.  Any  alteration  in  the 
former  must  be  explained.  Lord  Camp- 
bell, C.  J.,  in  Doe  d.  Tatham  v.  Cata- 
more,  supra;  Johnson  v.  Marlborough, 
2  Stark.  313;  Bishop  v.  Chambre,  3  C. 
&  P.  55  ;  Taylor  v.  Mosely,  6  C.  &  P. 
273;  Sibley  v.  Fisher,  7  A.  &  E.  444; 
Knight  V.  Clements,  8  A.  &  E.  215; 
Clifford  V.  Parker,  2  Man.  &  G.  909; 
Henman  v.  Dickinson,  5  Bing.  183; 
Cariss  v.  Tattersall,  2  Man.  &  G.  890; 
Whitfield  V.  Collingwood,  1  Car.  &  K. 
325.  Some  American  authorities  deny 
any  distinction  between  deeds  and  other 
writings,  and  hold  the  burden  to  be  always 
on  the  party  claiming  under   an   instru- 

[  233  J 


231* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


tion,  there  should  be  a  reexecution,  and  a  new  acknowledg- 
ment, (b)  But  no  alteration  in  a  deed  defeats  an  estate  or 
interest  granted  by  it,  if  the  estate  or  interest  have  vested  ;  for 
in  thatcase,  " the  moment  after  its  execution  the  deed  becomes 
valueless,  so  far  as  it  relates  to  the  passing  of  the  estate,  except 
as  affording  evidence  that  it  was  executed."  (c)     *  But  even  in 


ment  to  explain  any  alteration  in  it.  See 
Ely  V.  Ely,  6  Gray,  439  ;  Morris  v. 
Vanderen,!  Dall.  67;  Prevost  v.  Gratz, 
Pet.  C.  C.  .seg  ;  Jackson  d.  Gibbs  i'.  Os- 
borne, 2  Wend.  5.55 ;  Acker  v.  Ledyard, 
8  Barb.  514;  Jackson  v.  Jacoby,  9  Cow- 
en,  125.  In  England  there  may  be 
found  many  decisions  to  the  effect  that 
alterations  apparent  in  a  will,  will  be  pre- 
sumed to  have  been  made  after  the  original 
execution.  But  this  seems  to  be  based 
upon  tiie  construction  of  the  statute  of 
Wills,  1  Vict.  c.  26.  See  Doe  d.  Shall- 
cross  V.  Palmer,  16  Q.  B.  747,  6  Eng.  L. 
&  Eq.  155;  Cooper  v.  Bockett,  4  Moore, 
P.  C.  419;  Burgoyne  v.  Showier,  1  Rob. 
Ecc.  5.  In  Rankin  v.  Blackwell,  2  Johns. 
Cas.  198,  the  maker  of  a  note  relied  upon 
an  alteration  in  the  date  and  amount, 
as  a  defence.  His  proof  was  (intei-  alia) 
the  alterations  apparent  on  the  note  itself, 
from  which  the  jury  might  decide  whether 
the  note  had  been  altered  or  not ;  but  the 
judge  overruled  the  evidence  offered,  and 
charged  tlic  jury  that  the  mere  appearance 
of  alterations  on  the  face  of  the  note,  un- 
aided by  any  proof  as  to  the  character  of 
the  persons  through  whose  hands  it  had 
passed,  was  not  sufficient  to  support  the 
defence  set  up.  The  jury,  accordingly, 
found  a  verdict  for  the  plaintitf,  for  the 
full  amount  on  the  face  of  the  note,  with 
interest.  The  verdict  was  set  aside  be- 
cause other  competent  evidence  was  not 
admitted,  l)ut  the  court  observed :  "  The 
alterations  on  the  face  of  the  note,  unsup- 
ported by  other  proof,  would  not  be  com- 
petent evidence ;  but  if  any  previous  testi- 
mony had  been  offered,  to  show  that  the 
note  was  given  for  a  less  sum,  or  to  render 
it  prol)al)lo  that  a  fraud  had  been  com- 
mitted, the  alteration  on  the  face  of  the 
note  would  have  been  a  strong  corroborat- 
ing circumstance,  if  not  decisive,  of  the 
truth  of  the  f  ict.  On  the  fn'st  ground,  wo 
think  that  there  ought  to  be  a  new  trial, 
with  costs,  to  abide  the  event  of  the  suit." 
In  Bailey  i-.  Taylor,  11  Conn.  5.U,  the 
whole  reasoning  of  the  court  is  against 
the  principU;,  that  a  ]>arty  claiming  uuiler 
an  InHtrumi.'nt,  which  has  been  o!)vi()usly 

[234] 


altered,  must  necessarily,  and  in  all  cases, 
explain  such  alteration  before  he  can  re- 
cover upon  the  paper.  And  see  Matthews 
V.  Coalter,  9  Mo.  705  ;  North  River  Mea- 
dow Co.  V.  Shrewsbury  Church,  2  N.  J. 424. 

(b)  Hibblewhite  v.  McMorine,  6  M.  & 
W.  200.  But  see  upon  this  point,  Smith 
V.  Crooker,  5  Mass.  538 ;  Wiley  v.  Moor, 
17  S.  &  R.  438;  Duncan  v.  Ilodges,  4 
McCord,  239  ;  Stone  v.  Wilson,  id.  203  ; 
Fulton's  case,  7  Cowen,  484 ;  Bank  v. 
Curry,  2  Dana,  142  ;  Jordan  v.  Neilson, 
2  Wash.  Va.  164;  Boardman  v.  Gore,  1 
Stew.  517;  Bank  v.  McChord,  4  Dana, 
191  ;  Getty  v.  Shearer,  20  Penn.  St.  12. 

(c)  Per  Lord  Abinger,  in  Davidson  v. 
Cooper,  1 1  M.  &  W.  800.  So  in  Chess- 
man V.  Whittemore,  23  Pick.  231,  it  was 
held  that  where  the  title  to  real  estate  un- 
der a  deed,  has  once  vested  in  the  grantee 
by  transmutation  of  possession,  it  will  not 
be  divested  or  invalidated  by  a  subsecj[uent 
material  alteration  of  the  deed.  And 
Morton,  J.,  said  :  "  There  is  a  manifest 
distinction  between  executory  contracts 
and  conveyances  of  property.  When  deeds 
of  conveyance  of  real,  or  bills  of  sale  of 
personal  property  are  completed,  and  pos- 
session delivei-cd  under  tiiem,  so  far  as  the 
cliange  of  ownership  depends  on  them 
they  arc  executed,  and  the  property  passes 
and  vests  in  the  grantee.  The  instruments 
may  become  invalid,  so  that  no  action  can 
be  maintained  upon  the  covenants  con- 
tained in  them,  and  yet  the  titles  which 
have  been  acquired  under  them,  remain 
unaffected.  When  a  jicrson  has  become 
the  legal  owner  of  real  estate,  he  cannot 
transfer  it  or  part  with  his  title,  exccj)t  in 
some  of  tlic  forms  prescribed  by  law. 
The  grantee  may  destroy  his  deed,  but 
not  his  estate.  He  may  deprive  himself  of 
his  remedies  upon  the  covenants,  but  not 
of  his  right  to  hold  the  property.  This 
distinction  has  existed  from  the  earliest 
times."  And  .see  Barrett  v.  Tiiorndike, 
1  Greenl.  73 ;  Withers  v.  Atkinson,  1 
Watts,  236  ;  Smith  )'.  McGowan,  3  Barb. 
404  ;  Bolton  /-.  The  Bishop  of  Carlisle,  2 
II.  Bl.  259.  But  in  Bliss  r.  Mclntire,  18 
Vt.    466,  it   Avas   held,   that    if   a   lessee 


en.  III.]  DEFENCES.  *232 

that  case,  if  the  party  in  possession  of  the  land  under  the  deed, 
is  suing  the  grantor  upon  any  of  his  covenants  contained  in  the 
deed,  an  alteration  of  the  deed,  subsequent  to  the  execution, 
would  have  the  same  effect  as  if  made  in  any  other' instru- 
ment, (d) 

SECTION  VIII. 

ON   THE   PENDENCY    OF   ANOTHER    SUIT. 

Any  one  who  has  a  claim  against  another  is  at  liberty  to 
prosecute  this  claim  at  law,  and  the  whole  system  of  legal  pro- 
cedure exists  for  the  purpose  of  making  effectual  his  endeavors 
to  recover  the  debt,  if  it  be  just  and  legal.  But  no  man  can  do 
more  than  is  necessary  for  this  purpose,  or  use  the  machinery 
of  the  law"  merely  to  vex  and  distress  another.  Hence,  as  the 
law  presumes  that  any  one  question  may  be  tried  and  deter- 
mined by  means  of  one  action,  no  claimant  may  bring  more  than 
one  at  the  same  time.  Therefore,  it  is  a  good  cause  of  abate- 
ment of  an  action,  that  another  is  then  pending  for  the  same 
cause,  and  betw^een  the  same  parties,  (e)  But  the  prior  action 
must  be  between  the  same  parties ;  (/)  and  the  plaintiff  must 
sue  in  the  same  capacity,  (g-)  And  it  has  been  held  that  the 
parties  must  not  only  be  the  same,  but  must  stand  in  the  same 
relation  to  each  other  in  both  suits.  Thus,  it  has  been  held 
that  a  prior  suit  by  A  against  *  B  cannot  be  pleaded  in  abate- 
ment of  a  subsequent  suit  by  B  against  A  arising  from  the 
same  cause.  (A)     In  England  the  prior  suit  must  be  in  a  court 

fraudulently  alter  his  lease  in  a  material  Casey  v.  Harrison,  2  Dev.  244 ;  Henry  v. 

part,  subsequent  to  its  execution,  he  there-  Goldney,  15    M.   &  W.  494,  overruling 

by  destroys  all  his  future  right  under  the  whatever  is  contrary  in  Boyce  v.  Douglas, 

lease,  either  to  retain  the  possession  of  the  1   Camp.  GO.     And  see  Logs  of  Maliog- 

premises,  or  to  preclude  the  lessor  from  any,  2  Sumner,  589  ;  Treasurers  w.  Bates, 

reentering  upon  them.  2  Bailey,  362  ;  Davis  v.  Hunt,  id.  412 ; 

(d)  Davidson  v.  Cooper,  11   M.  &  W.  Thomas  v.  Freelon,  17  Vt.  138. 

800  ;  Withers  v.  Atkinson,  1  Watts,  236  ;  (g)  Cornelius  v.  Vanarsdallen,  3  Penn. 

Chessman  v.  Whittemore,  23  Pick.  231  ;  St.  434. 

Waring  v.  Smyth,  2  Barb.  Ch.  119.  {h)  See  Wadleigh  v.  Veazie,  3  Sumner, 

(e)  Tracy  v.  Reed,  4  Blackf.  56;  Mc-  165;  Colt  v.  Partridge,  7  Met.  570;  Has- 
Kinsey  v.  Anderson,  4  Dana,  62  ;  James  kins  v.  Lombard,  16  Me.  140.  Whether 
V.  Dowell,  7  Smedes  &  M.  333.  in  an  action  against  two,  a  prior  action 

(/)  Therefore,  in  a  suit  against  A, -pen-  against  one  of  them  is  a  good  cause  of 
dency  of  another  suit  for  the  same  cause  abatement,  may  not  perhaps  be  fully  set- 
against  B  is  not  a  good  plea  in  abatement,    tied.     We  are   inclined  to  believe  it  is. 

[  235  ] 


233' 


THE   LAW   OF   CONTRACTS. 


[part  II. 


not  inferior  to  that  in  which  the  second  is,  in  order  to  be  a  de- 
fence, (i)  If  the  prior  action  be  pending  in  another  State,  it 
will  not  have  this  effect,  (y)  *  except  in  the  case  of  a  foreign 
attachment  or  trustee  process,  (k) 


See  Earl  of  Bedford  v.  Bishop  of  Exeter, 
Hob.  137  ;  Rawlinson  v.  Oriet,  1  Show. 
7.5,  Carth.  96.  And  e  conuerso.  Graves  v. 
Dale,  1  T.  B.  Mon.  190  ;  Atkinson  v.  The 
State  BLink,  5  Blackf.  84.  Though  there 
was  a  misjoinder  of  defendants  in  the  first 
suit.     Id. 

(/)  Laughton  v.  Taylor,  6  M.  &  W. 
695;  Brinsby  v.  Gold,  12  Mod.  204; 
Sparry's  case,  5  Hep.  61  a;  Seers  ??. 
Turner,  2  Ld.  Raym.  1102.  We  are  not 
aware  of  any  sucii  distinction  in  this  coun- 
try, and  if  tiie  court  where  the  cause  is 
first  brought  has  jurisdiction  to  try  the 
case  and  render  a  valid  judgment  therein, 
■we  think  the  pendency  of  that  suit  is 
good  cause  of  abatement  to  a  second  suit 
in  anotiier  and  higher  court.  See  Bos- 
well  V.  Tunnill,  10  Ala.  958;  Johnston 
i\  Bower,  4  Hen.  &  Mun.  487  ;  Thomas 
r.  Freelon,  17  Vt.  138;  Slyhoof  i\  Flit- 
craft,  1  Ashni.  171  ;  Ship  Robert  Fulton, 

1  Paine,  620.  But  see  further.  Smith  r. 
The  Atlantic  jM.  F.  Ins.  Co.  2  Foster,  21, 
cited  infra,  n.  (j)  ;  and  Bowne  v.  Joy,  9 
Johns.  221. 

(j)  The  current  of  authorities  is  to  tlie 
effect  that  the  pendency  of  an  action  in  a 
foreifjn  tribunal,  although  of  competent 
jurisdiction,  is  not  good  cause  of  abate- 
ment. Story,  Confl.  of  Laws  (Bennett's 
Ed.),  §  610  a,  and  cases  cited.  See  also, 
Ostell' 1-.  Lepage,  5  De  G.  &  S.  95,  10 
Eng.  L.  &  E(i.  250;  McJilton  v.  I;Ove, 
13  111.  486;  Bowne  v.  Joy,  9  Johns. 
221;  Walsh  r.  Durkin,  12  Johns.  99; 
liusscl  V.  Field,  Stuart's  Lower  Canada 
K.  558;  Bayley  r.  Edwards,  3  Swanst. 
703;  Salmon  v.  AVooton,  9  Dana,  422; 
Ciuitzel  V.  Bolton,  3  McCord,  33;  Ly- 
man V.  Brown,  2  Curtis,  C.  C.  559.  And 
sec  ante,  p.  119,  n.  (o).  But  see  contra, 
Ex  parla  Baich,  3  McLean,  221.  And 
sec  ilart  v.  Granger,  1  Conn.  154.  If  a 
plea  ()f  such  foreign  suit  ever  is  good  in 
abatemciif,  it  must  clearly  show  the  juris- 
diction of  such  foreign  court  over  the  sul)- 
ject-nialt<r,  a?id  tlie  persons  of  the  parties. 
Newell  r.  Xcwion,  10  Pick.  470;  Trenton 
Jiank  v.  Wallace,  4  Ilalst.  83.  And  sec 
Siniili  V.  The  Atlantic  M.  F.  Ins.  Co., 

2  Foster,  21.     In  this  last  ca.sc  tlie(|uestion 


arose  whether  the  Circuit  Court  of  the 
United  States  for  the  district  of  New 
Hampshire  was  a  foreign  court  quoad  the 
state  courts  of  New  Hampshire;  and  it 
was  held  that  it  was  not ;  and  therefore 
that  the  pendency  of  another  action  for 
the  same  cause  in  the  former  court,  if  that 
court  had  jurisdiction,  is  a  good  plea  in 
abatement  of  an  action  in  the  latter  courts. 
Perleij,  J.,  said  :  "  The  ground  is  taken 
for  the  plaintiff  that,  as  to  the  courts  and 
government  of  New  Hampshire,  the  Cir- 
cuit Court  of  the  United  States  for  this 
di.strict,  is  to  be  regarded  as  a  court  of 
foreign  jurisdiction;  and  for  that  reason 
an  action  pending  in  the  Circuit  Court  of 
this  district  cannot  be  pleaded  in  abate- 
ment of  a  subsequent  suit  brought  for  the 
same  cause  in  a  court  of  this  State.  The 
judiciary  of  the  United  States  is  a  branch 
of  the  general  government  of  this  coun- 
try, established  by  the  constitution.  The 
Circuit  Court  of  the  United  States,  with- 
in its  territorial  limit,  and  as  to  causes 
witliin  its  jurisdiction,  cannot  be  regarded 
as  a  foreign  court.  Its  powers  are  not  de- 
rived from  any  foreign  government.  Its 
judgments  operate  directly  to  bind  persons 
and  property  within  this  State  ;  its  process, 
mesne  and  final,  is  effectual  to  enforce  its 
own  orders  and  judgments.  The  Circuit 
Court  of  another  district  has  no  authority 
within  this  State,  and  may  be  considered 
territorially  and  for  some  purposes  as  a 
foreign  jurisdiction.  The  Circuit  Court, 
and  the  courts  of  this  State,  derive  their 
powers  from  different  sources,  and  for 
most,  if  not  for  all  purposes,  are  indepen- 
dent of  each  other.  But  in  certain  cases 
they  exercise  concurrent  jurisdiction.  The 
case  su]iposed  by  the  i)lea  in  this  action, 
is  one  of  them.  The  jdaintiff  had  his 
election  to  i)ursue  his  remedy  in  the  courts 
of  this  State,  or  resort  to  the  concurrent 
jurisdiction  of  the  Circuit  Court.  The 
general  rule  of  law  forbids  that  a  defend- 
ant shoidd  be  harassed  by  two  suits  for 
the  same  cause  at  the  same  time.  In  some 
cases,  where  the  first  suit,  from  defect  of 
jurisdiction  in  the  court,  cannot  give  ade- 
quate remedy,  a  second  action  is  allowed, 
'riiis  case  falls  clearly  within  the  reason 


[2;]G] 


{k)  Sec  a«/e,  p.  119,  n.  (n). 


CH.  in.] 


DEFENCES. 


-233 


And  there  is  an  exception  to  that  part  of  the  rule  which  re- 
quires the  parties  to  be  the  same,  in  the  case  of  a  qui  tarn  action, 
which  may  be  brought  by  any  informer.  There  the  principle 
upon  which  the  rule  is  founded,  namely,  that  the  defendant 
shall  not  be  twice  vexed,  requires  the  second  suit  to  abate, 
although  the  first  were  prosecuted  by  a  different  person.  (/) 

The  plea  must  show  jurisdiction  of  the  former  suit,  if  pend- 
ing in  a  court  not  under  the  same  sovereignty,  [la) 

of  the  general  rule,  which  prohibits  the     nient  of  a  suit  in  a  State  court.     Walsh  v. 


second  suit.  No  ground  has  been  suf^ 
gested,  and  none  occurs  to  us,  for  suppos- 
ing tiiat  two  suits,  one  in  a  State  court, 
and  the  other  in  a  Circuit  Court  for  the 
same  State,  are  less  vexatious  and  oppres- 


Durkin,  12  Johns.  90.  But  in  this  case 
the  plaintiff's  remedy  was  as  complete  and 
effectual  in  the  Circuit  Court,  as  he  could 
have  in  the  courts  of  tliis  State.  Tiie 
mesne  process  of  tiiat  court  gives  security 


sive  to  the  defendants,  than  two  suits  in  on  the  person  and  property  of  the  dcfend- 
the  same  court.  On  tlie  otlier  hand,  the  ant,  at  least  as  effectual  as  can  be  had  by 
plaintifi'  fails  to  bring  himself  within  the  ours;  the  trial,  if  held,  would  be  by  jurors 
reason  of  the  excepted  cases,  wliere  a  of  tiiis  State  ;  the  judgment  for  the  plain- 
second  action  is  allowed,  because  the  court  tiff  would  be  final  and  conclusive,  and 
in  which  the  first  was  pending,  cannot  give  could  be  executed  by  the  process  of  tliat 
complete  remedy  for  want  of  jurisdiction  court  througliout  the  State.  The  plaintiff, 
over  the  jjcrson  or  property  of  the  defend-  therefore,  had  no  more  necessity  or  excuse 
ants.  Where  the  prior  suit  is  in  an  infe-  for  iiis  second  suit,  tiian  he  would  have 
rior  court  of  special  and  limited  jurisdic-  had  if  both  had  been  in  the  same  court, 
tion,  incapable  of  affording  the  ]daintiff  And  it  has  accordingly  been  held  that  the 
the  remedy  which  he  needs,  the  jiricr  will  judgment  of  the  Circuit  Court  for  the 
not  abate  the  second,  though  both  courts  same  State,  is  not  to  t]e  considered  in  the 
exercise  tlicir  jurisdiction  in  the  same  State  courts  as  a  foreign  judgment.  Bar- 
country.  Sparry's  case,  5  Coke,  62  a.  ney  r.  Patterson,  6  Harris  &  J.  20.3.  We 
But  the  f\\ct  that  the  court  in  which  tlie  are  of  opinion  that  the  pendency  of  an- 
prior  action  is  pending   is  a  subordinate  other  action  for  the  same  cause,  between 


jurisdiction,  would  seem  to  be  no  objection 
to  the  plea,  provided  the  first  action  can 
give  adequate  and  complete  remedy.  It 
has  been  decided  in  numerous  eases  that 
an  action  pending  in  a  court  whose  juris- 


the  same  parties,  in  fhe  Circuit  Court  of 
the  United  States,  is  sufficient,  if  well 
pleaded,  to  abate  a  suit  in  the  courts  of 
this  State,  where  the  Circuit  Court  had 
jurisdiction   of   the    prior    cause."     But 


diction  is   territorial! ij   foreign  cannot   be     see  Wadleigh  v.  Veazie,  3   Sumn.  165; 


pleaded  in  abatement.  The  reason  of  this 
rule  would  seem  to  be,  not  that  the  au- 
thority of  the  foreign  court  is  questionable 
within  the  limits  of  its  jurisdiction,  but 
because  the  foreign  court  cannot  enforce 
its  orders  and  judgment  beyond  its  own 


White  V.  Whitman,  1  Curtis,  C.  C.  494. 

(/)  Sec  Commonwealth  v.  Churcliili,  5 
Mass.  174;  Commonwealth  v.  Clieney, 
6  Mass.  347  ;  Henshaw  v.  Hunting,  'l 
Gray,  203  ;  Thayer  r.  Mowry,  36  Me.  287  ; 
Chamberlain  r.   Carlisle,   6    Foster,    .540. 


territory;  and,  on  this  account,  the  rem-  The  true  spirit  of  the  rule  also  requires 

edy  of  the  plaintiff  by  his  prior  suit  may  the   former  suit  to  have   been  valid  and 

be  incomplete.     The  defendant  may  have  effectual;  otherwise  the  second   suit  will 

property  which  ought  to  be  applied  to  the  not  be  considered  vexatious.     Downer  v. 

payment  of  the  same  demand  in  both  ju-  Garland,   21    Vt.   362  ;    Hill    v.    Dunlap, 

risdictions  ;  or  his  property  may  be  in  one  15  id.  645  ;  Quincbaug  Bank  r.  Tarbox, 

jurisdiction,  and   his  person  in  another;  20  Conn.  510;  Durand  v.  Carrington,  1 

and  suits  for  these  and  other  reasons  may  Root,  355.    The  prior  suit  must  also  have 

be  necessary  in   both  territorial  jurisdic-  been  actually  entered  in  court,  for  it  must 

tions.     It  has  accordingly  been  held,  that  be  proved  by  ihe  record  to  be  for  the  same 

a  suit  pending  in  the  Circuit  Court  for  cause,  and  pending  when  the  second  was 

another  district  cannot  be  pleaded  in  abate-  commenced.     Parker  v.  Colcord,  2  N.  H. 

{la)  White  v.  Whitman,  1  Curtis,  C.  C.  494. 

[237] 


234-235* 


THE  LAW   OF   CONTRACTS. 


[part  II. 


SECTION    IX, 


OF  FORMER  JUDGMENT. 


The  whole  purpose  of  the  law  being  to  settle  questions  and 
terminate  disputes,  it  will  not  permit  a  question  which  has  been 
settled  to  be  tried  again. (m)  But  it  must  be  the  meaning  of 
this  rule  —  for  this  meaning  is  required  by  obvious  justice  — 
that  only  a  question  which  has  been  settled  after  a  full  and 
regular  trial,  and  which  has  been  the  object  of  direct  investiga- 
tion, and  to  which  parties  have  had  their  attention  drawn  in 
such  wise  as  to  warrant  the  supposition  that  a  new  trial  would 
but  repeat  a  former  process,  —  only  a  question  tried  in  this  way 
is  exckided  from  further  trial.  For  it  would  be  unjust  and  dan- 
gerous to  permit  a  party  to  bring  up  an  important  question  in- 
cidentally, and  then  bind  conclusively  the  other  party  by  the 
result,  although  he  might  well  have  neglected  this  question,  for 
this  time,  in  his  wish  to  confine  all  his  attention  and  all  his 
efforts  to  what  he  had  a  right  to  deem  the  true  question.  The 
rule  therefore  may  be  expressed  thus,  —  that  a  judgment  on  the 
same  matter  in  issue  is  a  *conclusive  bar.  (i?)     But  when  we 


36  ;  Commonwealth  v.  Cluirchill,  5  Mass. 
174;  Trontoii  Bank  v.  Wallace,  4  Halst. 
8-3  ;  Smith  v.  Atlantic  M.  F.  Ins.  Co.  2 
Foster,  21.  The  pendency  of  a  prior  suit 
in  which  the  defendant  is  summoned,  as 
trustee  of  the  plaintiff,  is  no  cause  for 
abatement  of  the  suit  suhsequently  com- 
menced liy  the  plaintiff  (the  ))rincipal  de- 
fendant in  the  lirst  action)  for  the  cause 
of  action  sou;^iit  to  l)c  reached  by  the 
trustee  process.  Wadiei^rh  v.  Pillsljurv, 
14  N.  II.  .'J7:}.     And  see  Morton  v.  Webb, 

7  Vt.  12.3.  Neither  is  a  suit  at  law  a  de- 
fence to  a  suit  in  equity.     Peak  v.  Bull, 

8  B.  Mon.  42S.  Nor  virp.  versa.  Colt  v. 
l'arlrid;ic,  7  Met.  .')7() ;  Ilaskins  v.  Lom- 
bard, 10  Me.  140;  Blanchard  v.  Stone, 
!•;  Vr.  234  ;  Ilalpli  v.  Brown,  3  Watts  & 
S.  .30.5. 

(w)  But  tlic  party  insistinp;  upon  a 
form<T  recovery  as  a  liar  to  an  action, 
must  show  iliiit  the  rcrord  of  the  former 
suit  iiH-hiilcs  ilic  matter  alle;j;e(l  to  hiive 
been  detcriiiiiicd.     Campbell  i'.  Butts,  3 

[238] 


Comst.  173.  Consequently,  where  the 
declaration  in  the  first  suit  states  a  partic- 
ular matter  as  tiie  ground  of  action,  and 
issue  is  taken  by  tlic  defendant,  parol 
proof  is  inadniissil)lc  to  show  that  a  dif- 
ferent subject  was  litif^ated  upon  the  trial. 
Id.  And  sec  Boston  &  Worcester  R.  R. 
Corp.  V.  Dana,  1  Gray,  83 ;  Davis  v. 
Tallcot,  2  Kern.  184;  Green  v.  Clarke, 
id.  343. 

(n)  The  Duchess  of  Kingston's  case, 
20  Howell's  State  Trials,  538,  is  the  lead- 
ing case  on  this  point.  Lord  Chief  Jus- 
tice De  Grcji  there  said  :  "From  the  va- 
riety of  cases  relative  to  judgments  being 
given  in  evidence  in  civil  suits,  tiiese  two 
deductions  seem  to  follow  as  generally 
true  ;  —  First,  that  the  ju<lgment  of  a 
court  of  concin-rent  jurisdiction,  directli/ 
ujifiii  the  point,  is,  as  u  |)lea,  a  bar,  or,  as 
evidence,  conclusive  between  the  same 
parties,  upon  the  same  matter,  <l!rectli/  in 
ijucslioii  in  another  coiu't.  Secondly,  that 
the  judgment  of  a  court  of  exclusive  ju- 


CH.  III.] 


DEFENCES. 


*2:36 


come  to  the  meaning  of  the  phrase,  "  the  same  matter  in  issue," 
and  the  *  application  of  the  rule,  we  find  an  irreconcilable 
conflict  between  the   authorities,  (o)      Much   of  the  difficulty 


ristliction,  dircclhi  upon  the  point,  is,  in  like 
manner,  conclusive  upon  tlie  same  matter, 
between  the  same  parties,  coining  inci- 
dentally in  question  in  another  court  for 
a  different  purjiose.  But  neither  the  judg- 
ment of  a  concurrent  or  exclusive  juris- 
diction is  evidence  of  any  matter  which 
came  collaterally  in  question,  though 
within  their  jurisdiction,  nor  of  any  mat- 
ter incidentally  cognizable,  nor  of  any 
matter  to  be  inferred  by  argument  from  the 
judgment."  This  rule  was  expressly 
adopted  by  Story,  J.,  in  Harvey  v.  Rich- 
ards, 2  Gallis.  229  ;  and  by  Gibson,  C.  J., 
in  Hibshman  v.  DuUeban,  4  Walls,  191. 
See  also,  Wright  v.  Deklync,  Pet.  C.  C. 
202  ;  Gardner  v.  Buckbee,  3  Cowen,  120. 
In  this  last  case,  B.  sued  G.  upon  a 
promissory  note  in  the  Marine  Court  of 
the  city  of  New  York,  and  G.  pleaded  the 
general  issue,  with  notice  that  the  note 
was  given  upon  the  fraudulent  sale  of  a 
vessel  by  B.  to  G.,  which  was  the  question 
upon  the  trial,  and  the  verdict  was  for  the 
defendants  :  and  afterwards  B.  sued  G.  in 
the  Court  of  Common  Pleas  for  the  city 
and  county  of  New  York  upon  another 
note  given  upon  the  same  purchase;  lidd, 
that  upon  the  trial  of  the  second  cause, 
the  record  and  proceedings  in  the  first 
were  conclusive  evidence  of  the  fraud,  and 
were  a  conclusive  bar  to  the  second  action  ; 
that  the  proper  course  was  to  give  the 
record  of  the  Marine  Court  in  evidence, 
and  then  sliow  by  parol  evidence  (<?.  g., 
by  the  justice  who  tried  the  first  cause), 
that  the  same  question  had  been  tried  be- 
fore him.  So  where  B.  brought  trespass 
quare  clausum  fregit  in  May,  1816,  laying 
the  trespass  with  a  contimiando  between 
the  1st  November,  1814,  and  the  24th  No- 
vember, 1815,  and  recovered:  and  then 
brought  trespass  against  the  same  defend- 
ant for  a  subsequent  injury  to  the  premises 
in  question  in  the  former  suit ;  it  was  held, 
that  the  record  in  the  former  suit,  followed 
by  parol  evidence  that  the  premises  in 
question  were  the  same  in  both,  was  con- 
clusive evidence  of  the  plaintiff's  title  in 
the  second  action  ;  that  it  operated  against 
the  defendant  by  way  of  estoppel,  whether 
it  was  pleaded  or  given  in  evidence  in  the 
second  suit.  Burt  v.  Sternburgh,  4  Cowen, 
559.  Sec  also,  Outram  v.  Morewood,  3 
East,  346  ;  George  v.  Gillespie,  I  Greene, 


Iowa,  421.  It  is  not  necessary  that  the 
plaintiff's  claim  in  both  suits  be  identical. 
If  both  arise  out  of  the  sanw  transaction, 
and  the  defence  is  equally  applicable  to 
both,  the  first  judgment  will  be  conclusive. 
Bouchaud  v.  l)ias,  3  Denio,  2.'j8.  In  this 
case  H.  C.  was  indebted  to  the  United 
States  for  duties,  arising  upon  a  single 
importation,  and  gave  two  bonds  with  the 
same  sureties,  payable  at  difiercnt  times, 
for  distinct  parts  of  the  same  debt.  One 
of  the  sureties  having  paid  both  bonds, 
brought  an  action  in  the  Superior  Court 
of  the  city  of  New  York  against  his  co- 
surety for  contribution  on  account  of  the 
money  paid  upon  one  of  the  bonds,  and 
the  defendant  pleaded  a  discharge  of  him- 
self from  the  whole  debt  by  the  secretary 
of  tlie  treasury,  pursuant  to  the  act  of  con- 
gress, to  which  the  plaintiff  demurred, 
and  judgment  was  given  against  him. 
Held,  that  such  judgment  was  a  conclu- 
sive bar  to  a  subsequent  action  in  the  Su- 
preme Court  between  the  same  parties,  in 
which  the  plaintiff  sought  to  recover  con- 
tribution on  account  of  the  money  paid 
on  the  other  bond.  So  where  A  took 
from  B  a  bill  of  sale  of  certain  personal 
property,  and  C  afterwards  levied  upon 
the  property  by  virtue  of  attachments  in 
favor  of  B's  creditors,  and  A  subse- 
quently took  and  converted  to  his  own  use 
a  part  of  the  property,  for  which  C  sued 
him,  and  recovered  judgment  in  a  justice's 
court,  on  the  ground  that  the  bill  of  sale 
was  fraudulent  and  void  as  to  the  credi- 
tors ;  it  was  held,  that  the  judgment  was 
conclusive  upon  the  question  of  fraud,  in 
an  action  of  replevin  afterwards  brought 
by  A  against  C  in  the  Supreme  Court,  to 
recover  the  residue  of  the  property.  Doty 
V.  Brown,  4  Comst.  71. 

(o)  This  question  was  examined  by 
Parker,  C.  J.,  with  his  accustomed  abil- 
ity, in  King  v.  Chace,  15  N.  H.  9.  It  was 
there  held  that  by  "the  matter  in  issue" 
is  to  be  understood  that  nuitter  upon 
which  the  plaintiff  proceeds  by  his  action, 
and  which  the  defendant  controverts  by 
his  pleadings ;  that  the  facts  offered  in 
evidence  to  establish  the  matter  which  is 
in  issue  are  not  themselves  in  issue  within 
the  meaning  of  the  rule,  although  they 
may  be  controverted  on  trial.  Thus, 
where  an  action  of  trover  is  brought,  and 

[239] 


237* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


springs,  no  doubt,  from  the  relaxation  of  tlie  rules  and  practice 
of  pleading;  bat  there  are  questions  on  this  subject  in  their  own 
nature  difficult,  and  which  can  only  be  determined  by  further 
adjudication.  It  may  be  difficult  to  draw  the  line,  but  it  is 
necessary  that  it  should  be  drawn  somewhere.  (;>)  Suppose 
that  in  an  action  for  assault  and  battery,  in  which  the  general 
issue  is  pleaded,  the  defendant  relies  upon  the  •'  molliter  manus 
imposuU,''^  asserting  the  alleged  assault  to  have  taken  *place 
on  his  own  land;  the  plaintiff  denies  that  the  land  belonged 
to  the  plaintiff,  and  this  is  the  main  or  only  question  act- 
ually controverted.  Could  a  judgment  in  this  case  be  in- 
terposed as  a  bar  to  a  "writ  of  entry  for  the  same  land, 
between  the  same  parties?  We  think  it  clear  that  it  could  not. 
But  if  to  trespass  qiiare  cimisum,  soil  and  freehold  are  pleaded 
by  the  defendant,  can  a  judgment  in  this  action  be  pleaded  in 


a  deed  is  offered  in  evidence  to  establish 
the  title  of  the  ])laintiff,  and  imjjeachcd 
by  the  other  party  as  fraudulent,  if  the 
jury,  in  considerinr^  the  case,  are  of  the 
opinion  that  the  deed  is  fraudulent,  and 
they  find  that  the  property  in  question  is 
not  the  property  of  the  plaintiff,  and  re- 
turn a  verdict  that  the  defendant  is  not 
guilty,  the  verdict  and  judgment  will  not 
conclude  the  plaintiff,  in  another  suit,  for 
the  recovery  of  other  property  included  in 
the  same  conveyance.  Nor  can  the  ver- 
dict be  used  in  evidence  to  impeach  the 
deed  in  such  subsequent  suit. 

(p)  It  is  not  essential  that  the  second 
suit  should  be  in  tlic  same  form  as  the 
first,  in  order  tliat  a  judgment  therein 
should  be  a  bar.  If  ttio  cause  of  action 
is  the  same  in  both,  the  former  judg- 
ment is  conclusive.  Thus,  a  judgment 
in  trover  is  a  bar  to  a  second  action  of 
assumpsit  for  the  value  of  the  same 
goods.  Agnew  v.  McElroy,  10  Smedes 
&,  M.  .'J52  ;  Yoimg  v.  Ulack,  7  Cranch, 
505  ;  Livcrmoro  v.  Ilerscliell,  3  Tick. 
.3.3.  See  Loomis  v.  Green,  7  Greenl.  38G. 
Where  the  cause  of  action  is  tiic  same, 
a  former  judgment  in  a  suit  between 
tiic  same  parties,  though  an  inadequate 
one,  is  a  liar  to  a  second  recovery.  I'in- 
ncy  V.  Barnes,  17  Conn.  4'J().  In  that 
case  an  action  was  brouglit,  in  the  name 
of  the  judge  of  probate,  agiiinst  a  removed 
executor,  on  his  firobatc  bond,  in  whicii 
action  siindrv  breaches  were  assigned,  and 

[240] 


among  thern,  that  the  defendant  had 
neglected  and  refused,  upon  demand  made 
therefor,  to  pay  over  to  his  successor  the 
moneys  in  his  hands  belonging  to  the 
estate ;  and  thereupon  judgment  was 
rendered  against  the  defendant  for  a  cer- 
tain sum  and  costs.  On  a  scii-e  focias 
afterwards  brought  on  this  judgment,  it 
appeared  that  the  testator  had  given  by 
his  will  certain  legacies,  payable  to  the 
legatees  respectively  when  they  should 
become  eighteen  years  of  age ;  that  nei- 
ther at  the  time  of  tlie  defendant's  removal 
from  office,  nor  at  the  trial  of,  and  judg- 
ment in,  the  original  action,  had  these 
legatees  arrived  at  that  age ;  tliat  the  de- 
fendant had  then  in  his  hands  moneys 
belonging  to  the  estate,  derived  from  a 
sale  of  lands  under  a  decree  of  probate, 
sufficient  to  pay  such  legacies,  which  he 
still  retained  ;  that  on  the  trial  of  such  ac- 
tion, no  claim  was  made  or  evidence 
offered  in  relation  to  the  non-payment  of 
such  legacies,  nor  were  they  considered  by 
the  court  or  included  in  the  judgment,  the 
action  having  been  instituted  and  prose- 
cuted solely  f'or  the  benefit  of  those  entitled 
to  the  rcmluum  of  the  estate  after  the  pay- 
ment of  such  legacies.  Ilchl,  Williams, 
C.  J.,  and  Walle,  J.,  illssoitiii;/,  tliat  the 
former  judgment  must  be  considered  as 
covering  tiie  whole  ground,  and  constitut- 
ing a  bar  to  any  claim  for  the  legacies  in 
tlie  sriro  facias,  the  cause  of  action  in  both 
suits  being  essentially  the  same. 


CH.  III.] 


DEFENCES. 


*238 


bar  to  a  writ  of  entry  ?  It  is  more  difficult  to  answer  this  ques- 
tion, because  it  differs  from  the  former  in  the  new  clement,  that 
the  title  to  the  very  land  is  put  in  issue  of  record,  and  by  the 
pleadings.  And  very  high  authorities  answer  this  question  dif- 
ferently, (q)  Again,  if  in  trover,  the  question  turns  upon  the 
validity  of  *an  instrument  under  which  title  to  the  chattels  is 
claimed,  and  this  is  found  to  be  fraudulent  and  void,  is  the  judg- 
ment in  this  case  conclusive  as  to  all  questions  of  property  or 
title  between  the  same  parties,  under  that  instrum.ent,  and  in 
relation  to  all  the  property  which  the  instrument  purports  to 
transfer?  Here,  too,  the  authorities  are  directly  antagonistic,  (r) 
So  far  as  we  can  venture  to  state  rules  which  may  determine 
these   difficult  questions,  we   should   say  that  "  the  matter  in 


(q)  Thus,  in  Arnold  v.  Arnold,  17  Pick. 
4,  which  was  a  writ  of  right,  the  tenant 
pleaded  a  judgment  in  favor  of  his  grantor 
rendered  in  an  action  of  trespass  (/uare 
clausum  upon  an  issue  joined  upon  a  plea 
of  liberum  tennnentum,  and  the  plea  was 
held  to  be  no  bar.  And  from  the  opinion 
delivered,  it  seems  that  the  judgment 
upon  this  plea  would  have  been  the  same, 
if  it  had  been  interposed  as  a  bar  to  a  writ 
of  entry.  And  in  Mallett  v.  Foxcroft,  1 
Story,  474,  it  was  held  to  be  no  bar  to  a 
writ  of  right,  that  there  liad  been  a  judg- 
ment on  a  petition  for  partition  between 
the  same  parties,  in  favor  of  the  tenant, 
upon  an  issue  joined  therein  on  the  sole 
seisin  of  the  demandant.  But  in  Dame  r. 
Wingate,  12  N.  H.  291,  it  was  directly 
decided  that  a  judgment  rendered  in  an 
action  of  trespass  qiuire  clausum  upon  an 
issue  joined  on  a  plea  o^  liberum  tenementum, 
is  a  bar  to  a  writ  of  entry  for  the  same 
premises.  And  Gilchrist,  J.,  said  :  "  It  is 
a  principle  well  established  in  the  law, 
that  a  former  judgment,  upon  a  point 
directly  in  issue  upon  the  face  of  the 
pleadings,  is  admissible  in  evidence  against 
the  parties  and  their  privies,  in  a  subse- 
quent suit,  where  the  same  point  comes  in 
question.  Nor  is  it  material  that  the  for- 
mer suit  was  trespass,  and  the  latter  a 
writ  of  entrj',  if  the  same  point  were  de- 
cided in  the  former  suit.  It  is  not  the  re- 
covery, but  the  matter  alleged  by  the 
party,  and  upon  which  the  recovery  pro- 
ceeds, which  creates  the  estoppel.  The 
recovery  of  itself,  in  an  action  of  trespass, 
is  only  a  bar  to  the  future  recovery  of 
damages  for  the  same  injury;  but  the 
estoppel   precludes    parties    and    privies 

VOL.  II.  21 


from  contending  to  the  contrary  of  that 
point,  or  matter  of  fact,  which,  having 
once  distinctly  been  put  in  issue  by  them, 
or  by  those  to  whom  they  are  privy,  in 
estate  or  law,  has  been  on  such  issue 
joined,  solemnly  found  against  them. 
EUenhorough,  C.  J.,  Outram  v.  Morcwood, 
3  East,  355.  The  recovcri^  concludes 
nothing  upon  the  ulterior  right  of  posses- 
sion, much  less  of  property  in  the  land, 
unless  a  question  of  that  kind  be  raised  by 
a  plea  and  a  traverse  thereon.  Ibid.  357. 
And  a  recovery  in  any  one  suit,  upon 
issue  joined  on  matter  of  title,  is  equally 
conclusive  upon  the  subject-matter  of  such 
title  ;  and  a  finding  upon  title  in  trespass 
not  only  operates  as  a  bar  to  the  future 
recovery  of  damages  founded  on  the  same 
inquiry,  but  also  o]icrates  by  way  of  estop- 
pel to  any  action  for  an  injury  to  the  same 
supposed  right  of  possession.  Ibid.  354. 
The  issue  upon  a  plea  of  liberum  tenemen- 
tum raises  a  question  of  title.  Forsaith  v. 
Clogston,  3  N.  H.  403."  See  also,  Ben- 
nett V.  Holmes,  1  Dev.  &  Batt.  486.  In 
some  States,  a  judgment  in  an  action  of 
trespass  upon  the  issue  of  liberum  tene- 
mentum, has  been  held  admissible  in  a  sub- 
sequent action  of  ejectment  between  the 
same  parties.  See  Hoey  v.  Furman,  1 
Penn.  St.  295 ;  Kerr  v.  Chess,  7  Watts, 
371  ;  Foster  r.  M'Divit,  9  id.  341,  349; 
Meredith  v.  Gilpin,  6  Price,  146.  As  to 
the  effect  of  a  judgment  in  ejectment,  as 
regulated  by  the  Revised  Statutes  of  New 
York,  see  Beebe  v.  Elliott,  4  Barb.  457. 

(r)  See  King  v.  Chase,  15  N.  H.  9,  cited 
supra,  n.  (o),  and  Doty  v.  Brown,  4 
Comst.  71,  cited  supra,  n.  (n). 

[241] 


239*  THE   LAW   OF   CONTRACTS.  [PART  II. 

• 

issue"  is  either  that  which  the  record  and  the  pleadings  show- 
clearly  to  be  so,  or  else  a  question  which  extrinsic  evidence 
shows  to  have  been  actually  tried,  and  shows  also  to  have  been 
absolutely  essential  to  the  case,  in  so  much  that  the  answer 
to  it  decided  the  case,  and  if  it  had  not  been  contested  the 
case  could  not  have  tried.  Further  than  this  we  should 
not  be  willing  to  go.  And,  therefore,  we  should  say  that  the 
judgment  in  the  supposed  case  of  trover  should  not  be  conclu- 
sive upon  the  questions  which  might  be  raised  in  other  cases  as 
to  the  validity  of  the  instrument,  and  the  title  it  gave.  And 
we  should  incline  also  to  the  opinion  that  the  judgment  in  the 
supposed  case  of  trespass  quare  clausum  would  be  no  bar  to  a 
writ  of  entry. 

It  is  said  that  the  former  judgment  must  have  been  between 
the  same  parties  ;  and  for  this  rule  there  seems  to  be  good  rea- 
son as  well  as  authority,  [s)  It  has  also  been  held,  as  was 
said,  that  the  same  parties  must  stand  in  the  same  position,  as 
plaintiff  and  defendant.  It  is  obvious  that  sometimes  this  must 
be  necessary  to  constitute  the  question  the  same ;  and  it  is  only 
then  that  the  rule  can  apply,  {t) 

*  It  may  be  added  that  no  prior  judgment  is  a  bar  to  a  subse- 
quent action,  if  it  be  shown  that  the  judgment  was  obtained 
by  a  mistake  on  the  part  of  the  plaintiff,  which  prevented  him 
from  trying  the  question  ;  as  an  error  in  respect  to  the  charac- 
ter of  the  action,  or  a  fault  in  the  pleading,  (ti)  And  it  has  been 
held  that  a  foreign  judgment  does  not  merge  the  original  cause 
of  action,  and  cannot  be  pleaded  in  bar  of  an  action  founded 
thereon,  (ua) 

(s)  This  is  not  always  true;  for  wliere  sarne  cause  against  tlie  other.     Sec  King 

a  cause  of  action  is  such  tiiat  more  than  v.  Chase,  13  N.  H.  9.     And  in  Parkhurst 

one  may  sue,  a  judgment  in  an  action  v.  Sumner,  23  Vt.  538,  it  was  held,  that 

broiiglit  by  one  is  ii  l)ar  to  an  action  by  all  matters  whicli  might  liave  been  urged 

tlic  other.      'J'hus,  if  a  consignor  sue  a  by  the  ])arty  before  the  adjudication  arc 

carrier  fur  goods,  and  tlie  latter  lias  a  ver-  concluded  by  the  judgment,  as  to  the  prin- 

dict  and  jiidgnient  on  a  \>\ci\.  of  not  guilty,  cijtal  parties,  and  all  privies  in  interest,  or 

tiie    consignee    cannot    maintain    anotiier  estate  ;  and  among  privies  are  those  who 

action   for   tlic   same   goods.      Green   v.  are  holden  as  bail  for  tiie  party. 

Clark,   5  Dciiio,  4'J7.     So  where  a  plain-  {I)  Sec  (Uilr,  \)p.  231,  232,  and  n.  (//). 

till'  may  bring  bis  action  against  cither  of  (i/)  Agncw  r.  McKlroy,  10  Smedes  & 

two  ])crs()iis,   as    for   instance    against    a  M.  .'j.52  ;    .Johnson  r.  White,    13  Smedes 

shcritf  or  his  deputy,  for  tiu:  acts  of  tiio  &   M.   r)84.     Tiic   former   decision  must 

deputy,    a  judgment    in    favor   of  ciliicr  have  been  on  llie  merits,  or  the  judgment 

woiihi  be  a  liar  to  a  second  action  for  the  must  be  sucli  that  it  miijht  have  been.   Dix- 

(na)  Lvman  v.  IJrown,  2  Curtis,  C.  C.  559. 
[242] 


en.  III.] 


DEFENCES. 


-239 


SECTION    X, 


OF    SET-OFF. 


Where  two  parties  owe  each  other  debts  connected  in  their 
origin  or  by  a  subsequent  agreement,  the  balance  only  is  the 
debt,  and  he  to  whom  it  is  due  should  sue  only  for  that ;  and  if 
he  sue  for  more,  the  opposite  debt  may  be  offered  in  evidence, 
reducing  the  claim  of  the  plaintiff  to  the  balance.  But  where 
the  opposite  debts  or  accounts  are  not  so  connected,  each  con- 
stitutes a  distinct  debt,  for  which  suit  may  be  brought.  Such 
debts  or  accounts  may,  in  many  cases,  be  balanced  by  setting-  off 
one  against  the  other;  at  law  or  in  equity.  The  law  of  set-off 
is  very  much  regulated  by  statute  in  this  country ;  and  we  do 
not  propose  to  dwell  upon  the  special  provisions  of  any  of  the 
State  statutes.  Bat  these  generally  contain  many  principles  in 
common,  and  although,  strictly  speaking,  set-off  may  not  be  a 
part  of  the  common  law,  (v)  yet  some  rules  and  principles  have 
been  established  by  usage  and  adjudication. 


on  V.  Sinclear,  4  Vt.  354  ;  N.  E.  Bank  v. 
Lewis,  8  Pick.  113  ;  Lane  v.  Harrison,  6 
]\Iiinf.  573  ;  M'Donald  v.  Rainor,  8  Johns. 
442;  Lampen  r.  Keclgewin,  1  Mod.  207  ; 
Knox  V.  Wakloborough,  5  Greenl.  185; 
Bridge  v.  Sumner,  1  Pick.  371  ;  Mosby 
V.  Wall,  23  Missis.  81.  And  where  judg- 
ment was  rendered  in  replevin  against 
a  plaintitf,  by  nonsuiting  iiim  in  a  case  in 
which  he  had  replevied  a  vessel  alleged 
to  be  his  by  virtne  of  a  bottomry  bond, 
seized  by  an  attaching  officer,  it  was  held, 
that  that  judgment  to  be  good  in  bar  of 
an  action  of  trover  for  the  vessel  must  be 
pleaded  and  averred,  and  proved  to  have 
been  upon  the  merits  and  to  have  been 
rendered  in  a  suit  between  privies  in  in- 
terest. Greely  v.  Smith,  3  Woodb.  &  M. 
236. 

{v)  The  defence  of  set-off,  strictly  so 
called,  is  purely  the  creature  of  statute. 
Stat.  2  Geo.  2,"c.  22,  s.  13,  made  perpet- 
ual by  8  Geo.  2,  c.  24,  s.  4,  and  which, 
with  some  modifications,  has  been  gener- 
ally adopted  in  the  United  States  (see 
Meriwether  v.  Bird,  9  Ga.  594),  pro- 
vides, "that  where  there  are  mutual  debts 


between  the  plaintiff  and  defendant,  or, 
if  either  party  sue  or  be  sued  as  executor 
or  administrator,  where  there  are  mutual 
debts  between  the  testator  or  intestate  and 
either  party,  one  debt  may  be  set  against 
the  other,  and  such  matter  may  be  given 
in  evidence  upon  the  general  issue,  or 
pleaded  in  bar,  as  the  nature  of  the  case 
shall  require,  so  as  at  the  time  of  his  plead- 
ing the  general  issue,  where  any  such  debt 
of  the  plaintiff,  his  testator  or  intestate  is 
intended  to  be  insisted  on  in  evidence,  no- 
tice shall  be  given  of  the  particular  sum 
or  debt  so  intended  to  be  insisted  on,  and 
upon  what  account  it  became  due,  or 
otherwise  such  matter  shall  not  be  allowed 
in  evidence  upon  such  general  issue." 
The  object  of  these  statutes  was  to  prevent 
cross-actions  between  the  same  parties. 
Isberg  V.  Bowden,  8  Exch.  852,  22  Eng. 
L.  &  Eq.  551  ;  Wallis  v.  Bastard,  4  De 
G.,  M.  &  G.  251,  31  Eng.  L.  &  Eq. 
175.  Courts  of  equity  have  power  at 
common  law,  independent  of  any  statute, 
to  order  a  set-off  of  debts  in  certain  cases. 
See  2  Story's  Eq.  Jur.  ch.  38. 

[243] 


240-241* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


The  law  of  set-off  is  quite  similar  to  the  compensation  of  the 
civil  law ;  [w)  not  as  we  think  because  it  is  b'orrowed  from  it, 
but  because  both  rest  on  similar  principles  of  common  sense 
and  common  justice.  And  although  in  the  details  they  differ 
much,  the  civil  law  doctrines  can  be  applied  to  the  law  of  set-off, 
not  only  for  general,  but  sometimes  for  particular  illustration. 

Set-off  has  been  well  defined,  as  a  mode  of  defence  by  which 
the  defendant  acknowledges  the  justice  of  the  plaintiff's  de- 
mand, but  sets  up  a  demand  of  his  own  against  the  plaintiff,  to 
counterbalance  it  in  whole  or  in  part,  {x) 

A  demand  founded  on  a  judgment  may  be  set  off,  or  upon  a 
contract,  if  it  could  be  sued  in  indebitatus  assumpsit,  debt  or 
covenant,  {y)  But  if  it  arise  ex  delicto,  and  can  be  sued  only 
in  trespass,  replevin,  or  case,  it  is  not  in  general  capable  of  set- 
off; [z)  nor  is  it  if  recoverable  only  by  bill  in  equity,  [a) 

Courts  usually  permit  judgments  to  be  set  off  against  each 
other,  on  motion,  when  such  set-off  is  equitable,  even  if  the  par- 
ties are  not  the  same,  [b)  whether  the  statute  expressly  *allow 
this  or  not ;  but  it  is  a  matter  within  their  discretion,  (t)  and  is 


(w)  Domat,  pt.  1,  b.  4,  tit.  2,  s.  1  ;  1 
Ersk.  Ins.  b.  3,  tit.  4,  s.  5  ;  Pothier,  Traite 
dcs  Obligations,  pt.  3,  ch.  4.  It  has  fre- 
quently been  said  in  America,  that  as  the 
doctrine  of  set-off"  was  borrowed  from  the 
civil  law,  it  should  be  interpreted  bj  the 
same  principles  of  construction.  See 
Meriwether  v.  Bird,  9  Ga.  .')94  ;  per  Kent, 
J.,  in  Carpenter  v.  Butterfield,  3  Johns. 
Cas.  1.55. 

(x)  Barbour  on  Set-off,  p.  17. 

(y)  Hutchinson  v.  Sturgcs,  Willes,  261  ; 
Ilowlct  r.  Strickland,  Cowp.  56  ;  Dows- 
land  V.  Thonijison,  2  W.  Bl.  910. 

(z)  Iluddcrsfield  Canal  Co.  v.  Buckley, 
7  T.  K.  45  ;  Sapsford  v.  Fletcher,  4  T. 
H.  512;  Bull.  N.  V.  181;  Freeman  v. 
Ilyctt,  1  W.  Bl.  394 ;  Dean  v.  Allen,  8 
Johns.  390;  Gibbcs  v.  Mitchell,  2  Bay, 
351. 

(a)  Gilchrist  v.  Leonard,  2  Bailej',  135; 
Sherman  7;.  Ballon,  8  Cowen,  304. 

(h)  Jiarkcr  v.  Brahain,  3  Wilson,  390  ; 
Dcnnic  ?•.  Klliott,  2  II.  Bl.  587;  Sclier- 
iiicrliorn  v.  Schcrmcrhorn,  3  Caiiies,  190; 
Brcwcrton  /'.  Harris,  1  Johns.  145  ;  Tur- 
ner V.  Sattcrlce,  7  Cowen,  481  ;  Story  v. 
I'attcn,  3  Wcrnd.  331  ;  Graves  v.  Wood- 
bury, 4  Hill,  550  ;  Goodenow  v.  Buttrick, 

[211] 


7  Mass.  140;  Makepeace  v.  Coatcs,  8 
]\Iass.  451  ;  Barrett  v.  Barrett,  8  Pick. 
342 ;  Gould  r.  Parlin,  7  Greenl.  82 ; 
Wright  V.  Cobleigh,  3  Foster,  32.  In 
this  last  case  it  was  held,  1.  That  courts 
of  law  have  power  to  set  off  mutual  judg- 
ments. 2.  The  set-off  is  made  between 
the  real  and  equitable  owners  of  the  judg- 
ment, and  not  between  the  nominal  par- 
ties. 3.  If  the  defendant,  against  whom 
a  judgment  is  recovered,  is  the  assignee 
and  equitable  owner  of  an  ascertained 
part  of  a  judgment  recovered  against  the 
plaintiff,  in  the  name  of  another  person, 
that  part  may  be  set  off  against  the  plain- 
tiff's judgment.  4.  The  application  to 
set  off  judgments  must  be  made  in  the 
court  wiierc  the  jmlginent  was  recovered 
against  the  party  wlio  makes  the  apjilica- 
tion.  5.  To  authorize  a  sct-olf  of  judg- 
ments it  is  not  necessary  that  either  of  the 
suits  shall  be  pending. 

(<■)  Burns  v.  Tiioruliurgh,  3  Watts,  78  ; 
Tolliert  r.  Harrison,  I  Bailey,  599  ;  Coxo 
)'.  State  Bank,  3  Ilalst.  172  ;  Scott  v. 
Ilivcrs,  1  Stew.  &  1'.  24 ;  Davidson  v. 
Gcoghagan,  3  IJihb,  233;  Smith  v,  Low- 
ilcn,  1    Sandf.  096. 


en.  III.]  DEFENCES.  *242 

determined  by  the  justice  of  the  case.  Therefore  it  will  not  be 
permitted  against  a  bona  fide  assignee  for  value,  [d)  Nor  if  the 
defendant  is  in  execution  on  the  judgment,  (e)  for  that  is,  in 
general,  a  satisfaction  of  it.  Or  if  having  been  imprisoned,  he 
has  been  discharged  by  his  creditor,  even  if  it  was  not  the  in- 
tention of  the  creditor  to  discharge  the  debt.  (/)  But  if  he 
escapes,  or  is  released  from  imprisonment  under  an  insolvent 
act,  which  does  not  discharge  the  debt,  the  judgment  may  be 
set  off.  {g)  And,  in  the  exercise  of  their  discretion,  courts  usu- 
ally permit  the  judgments  recovered  in  other  courts  to  be  set 
oft'.  (/«)  And  not  only  the  original  judgment  creditor  may  so 
use*it,  but  an  absolute  assignee  for  value  may  make  this  use  of 
the  judgment,  (f)  Nor  is  it  material  on  what  ground  of  action 
the  judgment  was  founded.  And  if  the  judgment  which  it  is 
desired  to  set  oft'  can  be  enforced  by  him  who  would  so  use  it, 
against  the  party  who  has  the  judgment  to  be  satisfied  by  the 
set-off",  this  is  sufficient;  and  therefore  it  is  not  necessary  that 
the  judgments  be  in  the  same  rights,  or  that  the  parties  on  the 
record  be  the  same,  [j)  So  costs  may  be  set  off,  either  *against 
costs  alone,  or  against  debt  and  costs,  [k)  After  some  fluctua- 
tions, it  seems  to  be  settled  as  the  better  opinion  that  this  set- 


(d)  Makepeace  v.  Coates,  8  Mass.  451 ;  Sliapley  v.  Bellows,  4  N.  H.  351  ;  Goode- 
Holmes  v.  Robinson,  4  Ohio,  90.  now  v.  Buttrick,  7  Mass.  140  ;  Dennie  v. 

(e)  Burnabv's  case,   Stra.  653  ;  Foster  Elliott,  2  H.  Bl.  587. 

V.   Jackson,   Hob.    52  ;    Horn   v.    Horn,  [k]  Nunez  v.  Modigliani,  1  H.  Bl.  217. 

Amb.  79  ;  Cooper  w.  Bigalow,  1  Cowen,  The  old  practice  was  otiierwise.    See  But- 

56;  Taylor  u.  Waters,  5  M.  &  S.   103;  ler  ;-.  Inneys,  2  Stra.  891.     But  the  rule 

Jaques  w.  Withy,  1  T.  R.  557.     But  see  stated  in  the  text  is  now  firmly  established. 

Peacock  u.  Jeftery,  1  Taunt.  428  ;  Simp-  James   r.    Raggett,    2    B.   &   Aid.    776; 

son  V.  Hanley,  1  M.  &  S.  696  ;  Kennedy  Thrustout  v.  Crafter,  2  W.  Bl.  826;  How- 

V.  Duncklee,  1  Gray,  65.  ell   v.  Harding,    8   East,   362;    Lang   v. 

(/)  Pouchcr  V.  Holley,  3  "Wend.  184;  AVebber,  1  Price,  375;  Hurd  v.  Fogg,  2 

Yates  V.  Van  Rensselaer,  5  Johns.  364.  Foster,  98.     But  if  this  set-otf  of  costs  is 

(g)  Cooper  v.  Bigalow,  1   Cowen,  206.  sought  by  motion  to  the  court,  it  will  be 

(h)    Ewen   r.    Terry,   8    Cowen,    126;  granted  or  not,  according  to  the  justice  of 

Schermerhorn  v.  Schermerhorn,  3  Caines,  the  case.     Gihon  v.  Fryatt,  2  Sandf.  638. 

190;  Duncan  ?'.  Bloomstock,  2  McCord,  In   McWilliams   r.   Hopkins,    1    Whart. 

318  ;  Noble  v.  Howard,  2  Hayw.  14;  Best  275,  it  was  held  that  judgment  for  costs 

v.  Lawson,  1  Miles,  11;  Barker  v.  Bra-  obtained  against  an  administrator  plaintiff 

ham,  2  W.  Bl.  866,  3  Wilson,  396 ;   Hall  in  the   District   Court  for  the  City  and 

V.  Ody,  2  B.  &  P.  28  ;  Simpson  v.  Hart,  1  County  of  Philadelphia,  and  assigned  by 

Johns.  Cli.  91,  14  Johns.  63;  Bristowe  r.  the  defendant  tlicre  to  A,  cannot  be  set 

Needham,  7  Man.  &  G.  648 ;  Brewerton  off  against  a  judgment  for  damages  ob- 

V.  Harris,  1  Johns.  144.  tained  by  such  administrator  against  A  in 

(i)  Mason  v.  Knowlson,  1  Hill,  218.  the  Supreme  Court. 

(j)  Hutchins  v.  Riddle,  12  N.  H.  464 ; 

21*  '                       [245] 


243*  THE   LAW   OF   CONTRACTS.  [PART  II. 

off  will  be  made  without  regard  to  the  attorney's  lien,  on  the 
ground  that  this  extends  only  to  the  net  amount  due  after  the 
equities  between  the  parties  are  adjusted.  (/) 

Judgments  will  be  set  off  on  motion,  because  the  question  on 
which  they  depend  has  been  tried  and  settled,  and  the  claim 
established,  or  admitted,  (m)  But  other  claims  than  those  rest- 
ing on  judgments  must  be  pleaded,  or  filed  in  such  manner  as 
the  statutes  or  rules  of  court  direct,  with  sufficient  notice  for  the 
plaintiff  to  deny  and  contest  them  if  he  chooses  to  do  so.  For 
not  even  the  amount  of  a  note  will  be  set  off,  unless  the 
plaintiff  had  the  opportunity  to  contest  it,  nor  even  the  amount 
of  a  verdict  recovered,  for  it  may  be  that  this  will  be'  set 
aside,  (w) 

The  amount  due  on  the  condition  of  a  bond  may  generally 
be  pleaded  in  set-off,  but  not  the  penalty ;  for  this  may  be  re- 
duced both  at  law  or  in  equity,  (o)  But  if  the  full  *amount  of  a 
bond  is  agreed  upon  as  liquidated  damages,  it  may  be  set 
off.{p) 

One  important  and  very  general  principle  in  the  law  of  set- 
off is,  that  the  demand  must  be  due  to  the  party,  or  the  claim 
must  be  possessed  by  him,  in  his  oicn  rig-ht.  (q)     But  this  may 


(l)  Roberts  v.  Mackoul,  cited  in  Thrust-  see  note  to  Schcrmerhorn  v.  Schcrmer- 

out  V.  Crafter,  2  W.  Bl.  826;    Schoole  horn,  3  Caines,  190. 

V.Noble,  1  11.  Bl.  23;  Nunez  v.  Modig-  (m)   And   it  is  only  such  a  judgment 

liani,  1  H.  Bl.  217  ;  Vaughan  v.  Davies,  that  can  be  set  off  on  motion.     The  judg- 

2  II.  Bl.  440 ;  Dennie  v.  Elliott,  2  H.  Bl.  ment  must  be  conclusive  upon  the  party, 

.587  ;  Hall  v.  Ody,  2  B.  &  P.  28  ;  Emdin  rendered  in  a  court  which  had  jurisdic- 

V.  Darley,  4  B.  &  P.  22  ;  Lane  v.  Pearce,  tion,  and  the  decision    must   have   been 

12  Price,  742,  752;  Taylor  v.  Popham,  final,  and  not  appealed  from.    See  Harris 

1.5  Vcs.  72;  Jix  parte  Rhodes,  id.  539;  c.  Palmer,  5  Barb.  105;  The  People  v. 

Mohawk  Bank  r.  Burrows,  6  Johns.  Ch.  Judges,  G  Cowen,  598.     And  see  Willard 

317;  Tiie  Peojde  /;.  New  York  Common  v.  Fox,    18   Johns.   497;  Weatherred  v. 

Pleas,  13  Wend.  649;  Spence  v.  Wliite,  Jlays,  1   Texas,  472. 

1    Johns.    Cas.    102;  Porter  v.   Lane,  8  (n)  Bagg  r.  Jeil'erson  C.  P.  10  "Wend. 

Johns.  357;  Martin  v.  Hawks,  15  Johns.  615;  Cobb  r.  Haydock,  4  Day,  472. 

405.     But  see  Mitchell  v.  Oldlield,  4  T.  (o)  Burgess  v.  Tucker,  5  Johns.  105 ; 

R.  123;   Uandlc  /•.   Fuller,  G  T.   R.  45G  ;  Nedriffo   r.  Hogan,  2  Burr.  1024.     Dam- 

Glaister  );.  Hcwcr,  8   T.   R.  C9 ;  Read  ;;.  ages  arising  from  the  hrcac^h  of  covenant 

Du|)j)er,  6  T.  R.  3G1  ;  Middleton  v.  Hill,  in  a  deed  of  real  estate  may  be  set  olF  in 

1  M.  &  S.  210 ;  Harrison  r.  Bainbridgc,  cases  where  the  amount  of  such  damages 

2  B.  &  C.  800 ;  Sha])lcy  r.  Bellows,  4  N.  may  be  ascertained  by  a  mere  computa- 
II.   353;   Dunklee   v.   Locke,    13   Mass.  tion.     Drew  ?;.  Towle,  7  Foster,  412. 
525 ;    Barrett   j;.    Barrett,   8   Pick.   342  ;  (/>)  Fletcher    ?'.   Dycho,  2   T.   R.    32 ; 
Ainslic  v.   Boynton,  2  Barb.  258;  Rider  Duckwortli  /•.  Alison,  1  M.  &  W.  412. 

V.  Ocean  Ins.   Co.  20  Pick.  259.     And  (7)  Tliis  is   too    universally  settled  to 

uced  the  citation  of  adjudged  cases. 
[21G] 


CII.  III.]  DEFENCES.  *244 

be,  either  as  original  creditor  or  payee,  or  as  owner  by  assign- 
ment. It  seems  indeed  to  be  settled  that  debts  held  in  the  right 
of  another  can  be  set  off  neither  at  law  nor  in  equity.  But  a 
question  sometimes  exists  as  to  the  application  of  this  rule. 
Whether  a  party  holds  a  claim  or  debt  for  this  purpose  in  his  own 
right  may  perhaps  be  determined  by  two  tests ;  he  so  holds  it  if, 
first,  he  can  sue  for  it  in  his  own  name,  without  setting  forth  as  the 
foundation  of  his  right  some  represeniative  or  vicarious  charac- 
ter; and  secondly,  if,  having  sued  for  and  recovered  the  debt, 
he  would  have  a  right  to  use  it  at  his  own  pleasure,  and  for  his 
own  benefit,  or  has  a  valid  lien  on  it  for  his  own  security. 
The  rights  to  the  two  demands,  one  of  which  is  to  be  balanced 
against  the  other  by  set-off,  must  be  similar  rights.  Thus,  if  an 
executor  sues  as  executor,  the  defendant  may  set  off  a  debt  due 
from  the  testator  ;(r)  if  he  sues  for,  a  cause  of  action  accruing 
after  the  testator's  death,  and  does  not  describe  himself  as 
executor,  the  defendant  cannot  set  off  a  debt  due  to  him  from 
the  testator;  [s)  he  cannot  himself  set  off  a  debt  due  to  him  per- 
sonally against  a  claim  on  the  estate  of  the  testator  made 
*against  him  as  executor ;  [t)  nor  if  he  be  sued  for  his  own  debt 
can  he  set  off  a  debt  due  him  as  executor.  («)     So  a  debt  due 


(?•)  But  if  the  defendant  has  purchased  to  pay  the  legacy.   Robinson  w.  Robinson, 

a  debt  against  an  intestate,  since  his  death,  4  Harring.  Del.  418  ;  Sorrclle  v.  Sorrelle,  5 

it  has  been  held  that  he  cannot  set  it  off  Ala.  245.    But  if  the  executor  is  sued  for  a 

against  an  action  by  the  administrator  to  debt  due  from  his  testator  in  his  lifetime, 

recover  a  debt  due  the  intestate.     Root  v.  he  may  set  off  a  debt  which  has  accrued 

Taylor,   20   Jolins.    1.37  ;    Whitehead  v.  due  from  the  plaintiff  to  him  as  executor 

Cade,  1  How.  Miss.  95.  since  the  death  of  tlie  testator.     IMardall 

(s)  Kilvington  v.  Stevenson,  Willcs,  i'.  Thelluson,  18  Q.  B.  857,  14  Eng.  L.  & 
264,  note ;  Tegetmeyer  v.  Lumley,  id. ;  Eq.  74.  So  where  an  executor  is  sued 
Schofield  V.  Corbett,  6  Nev.  &  Man.  527  ;  for  a  debt  created  by  himself  as  executor, 
Houston  V.  Robertson,  4  Camp.  342  ;  he  may  set  off  a  debt  due  from  the  plain- 
Watts  V.  Rees,  9  Exch.  696,  25  Eng.  L.  tiff  to  the  testator  in  his  lifetime.  Blakes- 
&  Eq.  565  ;  Mercein  v.  Smith,  2  Hill,  ley  v.  Smallwood,  8  Q.  B.  538. 
210  ;  Fry  r.  Evans,  8  Wend.  530  ;  Dale  v.  (t)  Nor  vice  versa.  Grew  v.  Burditt,  9 
Cook,  4  Johns.  Ch.  13  ;  Colby  v.  Colby,  Pick.  265;  Snow  v.  Conaut,  8  Vt.  308; 
2  N.  H.  419;  Wolfersberger  v.  Bucher,  Cummins  v.  Williams,  5  J.  J.  Marsh. 
10  S.  &  R.  10;  Brown  v.  Garland,  1  384;  Banton  t;.  Hoomes,  1  A.  K.  Marsh. 
Wash.  Va.  221;  Rapier  v.  Holland,  19 ;  Harbin  w.  Levi,  6  Ala.  399.  In  an 
Minor,  176  ;  Burton  v.  Chinn,  Hardin,  action  against  an  executor  to  recover  a 
252;  Mellen  v.  Boarman,  13  Smedcs  &  legacy  given  to  the  plaintiff 's  wife,  the  ex- 
M.  100;  Shaw  v.  Gookin,  7  N.  H.  16.  ecutor  may  set  off  a  bond  given  by  the 
And  see  Stuart  v.  Commonwealth,  8  plaintiff  himself  to  the  testator  in  his  life- 
Watts,  74.  In  an  action  by  an  executor,  time.  Lowman's  Appeal,  3  Watts  &  S. 
a  legacy  bequeathed  the  defendant  cannot  349. 
be  set  off,  although  the  executor  has  funds        (u)  Thomas  v.  Hopper,  5  Ala.  442. 

[247] 


245* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


to  a  man  in  right  of  his  wife  cannot  be  set  off  in  an  action 
against  him  on  his  own  bond,  (v)  Nor  can  a  debt  contracted 
by  the  wife,  before  marriage,  be  set  off  in  an  action  brought 
by  the  husband  alone ;  (iv)  unless  he  has  by  his  promise  to  pay 
it  made  it  his  own  debt.  So  in  a  suit  either  at  law  or  in  equity 
against  partners,  the  demand  of  one  of  the  defendants  against 
the  plaintiff  cannot  be  set  off.  (x) 

♦  It  sometimes  happens  that  a  demand  may  be  set  off,  due 
from  the  person  actually  and  beneficially  interested  in  the  suit, 
although  it  is  brought  for  his  benefit  by  one  who  has  the  legal 
interest,  and  is  therefore  plaintiff  of  record,  but  has  no  other 
interest.  (?/) 

*  If  there  is  more  than  one  defendant,  neither  one  can  set  off 
a  demand  due  to  himself  alone,  but  all  may  set  off  demands 
due  to  all  jointly.  Nor  can  a  single  defendant  set  off  a  debt  due 
to  him  from  a  part  only  of  two  or  more  plaintiffs,  (z) 


(r)  Paynter  v.  Walker,  Bull.  N.  P.  179. 
In  an  action  by  husband  and  wife,  for  a 
legacy  left  to  the  wife  "  for  her  own  use," 
the  executor  cannot  set  off  a  debt  due 
from  the  husband  to  the  testator  in  his 
lifetime.  Jamison  r.  Brady,  6  S.  &  K. 
466.  Otherwise  if  the  legacy  is  given  to 
the  wife  not  to  her  separate  use.  Low- 
man's  Appeal,  3  Watts  &  S.  349.  Neither 
can  the  husband's  debt  be  set  off  against 
the  wife's  distributive  share  of  her  father's 
estate,  when  the  parties  have  been  di- 
vorced ;  and  although  such  divorce  was 
after  the  intestate's  death.  Fink  r.  Plake, 
6  Watts,  131.  In  a  suit  by  husband  and 
wife  for  rent  of  the  wife's  premises,  the 
defendant  may  set  off  a  demand  against 
tlie  husband  alone.  Ferguson  v.  Lotlu'op, 
l.')  Wend.  G25.  But  see  Naglcc  v.  Inger- 
6oll,  7  Pcnn.  St.  185,  where  it  was  held 
that  a  ilelit  due  liy  a  htisl)and,  or  one 
which  he  had  agreed  to  pay,  could  not  be 
set  off  against  a  claim  for  rent  due  to  liis 
wife's  separate  estate,  although  she  had 
authorized  him  to  receive  the  rents  with- 
out accounting. 

(/f)  Burrough  v.  Moss,  10  B.  &  C.  558 ; 
Wood  r.  Akers,  2  Esp.  594. 

(r)  Tiie  decisions  arc  uniform  that  a 
joint  del)t  cannot  be  set  off  against  a  sep- 
arate dci)t,  nor  vicn  versa.  Woods  v.  Car- 
lisle, C  N.  II.  27  ;  Walker  v.  Lci^rlitou,  11 
Mass.  140  ;  IIow(;  r.  Shcppard.'J  Sunnier, 
409  ;  M'Dowell  v.  Tyson,  14  S.  &  U.  300  ; 

[2481 


Bibb  r.  Saunders,  2  Bibb,  8G  ;  Armistead 
r.  Butler,  1  Hen.  &  Munf.  176;  Palmery, 
Green,  6  Conn.  14;  Emerson  zj.  Baylies, 
19  Pick.  59;  Warren  v.  Wells,  1  Met.  80. 
And  see  Grant  v.  Royal  Exch.  Ass.  Co.  5 
M.  &  S.  439.  If  there  is  an  express  agree- 
ment with  a  person  dealing  with  a  firm, 
that  the  debts  severally  due  from  the  mem- 
bers of  the  firm  to  that  person  shall  be  set 
off  against  any  demands  which  the  firm 
may  have  jointly  on  him,  such  agreement 
is  binding,  and  the  set-off  may  be  al- 
lowed. Kinnerlv  v.  Hossack,  2  Taunt. 
170;  Hood  r.  Riley,  3  Green,  127.  See 
Lovel  r.  Whitridge,  1  IMcCord,  7  ;  Everng- 
him  V.  Ensworth,  7  Wend.  326.  So  if  the 
surviving  partner  sue  for  a  debt  duo  the 
firm,  the  defendant  may  set  off  a  debt  due 
from  such  a  partner  alone.  Holl)rook  v. 
Lackey,  13  ]\Iet.  132.  But  sec  Meader  v. 
Scott,  4  Vt.  26  ;  Lewis  v.  Culbertson,  11 
S.  &  R.  48. 

(//)  See  Campbell  r.  Hamilton,  4  Wash. 
C.  C.  92.     But  see  infra,  nn.  (h).  (o)- 

{z)  Ross  V.  Knight",  4  N.  II.  236 ;  Hen- 
derson V.  Lewis,  9  S.  &  R.  379;  Banks 
V.  Pike,  15  Me.  268;  Fuller  v.  Wright, 
18  Pick.  403  ;  AVatson  r.  Ilensel,  7  Watts, 
344  ;  Archer  )•.  Dunn,  2  AVatts  &  S.  327; 
Trammcll  r.  Ilancll,  4  Pike,  602;  Jones 
?•.  (iilreath,  6  Ircd.  338;  Voso  v.  Phil- 
brook,  3  Story,  335.  The  statutes  in 
some  States  are  dilferent.  But  in  an  ac- 
tion against  principal  and  surety,  for  the 


CH.  III.] 


DEFENCES. 


-245 


No  demand  can  be  pleaded  in  set-off,  unless  it  be  reasonably 
certain.  But  by  this  is  meant  to  exclude  only  those  cases  in 
which  a  jury  must  determine  the  amount  of  damages  by  their 
own  estimate  or  opinion,  and  not  those  in  which  they  can  ascer- 
tain the  amount  by  mere  calculation,  if  they  find  the  claim 
valid.  In  general,  demands  may  be  set  off,  which  are  for  liqui- 
dated damages,  meaning  thereby  when  their  amount  is  specific, 
or  is  directly  and  distinctly  ascertainable  by  calculation  ;  and 
also  all  those  which  usually  may  be  sued  for  and  recovered 
under  the  common  counts,  (a) 


default  of  the  principal,  a  debt  from  the 
plaintiff  to  the  principal  alone  lias  in  some 
cases  been  allowed  to  be  set  off.  Brun- 
dridge  v.  Whiteconib,  1  D.  Chip.  180; 
Crist  V.  Brindle,  2  Eawle,  121.  See 
Lynch  v.  Bragp,  13  Ala.  77.3  ;  Mahurin  i-. 
Pearson,  8  N.  H.  539;  Prince  v.  Fuller, 
34  Maine,  122.  And  such  was  the  civil 
law.  2  Story's  Eq.  Jur.  s.  1442.  But 
see  Warren  v.  Wells,  1  Met.  80  ;  ^Valker 
V.  Leigliton,  11  Mass.  140.  So  where  a 
tax  collector  oives  a  jointfl«(Z  several  bond 
to  a  town,  with  sureties,  and  then  sues  the 
town  in  his  own  name,  on  an  order  of  the 
town  to  him,  the  town  may  set  off  money 
which  the  plaintiff  has  received  and  not 
paid  over,  in  breach  of  his  bond.  Donel- 
son  r.  Colerain,  4  I\Iet.  430. 

((f)  This  rule  arises  from  the  words  of 
the  statute,  before  cited,  that  a  set-off  is 
allowed  in  cases  of  mutual  debts,  i.  e., 
claims  in  the  nature  of  a  debt ;  and  the 
same  rule  is  applied  to  both  parties.  For 
if  the  suit  is  bi-ought  not  for  a.  debt,  but  for 
unliquidated  damages,  no  defence  of  set- 
off can  be  allowed.  liardcastle  v.  Nether- 
wood,  5  B.  &  Aid.  93,  which  was  an 
action  for  not  indemnifying  the  plaintiff 
for  paying  the  defendant's  own  proper 
debt;  Ilutciiinson  v.  Reid,  3  Camp.  329, 
for  not  accepting  a  l)iil  of  exchange  ;  Birch 
V.  Depeystcr,  4  Camp.  38.5,  against  an 
agent  for  not  accounting ;  Gillingham  v. 
Waskett,  13  Price,  434,  for  not  replacing 
stock  according  to  agreement;  Warn  v. 
Bickford,  7  Price,  .550,  for  breach  of  a 
covenant  for  quiet  enjoyment ;  Attwool  v. 
Attwool,  1  Ellis  &  B.  21,  18  Eng.  L.  & 
Eq.  38G,  for  breach  of  a  bond  to  indem- 
nify generally ;  Castelli  v.  Boddington,  1 
Ellis  &  B.  66,  16  Eng.  L.  &  Eq.  127,  an 
action  on  a  policy  of  insurance  for  an  av- 
erage loss.  And  see  Cope  v.  Joseph,  9 
Price,  155;  Gordon  v.  Bowne,  2  Johns. 


150  ;  Osborn  v.  Etheridge,  13  Wend.  339, 
a  suit  by  a  tenant  against  his  landlord,  to 
recover  costs  of  the  defence  of  summary 
proceedings,  instituted  by  the  latter ; 
Cooper  r.  Eobinson,  2  Chitty,  161,  for 
not  indemnifying  jjhuntitf  from  certain 
taxes;  Wilmot  v.  Hurd,  11  Wend.  584, 
for  breach  of  warranty  in  the  sale  of 
goods  ;  Dowd  v.  Faucett,  4  Dev.  92,  cov- 
enant for  uncertain  damages.  And  see 
further,  Pettee  v.  The  Tennessee  Manu- 
facturing Co.  1  Snced,  385  ;  Edingtou 
V.  Pickle,  id.  122.  More  frequent  illus- 
trations exist  of  claims  which  cannot  be 
used  by  a  defendant  by  way  of  set-off, 
because  they  are  not  debts,  within  the 
statutory  meaning  of  that  word.  Thus 
it  seems  that  unliquidated  losses  on  a  pol- 
icy of  insurance  cannot  be  made  the  sub- 
ject of  set-off.  Thomson  v.  Redman,  11 
M.  &  W.  487  ;  Grant  v.  Royal  Exch.  Ass. 
Co.  5  M.  &  S.  439.  And  see  Gumming 
V.  Forester,  1  id.  494.  Nor  can  a  claim 
for  tortiously  taking  the  defendant's  prop- 
erty be  set  off.  Hopkins  v.  INIcgquire,  35 
Me.  78.  Neither  is  a  breach  of  a  cove- 
nant for  the  non-delivery  of  goods  accord- 
ing to  contract  a  subject  of  set-off.  How- 
let  V.  Strickland,  Cowp.  56  ;  Wright 
V.  Smyth,  4  Watts  &  S.  527.  Nor  a 
breach  of  a  guaranty  when  the  damages 
are  uncertain.  Morley  v.  Inglis,  4  Bing. 
N.  C.  58  ;  Crawford  v.  Stirling,  4  Esp. 
207.  Contra  if  the  damages  are  certain. 
Collins  V.  Wallis,  11  J.  B.  Moore,  248. 
So  to  an  action  by  a  bank,  the  defendant 
cannot  set  off  his  stock  in  the  bank.  Har- 
per V.  Calhoun,  7  How.  jMiss.  203  ;  Whit- 
tington  !'.  Farmers  Bank,  5  Harris  &  J. 
489.  Nor  can  he  set  off  the  bills  of  such 
bank.  Hallowell  Bank  v.  Howard,  13 
Mass.  235.  A  note  payable  in  work  can- 
not be  set  off  against  a  demand  payable 
in  cash.     Brather  v.  McEvov,  7  Mo.  598. 

[249] 


246-247*  THE   LAW    OF   CONTRACTS.  [PART  II. 

It  may,  perhaps,  be  doubtful,  when  compensation  for  part 
performance  of  a  contract  may  be  set  off  against  an  action  for 
breach  of  the  contract,  and  when  it  should  rather  be  given  in 
evidence  by  way  of  reduction,  or  when  it  can  only  be  used  as 
the  ground  of  a  cross-action,  (b)  This  must  depend  upon  the 
circumstances  of  the  case,  and  upon  the  provisions  of  the  stat- 
ute in  the  State  where  the  action  is  tried. 

Set-ofF  should,  however,  be  discriminated  from  reduction,  and 
recoupment ;  to  both  of  which  it  bears  much  analogy,  and  with 
either  of  which  it  may  be  so  mingled  by  the  facts  of  a  case 
as  to  make  it  difficult  to  say  in  which  of  these  forms  the  oppos- 
ing demand  should  be  brought  against  the  plaintiff's  action. 
In  general,  a  defendant  may  deduct  from  the  plaintiff's  claim 
all  just  demands,  or  claims  owned  by  him,  or  payments  made 
by  him,  in  the  very  same  transaction,  or  even  in  other  but 
closely  connected  transactions.  They  must,  however,  be  so 
connected  as  fairly  to  authorize  "the  defendant  to  say  that  he 
does  not  owe  the  plaintifll  on  that  cause  of  action,  so  much  as 
he  seeks,  and  not  that  he  ought  not  to  pay  the  plaintiff  so 
much,  because  on  another  cause  of  action  the  plaintiff  owes 
him.  If  he  can  so  present  and  use  his  claims  he  diminishes 
the  plaintiff's  claim  by  way  of  reduction,  (c)  Recoupment  we 
consider  to  belong  rather  to  cases  *where  the  same  contract 
lays  mutual  duties  and  obligations  on  the  two  parties,  and  one 

In  Massachusetts,  taxes  arc  not  the  sub-  dyciuf^  goods,  the  defondant  may,  at  com- 

ject  of  set-otf.     Peirce  v.  Boston,  3  Met.  nion  law,  show  tliat  tlicre  is  a  custom  of 

520.  the  trade   hy   which,  damages   done   tlie 

{b)  As  to  the  ri^ht  of  tlie  defendant  to  goods   in  dyeing  shall  i)c  deducted  from 

reduce  the  ])huntilt''s  demand  in  tlie  eases  the  price  of  dyeing.     Bamford  v.  Harris, 

mentioned  iuite,  ]).  35,  n.  {d),  see  the  fol-  1    Stark.  343.     So  a  master  may  show  in 

lowing  cases.     Basten  v.  Butter,  7  East,  an  action  hy  a  servant  for  his  wages,  that 

479  ;  Farnsworth  i\  Garrard,  1  Cam]i.  38 ;  the   ])laintitf  agreed  to  deduct  therefrom 

Dencw  v.  Daverell,  3  id.  4.'Jl  ;  ]\Iandel  o.  the  value  of  goods  lost  by  his  negligence. 

Steel,  8   M.  &  W.  8.58;  Heck  v.  Shener,  Le  Loir  v.  Bristow,  4  Camp.   134.     And 

4    S.  &   U.  249;  Still  v.  Hall,  20  Wend,  sec   Dobson    v.  Lockhart,  5  T.  R.  133; 

51  ;    Hunt  r.  'i'he  Otis  Company,  4  Met.  Kinnerley  r.  Ilossack,  2  Taunt.  170;  Cle- 

404;  McAllister   c.    Ucab,  4  Wend.  483  ;  worth  v.  Pickford,  7  M.  &  W.  314.     So 

8   id.    100;  ]}riiton   v.   Turner,   G   N.  II.  in  an  action  for  work  and  labor  and  mate- 

481.  rials,   the   defendant   may  show  without 

(r)  Tli(t  diircrence  bctwf'cn  allowing  a  ))leading  any  set-otf,  that  he  supplied  ]iart 

certain    defence   by  way  of  scl-n//',  and  by  of  the  materials  himself.     Newton  r.  Por- 

way  of  rtiliK-lion  of  (himiitics,  allliough  not  ster,  12  M.  &  W.  772;  Turner  v.  Diaper, 

hroad    is  yet  clear  and   well  dcliiicd.     A  2    Man.    i<i    C.    241.     And    sec    Dale    v. 

few  instanci's  will  illiisiralc  ihc  application  Solicit,  4  Burr.  2133. 
of  the  ])rin(ipli\     Thus,  in  assumpsit  for 

[200] 


en.  III.]  DEFENCES.  *248 

seeking  remedy  for  the  breach  of  duty  by  the  second,  the  sec- 
ond meets  the  demand  by  a  claim  for  a  breach  of  duty  against 
the  first.  But  the  word  is  of  recent  introduction,  and  is  not 
used  with  uniformity  or  precision,  (d)  The  essential  difference 
between  recoupment  or  reduction  on  the  one  hand,  and  set-off 
on  the  other,  is  that  in  set-off  the  ground  taken  by  the  defend- 
ant is  that  he  may  owe  the  plaintiff  what  he  claims,  but  a  part 
or  the  whole  of  this  debt  is  paid  in  reason  and  justice  by  a  dis- 
tinct and  unconnected  debt  which  the  plaintiff  owes  him. 

It  should  be  remarked  that  a  set-off  is  a  defence  which  the 
defendant  may  use  or  not  at  his  pleasure.  If  he  forbears  doing 
so,  this  in  no  way  impairs  his  right  to  establish  his  claim  by  a 
separate  action,  (e)  It  is,  however,  better  that  it  should  be  set- 
tled by  set-off,  when  that  can  properly  be  done,  because  it  saves 
both  expense  and  time  to  do  this.  And  courts  have  censured 
parties  for  not  pleading  a  demand  by  way  of  set-off,  when  there 
was  nothing  to  show  that  it  might  not  have  been  made  per- 
fectly available  to  the  defendant  in'  *that  way.  For  set-off  is  in 
the  nature  of  a  cross-action,  and  is  substituted  for  that,  for  the 
very  purpose  of  preventing  unnecessary  litigation.  Therefore, 
also,  only  those  demands  can  be  set  off  for  .which  an  action 
might  be  brought  by  the  defendant,  and  sustained.  If  it  be 
barred  by  the  statute  of  limitations,  or  otherwise  defeasible,  it 
cannot  be  set  off.  (/) 

(d)  The  doctrine  of  recoupment,  or  re-  Minor  v.  "Walter,  17  Mass.  237;  De  Sylva 
co!<per,  as  it  was  formerly  termed,  is  not  a  v.  Henry,  3  Port.  132;  Baskerville  v. 
new  one  in  the  common  law,  although  it  Brown,  2  Burr.  1229;  Ilimes  v.  Barnitz, 
was  formerly  used  in  a  different  sense  8  Watts,  39 ;  Garrow  v.  Carpenter,  1 
from  that  alluded  to  in  the  text.  It  was  Port.  3.'59.  The  civil  law  was  different.  2 
formerly  used  to  signify,  as  it  is  now  in  Story's  Eq.  Jur.  §  1440.  In  some  States 
many  courts,  and  decisions,  a  right  of  de-  a  defendant  cannot  set  off  a  claim,  on 
duction  from  the  amount  of  the  plaintiff's  which  a  suit  is  then  pending  in  his  favor, 
claim,  either  from  part  payment,  or  de-  Lock  v.  Miller,  3  Stew.  &  P.  13.  In 
fective  performance  of  contract  on  the  part  others  the  contrary  has  been  held.  Stroh 
of  the  plaintiff,  or  from  any  analogous  fact.  v.  Uhrich,  1  Watts  &  S.  57.  Neither  can 
The  same  idea  was  expressed  by  defalk,  the  plaintiff  file  a  counter  set-off"  to  the 
discount,  deduction,  reduction,  and  in  actions  defendant's  set-off.  Hudnall  v.  Scott,  2 
of  tort  by  mitigation.  But  we  have  given  Ala.  567  ;  Ulrich  v.  Berger,  4  Watts  & 
the  definition  of  the  text  as  the  true  and  S.  19. 

proper  one,  since  the  word  recouper  in  the  ( /)  Chappie  v.  Durston,  1  Cromp.  &  J. 

original  signifies  to  cut  again,  and  therefore  1  ;  Gilchrist  v.  Williams,  3  A.  K.  Marsh, 

would  favor  the  definition  above,  and  Bar-  235  ;  Williams  v.  Gilchrist,  3  Bibb,  49  ; 

hour  on  set-off  is  in  favor  of  the  same  use  Turnbull  v.  Stroheckcr,  4  McCord,  210; 

of  the  term.  Jacks  v.  Moore,  1  Yeates,  391 .    And  a  debt 

(e)  Laing  v.  Chatham,  1  Camp.  252 ;  discharged  by  bankruptcy  or  insolvency 

[251] 


249' 


THE   LAW   OF   CONTRACTS. 


[part  II. 


A  debt  is  not  properly  a  subject  of  set-ofF,  unless  it  existed 
when  the  plaintiff  brought  his  action  and  at  that  time  belonged 
to  the  defendant ;  but  it  may  have  become  the  defendant's 
after  the  cause  of  action  accrued  to  the  plaintiff.  And  it  must 
be  due  to  the  defendant  when  pleaded,  and  this  should  be  al- 
leged, (g) 

An  agreement  to  pay  a  debt  in  cash,  or  in  any  specific  way, 
or  even  an  express  negative  of  set-off,  does  not,  in  general,  de- 
prive the  defendant  of  paying  it  by  setting  off  a  debt  due  to 
himself.  (A) 

One  who  buys  goods  of  a  factor,  as  such,  and  is  sued  for  the 
price  by  the  real  owner,  cannot  set  off  a  debt  due  from  the  fac- 
tor ;  (i)  but  he  may  if  the  factor  sell  the  goods  as  his  *own,  with 
a  right  to  do  so,  and  the  buyer  does  not  know  that  they  are  not 
his  own.  (j)  But  he  cannot  set  off  a  debt  due  to  him  from  the 
principal,  if  the  factor  has  a  lien  on  the  goods,  even  if  the  prin- 
cipal be  mentioned  at  the  sale,  (k)      And,  if  before  they  are 


cannot  be  the  subject  of  a  set-off.  Francis 
V.  Dodsworth,  4  C.  B.  202.  Neither  can 
a  claim  which  the  court  would  not  have 
jurisdiction  to  tr_v,  if  an  action  had  been 
brought  upon  it,  he  allowed  in  set-off. 
Picquet  v.  Corinick,  Dudley,  20.  Nor 
a  debt,  the  collection  of  which  has  been 
enjoined  in  Chancery.  Key  v.  Wilson,  3 
Humph.  40.').  Nor  a  note  which  the  de- 
fendant holds,  but  which  he  cannot  sue  in 
his  own  name,  as  a  note  not  negotiable. 
Bell  V.  Ilorton,  1  Ala.  413;  Carew  r. 
Northrup,  .5  Ala.  .'JG?.  Nor  a  bond  which 
has  been  cancelled,  but  l>v  mistake.  Wil- 
liams V.  Crary, .')  Cowcn,3()8.  The  maker 
of  a  note  ]jayal)le  to  A  B  orbmrer,  cannot 
get  off  against  one  who  sues  as  bearer, 
any  claim  against  A  B  or  other  person 
except  the  plaintiff.  I'arker  v.  Kendall, 
3  Vt.  540. 

(r/)  Hardy  r.  Corlis,  1  Foster,  3.')G ; 
Deiidy  v.  I'owell,  3  M.  &  W.  442;  Fvans 
V.  I'rosser,  3  T.  \{.  180;  Inland  r.  Karr,  1 
East,  .'{7.'>;  Itichards  v.  James,  2  Exch. 
471  ;  liogerson  r.  Ladbrokc,  1  Bing.  '.13; 
Cari)cnter  i;.  Bnttcrdidd,  3  .Johns.  Cas. 
145;  Jeff.  (Jo.  Bank  ?'.  Chapnnin,  I'J 
Johns.  322 ;  Biailliwaite  r.  Coleman,  4 
Ncv.  &  .M.  (".54  ;  Stewart  v.  U.  S.  Ins.  Co. 
9  Walts,  120;  Morrison  ?>.  Moreland,  15 
S.&Jt.  01;  Hilling  w.  liugg,  1  Watts  &S. 
418;  Edwards  v.  'rcrnplc,  2  Harrlng.  Del. 
322;   Carj)r<'W   ik  Caiiavan,  4  How.  Miss. 

[252] 


370.  And  if  the  defendant  claims  to  set 
off  the  plaintiff's  note,  wiiich  has  been  in- 
dorsed to  him,  he  must  show  that  it  came 
to  him  before  the  plaintiff's  suit  was  com- 
menced. Jeff.  Co.  Bank  v.  Chapman,  19 
Johns.  322 ;  Kelly  v.  Garrett,  i  Oilman, 
649.  Money  paid  by  the  defendant  as  sure- 
ty for  the  plaintiff  after  action  brought,  but 
on  an  obligation  entered  into  before,  can- 
not be  set  off.    Cox  v.  Cooper,  3  Ala.  256. 

{h)  Lechmere  v.  Hawkins,  2  Esp.  626; 
M'Gillivray  v.  Simson,  2  C.  &  P.  320 ;  9 
T>.  &  n.  35  ;  Loudon  v.  Tiffany,  5  Watts 
&  S.  367  ;  Baker  v.  Brown,  10  Mo.  396. 

(/)  Browne  v.  Robinson,  2  Caincs'  Cas. 
341  ;  Gordon  v.  Ciiurch,  2  Caines,  299  ; 
Fish  V.  Kcmpton,  7  C.  B.  G87 ;  Jarvis  v. 
Chappie,  2  Chitty,  387. 

(,/)  Can-  V.  Hinchlilf,  4  B.  &  C.  547 ; 
Straccy  v.  Dcev,  7  T.  K.  301,  note ;  Pur- 
ciicU  V.  Salter,  1  Q.  B.  197.  And  sec 
George  v.  Ciagett,  7  T.  R.  359 ;  Ral)onc 
r.  Williams,  id.  360,  note ;  Pigeon  ?'. 
Osborn,  12  A.  &  E.  715  ;  Parker  v.  Don- 
aldson, 2  Watts  &  S.  9 ;  Gardner  v.  Al- 
len, 0  Ala.  187;  Sims  v.  Bond,  5  B.  & 
Ad.  3S9  ;  \Varing  v.  Favenck,  1  Camp. 
85;  Wcstwood  v.  Bell,  Holt,  N.  P.  124. 

(/■)  Hudson  V.  Granger,  5  B.  &  Aid.  27  ; 
Drinkwater  r.  (Joodwin,  (^owp.  251 .  But 
if  tiie  factor  has  ])aited  willi  the  goods  and 
lost  his  lien,  the  ])iircliaser  ma}'  set  off  his 
del;t   aguiiist    the    jirincijial.     Coj)pin    v. 


CII.  III.] 


DEFENCES. 


*2o0 


delivered,  or  any  payment  made,  the  buyer  is  notified  that  they 
belong  to  a  third  person,  he  cannot  set  off  against  an  action  by 
that  person,  a  debt  due  to  him  from  the  factor.  (1)  A  broker, 
being  one  to  whom  goods  are  not  intrusted,  and  who  usually 
and  properly  sells  in  the  name  of  his  principal  and  who  is  un- 
derstood to  be  only  an  agent,  whether  he  sells  in  his  own  name 
or  not,  stands  only  on  the  footing  of  an  agent,  (m)  And  if 
an  action  be  brought  by  an  agent  in  his  own  name  for  a  debt 
due  to  his  principal,  the  defendant  may  set  off  a  debt  due  from 
such  principal,  {n)     *In  general,  if  an  agent  be  permitted  by  his 


Craig,  7  Taunt.  243  ;  Coppin  v.  "Walker, 
id.  237. 

(/)  1  Harrison  &  Edwards'  N.  P.  356 ; 
Barbour  on  Set-off,  136 ;  Rabone  v.  Wil- 
liams, 7  T.  R.  360,  n. 

(m)  Wilson  v.  Codman,  3  Crancli,  193; 
Atkinson  v.  Teasdale,  1  Bay,  299 ;  God- 
frey V.  Forrest,  id.  300. 

{n)  Eoyce  ;;.  Barnes,  11  Met.  276.  This 
doctrine,  however,  is  repudiated  by  the  late 
English  case  of  Isberg  v.  Bowden,  8  Exch. 
852,  22  Eng.  L.  &  Eq.  551.  That  was  an 
action  for  freight  due  under  a  charter-party. 
Plea,  that  the  plaintift"  entered  into  the 
charter-party  as  master  of  the  sliip,  and 
for,  and  on  behalf  of,  and  as  agent  for  M. 
the  owner;  that  the  plaintiff'  never  had 
any  beneficial  interest  in  the  charter,  or 
any  lien  on  the  freight,  and  that  he  brouglit 
the  action  solely  as  agent  and  trustee 
for  M.,  and  that  M.  was  indebted  to  the 
defendant  in  a  certain  amount,  which  the 
defendant  offered  to  set  off.  irdd,  on  de- 
murrer, that  the  statute  of  set-off  did  not 
apply.  Martin,  B.,  in  delivering  the  judg- 
ment of  the  court,  said  :  "  It  was  contend- 
ed, on  behalf  of  the  plaintiff,  in  support  of 
the  demurrer,  that  the  plea  was  bad  at 
common  law,  and  could  only  be  supported 
by  virtue  of  the  statute  of  set-off,  and  that 
inasmuch  as  the  plaintiff  in  tlie  action  was 
not  the  debtor  to  the  defendant,  the  case 
was  not  within  the  statute.  It  was  ad- 
mitted, on  the  other  hand,  that  the  plea 
was  bad  at  common  law,  but  contended 
that  tlie  statute  had  received  a  construc- 
tion in  several  cases  wliich  were  cited,  and 
to  wliich  we  shall  presently  refer,  and  that 
upon  such  construction  the  plea  could  be 
maintained.  The  statute  enacts,  '  that 
where  there  are  mutual  debts  between  the 
plaintiff  and  the  defendant,  one  debt  may 
be  set  against  the  other.'  This  is  the  whole 
enactment  as  applicable  to  the  present  case, 

VOL.  II.  22 


and  upon  its  true  construction  the  ques- 
tion depends.  If  the  words  of  the  statute 
had  been  that  where  there  were  '  mutual 
debts  the  one  might  be  set  against  the 
other,'  the  argument  for  the  defendant 
would  have  had  more  weight;  but  these 
are  not  the  only  words,  for  the  debts  are 
to  he  mutual  debts  between  the  plaintiff 
and  the  defendant,  and  there  is  no  debt 
here  due  from  the  plaintiff  at  all;  and  ex- 
cept the  words  '  between  the  plaintiff  and 
the  defendant'  can  be  excluded,  the  plea 
cannot  be  maintained.  In  support  of  his 
view,  the  defendant's  counsel  cited  the 
case  of  Coppin  v.  Craig,  where  a  plea,  in 
substance  the  same  as  the  present,  was 
pleaded.  The  plea  was  not  demurred  to, 
and  its  validity  or  non-validity  in  point  of 
law,  seems  never  to  have  been  considered 
at  all,  and  the  matter  decided  by  the  court 
was  quite  collateral  to  the  present  ques- 
tion ;  so  also  a  case  of  Jarvis  v.  Chappie, 
where  a  similar  plea  was  pleaded,  was 
also  relied  on.  This  was  an  action  by  an 
auctioneer,  for  goods  sold  and  delivered, 
and  the  defendant  pleaded  that  the  plain- 
tiff sold  as  agent  for  one  Tappinger,  who 
was  indebted  to  the  defendant,  which  debt 
was  pleaded  as  a  set-off.  The  plaintiff  re- 
plied, that  the  goods  were  not  the  goods 
of  Tappinger,  and  wei'e  not  sold  by  the 
plaintift'  as  his  agent,  upon  which  issue 
was  joined.  The  plaintiff  was  nonsuited 
at  the  trial,  and  the  application  to  the 
court  was  to  set  aside  this  nonsuit.  It  is 
at  once,  therefore,  obvious  that  the  present 
question  could  not,  by  possibility,  have 
arisen  under  such  circumstances.  The 
case  of  Carr  v.  Hinchlifl",  and  several 
other  cases  decided  on  the  same  principle, 
were  also  cited.  It  is  quite  true  that  there 
are  expressions  in  the  judgment  of  the 
learned  judges  in  that  case  which  seem  to 
support  the  argument  for  the  defendant; 

[253] 


251* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


principal  to  act  as  if  he  were  the  principal  and  not  an  agent, 
one  dealing  with  him,  and  supposing  him  to  be  a  principal, 
acquires  the  same  rights,  and  among  these  the  right  of  set-ofF, 
which  he  would  have  if  the  agent  were  a  principal ;  nor  can  he 
be  subsequently  deprived  of  these  rights  by  the  coming  in  of  a 
third  party  who  was  a  stranger  to  him  in  the  original  trans- 
action. 

*When  an  action  is  brought  by  or  against  a  trustee,  in  that 
capacity,  money  due  to  or  from  the  cestui  que  trust,  may  be 
set  off;  for  it  will  be  considered  that  the  party  in  interest,  and 
not  merely  the  party  of  record,  is  the  one  by  whom  or  against 
whom  the  set-ofF  should  be  made,  (o) 


but  the  real  ground  upon  which  tliat  and 
the  other  cases  decided  on  the  same  point 
proceeded  is,  that  wliere  a  principal  per- 
mits an  agent  to  sell  as  apparent  principal, 
and  afterwards  intervenes,  the  buyer  is 
entitled  to  be  placed  in  the  same  situation 
at  the  time  of  the  disclosure  of  the  real 
principal,  as  if  the  agent  had  been  the 
real  contracting  party,  and  is  entitled  to 
the  same  defence,  whether  it  be  liy  com- 
mon law  or  by  statute,  payment  or  set-otF, 
as  he  was  entitled  to  at  that  time  against 
the  agent,  the  apparent  principal.  The 
cases  of  Carr  v.  Hinchliflf,  George  v.  Clag- 
ett,  7  T.  R.  359,  and  Rabone  v.  Wil- 
liams, id.  360,  n.,  are  all  explained  on 
that  princijjle  in  Tucker  v.  Tucker.  By 
this  case,  and  tliat  of  Wake  v.  Tinkler,  and 
Lane  v.  Chandler,  referred  to  in  7  liast, 
154,  the  cases  of  Bottomley  v.  Brooke, 
and  Rudge  v.  Bircli,  must  be  considered 
as  entirely  overruled,  and  tiie  case  of 
Tucker  v.  Tucker  goes  far  to  show  tliat 
the  statute  of  set-otF  is  confined  to  tlie 
legal  debts  l)etween  the  parties,  tiic  sole 
object  of  the  statute  being  to  prevent  cross- 
actions  between  tlie  same  ])artics.  The 
case  of  Slackwood  v.  Dunn  was  cited  on 
bclialf  of  the  defendant.  It  is  enough  to 
fiay  tliat  this  case  goes  much  Ijcyond  tliat. 
Ill  that  case  it  seems  to  have  hct'ii  ruled  that 
tlie  demurrer  having  cunfes.scd  the  truth  of 
tlic  pleas,  the  set-off  was  to  be  allowed 
between  the  parties.  The  cases  cited  in 
Story  (jn  Agency,  p.  30 1,  sect.  4()!t,  as 
the  authority  for  what  is  there  said,  are 
those  idready  adverted  to  from  7  Taiiiiton, 
237  and  21.3,  anil  shown  not  to  support 
the  general  jiropositioti.  In  this  ease  tlie 
plaintill  was  the  party  whom  the  defend- 
uut  agreed  to  pay,   and   wc   think    that, 

[254] 


looking  at  the  ]ilain  words  of  the  statute, 
we  best  give  eft'cct  to  the  true  rule  now 
adopted  by  all  the  courts  at  Westminster  for 
its  construction,  by  holding,  that  inasmuch 
as  the  debts  are  not  mutual  debts  between 
the  plaintitf  and  the  defendant,  the  one 
cannot  be  set  off  against  the  other.  This 
is  acting  upon  the  rule  as  to  giving  effect 
to  all  the  words  of  tlie  statute ;  a  rule 
universally  applicable  to  all  writings,  and 
Avhich  we  think  ought  not  to  be  departed 
from  except  upon  very  clear  and  strong 
grounds,  which  do  not,  in  our  opinion, 
exist  in  this  case." 

(o)  Campbell  v.  Hamilton,  4  Wash.  C. 
C.  92;  Sheldon  v.  Kendall,  7  Cusli.  217. 
See  Barrett  v.  Barrett,  8  Pick.  342. 
But  see  Wheeler  v.  Raymond,  5  Cowen, 
231,  9  Cowen,  295;  Beale  v.  Coon,  2 
Watts,  183  ;  Porter  v.  Morris,  2  Harring. 
Del.  509  ;  President,  &c.  v.  Ogle,  Wright, 
281  ;  Tucker  v.  Tucker,  4  B.  &  Ad.  745. 
In  this  case  S.  gave  a  bond,  conditioned 
for  the  payment  of  money.  The  obligee 
made  C.  his  executrix  and  residuary  leg- 
atee, and  died.  C.  proved  the  will,  as- 
sented to  the  bequest,  and  died,  not  hav- 
ing fully  administered,  leaving  K.  execu- 
trix of  the  executrix  C.,  in  trust  for  her 
(K.'s)  own  benefit.  A  sum  due  on  the 
bond  in  the  first  testator's  time  remained 
unpaid.  C,  during  her  lifetime,  in  con- 
sideration of  a  nnvrriage  about  to  take 
jilaee  between  her  and  the  father  of  S., 
gave  a  bond  to  a  trustee,  conditioned  for 
a  piiymeiit  of  a  sum  of  money  to  the  use 
of  S.,  il'(/.  should  marry  and  survive  her 
intended  husband.  She  did  marry  and 
survive  liiiii,  and  the  money  not  having 
been  paid  in  her  lifetime,  tlie  trustee's 
executor  sued  E.,  the  executrix  of  C, 


en.  III.]  •  DEFENCES.  *252 

Set-ofF,  it  has  been  said,  is  in  the  nature  of  a  cross-action, 
which  may  be  for  a  larger  amount  than  was  due  on  the  original 
action.  If,  therefore,  the  defendant  files  and  sustains  his  set-off, 
and  the  result  is  not  only  that  he  owes  the  plaintiff  nothing,  but 
that  the  plaintiff  owes  him  a  balance  when  the  mutual  and 
opposing  claims  are  adjusted,  the  defendant  may  have  judgment 
and  execution  against  the  plaintiff,  in  that  action,  for  the  bal- 
ance or  surplus  due  to  him.  (p) 

Of  the  notice  of  set-ofT,  which  must  depend  much  on  the 
several  statutes  and  the  rules  of  court,  it  is  only  necessary  to 
say,  that  it  must  be  very  precise  and  certain.  For  set-ofF  is 
in  effect,  as  has  been  often  said,  in  the  nature  of  a  cross-action 
of  which  the  notice  takes  the  place  and  performs  the  office  of 
the  declaration,  and  it  should  *be  in  fact  and  substance,. if  not  in 
form,  as  full  and  as  clear  and  definite  as  a  declaration,  in  order 
that  the  plaintiff  may  have  the  same  opportunity  of  knowing 
precisely  what  claim  is  made  against  him,  that  he  would  have 
if  it  were  made  by  an  original  action,  (q) 

A  defendant  has  a  right  to  withdraw  his  account  in  set-off, 
although  this  may  expose  the  plaintiff's  claim  to  the  statute  of 
limitations,  by  the  absence  of  all  other  evidence,  of  any  mutual 
and  open  accounts,  (r) 

npon  the  bond.  Held,  that  in  this  action  for  the  surplus.  Hennell  v.  Fairlamb,  3 
the  chiim  of  E.  upon  S.'s  bond  could  not  Esp.  104.  But  in  America,  such  a  course 
be  set  off.  See  Isberg  ?■.  Bowden,  ante,  is  common.  Good  v.  Good,  9  Watts, 
and  the  remarks  of  Martin,  B.  In  Hurl-  567  ;  Cowser  v.  Wade,  2  Brev.  291.  And 
bert  V.  Pacific  Ins.  Co.  2  Sumner,  471,  the  plaintiff  cannot  file  any  counter  set- 
where  the  subject  was  fully  discussed,  it  off,  Hall  v.  Cook,  1  Ala.  629  ;  nor  dis- 
was  decided  that  where  an  insurance  was  continue  his  action,  Eiley  v.  Carter,  3 
effected  by  an  agent,  for  the  benefit  of  Humph.  230.  A  defendant  cannot  file 
whom  it  concerned,  and  the  agent  brought  the  same  account  in  set-off  to  two  sepa- 
an  action  in  his  oicn  name,  the  Insurance  rate  actions  by  the  same  plaintiff.  Chase 
Co.  could  not  set  off  a  debt  due  them  v.  Strain,  15  N.  H.  535. 
from  the  agent  in  his  own  right.  Wil-  {q)  See  Barbour  on  Set-off.  Babbing- 
liams  V.  Ocean  Ins.  Co.  2  Met.  303,  is  to  ton  on  Set-off,  6  Law  Lib. 
the  same  effect.  (r)  Theobald  v.  Colby,  35  Me.  179; 
(p)  In  England  this  cannot  be  done,  Muirhead  v.  Kirkpatrick,  5  Watts  &  S. 
but  the  defendant  must  bring  his  action  506;  Cary  i'.  Bancroft,  14  Pick.  318. 

[255] 


253* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


SECTION    XI 


OF    SOME   ILLEGAL   CONTRACTS. 


We  have  already  spoken  of  illegal  contracts  in  connection 
with  other  subjects,  and  especially  of  an  illegal  consideration,  in 
our  first  volume,  and  in  a  preceding  section  of  this  chapter. 
We  would  add  here,  that  as  all  contracts  which  provide  that 
any  thing  shall  be  done  which  is  distinctly  prohibited  by  law, 
or  morality,  or  public  policy,  are  void,  (s)  so  he  who  advances 
money  in  consideration  of  a  promise  or  undertaking  to  do  such 
a  thing,  may,  at  any  time  before  it  is  done,  rescind  the  contract, 
and  prevent  the  thing  from  being  done,  and  recover  back  his 
money,  (t)  But  it  would  seem  *  obvious  that  if  he  delays 
rescinding  until  his  rescission  is  inoperative,  and  the  thing 
will  still  be  done,  although  the  contract,  at  the  time  of  the 


(s)  This  principle  is  embodied  in  the 
maxim,  ex  turpi  causa,  non  oritur  actio. 
No  principle  is  better  settled  in  the  law, 
as  the  following  among  man  v  other  au- 
thorities show.  Shiffner  v.  Gordon,  12 
East,  304 ;  Bidding  v.  Pitkin,  2  Caines, 
149 ;  Springfield  Bank  v.  Merrick,  14 
Mass.  322;  Ilussell  v.  De  Grand,  15 
Mass.  39 ;  Wiieelcr  v.  liussell,  17  Mass. 
281;  Allen  v.  Kescous,  2  Lev.  174; 
Flctclier  v.  Ilarcot,  Ilutton,  56  ;  Holman 
V.  Johnson,  Cowp.  343  ;  Gaslight  Co.  v. 
Turner,  7  Scott,  779  ;  Wcthcrell  v.  Jones, 
3  B.  &  Ad.  221  ;  Fivaz  v.  Nicholls,  2  C. 
B.  .501  ;  Simpson  v.  Bloss,  7  Taunt.  246. 

(t)  Tiius,  in  White  i'.  The  Franklin 
Bank,  22  Pick.  181,  where,  upon  the 
deposit  of  money  in  a  bank,  the  dc|)ositor 
received  a  iiook  containing  tlie  cashier's 
certificate  thereof,  in  winch  it  was  stated 
that  the  money  wa.s  to  remain  in  deposit 
for  a  certain  time,  it  was  held,  that  such 
agreement  was  illegal  and  void,  under  tiie 
Bevisccl  Statutes,  c.  30,  ^  57,  as  i)cing  a 
ronlmrt  In/  t/ii'  Imiilr  for  the  juii/iiioit  of 
moncji  (it  a  filun  tlm/  rrrliiiii ;  iind  tiiat  no 
acti'jn  coidd  b(!  niaintaimwl  by  the  dc]){)si- 
tor  against  tiie  liank  upon  such  express 
contract;  Imt  that  lie  migiit  recover  back 


the  money  in  an  action  commenced  before 
the  expiration  of  the  time  for  which  it 
was  to  remain  in  deposit,  the  parties  not 
being  in  pari  delicto,  and  the  action  being 
in  disaffirmance  of  the  illegal  contract ; 
and  that  such  action  might  be  maintained 
witliout  a  previous  demand.  And  the  fol- 
lowing cases  were  relied  upon  as  showing 
that  money  advanced  upon  an  illegal  con- 
tract nuiy  be  recovered  hack.  Bartlett  v. 
Vinor,  Garth.  252  ;  De  Begnis  v.  Armis- 
tcad,  10  Bing.  110;  Lanuton  r.  Hughes, 
1  M.  &  S.  596 ;  Galliiii  r.  Laboric,  5  T. 
11.  242;  Springfield  Bank  v.  Merrick, 
14  Mass.  322;'  Wiieeler  v.  Russell,  17 
Mass.  258  ;  Lacaussade  r.  White,  7  T.  K. 
535;  Cotton  v.  Thurland,  5  id.  405; 
Smith  r.  Bickmore,  4  Taunt.  474  ;  Scott 
I}.  Nesbit,  2  Cox,  183  ;  Parker  r.  Kochcs- 
ter,  4  Johns.  Cli.  '.VM) ;  Wiicaton  v.  Ilib- 
bard,  20  Johns.  290;  Fitzroy  ?'.  Gwillim, 
1  T.  11.  153  ;  Robinson  ik  Bland,  2  Burr. 
1077;  Tenant  v.  Kiliott,  1  B.  &  P.  3; 
Utica  Ins.  Co.  );.  Scott,  19  Johns.  1  ; 
Utica  Ins.  Co.  v.  Bloodgood,  4  Wend. 
r.52  ;  Utica  Ins.  Co.  r.  Kip,  8  Cowcn,  20; 
Utica  Ins.  Co.  v.  Cadwell,  3  Weud. 
29G. 


Cir.  III.]  DEFENCES.  *254 

rescission  was  in  form  executory,  it  should  come  under  the  same 
rule  as  an  executed  contract  for  unlawful  purposes  ;  and  here 
the  law,  in  general,  refuses  to  interfere,  but  leaves  both  parties 
as  they  were  ;  (u)  unless  the  case  shows  that  there  is  a  substan- 
tial difference  between  them ;  the  one  doing  and  the  other  suf- 
fering the  wrong.  And  in  this  case  the  sufferer  may  have  a 
remedy,  but  not  the  wrongdoer,  (v) 

The  more  important  classes  of  contracts  in  which  the  ques- 
tion of  illegality  has  arisen,  are  contracts  in  restraint  of  mar- 
riage, contracts  in  restraint  of  trade,  contracts  which  violate  the 
revenue  laws  of  foreign  countries,  contracts  which  tend  to  cor- 
rupt legislation,  wagering  contracts,  contracts  in  violation  of 
the  Sunday  law,  and  champerty  and  maintenance.  Contracts 
in  restraint  of  marriage  we  have  already  noticed  in  our  first 
volume,  (iv)     The  others  we  shall  consider  briefly  in  this  place. 


1.    Of  contracts  in  restraint  of  trade. 

It  is  not  only  a  defence  to  a  contract  that  it  requires  of  the 
defendant,  or  that  the  defendant  by  it  promised  to  do  an  act 
which  the  law  forbade  his  doing,  but  it  may  also  be  a  defence, 
that  by  the  contract  the  defendant  undertook  to  do  what  the 
plaintiff  was  forbidden  by  law  to  ask  of  him.  Generally  these 
two  cases  would  be  the  same  ;  for  it  is  not  often  that  it  is  un- 
lawful to  ask  what  it  would  be  lawful  to  *  do.  But  the  distinc- 
tion exists,  and  may  be  well  illustrated  by  certain  contracts 
which  are  called  "  contracts  in  restraint  of  trade,"  and  which 
the  policy  of  the  law  is  said  to  make  illegal  and  void.  If  there- 
fore an  action  be  brought  on  such  a  contract  to  recover  dam- 
ages for  carrying  on  the  trade  which  it  is  agreed  shall  be  aban- 
doned, the  defence  of  illegality  may  be  made.  And  yet  it  is 
certain  that  every  one  is  at  full  liberty  to  abandon  or  to  vary 
his  trade  or  occupation  at  his  own  pleasure.     By  these  contracts, 

(m)  Foote    V.   Emerson,    10   Vt.   338  ;         (r)  See  White  v.  The  Franklin  Bank, 
Dixon  V.  Olmstead,  9  Vt.  310;  Pepper     22  Pick.  181. 
?•.  Haight,  20   Barb.   429;    Lubbock   v.         (w)  See  Vol.  I.  pp.  555,  5.56. 
Potts,  7  East,  449  ;  Howson  v.  Hancock, 
8  T.  E.  575. 

22  *  [  257  ] 


255* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


which  the  law  makes  void,  such  a  promise  is  made ;  that  is, 
one  who  exercises  a  certain  trade,  business,  or  occupation,  prom- 
ises to  abandon  the  same,  and  thereafter  exercise  it  no  more. 

The  history  of  the  law  upon  this  subject  is  somewhat  pecul- 
iar. So  long  ago  as  in  the  times  of  the  Year-Books  the  courts 
frowned  with  great  severity  upon  every  contract  of  this  kind. 
But  after  a  while  this  excessive  aversion  became  much  miti- 
gated. Many  exceptions  and  qualifications  were  allowed. 
These  were  gradually  enlarged,  until  it  became  the  settled  rule 
that  while  a  contract  not  to  carry  on  one's  trade  anywhere  was 
null  and  void,  a  contract  not  to  carry  it  on  in  a  particular  place, 
or  within  certain  limits,  was  good  and  enforceable  at  law. 

If  the  series  of  cases  in  relation  to  this  subject  are  critically 
examined,  (.r)  and  considered  in  connection  with  the  *contempo- 


{x)  The  principal  cases  on  this  subject 
are  here  stated  in  chronological  order. 
The  tirst  reported  case  to  be  found  is  in 
Year-Book,  2  Hen.  5,  fol.  5,  pi.  26  (1415). 
There  a  writ  of  debt  was  brought  on  an 
obligation  by  one  John  Dier,  in  which 
the  defendant  alleged  the  obligation  in  a 
certain  indenture  wliich  lie  put  fortii,  and 
on  condition  that  if  the  defendant  did  not 
use  his  art  of  a  dyer's  craft,  within  the  city 
where  tlie  plaintiff,  &c.,  for  a  certain  time, 
to  wit,  for  lialf  a  year,  the  obligation  to 
lose  its  force ;  and  said  that  he  did  not 
use  his  art  of  dyer's  craft  witliin  the  limited 
time,  which  he  averred,  and  prayed  judg- 
ment, &c.  llaU.  In  my  opinion  you  might 
have  demurred  upon  him,  that  tlie  obliga- 
tion is  void,  inasmuch  as  the  condition  is 
against  the  common  law  ;  and  hy  G — , 
{per  Dieu)  if  tlie  plaintiff  were  here,  he 
should  go  to  prison  till  he  paid  a  fine  to 
the  king.  In  Colgate  ?'.  Baclielcr,  Cro. 
Eliz.  872,  it  was  held  that  a  l)ond  condi- 
tioned to  pay  .£20  if  A  sliall  use  the  trade 
of  a  iiaberdashcrwithin  a  certain  time  and 

Slacc,  is  void.  JJut  in  liogcrs  v.  I'arrcy,  2 
iulstr.  l.'JG,  the  court  declared  that  a  man 
may  be  well  bound  and  restrained  from 
using  his  trade  fur  a  lime  certain  and  in  a 

iilace  certain.  Src  also,  .lillict  r.  Broade, 
S'oy,  08,  wiiere  the  court  declared  substan- 
tially the  same  doctrine.  Sec  also,  I'rug- 
ncll  V.  (josse,  Alcyn,  G7  ;  ('lerk  c.  Tailors 
of  Exeter,  .'{  Lev.  241.  In  Broad  v.  Jol- 
lyfe,  Cro.  Jac  .^'JO  (ir)21),  the  principle 
was  expressed  thus  :  "  L'j)on  a  valuui)le 
conHitlcralion  one  may  restrain  himscll'that 
lie  hhull  not   use  hi.s  trade  iu  such  a  j)ar- 

[258] 


ticular  place  ;  for  he  who  gives  that  con- 
sideration expects  the  benefit  of  his  cus- 
tomers ;  and  it  is  usual  here  in  London  for 
one  to  let  his  shop  and  wares  to  his  ser- 
vant when  he  is  out  of  his  apprenticeship; 
as  also  to  covenant  that  he  shall  not  use 
that  trade  in  such  a  shop  or  in  such  a 
street ;  so  for  a  valuable  consideration, 
and  voluntarily,  one  may  agree  that  he 
will  not  use  his  trade ;  for  volenti  non  fit 
injuria."  But  the  leading  case  on  this 
subject  is  Mitchell  v.  Keynolds,  Fort.  296, 
1  P.  Wms.  181.  There  the  condition  of 
a  bond  was  that  neither  the  defendant  nor 
his  assigns  should  keep  a  victualling 
house,  or  vend  liciuor  therein,  or  in  any 
other  place  within  a  mile  of  Kosemary- 
lane,  during  twenty-one  years  ;  the  con- 
sideration was,  that  the  defendant  had 
assigned  his  interest  in  this  house  to  the 
plaintiff.  It  was  held  that  this  bond  was 
valid,  because  grounded  on  a  special  con- 
sideration, set  down  in  the  bond,  which 
made  it  a  reasonable  contract;  but  other- 
wise, if  there  had  been  no  ])ariicular  con- 
sideration to  balance  the  restraint  of  trade. 
So  a  bond  conditioned  not  to  set  up  trade 
in  any  part  of  England  is  void,  because 
this  cannot  be  any  advantage  to  the  obli- 
gee, and  serves  only  the  ])ur|iose  of  oppres- 
sion. This  was  followed  by  Cheesman 
V.  Ramby,  Fort.  2<t7,  2  Stra.  739,  where 
the  condition  of  a  bond  was  that  the  de- 
fendant should  not  set  \\\)  trade  within 
half  a  mile  of  the  plaintilf 's  then  dwelling- 
house,  or  any  other  house  that  she,  her 
executors  or  administrators,  should  think 
fit  to  remove  to,  to  carry  on  the  trade  of  a 


en.  III.] 


DEFENCES. 


*256 


rary  alterations  in  the  law  or  usage  in  other  respects,  we  cannot 
but  think  that  much  reason  will  be  found  for  *believins:  that  the 


linen-draper.  The  considerntion  was,  that 
the  phiintiff"  was  to  take  the  defendant's 
wife  as  a  liired  servant  to  her,  to  assist  iier 
in  the  trade  of  linen-draper  for  three 
years,  witiiout  any  money,  whereas  she 
did  reasonal)ly  deserve  £100  with  sucli 
servant.  It  was  held  that  the  bond  was 
valid  ;  because  it  was  <rroundcd  on  a  good 
consideration,  and  did  not  amount  to  a 
general  restraint.  In  Davis  r.  Mason, 
5  T.  R.  118  (1793),  the  same  question 
was  before  the  court.  There,  in  consid- 
eration that  A  would  take  B  as  an  assist- 
ant in  his  business  as  a  surgeon,  for  so 
long  a  time  as  it  should  please  A,  B 
agreed  not  to  practise  on  his  own  account 
for  fourteen  years  witliin  ten  miles  of  the 
place  wliere  A  lived,  and  gave  a  bond  for 
this  purpose ;  this  bond  was  held  good  in 
law.  Still  again  in  Bunn  v.  Guy,  4  East, 
190  (1803),  a  contract  entered  into  by  a 
practising  attorney  to  relinquish  his  busi- 
ness and  recommend  his  clients  to  two 
other  attorneys  for  a  valuable  considera- 
tion, and  not  to  practise  himself  in  such 
business  within  certain  limits,  and  to  per- 
mit them  to  make  use  of  his  name  in  their 
firm  for  a  certain  time,  but  without  his 
interference,  &c.,  was  holden  to  be  valid 
in  law.  Three  years  afterwards,  in  the 
same  court,  in  Gale  v.  Heed,  8  East,  80 
(180G),  the  question  was  presented  in  a 
somewhat  different  form.  By  indenture 
between  A  and  B  and  C  dissolving  their 
partnership  as  rope-makers,  A  and  B  cov- 
enanted to  allow  C,  during  liis  life,  2s.  on 
every  cwt.  of  cordage  which  they  should 
make  on  the  recommendation  of  C  for 
any  of  his  friends  and  connections,  and 
whose  debts  should  turn  out  to  be  good  ; 
and  tiiat  A  and  B  should  stand  the  risk  of 
such  del)ts  incurred,  but  should  not  lie 
compelled  to  furnish  goods  to  any  of  C's 
connections  whom  they  should  be  disin- 
clined to  trust.  And  C  covenanted  not  to 
carry  on  the  business  of  a  rope-maker  dur- 
ing his  life  (except  on  government  con- 
tracts) ;  and  that  all  debts  contracted,  or 
to  be  contracted,  in  his  or  their  names, 
pursuant  to  the  indenture,  should  be  the 
exclusive  pro])erty  of  A  and  B,  and  that 
C  should,  during  his  life,  exclusively  em- 
ploy A  and  B,  and  no  other  person,  to 
make  all  the  cordage  ordered  of  him,  by 
or  for  his  friends  and  connections,  on  the 
terms  aforesaid,  and  should  not  employ 
any  other  person  to  make  cordage  on  any 


pretence  whatsoever.  Iltid,  that  the  cov- 
enant by  C  to  employ  A  and  B  exclu- 
sively to  make  cordage  for  his  friends,  and 
not  to  employ  any  other,  &c.,  A  and  B 
not  being  obliged  to  work  for  any  other 
than  such  as  they  chose  to  trust,  was  not 
illegal  and  void  as  being  in  restraint  of 
trade  without  adequate  consideration,  for 
the  whole  indenture  must  be  construed  to- 
gether, according  to  the  apparent  reason- 
able intent  of  the  parties  ;  and  the  general 
object  being  only  to  appropriate  to  A  and 
B  so  much  of  C's  private  trade  as  they 
chose  to  give  his  friends  credit  lor,  so 
much  only  was  covenanted  to  be  trans- 
ferred, and  C  was  still  at  liberty  to  work 
for  any  of  his  friends  who  were  refused  to 
be  trusted  by  A  and  B,  by  which  con- 
struction the  restraint  on  C  was  only  co- 
extensive, as  in  reason  it  could  only  he 
intended  to  be,  with  the  benefit  to  A  and 
B  ;  and  therefore  the  restraint  on  C  could 
be  no  prejudice  to  public  trade.  And  in 
Hayward  v.  Young,  2  Ciiitty,  407  (1818), 
it  was  Ill-Id  that  a  bond  by  an  apothecary 
not  to  set  up  business  within  twenty  miles 
is  not  illegal  as  in  restraint  of  trade.  In 
Bryson  v.  Whitehead,  1  Simons  &  S. 
74  (1822),  the  Vice-Chancellor  of  Eng- 
land, Sir  John  Leach,  said:  "Although 
the  policy  of  the  law  will  not  permit  a 
general  restraint  of  trade,  yet  a  trader  may 
sell  a  secret  of  business,  and  restrain  him- 
self generally  from  using  that  secret.  Let 
the  Master,  in  settling  the  deed  which  is 
to  give  effect  to  this  agreement,  introduce 
a  general  covenant  to  restrain  the  use  of 
the  secret  for  twenty  years,  and  a  limited 
covenant,  in  point  of  locality,  as  to  carry- 
ing on  the  ordinary  business  of  a  dyer,  both 
parties  being  willing  that  the  agreement 
should  be  so  modified."  Three  years 
afterwards,  in  Homer  v.  Ashford,  3  13ing. 
322,  the  same  general  principle  and  limi- 
tations were  recognized.  Wickens  v.  Ev- 
ans, 3  Young  &  J.  318  (1829),  recognizes 
the  same  general  principles.  And  this 
was  followed  in  the  same  court  in  Young 
V.  Timmins,  1  Crorap.  &  J.  331  (1831), 
where  an  agreement  in  partial  restraint  of 
trade  was  declared  void  for  want  of  con- 
sideration. And  in  the  same  year  was 
decided  in  the  Common  Pleas  the  impor- 
tant case  of  Horner  v.  Graves,  7  Bing.  735 
(1831).  It  was  there  held,  after  mature 
deliberation,  that  an  agreement  that  de- 
fendant,   a    moderately    skilful    dentist, 

'[259] 


257" 


THE   LAW   OF   CONTRACTS. 


[part  IL 


law  in  relation  to  these  contracts  grew  out  of  the  English  law 
of  apprenticeship,  to  which  we  have  *  already  referred.  By  this 
law  in  its  original  severity,  no  person  could  exercise  any  regular 
trade  or  handicraft  except  after  a  long  apprenticeship,  and,  gen- 
erally, a  formal  admission  to  the  proper  guild  or  company.  If 
he  had  a  trade,  he  must  continue  in  that  trade,  or  have  none. 
To  relinquish  it,  therefore,  was  to  thow  himself  out  of  employ- 


would  abstain  from  practising  over  a  dis- 
trict 200  miles  in  diameter,  in  considera- 
tion of  receiving  instructions  and  a  salary 
from  the  plaintiti',  determinable  at  three 
months'  notice,  was  unreasonable  and  void. 
See  further,  Hitchcock  v.  Coker,  1  Nev. 

6  P.   796   (1836);    Archer   v.  Marsh,  6 

A.  &  E.  959  (1837);  Wallis  v.  Day, 
2  M.  &  W.  273  (1837);  Leighton  v. 
Wales,  3  M.  &  W.  545  ;  Ward  v.  Bvrne, 
5  M.  &  W.  548  (1839) ;  Hinde  v.  Gray,  1 
Man.  &  G.  195  ;  Proctor  v.  Sargent, 
2  Man.  &  G.  20  (1840) ;  Mallan  v.  May, 
11  M.  &  AV.  653  (1843) ;  Kannie  v.  Irvine, 

7  Man.  &  G.  969  (1844)  ;  Green  v.  Price, 
13  M.  &  W.  695  (1845),  16  M.  &  W. 
346;  Pilkington  r.  Scott,  15  M.  &  W. 
657   (1846)  ;  Nicholls  v.  Stretton,   10  Q. 

B.  346  (1847);  Peml)erton  v.  Vaughan, 
11  Jur.  411  ;  Hartley  v.  Cummings,  5  C. 
B.  247  (1847) ;  Sainter  v.  Ferguson,  7  C. 
B.  716  (1849);  Hastings  v.  Whitlev,  2 
Exch.  611  (1848);  Hilton  v.  Eckersley 
(1855),  6  Ellis  &  B.  47,  32  Eng.  L.  &  Eq. 
198.  AVhere  the  agreement  is  not  to 
keep  a  shop  or  practise  a  trade  within  a 
certain  number  of  miles  of  a  certain  place, 
the  shortest  and  nearest  mode  of  access  is 
to  be  the  standard  of  estimate.  Leigh  v. 
Hind,  9  P>.  &  C.  774 ;  Woods  v.  Dennett, 
2  Stark.  89.  The  princi])al  American 
cases  on  this  subject  seem  to  be  the  follow- 
ing: Pierce  y.  Fuller,  8  Mass.  223  (1811), 
where  an  oldigaiion  not  to  run  a  stage  be- 
tween Boston  and  Providence,  a  distance 
of  aliont  forty  miles,  in  opposition  to  the 
pluintilf's  stage,  was  held  to  be  valid,  hav- 
ing been  made  for  a  reasonable  and  good 
consideration.  This  was  followed  by  Per- 
kins /'.  Lyman,  9  .Muss.  522  (1813).  Four 
years  after,  the  general  principle  as  stated 
in  the  text  was  recognized  ^uid  adopted  in 
Pyke  j>.  Thomas,  4  JJibb,  486.  In  1823, 
the  question  cami!  again  before  the  Su- 
preme Court  of  Massaclnisetts  in  Stearns 
V.  Barrett,  1  I'ick.  443,  ami  th(!  eases  in 
the  8th  &  9th  Mass.  above  cited,  were 
confirmed.     'I'he  same  court /if/t/  in  1825 

[  2G0  ] 


(Palmer  v.  Stebbins,  3  Pick.  188),  that  a 
bond  conditioned  that  the  obligor  shall 
give  the  obligee  all  the  freighting  of  the 
obligor's  goods  up  and  down  the  Connec- 
ticut, at  the  customary  price,  to  be  paid 
in  goods  at  the  usual  price,  and  that  he 
shall  not  encourage  any  other  boatman  to 
compete  with  the  obligee  in  the  business  of 
boating,  is  not  void,  as  being  in  restraint  of 
trade,  and  is  founded  on  a  sufficient  con- 
sideration. The  case  of  Nobles  v.  Bates, 
7  Co  wen,  307  (1827),  seems  to  have  been 
the  next  touching  this  question.  There 
the  agreement  was  not  to  carry  on  a  cer- 
tain trade  "  within  twenty  miles  of  a  cer- 
tain stand."  The  agreement  was  held 
binding,  the  court  observing:  "A  bond 
or  promise  upon  good  consideration,  not 
to  exercise  a  trade  for  a  limited  time,  at  a 
particular  place,  or  within  a  particular 
parish,  is  good.  But  where  it  is  general 
not  to  e.xercisc  a  trade,  throughout  the  king- 
dom, it  is  bad,  though  founded  on  good 
consideration,  as  being  a  too  unlimited  re- 
straint of  trade  ;  and  operating  oppres- 
sively ujjon  one  party,  without  being  of 
anv  benelit  to  either."  Again,  in  Pierce 
V.  Woodward,  6  Pick.  206  (1828),  the  de- 
fendant sold  tlie  plaintiff  a  grocery  store, 
and  verballji  agreed  not  to  carry  on  the 
same  kind  of  business  within  a  "  certain 
limited  distance  in  the  city  of  Boston." 
It  was  held  that  it  was  a  snliicient  consid- 
eration for  such  agreement  if  the  plaintiff 
was  thereby  induced  to  make  the  purchase, 
and  that  this  might  be  shown  by  parol, 
although  the  deed  was  silent  about  any 
sucli  consideration.  The  next  case  in 
jioint  of  time  was  Alger  v.  Thacher,  19 
Pick.  51  (1837),  for  which  see  next  note. 
And  see  Vickcry  r.  Welch,  19  Pick.  523. 
The  whole  subject  was  examined  at  much 
Icngtli  by  liroution,  J.,  in  the  subsequent 
case  of  Chajijiel  v.  Brockway,  21  Wend. 
157  (1839).  See  further.  Boss  v.  Sadg- 
bcer,  21  Wend.  160;  .Jarvis  v.  Peck,  1 
Hoff.  Cii.  479  (184(1) ;  Bow.scr  v.  Bliss,  7 
Blackf.  344  (1845). 


CH.  III.] 


DEFENCES. 


*258 


ment ;  to  fall  as  a  burden  upon  the  community;  to  become  a 
pauper.  And  it  is  not  surprising  that  a  judge  in  the  reign  of 
Henry  V.  should  speak  of  a  promise  to  do  this  in  language 
which  would  now  be,  because  indecorous,  impossible.  But  this 
ancient  severity  of  the  law  of  apprenticeship  abated  ;  and  as 
this  severity  gradually  relaxed,  it  will  be  seen  that  contracts 
"  in  restraint  of  trade  "  were  treated  with  less  and  less  of  dis- 
favor, until  the  present  rule  became  established. 

In  the  application  of  this  rule  we  shall  see  a  gradual  enlarge- 
ment, until,  in  this  country  at  least,  it  seemed  to  be  little  more 
than  nominal.  The  cases  are  quite  numerous,  but  we  believe 
that  the  first  one  in  which  a  contract  was  sought  to  be  enforced 
in  which  the  renunciation  was  absolute,  was  in  Massachusetts, 
in  1837;  (//)  and  this  is  also  *nearly,  if  not  quite,  the  first  in 


[;/)  Alger  v.  Tliacher,  19  Pick.  51. 
This  was  debt  on  a  bond  conditioned  that 
the  obli<ror  should  never  cany  on  or  he 
concerned  in  the  business  of  founding  iron. 
The  case  was  argued  at  great  length  be- 
fore the  Supreme  Judicial  Court  of  Massa- 
chusetts, and  all  the  cases  from  the  Year- 
Books  to  that  time  were  cited.  And  Mor- 
ton,  J.,  in  delivering  the  opinion  of  the 
court,  said:  "Among  the  most  ancient 
rules  of  the  common  law,  we  find  it  laid 
down,  that  bonds  in  restraint  of  trade  are 
void.  As  early  as  the  second  year  of 
Henry  V.  (a.  d.  1415),  we  find  by  the 
Year-Books  that  this  was  considered  to  be 
old  and  settled  law.  Through  a  succes- 
sion of  decisions,  it  has  been  handed  down 
to  us  unquestioned  till  the  present  time. 
It  is  true,  the  geneial  rule  has,  from  time 
to  time,  been  modified  and  qualified,  but 
the  principle  has  always  been  regarded  as 
important  and  salutary.  For  two  hun- 
dred years  the  rule  continued  unchanged 
and  without  exceptions.  Then  an  attempt 
was  made  to  qualify  it,  by  setting  up  a 
distinction  between  sealed  instruments  and 
simple  contracts.  But  this  could  not  be 
sustained  upon  any  sound  principle.  A 
different  distinction  was  then  started,  be- 
tween a  general  and  a  limited  restraint  of 
trade,  which  has  been  adhered  to  down  to 
the  present  day.  This  qualification  of  the 
general  rule  may  be  found  as  early  as  the 
eighteenth  year  of  James  I.,  A.  D.  1621, 
Broad  ?■.  JoUyfe,  Cro.  Jac.  596,  when  it 
was  holden,  that  a  contract  not  to  use  a 
certain  trade  in  a  particular  place  was  an 


exception  to  the  general  rule,  and  not  void. 
And  in  the  great  and  leading  case  on  this 
subject,  Mitchell  v.  Reynolds,  reported  in 
Lucas,  27,  85,  130,  Fortcscue,  296,  and 
1  P.  Wms.  181,  the  distinction  between 
contracts  under  seal  and  not  under  seal 
was  .finally  exploded,  and  the  distinction 
between  limited  and  general  restraints 
fully  established.  Ever  since  that  decision, 
contracts  in  restraint  of  trade  generally 
have  been  held  to  be  void  ;  while  those 
limited  as  to  time,  or  place,  or  persons, 
have  been  regarded  as  valid,  and  duly  en- 
forced. Whether  these  exceptions  to  the 
general  rule  were  wise,  and  have  really 
improved  it,  some  may  doubt ;  but  it  has 
been  too  long  settled  "to  be  called  in  ques- 
tion by  a  lawyer.  This  doctrine  extends 
to  all  branches  of  trade  and  all  kinds  of 
business.  The  efforts  of  the  plaintiff's 
counsel  to  limit  it  to  handicraft  trades,  or 
to  found  it  on  the  English  system  of  ap- 
prenticeship, though  enriched  by  deep 
learning  and  indefatigable  research,  have 
proved  unavailing.  In  England  the  law 
of  apprenticeship  and  the  law  against  the 
restraint  of  trade  may  have  a  connection. 
But  we  tliink  it  very  clear  that  they  do 
not,  in  any  measure,  depend  upon  each 
other.  That  the  law  under  consideration 
has  been  adopted  and  practised  upon  in 
this  country  and  in  this  State,  is  abun- 
dantly evident  from  the  cases  cited  from 
our  own  reports.  It  is  reasonable,  salu- 
tary, and  suited  to  the  genius  of  our  gov- 
ernment and  thenatiu'e  of  our  institutions. 
It  is  founded  on  great  principles  of  public 

[201] 


259*  THE  LAW   OF   CONTRACTS.  [PART  n. 

which  such  a  promise  was  declared  to  be  wholly  null,  by  direct 
adjudication  ;  the  statements  in  other  cases,  that  a  local  limita- 
tion was  necessary,  and  would  make  the  promise  enforceable, 
being  for  the  most  part,  if  not  altogether,  ohiler.  In  the  previ- 
ous cases,  such  a  promise,  it  is  said,  would  be  avoided  by  the 
law  ;  but  in  none  of  them  was  this  done,  as  there  was  always 
some  limitation.  But  this  was  sometimes  very  wide.  In  one, 
for  example,  a  promise  not  to  use  certain  machines  in  any  of 
the  United  States  except  ^it'O  (Massachusetts  and  Rhode  Island) 
*was  held  good,  because  "  agreements  to  restrain  trade  in  par- 
ticular places  are  valid  in  law,  and  may  be  enforced."  (z)  In 
the  case  of  Alger  v.  Thacher,  already  referred  to,  it  was  argued 
that  the  reason  of  the  law  against  such  contracts  had  passed 
away,  and  that  this  was  shown  by  an  extension  of  the  excep- 
tion which  made  the  rule  itself  unmeaning ;  for  it  could  hardly 
be  said  that  all  the  United  States  except  two  were  any  "  particu- 
lar place,"  if  this  phrase  was  to  be  used  with  any  reference  to 
its  ordinary  meaning.  The  court,  however,  were  of  opinion 
that  although  the  connection  between  such  contracts  and  the 
law  of  apprenticeship  might  have  originated  the  rules  of  law  in 
relation  to  these  contracts,  in  England,  and  we  never  had  here 
a  similar  law  or  usage  of  apprenticeship,  still  there  were  suf- 
ficient reasons  for  sustaining  the  rule,  in  this  country,  as  it  had 
been  laid  down  in  previous  cases.  This  may  be  regarded  as  a 
leading  authority,  and  it  leaves  no  other  question  than  as  to 
what  shall  be  deemed  "  a  reasonable  limitation."  [za)     If  this 

polioy,  and  carries  out  our  constitutional  industry  and  enterprise,  and  diininisli  the 

proiiibition   of  monopolies  and  cxchisivo  products  of  ingenuity  and  skill.     4.  They 

privileges.     Tlie  unreasonableness  of  con-  prevent  competition,  and  enhance  prices, 

tracts  in  restraint  of  trade  and  husiness  is  5.  They  expose  the  public  to  all  the  evils 

very  apparent  from  several  obvious  con-  of  monopoly.     And  this  especially  is  ap- 

siderations.     1.   Such  contracts  injure  the  plicablc  to  wealthy  companies  and  largo 

parties  making  them,  because  tliey  dimin-  cor[)orations,  who  iiavc  tlic  means,  unless 

isli  their  means  of  procuring  livelihoods  restrained  hy  law,  to  exclude  rivalry,  mo- 

nnd  a  compi^tcncy  for  their  families.     They  nopolize  husiness,  and  engross  the  market, 

tempt  improvideiiL  persons,  for  the  sake  of  Against  evils  like  tiiesc,  wise  laws  protect 

])resent  g.iin,  to  di.-prive  tlu'msc-ives  of  the  individuals   and   the  ])ublic,  by  declaring 

power  to  make  future  ac(iuisitions.     And  all  such  contracts  void." 
they  expftse  such  persons   to   imposition         {z)  Stearns    r.    Barrett,    1    Pick.    443. 

ami  oppression.     2.  They  tend  to  deprive  And  see  Tiiomas  v.  Miles,  3  Ohio  State, 

tlie  pulilic  f)f  liie  nerviccs  of  men  in  the  274. 

employments  and  ca|)acitics  in  whi('h  they         (zn)   Kinsman   r.  I'arkhurst,    18  How. 

may  he  mo^t  useful  to  the  conimimity  as  28'J  ;  Lawrence  r.  Kidder,  10   H;irl).  641  ; 

well  ns  themsc'lves.     3.  They  discourage  Mott  »'.  ISIott,  11  IJarb.  127;  Van  Martcr 

[  2'-^  ] 


en.  III.]  DEFENCES.  *2G0 

question  is  to  be  answered  by  a  reference  to  the  cases,  the  prob- 
able conclusion  would  be,  that  almost  any  limitation  would  suf- 
fice. Still,  however,  if  the  courts  adhere  to  the  rule  which 
seems  now  to  be  established,  the  limitation,  to  protect  the  con- 
tract, must  be  botid  Jidc,  and  not  a  slight  and  unreal  exception, 
inserted  as  a  mere  evasion  of  the  law.  (zb) 

It  has  recently  been  held  in  England  that  an  agreement  by 
eighteen  mill-owners,  to  be  governed,  as  to  wages  and  the  gen- 
eral management  of  their  works,  by  a  majority  of  the  parties  to 
it,  for  the  purpose  of  more  effectually  resisting  a  combination  of 
the  work-people,  was  void  as  in  restraint  of  trade,  (zc) 


2.   Of  contracts  opposed  to  the  revenue  laws  of  other  countries. 

A  contract  which  violates  or  proposes  to  violate  the  revenue 
laws  of  the  country  in  which  it  is  made,  is  of  course  void,  (a) 
But  it  seems  to  be  quite  settled,  both  in  England  and  in  this 
country,  that  a  contract  may  lawfully  be  made  for  the  purpose 
of  violating  the  revenue  laws  of  a  foreign  *country.  (b)  Per- 
haps this  rule  is  the  necessary  result  of  the  universal  antago- 
nism which  now  pervades,  to  some  extent,  the  revenue  laws  of 
all  the  States  in  Christendom.  Everywhere  duties  or  imposts 
are  laid,  and  nowhere  is  there  any  thought  of  regulating  them, 
by  any  other  principle  than  that  of  securing  the  greatest  gain 
to  the  country  which  enacts  them.  For  even  the  zealous  pro- 
moters of  what  is  called  free  trade  rest  their  arguments  in  its  fa- 
vor on  the  profitableness  of  the  system  to  the  State  by  which  it 
shall  be  adopted.     And  while  it  may  seem  immoral  for  courts 

V.   Babcock,    23    Barb.    633;    Beard    v.  Cranch,  242;  Lii!;btfoot  v.  Tenant,  1  B. 

Dennis,  6  Ind.  200.  &  P.  551 ;  Langt'on  v.  Hiigbes,  1  M.  &  S. 

{zb)  See,  in  illustration  of  the  general  593 ;   Eitchie   v.    Smith,    6    C.   B.   462 ; 

principle,  Jones  v.  Lees,  1  H.  &  N."lS9.  Hodgson  v.  Temple,  5  Taunt.  181  ;  Cat- 

(sc)  Hilton  V.  Eckersley,  6  Ellis  &  B.  lin  v.  Bell,  4  Camp.  183. 

47.     So   held   by    Campbell,    C.   J.,  and  (6)  Boucher    i\    Lawson,    Cas.    temp. 

Crompton,  J. ;  Erie,  J.,  dissenting.  Hardw.  84 ;  Holman  r.  Johnson,  Cowp. 

(a)  Johnson  i\  Hudson,  11  East,  180;  341;  Biggs  v.  Lawrence,  3  T.  R.    454; 

Cope  V.  Rowlands,  2  M.  «fc  W.  149  ;  Smith  Ludlow  v.  Van  Rensselaer,  1  Johns.  94  ; 

V.  Mawhood,  14M.  &W.  452;  Meux  i'.  Lightfoot   v.   Tenant,    1    B.    &   P.   .551; 

Humphries,  3    C.   &  P.  79 ;    Holman  v.  Planche   v.   Fletcher,  Doug.  251  ;  Kohn 

Johnson,  Cowp.  341  ;  Armstrong  r.  Toler,  v.  Schooner  Rcnaisance,  5  La.  Ann.  25; 

11  Wheat.  258;  Cambioso  v.   Maftett,  2  Pellecat   v.   Angell,  2  Cromp.  M.  &  R. 

Wash.    C.    C.    98;    Hannay  v.   Eve,   3  311. 

[263] 


260- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


to  sanction  the  breach  of  the  positive  laws  of  a  foreign  State, 
yet  it  is  too  much  to  ask  of  them  to  enforce  an  observance  of 
laws  made  almost  professedly  against  the  interest  of  the  gov- 
ernment to  which  they  belong.  The  rule  began  in  England, 
when  the  courts  could  not  have  adopted  any  other  without 
breaking  up  the  very  profitable  business  which  their  merchants 
found  in  carrying  on  with  different  nations  of  the  continent  a 
trade  prohibited  by  the  laws  of  those  nations.  The  same  rule 
seems  to  be  extended  to  such  things  as  making  false  or  de- 
praved coin  or  counterfeit  paper-money,  for  use  in  a  foreign 
country,  although  it  is  not  perhaps  so  well  settled.  But  it  is 
obvious  that  arguments  might  be  urged  against  this  extension 
of  the  rule,  which  would  not  apply,  at  least  with  equal  force,  to 
the  rule  itself. 


3.    Of  contracts  wMcJi  tend  to  corrupt  legislation. 

All  those  whose  interests  are  to  be  affected  by  legislation, 
may,  both  morally  and  legally,  for  the  protection  or  advance- 
ment of  their  interests,  use  all  means  of  persuasion  which  do 
not  come  too  near  to  bribery  or  corruption  ;  but  the  promise  of 
any  personal  advantage  to  a  legislator  is  open  to  this  objection, 
and   therefore   void,  (c)     And  a  contract  tending  to  corrupt  ap- 


(c)  Sec  Clippingcr  v.  IIc])baugh,  5  Watts 
&  S.  315;  Wood  v.  IMcCann,  6  Dana, 
366  ;  Coppock  v.  Bower,  4  M.  &  W.  361  ; 
Ilat/.fielcl  r.  Gulden,  7  Watts,  152;  Nor- 
man V.  Cole,  3  Esp.  253.  This  subject  is 
very  fully  discussed  in  the  late  case  of 
Marshall  v.  Baltimore  &  Ohio  Railroad 
Company,  10  How.  314.  It  is  there 
held  that  a  contract  is  void,  as  against 
jiuhlic  i)olicy,  and  can  have  no  standing 
in  court,  hy  which  one  party  stipulates  to 
cinjiloy  a  nuniher  of  secret  agents  in  order 
to  obtain  the  ])assage  of  a  ])articular  law 
by  the  legislature  of  a  State,  and  tlie  other 
])arty  promises  to  ])ay  a  large  sum  of 
money  in  case  the  law  should  pass.  Held 
also,  that  tlu;  contract  was  void,  if,  when 
it  was  mail.:  I  he  piirtics  agreed  to  conceal 
from  the  members  of  the  legislature  the 
fact  tliat  the  one  party  was  the  agent 
of  the  other,  and  was  to  receive  u  com- 
j)enHation  for  his  services,  in  case  of  the 
l)a.ssage  of  the  law.     And  further,  if  tliero 

[2G4] 


was  no  agreement  to  that  effect,  there  can 
be  no  recovery  upon  the  contract,  if  in 
fact  the  agent  did  conceal  from  the  mem- 
bers of  the  legislature  that  he  was  an 
agent  who  was  to  receive  compensation 
for  his  services,  in  case  of  the  passage  of 
the  law.  Mr.  Justice  Giier,  in  delivering 
his  opinion  said:  "Influences  secretly 
urged  under  false  and  covert  pretences  must 
necessarily  ojierate  deleteriously  on  legis- 
lative action,  whether  it  be  emi)loye(l  to 
obtain  the  passage  of  private  or  j)ublic  acts. 
Bribes,  in  the  sliape  of  high  contingent 
coini)ensation,  must  necessarily  lead  to  the 
use  of  improper  means  and  the  exercise 
of  undue  influence.  Their  necessary  con- 
sc(|ucnc('  is  tin'  dcm()rali/,;\tion  of  the  agent 
will)  ciivcnants  for  ihcni  ;  he  is  soon  brought 
to  believe  that  any  means  which  will  pro- 
duce so  beneficial  a  result  to  himself  arc 
'  i)r()|ier  means  ; '  and  that  a  share  of  these 
jjrofits  nniy  have  tlu;  same  cflcct  of  (|uick- 
ening   the   jicreeptions  mid  warming  the 


CII.  III.] 


DEFENCES. 


*2Q1 


pointment  to  office,  even  by  a  private  corporation,  is,  for  a  sim- 
ilar reason,  void,  (ca) 


*4.   Of  wagering  contracts. 

It  was  formerly  held  in  England,  tliat  some  wagers  are  valid 
contracts  at  common  law.  {d)  But  they  have  been  recently 
prohibited  by  statute  in  England  and  in  parts  of  this  country; 
and  there  are  American  courts  which  have  denied  to  them  any 
validity  whatever,  {e)  Even  if  admitted  to  be  valid,  it  is  cer- 
tain that  this   must  be   with  important  qualifications  ;  (/)  as 


zeal  of  influential  or  'careless'  members 
in  favor  of  his  bill.  The  nse  of  sueh 
means  antl  such  agents  will  have  the 
effect  to  sulyect  the  State  governments 
to  the  coniljined  capital  of  wealtliy  cor- 
porations, and  produce  universal  corrup- 
tion, commencing  with  the  representative 
and  ending  with  the  elector.  Speculators 
in  legislation,  public  and  private,  a  com- 
pact corps  of  venal  solicitors,  vending 
their  secret  influences,  will  infest  the  cap- 
ital of  tlie  Union  and  of  every  State,  till 
corruption  shall  become  the  normal  con- 
dition of  the  body  politic,  and  it  will  be 
said  of  us  as  of  Rome  — '  omne  Ronue 
venale.'  " 

{ca)  Davison  v.  Seymour,  1  Bosw.  88. 

{d)  Good  V.  Elliott.  3  T.  R.  693.  The 
wager  here  was,  whether  one  S.  T.  had, 
or  had  not,  before  a  certain  day  brought  a 
wagon  belonging  to  D.  C.  So  a  wager 
on  the  age  of  the  plaintiff  and  defendant 
has  been  held  good  at  common  law.  Hus- 
sey  V.  Crickitt,  3  Camp.  168.  And  see 
Bland  v.  Collett,  4  Camp.  157;  Fisher 
V.  Waltham,  4  Q.  B.  889.  So  a  wager  on 
the  result  of  an  ajipeal  from  the  Court  of 
Chancery  to  the  House  of  Lords  has  been 
held  good,  no  fraud  being  intended,  and 
the  parties  having  no  power  to  bias  the 
decision.  Jones  v.  Randall,  Cowp.  37. 
And  so  of  a  wager  on  the  price  of  foreign 
funds.  Morgan  v.  Pebrer,  4  Scott,  230. 
So  of  a  wager  that  a  certain  horse  would 
win  a  certain  race.  Moon  v.  Durden,  2 
Exch.  22.  By  the  common  law  of  Eng- 
land, therefore,  wagers  were  not  per  se 
void,  unless  they  affected  tlie  interests, 
feelings,  or  character  of  third  persons,  or 
led  to  indecent  evidence,  or  were  contra- 
ry to  public  policy,  or  tended  to  immoral- 
ity, or  to  a  breach  of  some  law.  Lord 
Campbell,  in  Thackoorseydass  v.  Dhond- 

voL.  II.  23 


mull,  6  Moore,  P.  C.  300 ;  Doolubdass  v. 
Ramloll,  7  Moore,  P.  C.  239,  3  Eng.  L. 
&  Eq.  39.  And  a  few  early  decisions  in 
America  inclined  the  same  way.  ■  Bunn 
V.  Riker,  4  Johns.  426;  Morgan  v.  Rich- 
ards, 1  Browne,  Pa.  171  ;  Hasket  v. 
Wootan,  1  Nott  &  McC.  180;  Sliephcrd 
V.  Sawyer,  2  Murphy,  26  ;  Grant  v.  Ham- 
ilton, 3  McLean,  100;  Ross  i'.  Green,  4 
Harring.  Del.  308  ;  Dunman  i\  Strother, 

1  Texas,  89  ;  Barret  v.  Hampton,  2  Brev. 
226.  But  a  different  view  was  taken  in 
many  States,  and  all  wacjers  were  consid- 
ered to  be  illegal,  and  contrary  to  good 
policy.  Thus,  in  Collamer  v.  Day,  2  Vt. 
144,  a  wager  that  a  certain  chaise  then  in 
sight  was  the  property  of  A  and  not  of  B 
was  held  void.    And  see  Amory  i'.  Gilman, 

2  Mass.  1  ;  Babcock  v.  Thompson,  3  Pick. 
446  ;  Ball  v.  Gilbert,  12  Met.  399,  Shaio, 
C.  J. ;  Hoit  V.  Hodge,  6  N.  H.  104 ;  Rice 
V.  Gist,  1  Strobli.  82  ;  Edgell  (•.  McLaugh- 
lin, 6  Whart.  176;  Lewis  v.  Littlefield, 
15  Me.  233;  Carrier  v.  Brannan,  3  Calif. 
328.  But  however  the  common  law  may 
be,  all  wagers  are  now  forbidden  in  Eng- 
land by  statute,  8  &  9  Vict.  c.  109,  s.,  18 
(1845),  and  similar  statutes  exist  in  many 
American  States.  Unless  special  pro- 
vision was  made  therefor,  however,  they 
would  not  have  a  retrospective  opera- 
tion upon  actions  commenced  before. 
Moon  V.  Durden,  2  Exch.  22  ;  Doolubdass 
V.  Ramloll,  7  Moore,  P.  C.  239,  3  Eng. 
L.  &  Eq.  39. 

(e)  See  preceding  note.  And  see  ante, 
p.  139  and  notes. 

(f)  Wagers  as  to  the  mode  of  playing, 
or  the  result  of  any  illegal  game,  as  box- 
ing, wrestling,  cockfighting,  &c.  are  void 
at  common  law.  Brown  v.  Leeson,  2  H. 
Bl.  43  ;  Egerton  v.  Furzeman,  1  C.  &  P. 
613;  Kennedy  v.  Gad,  3   C.  &  P.  376; 

[2G5] 


262* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


for  instance,  that  they  shall  not  refer  to  another's  person  *or 
property,  {g-)  so  as. to  make  him  infamous,  or  to  be  libellous  or 
indecent,  or  to  injure  his  property,  or  to  tend  to  break  the 
peace.  It  cannot  be  believed,  in  these  days,  that  wagers  would 
be  anywhere  upheld,  against  which  these  objections  could  be 
fairly  urged  ;  and  upon  some  of  these  points  the  authorities  are 
quite  clear,  (h) 


5.   Of  the  Sunday  law. 

In  Great  Britain  and  in  this  country,  a  view  prevails  concern- 
ing the  obligation  and  sanctity  of  Sunday  as  the  Sabbath, 
which  differs  somewhat  from  that  which  is  generally  adopted 
elsewhere  in  Christendom,  (ha)     One  or  two  laws  were  passed 


Squires  i'.  "Whisken,  3  Camp.  140  ;  Hunt 
V.  Bell,  1  Bing.  1  ;  MeKeon  v.  Caherty, 
1  Hall,  300  ;  Hasket  v.  Wootan,  1  Nott 
&  McC.  ISO  ;  Atchison  v.  Gee,  4  McConl, 
211.  Money  lent  for  the  purpose  of  bet- 
ting cannot  be  recovered  by  the  lender  of 
the  borrower.  Peck  v.  Briggs,  3  Denio, 
107  ;  Ruckman  v.  Bryan,  id.  340.  And 
a  note  given  for  a  gaining  debt  is  void, 
even  in  the  hands  of  an  innocent  indorsee 
for  value.  Unger  v.  Boas,  13  Penn.  St. 
601. 

((/)  Such  wagers  were  always  void  at 
common  law.  De  Costa  v.  Jones,  Cowp. 
'  7:29,  a  wager  as  to  the  sex  of  a  tiiird  j)cr- 
son ;  Phillips  v.  Ives,  1  Rawle,  37,  a  wa- 
ger that  Napoleon  Bonaparte  would  bo 
removed  from  the  Island  of  St.  Helena 
before  a  certain  time  ;  Ditchburn  r.  Gold- 
smith, 4  Camp.  152,  a  wager  that  an 
unmarried  woman  would  have  a  child  by 
a  certain  (lay ;  Hartley  r.  IMce,  10  East, 
22,  a  wager  that  a  certain  person  would 
not  marry  within  a  certain  number  of 
years;  Gilbert  v.  Sykes,  16  East,  l.'JO,  a 
wager  on  the  duration  of  the  life  of  Napo- 
leon Bonaparte,  at  a  time  when  his  jjrob- 
ablc  assassination  was  the  subject  of  spec- 
ulation; Evans  v.  Jones,  .5  I\l.  &  W.  77, 
a  wager  that  a  certain  prisoner  would  Ije 
acquitted  on  trial  of  a  criminal  charge. 
Some  of  these  cases  may  have  also  pro- 
ceeded upon  tiie  ground  of  jmblic  jwlirii, 
and  as  having  an  injurious  tendency  in 
respect  to  jutlilir  rii/lils. 

(/()  Wagers  upon  the  result  of  an  elec- 
tion have  always  been  considered  as  void, 
on  both  hides  of  the  Atlantic,  as  i)eiiig 
contrary  tf)  sound  policy,  and  tending  to 

[2GG] 


impair  the  purity  of  elections.  Ball  v. 
Gilbert,  12  Met.  397;  Allen  v.  Hearn,  1 
T.  R.  .56;  M'Allister  v.  Hoffman,  16  S. 
&  R.  147  ;  Smyth  v.  M'Masters,  2  Browne, 
Pa.  182  ;  Bunn  v.  Riker,  4  Johns.  426; 
Lansing  v.  Lansing,  8  Johns.  454 ;  Vischer 
V.  Yates,  11  Johns.  23;  Yates  v.  Foot, 
12  Johns.  1  ;  Rust  i'.  Gott,  9  Cowen,  169; 
Stoddard  v.  Martin,  1  R.  I.  1  ;  Denniston 
V.  Cook,  12  Johns.  376  ;  Brush  v.  Keeler, 

5  Wend.  250 ;  Lloyd  v.  Leisenring,  7 
Watts,  294 ;  Wagonscller  v.  Snyder,  7 
Watts,  343  ;  Wroth  v.  Johnson,  4  Harris 

6  McH.  284  ;  Laval  v.  Myers,  1  Bailey, 
486;  David  v.  Ransom,  1  Greene,  383; 
Davis  V.  Holbrook,  1  La.  Ann.  176  ;  Tarl- 
ton  V.  Baker,  18  Vt.  9  ;  Commonwealth 
V.  Pash,  9  Dana,  31 ;  Machir  v.  Moore, 
2  Gratt.  257  ;  Foreman  v.  Hardwick,  10 
Ala.  316  ;  Wheeler  v.  Spencer,  15  Conn. 
28;  Russell  v.  Pyland,  2  Humph.  131; 
Porter  v.  Sawyer,  1  Harring.  Del.  517  ; 
Gardner  i\  Nolen,  3  id.  420  ;  llickcrsou 
V.  Benson,  8  Mo.  8. 

(ha)  By  the  common  law  no  judicial  act 
could  be  done  on  Sunday.  Swan  v. 
Broome,  1  W.  Bl.  496,  526,  3  Burr. 
1595;  Baxter  v.  The  People,  3  Gilman, 
368  ;  Shaw  v.  M'Combs,  2  Bay,  232 ; 
True  V.  Plumley,  36  Me.  466  ;  Hillcr  v. 
English,  4  Strobh.  486 ;  Davis  v.  Fish,  1 
Greene,  Iowa,  406.  And  in  Story  v. 
lOlliot,  8  Cowen,  27,  it  was  held  that  an 
award  made  and  pulilisiicd  on  Sunday  was 
void,  an  awar<l  liiMUg  a  judicial  act.  But 
see  Sargeant  r.  Butts,  21  Vt.  99.  But  as 
to  tlie  nuiking  of  contracts  and  all  other 
acts  not  of  a  judicial  nature,  the  common 
law  made  uo  distinction  betwceu  Sunday 


CH.  III.] 


DEFENCES. 


262  a 


before  England  became  Protestant;  but  the  statute  of  29 
Charles  2,  ch.  7,  s.  1,  is  the  principal  English  statute,  (hb) 
Many  cases,  involving  many  different  questions,  have  arisen 
under  this  statute.  But  most  of  them  turn  upon  a  peculiarity 
in  its  phraseology  which  is  not  generally  copied  in  this  country. 
This  statute  enacts  that  no  person  shall  do  any  worldly  labor, 
&c.  upon  the  Lord's  day,  "  of  their  ordinarij  callings.^'  Hence 
any  man  may  do  any  thing,  buy,  or  sell,  or  work  in  any  way, 
on  any  part  of  Sunday,  if  not  in  his  ordinary  calling,  without 
prohibition  from  this  statute.  Some  nice  distinctions  have 
been  made  under  this  clause,  {he)     In  this  country  Sunday  laws, 


and  anv  other  dav.  Rex  v.  Brotherton, 
Stra.  702 ;  Mackallv's  Case,  9  Kep.  66  b, 
Cro.  Jac.  280 ;  Waite  v.  The  Hundred  of 
Stoke,  Cro.  Jac.  496;  Drurv  i\  Defontaine, 
1  Taunt.  131  ;  Story  v.  Elliot,  8  Cowen, 
27;  Kepncr  r.  Kecfer,  6  Watts,  231; 
Johnson  v.  Day,  17  Pick.  106;  Bloom  v. 
Richards,  2  Ohio  St.  387. 

(hb)  The  first  statute  on  the  subject  in 
England  was  27  H.  6,  ch.  5.  This  was 
followed  by  1  Jac.  l.^ch.  22,  sect.  28  ;  1 
Car.  1,  ch.  1 ;  3  Car.  1,  ch.  1  ;  29  Car.  2, 
ch.  7. 

(he)  The  language  of  the  statute  of  29 
Car.  2,  ch.  7,  sect.  1,  is,  "  that  no  trades- 
man, artificer,  workman,  Uiborer,  or  other 
person  whatsoever,  shall  do  or  exercise 
any  worldly  labor,  business,  or  work  of 
their  ordinary  callings,  ui)on  the  Lord's 
day,  or  any  part  thereof  (works  of  neces- 
sity and  charity  only  excepted);"  and 
"that  no  person  or  persons  whatsoever 
shall  publicly  cry,  show  forth,  or  expose 
to  sale,  any  wares,  merchandises,  fruit, 
herbs,  goods,  or  chattels  whatsoever,  upon 
the  Lord's  day  or  any  part  tliereof."  The 
first  important  case  in  England,  putting  a 
construction  upon  these  provisions,  was 
Drury  v.  Defontaine,  1  Taunt.  131.  It 
was  there  determined  that  a  sale  of  goods 
made  on  Sunday,  which  is  not  made  in 
the  ordinary  calling  of  the  vendor,  or  his 
agent,  is  not  void  by  the  stat.  29  Car.  2, 
ch.  7,  so  as  to  disable  the  vendor  from  re- 
covering the  price.  And  ManxJiKkl,  C.  J., 
said :  "  We  cannot  discover  that  the 
law  has  gone  so  far  as  to  say  that  every 
contract  made  on  a  Sunda//  shall  be  void, 
although  under  these  penal  statutes,  if  any 
man  in  the  exercise  of  his  ordinary  calling 
should  make  a  contract  on  Sanday,  that 
contract  would  be  void."     The  next  case 


was  Bloxsome  i'.  Williams,  3  B.  &  C. 
232,  which  was  an  action  for  a  breach  of 
warranty  on  the  sale  of  a  horse,  the  sale 
having  been  made  on  Simdai/.  There, 
Bayky,  J.,  said:  "In  Drury  v.  Defon- 
taine, it  was  held  that  the  vendor  of  a 
horse,  who  made  a  contract  of  sale  on  a 
Sunday,  but  not  in  the  exercise  of  his 
ordinary  calling,  miglit  recover  the  price. 
I  entirely  concur  in  that  decision,  l)ut  I 
entertain  some  doubts  whether  the  statute 
applies  at  all  to  a  bargain  of  this  descrip- 
tion. I  incline  to  think  that  it  applies  to 
manual  lalior  and  other  work  visibly  labo- 
rious, and  the  keeping  of  open  shops. 
But  I  do  not  mean  to  pronounce  any  de- 
cision upon  that  point."  The  case  finally 
went  otf  on  other  grounds.  The  next  im- 
portant case  was  Fennell  v.  Ridler,  .'5  B. 
&  C.  406.  It  was  there  held  that  a  horse- 
dealer  cannot  maintain  an  action  upon  a 
contract  for  the  sale  and  warranty  of  a 
horse  made  by  him  upon  a  Sunday.  Bay- 
ley,  J.,  in  delivering  the-  opinion  of  the 
court,  after  adverting  to  the  language  of 
the  statute,  said  :  "  The  interposition  of 
the  word  '  business '  between  the  words 
'  labor  and  work  '  might  justify  a  question, 
whether  it  included  every  description  of 
the  business  of  a  man's  ordinary  calling, 
or  whether  it  was  not  confined  to  such  as 
was  manual  and  calculated  to  meet  the 
public  eye.  There  is  nothing,  however, 
in  the  act  to  show  that  it  was  passed  ex- 
clusively for  promoting  pul)lic  decency, 
and  not  for  regulating  private  conduct; 
and  though  I  expressed  a  doubt  upon  this 
point  in  Bloxsome  i'.  Williams,  I  am  sat- 
isfied upon  further  consideration,  that  it 
would  be  a  narrow  construction  of  the  act, 
and  a  construction  contrary  to  its  spirit, 
to  give  it  such  a  restriction.     Labor  may 

[267] 


262  b 


THE   LAW    OF   CONTRACTS. 


[part  II. 


or  "  laws  for  the  better  observance  of  the  Lord's  clay,"  as  they 
were  generally  called,  were  passed  in  most  of  the  colonies,  and 
are  now  in  force  in  most  of  the  States ;  but  the  prevailing  dis- 
tinction is  between  "  works  of  necessity  and  mercy,"  or  "  neces- 
sity and  charity,"  which  are  permitted,  and  all  others  which  are 
prohibited,  (hd) 


be  private,  and  not  meet  the  public  eye, 
and  so  not  offend  against  public  decency, 
but  it  is  equally  labor,  and  equally  inter- 
feres with  a  man's  religious  duties.  The 
same  may  be  said  of  business  or  of  work. 
Each  may  be  public  and  meet  the  public 
eye  ;  each  may  be  private  and  concealed. 
There  is  nothing,  therefore,  in  the  position 
of  the  word  '  business  '  between  those  of 
'labor  and  work'  which  in  our  judgment 
can  justify  us  in  giving  to  it  any  thing  but 
its  ordinary  meaning ;  and  it  seems  to  us 
that  every  species  of  labor,  business,  or 
■work,  whether  public  or  private,  in  the  or- 
dinary calling  of  a  tradesman,  artificer, 
workman,  laborer,  or  other  person,  is 
within  the  prohibition  of  this  statute." 
In  Smith  v.  Sparrow,  4  Bing.  84,  Parke, 
J.,  disapproved  of  the  decision  of  Drury 
V.  Dcfontaine,  and  said  :  "I  tiiink  the 
construction  put  upon  the  statute,  in  that 
case,  too  narrow.  The  expression  '  aiii/ 
worhlli/  labor '  cannot  be  confined  to  a 
mien's  ordinary  calling,  but  applies  to  any 
business  he  may  carry  on,  whether  in  his 
ordinary  calling  or  not."  But  no  such 
opinion  was  exjjressed  by  any  other  mem- 
ber of  tlie  court,  and  tiiis  construction 
was  entirely  rejected  by  the  Court  of 
King's  Bench,  in  Rex  v.  Tiie  Inhabitants 
of  Wliitnasii,  7  B.  &  C.  596,  where  it 
was  licld  that  the  statute  only  prohil)its 
Ial)or,  business,  or  work  done  in  the  course 
of  a  man's  ordinary  calling,  and  tlierefore 
tliat  a  contract  of  hiring  made  on  a  Sun- 
day between  a  farmer  and  a  laborer  for  a 
year,  was  valid.  And  see,  to  the  same 
effect,  Scarfe  v.  Morgan,  4  IM.  &  W.  270  ; 
Wolton  r.  Gavin,  IG  Q.  B.  48;  Begbie  v. 
Levi,  1  Cromp.  &  J.  180.  There  has  been 
Bome  (piestion  as  to  what  jxrxons  are  em- 
braced in  the  al)ove  provisions,  under  tiio 
word-:,  "  tradesman,  artificer,  woikman, 
laliori'r,  or  other  person,  wiiatsoevcr." 
In  Saiidiman  v.  Breaeii,  7  B.  &  C.  DO,  it 
was  hiid  tbat  drivers  and  pr()|)rietors  of 
Htage-coaclics  were  not  incimU'd ;  and 
tliercfcjre  liiat  a  conlract  to  carry  a  |)as- 
Ken;.'cr  in  a  stage-coach  on  Sunday  was 
valid.  Lord  T<nhrd<n  said:  "It  was 
contended,  that   uinler  the  words   '  other 

[2G8] 


person  or  persons  '  the  drivers  of  stage- 
coaciies  are  included.  But  where  general 
words  follow  particular  ones,  the  rule  is 
to  construe  tiiem  as  apijlicable  to  persons 
ejiisdem  generis."  And  see,  to  the  same 
effect,  Rex  v.  Inhabitants  of  Whitnash,  7 
B.  &  C.  596.  In  Peate  v.  Dicken,  1  Cromp. 
M.  &  R.  422,  the  court  were  inclined  to 
hold  that  an  attorney  was  not  a  person  in- 
cluded within  the  above  words,  but  the 
point  was  not  decided. 

{lid)  In  Massachusetts,  Maine,  and 
INIichigan  the  words  of  the  statute  are, 
that  "  no  person  shall  do  any  manner 
of  labor,  business,  or  work,  except  only 
works  of  necessity  and  charity,  on  tlie 
Lord's  day."  In  New  Hampshire,  "  No 
person  shall  do  any  labor,  luisiness,  or 
work,  of  his  secular  calling,  works  of  ne- 
cessity and  mercy  only  excepted,  on  the 
Lord's  day."  In  Vermont,  "  No  person 
shall  exercise  any  secular  labor,  iiusiness, 
or  employment,  except  such  only  as  works 
of  necessity  and  charity,"  on  the  Lord's 
day.  In  Connecticut,  ''  No  person  shall 
do  any  secular  business,  work,  or  labor, 
works  of  necessity  and  mercy  excepted, 
nor  keep  open  any  shop,  warehouse,  or 
workhouse,  nor  expose  to  sale  any  goods, 
wares,  or  merchandise,  or  any  other  prop- 
erty on  the  Lord's  day."  In  J\Minsyl- 
vania,  "  No  person  shall  do  or  perforin 
any  worldly  employuK'nt  or  liusiness  what- 
soever on  the  Lord's  day,  I'omnionly  called 
Sunday,  works  of  necessity  and  charity 
only  excepted."  In  Alabama,  "  No  worldly 
business  or  employment,  ordinary  or  ser- 
vile work,  works  of  necessity  or  cliarity 
excepted,  shall  be  done,  perf'oiincd,  or  prac- 
tised, by  any  ])crson  or  persons,  on  the 
first  day  pf  the  week,  commoidy  called 
Simday."  In  Kentucky,  "  No  work  or 
business  sinill  be  done  or  pcrfiirme<l  on  the 
sai)bath  day,  unless  the  ordinary  houseliold 
offices  of  daily  necessity,  or  uiher  work  of 
necessity  in- ciniiity."  Undcrall  the  above 
statutes,  it  is  now  iiuite  wi'll  settled,  that 
all  contracts  of  every  description,  entered 
into  on  Suiulay,  and  not  within  the  excep- 
tions, are  unlawful  and  void.  Thus,  in 
Towlc   i;.  Larrabce,  20  Mc.   4G4,  it  was 


en.  III.] 


DEFENCES. 


262  c 


There  are  but  few  reported  cases  which  illustrate  this  distinc- 
tion ;  (he)  but  some  have  occurred  in  practice,  from  which  we 


held,  that  a  promissory  note,  made  on  the 
Lord's  day,  and  given  and  received  as  the 
consideration  for  articles  purchased  on  that 
day,  is  void.  And  in  Hilton  v.  Hougiiton, 
35  Me.  143,  it  is  said  to  he  a  violation  of 
the  statute  to  sign  and  deliver  a  promis- 
sory note  on  the  Lord's  day ;  and  a  note 
so  signed  and  delivered  is,  therefore,  of  no 
validity.  And  see  Nason  v.  Uinsmore, 
34  Me.  391  ;  State  v.  Suheer,  33  Mc.  539. 
In  Allen  v.  Deming,  14  N.  H.  1.33,  it 
was  held  that  the  execution  and  delivery 
of  a  promissory  note  on  Sunday,  is  "  busi- 
ness "  of  a  person's  "secular  calling,"  and 
as  such  is  prohibited  by  the  statute  ;  and 
the  note  is  void.  The  same  rule  is  well 
established  in  Vermont.  See  Lyon  v. 
Strong,  6  Vt.  219;  Lovcjoy  «.  Whipple, 
18  Vt.  379;  Adams  v.  Gay,  19  Vt.  358. 
In  Pattee  v.  Greely,  13  Met.  284,  it  was 
held  tliat  an  action  could  not  be  main- 
tained on  a  bond  which  was  executed, 
neither  from    necessity    nor   charity,   on 

(he)  In  Flagg  v.  Millhury,  4  Cush.  243, 
it  was  held  to  be  a  work  of  necessity  and 
charity  to  repair  a  defect  in  a  highway, 
which  endangers  the  public  safety.  And 
Wilde,  J.,  said  :  "  By  the  word  '  necessity ' 
in  the  exception,  we  are  not  to  understand 
a  physical  and  absolute  necessity ;  but  a 
moral  fitness  and  propriety  of  the  work 
and  labor  done,  under  the  circumstances 
of  any  particular  case,  may  well  be  deemed 
necessity  within  the  statute  ;  and  so  it  was 
decided,  in  the  construction  of  a  similar 
exception,  in  the  prohibition  against  trav- 
elling on  the  Lord's  day,  in  the  statute  of 
1791,  c.  58,  §  2.  Commonwealth  v.  Knox, 
6  Mass.  76  ;  Pearce  v.  Atwood,  13  Mass. 
354.  Now,  when  a  defect  in  the  highway 
is  discovered  on  the  Lord's  day,  which 
may  endanger  the  limbs  and  the  lives  of 
travellers,  it  is  not  only  morally  fit  and 
proper  that  it  should  be  immediately  re- 
paired, but  it  is  the  imperative  duty  of  the 
town  which  is  bound  to  keep  the  highway 
in  repair,  to  cause  it  so  to  be  done,  or  to 
adopt  means  to  guard  against  the  danger, 
until  it  can  be  done ;  and  work  and  labor 
for  this  purpose  is  no  violation  of  the  law 
or  of  religious  duty."  In  Hooper  ;;.  Ed- 
wards, 18  Ala.  280,  it  was  held  that  if  the 
exigency  of  a  case  be  such  as  to  render  it 
necessary  that  a  creditor,  in  order  to  save 
his  debt,  or  procure  indemnity  against 
liability,  should  contract  with  his  debtor 

23* 


the  Lord's  day.  And  Shaio,  C.  J.,  said  : 
"  The  statement  of  facts  admits  that  there 
is  nothing  to  show  that  the  execution 
of  this  bond  was  a  work  of  necessity  or 
charity.  Was  its  execution  '  any  manner 
of  labor,  business,  or  work,'  within  the 
meaning  of  the  statute  1  Certainly  it  was. 
Tiie  legislature  intended  to  prohibit  secu- 
lar business  on  the  Lord's  day,  and  did 
not  confine  the  prohibition  to  manual 
labor,  but  extended  it  to  the  making  of 
bargains,  and  all  kinds  of  trafficking." 
The  ease  of  Gcer  v.  Putnam,  10  Mass. 
312,  was,  for  a  long  time,  supposed  to 
have  established  a  different  rule  in  Massa- 
chusetts. But  it  may  now  be  considered 
as  overruled,  so  far  as  it  is  inconsistent 
with  Pattee  v.  Greely,  supra.  The  same 
rule  has  been  established  in  Connecticut 
from  an  early  day.  Wight  v.  Geer,  1 
Eoot,  474  ;  Northrup  v.  Foot,  14  Wend. 
248.  And  in  Pennsylvania.  Morgan  v. 
Richards,  1  Browne,  Pa.  171  ;  Kcpner  v. 

on  Sunday,  such  contract  is  not  void,  but 
comes  within  the  saving  of  the  statute ; 
and  it  is  the  province  of  the  jury  to  deter- 
mine whether,  under  all  the  proof,  it  was 
justified  b}^  the  necessity  of  the  case.  In 
Logan  V.  Mathews,  6  Penn.  St.  417,  it  was 
held,  that  "the  hire  of  a  carriage  on  a 
Sunday,  by  a  son,  to  visit  his  father, 
creates  a  legal  contract,"  there  being  no 
evidence  to  show  that  the  journey  was  a 
trip  or  excursion  of  pleasure.  But  in 
Johnston  v.  The  Commonwealth,  22  Penn. 
St.  102,  it  was  held  that  driving  an  omni- 
bus, as  a  public  conveyance,  daily  and 
every  day,  is  worldly  employment,  and 
not  a  work  of  charity  or  necessity,  within 
the  meaning  of  the  act  of  1794,  and  tliere- 
fore  not  lawful  on  Sunday.  And  in  Phil- 
lips V.  Innes,4  Clark  &F.  234,  it  was  held 
by  the  House  of  Lords,  in  England,  that 
an  apprentice  to  a  barber  could  not  be 
lawfully  required  to  attend  his  master's 
shop  on  Sundays  for  the  purpose  of  shav- 
ing the  customers,  that  not  being  work  of 
necessity  or  mercy  or  charity.  Lord  Cot- 
tenham  said  :  "  This  work  is  not  a  work  of 
necessity,  nor  is  it  a  work  of  mercy  ;  it  is 
one  of  mere  convenience."  In  Ulary  v. 
The  Washington,  Crabbe,  204,  it  was 
held  that  a  seaman  was  bound  to  work  on 
Sunday,  the  nature  of  the  service  requir- 
ing it. 

[269] 


262  d 


THE   LAW   OF   CONTRACTS. 


[part  II. 


should  infer  some  change  of  sentiment  on  this  subject.     For- 
merly there  were  many  instances  of  persons  punished  for  bak- 


Kecfcr,  6  Watts,  231  ;  Fox  v.  Mensch,  3 
Watts  &  S.  444 ;  Commonwealth  v.  Ken- 
di^,  2  Penn.  St.  448 ;  Berrill  u.  Smith,  2 
Miles,  402  ;  Johnston  v.  The  Common- 
wealth, 22  Penn.  St.  102.  Tlie  same  rule 
is  established  in  Alabama.  O'Donnell  v. 
Sweeney,  5  Ala.  467  ;  Shippey  i\  East- 
wood, 9  A\a.  198;  Dodson  i-.  Harris,  10 
Ala.  566;  Butler  v.  Lee,  11  Ala.  88.i ; 
Saltmarsh  r.  Tuthill,  13  Ala.  390;  Rainey 
V.  Capps,  22  Ala.  288.  And,  it  seems,  in 
Michigan.  Adams  v.  Hamell,  2  Doug. 
73.  In  Kentuekv,  the  rule  is  less  certain. 
In  Kay  r.  Catlctt,  12  B.  Mon.  .532,  Mar- 
shall, J.,  said  :  "  We  are  not  prepared  to 
decide  that  tlie  mere  execution  and  de- 
livery of  a  note,  or  its  mere  acceptance  on 
Sunday,  is  laboring  in  any  trade  or  calling, 
unless  it  be  a  part  of  some  other  transac- 
tion done  also  on  Sunday,  which  may  be 
regarded  as  labor  in  some  trade  or  calling. 
And  if  tiie  mere  execution  and  delivery  of 
a  note  could  l)e  deemed  such  labor,  wc  are 
satisfied  tliat  its  mere  acceptance  could 
not,  and  the  person  accepting  it  would 
not  be  involved  in  any  consequence  of  a 
breach  of  the  law  by  the  other,  unless  he 
knew  that  the  note  iiad  been  made  as  well 
as  delivered  on  Sunday."  But  in  Slade 
V.  Arnold,  14  B.  Mon.  287,  it  was  held 
that  all  contracts,  having  for  their  consider- 
ation, or  any  jjart  of  it,  the  performance  of 
any  work  or  labor  on  Sunday,  were  void. 
And  in  Murphy  v.  Simpson,  14  B.  ]\Ion. 
419,  it  was  held  that  an  exchange  of  horses 
on  Sunday  was  a  violation  of  the  statute, 
and  void.  In  New  York,  the  statute  pro- 
vides, that  tiiere  "  shall  not  be  any  servile 
laboring  or  working  on  the  first  day  of  the 
week,  called  Sunday,  excepting  works  of 
necessity  or  charity  ;  "  and  "  no  person 
sliall  ex|)osc  to  sale  any  wares,  merchan- 
dise, fruit,  herbs,  goods,  or  chattels,  on 
Sunday,  except  meats,  milk,  and  fish, 
which  may  be  sold  at  any  time  before  nine 
of  the  clock  in  the  morning."  Under 
tliese  [)rovi^ioiis  it  is  held,  first,  that  any 
contract  wliicli  has  for  its  consideration 
the  doing  of  ordinary  work  or  labor  on 
Sunday,  is  void  ;  second,  that  any  con- 
tract which  involves  the  exposing  to  sale 
of  any  wari's,  &(•..,  on  Sunday,  is  void. 
Tliusin  Watts  r.  Van  Ness,  1  Ilill,  76,  it 
was  Ill-Id  iliat  a  i-ontract  to  ))(rforni  labor 
on  Sunday  as  an  attorney's  clerk,  was 
void,  and  no  comjx-nsation  could  be  re- 
covered.    And  see  I'alriier  v.  The  City  of 

[270] 


New  York,  2  Sandf.  318.  So  in  Smith 
V.  Wilcox,  19  Barb.  581,  it  was  held  that 
a  contract  to  publish  an  advertisement  in 
a  newspaper  issued  on  Sunday  was  un- 
lawful and  void,  as  involving  a  violatioa 
of  both  the  above  provisions.  But  con- 
tracts which  are  not  liable  to  either  of 
these  objections  may  be  made  on  Sunday 
as  well  as  any  other  day.  Thus,  in  Boyn- 
ton  V.  Page,  13  Wend.  425,  it  was  held 
that  the  prohibition  against  exposing  to  sale, 
on  Sunday,  any  goods,  chattels,  &e.,  ex- 
tends only  to  the  public  exposure  of  com- 
modities to  sale  in  the  streets  or  stores, 
shops,  warehouses,  or  market-places,  and 
has  no  reference  to  mere  private  contracts, 
made  without  violating,  or  tending  to 
produce  a  violation,  of  the  public  order 
and  solemnity  of  the  day ;  and,  therefore, 
that  a  private  transfer  of  personal  property 
made  on  Sunday  was  valid.  In  Ohio, 
the  statute  jirovides,  "  that  if  any  person 
shall  be  found,  on  the  first  day  of  the  week, 
commonly  called  Sunday, a«  commonlabor, 
works  of  necessity  and  charity  only  ex- 
cepted, he  shall  be  fined  in  a  sum  not 
exceeding  five  dollars,  nor  less  than  one 
dollar."  In  the  case  of  the  City  of  Cin- 
cinnati V.  Rice,  15  Ohio,  225,  it  was  held 
that  the  prohibition  of  "common  labor" 
in  the  at)Ove  statute,  embraces  the  business 
of  "  trading,  bartering,  selling,  or  buying 
any  goods,  wares,  or  merchandise."  In 
Bloom  V.  Richards,  2  Ohio  St.  387,  over- 
ruling Sellers  v.  Dugan,  18  Ohio,  489,  it 
was  held  that  a  contract  entered  into  on 
Sunday,  for  the  sale  of  land,  was  valid. 
But  the  court  said :  "  It  is  not  to  be  under- 
stood that,  because  a  Sunday  contract  may 
be  valid,  therefore  business  may  be  trans- 
acted upon  that  as  upon  other  days  ;  as, 
for  instance,  that  a  merchant  may  lawfully 
keep  open  store  for  the  disposition  of  his 
goods  on  the  Sabbath.  To  wait  upon  his 
customers,  and  receive  and  sell  his  wares, 
is  the  common  labor  of  a  merchant ;  and 
there  is  a  broad  distinction  lietwceu  pur- 
suing this  avocation,  and  the  case  of  a 
single  sale  out  of  the  ordinary  course  of 
l)usiness."  And  see  Swisher  r.  Williams, 
Wright,  754.  In  Indiana,  however,  where 
the  statute  is  precisely  like  that  in  Ohio, 
it  is  held  that  all  contracts  made  on 
SiMKlay  ar(!  void.  IJnk  v.  Clcnimcns,  7 
IJIackf.  479;  Reynolds  v.  Stevenson,  4 
Ind.  619. 


en.  III.]  DEFENCES.  262  e 

ing  provisions,  or  slaughtering  animals,  even  in  hot  weather, 
on  Sunday  ;  but  we  have  heard  of  nothing  of  the  kind  of 
late. 

Another  question  has  been  before  the  courts,  and  though  not 
reported,  we  should  think  it  admitted  of  a  definite  answer. 
Are  there  certain  things,  of  themselves,  works  of  necessity  or 
mercy  ?  We  should  say  few  or  none ;  funerals  would  be,  or 
baptisms,  or  other  religious  services  as  appropriate  to  the  day. 
But  making  a  will,  for  example,  would  be  so,  only  when  the 
particular  circumstances  of  the  case  made  it  so.  [hf)  And  some 
question  has  arisen,  whether  the  celebration  of  marriage  on 
Sunday  be  a  violation  of  law.  It  is  the  rule  in  this  country  that 
marriage  is  a  civil  contract.  But  it  is  generally  believed  that 
it  may  be  lawfully  entered  into  on  Sunday,  either  because  the 
frequency  of  the  thing  has  in  some  measure  protected  it  by  a 
usage,  and  the  consequences  of  an  opposite  view  would  be  dis- 
astrous, or  because  the  contract  of  marriage  is  in  the  nature  of 
a  continuing  contract,  and  may  be  regarded  as  made  every  suc- 
ceeding day  as  long  as  the  parties  cohabit.  But,  regarded  as  a 
question  of  strict  law,  it  might  be  found  not  without  its  dijfR- 
culties.  [hg) 

It  seems  now  to  be  conceded  that  a  contract  which  is  made 
in  violation  of  the  express  provisions  of  the  Lord's  day  acts,  is 
void,  like  any  other  illegal  and  prohibited  contract.  (//A)  For 
many  years  the  rule  prevailed  in  Massachusetts,  that  while  the 
acting  party,  as  the  maker  of  a  promissory  note  for  example, 
was  liable  to  punishment,  the  note  itself  was  valid.  A  recent 
decision,  however,  has  put  the  law  in  that  State  in  harmony 
with  the  generally  prevailing  view,  [hi)  Where  a  schedule  of 
property  was  to  be  annexed  to  an  assignment  for  the  benefit  of 
creditors  by  the  terms  of  the  assignment,  and  was  so  annexed 

(lif)  See  2  Hall's  Am.  Law  Jour.  408.  country,  expressly  declare  that  contracts 

(/(//)  In  re  Gangwere's  Estate,  14  Penn.  made  on  Sunday  shall  be  void.     But  the 

St.  417,  it  was  admitted,  that  a  marriage  principle  is  well  settled,  and  of  general 

celebrated  on  Sunday  was  valid  ;  but  upon  application,  that  all  contracts  made  in  vio- 

the  question,  whether  a  marriage   settle-  lation   of  a   statute   are   void.     Lyon  v. 

ment,  executed  at   the   same  time,    was  Armstrong,  6  Vt.  219;  Eobcson  r.  French, 

valid,  the  court  were  equally  divided,  and  12  Met.  24;  Gregg  v.  Wyman,  4  Gush, 

gave  no  opinion.  322. 

(hh)  It  is  to  be  observed,  that  neither         (ki)    Pattee   v.    Greely,    13   Met.   284. 

the   English  statute,   nor   those   of   this  And  see  supra,  note  {hd). 

[271] 


262/  THE   LAW    OF   CONTRACTS.  [PART  II. 

on  Sunday,  it  was  held  in  Massachusetts,  valid  as  against  a 
subsequent  attaching  creditor.  {Jij)  It  may  be  doubted,  whether 
such  would  be  the  doctrine  of  this  court  since  the  case  above 
referred  to  of  Pattee  v.  Greely. 

A  more  difficult  question  has  arisen,  which  cannot  be  posi- 
tively answered  on  authority.  It  may  be  stated  thus :  If  A 
makes  a  bargain  with  B,  prohibited  by  the  Sunday  law  and 
therefore  void,  and  B,  by  means  which  this  bargain  gives  him, 
and  by  an  abuse  of  the  bargain  on  his  part,  commits  a  wrong 
against  A,  is  A  barred  by  his  illegal  conduct  from  getting  re- 
dress for  the  wrong  ?  Thus,  if  A  lets  a  horse  to  B  on  Sunday 
to  go  from  C  to  D  and  nowhere  else,  it  is  certain  that  A  cannot 
recover  for  the  hire  of  the  horse.  But  if  B  drives  him  from  D 
to  E,  and  by  hard  driving,  a  part  of  which  is  on  this  added 
route,  B  kills  the  horse,  can  A  now  recover?  The  Supreme 
Court  of  Massachusetts  holds  that  A  cannot  recover,  even  in 
trover,  partly  because  the  action,  though  sounding  in  tort,  is  in 
fact  for  damages  for  breach  of  contract,  but  mainly  because  the 
plaintiff  must  found  his  right  of  action  upon  his  own  wrong- 
doing in  the  first  place,  and  by  that  wrong-doing  he  enabled  the 
defendant  to  do  his  wrong,  {hk)  But  the  Supreme  Court  of  New 
Hampshire  has  held  that  the  property  in  the  horse  remained  in 
the  original  owner,  and  that  the  driving  of  it  to  another  place 
than  that  bargained  for  was  a  conversion,  for  which  trover  would 
lie.  {Ill)  The  question  presents  much  difficulty,  and  collateral 
decisions  and  strong  arguments  apply  on  each  side  of  it ;  but 
upon  the  whole,  we  incline  to  the  view  held  in  New  Hamp- 
shire. 

What  constitutes  the  "  Lord's  day,"  within  the  provisions  of 
these  statutes,  is  usually  determined  by  exact  definition  by  the 
statutes  themselves.  Sometimes  this  is  different  for  different  pur- 
poses. In  Massachusetts,  no  labor,  &c.  is  to  be  done  "  betweisn 
the  midnight  preceding  and  sunsetting  on  the  Lord's  day,"  but  no 
civil  f)r()ccss  can  be  served  between  the  midnight  preceding  and 
the  midnight  following  that  day.  [km)      Under  this  statute  it  has 

ihj)  Clapp  i;.  Smitli,  10  rick.  247.  (/(//()    In  Nason  v.  Dinsmore,  34  Me. 

\hk)  Grff^K  "■  WyiriiUi,  4  (Jiisli.  322.  31)1,  it  was  lidd  lliat  a  coiilrart,  ])rovc(l  to 

(/(/)  Wooflman  v.  Hubbard,  5   Foster,  liavc  hecii  inadc  on  tlic  Lonl's  day,  is  not 

67.  tlicrcby  rendered  invalid,  unless  it  bo  also 

[272] 


CH.  III.]  DEFENCES.  2G2g 

been  held  that  a  mortgage  deed  executed,  acknowledged,  and 
recorded,  after  sunset  on  Sunday  evening,  was  not  void  as 
against  an  attaching  creditor,  {hu)  In  Connecticut,  the  Lord's 
day  has  been  defined  as  continuing  from  daybreak  to  the  clos- 
ing of  daylight  on  Sunday,  (ho) 

In  Massachusetts  and  New  York  and  some  other  States  it  is 
provided,  that  the  Sunday  laws  shall  not  apply  to  those  persons 
who  conscientiously  observe  the  seventh  day  of  the  week  as 
the  Sabbath,  if  they  do  not  disturb  others  in  their  observance 
of  Sunday.  But  in  P^imsylvania  and  South  Carolina  there  is 
no  such  exception  ;  and  it  has  been  contended  that  the  Sunday 
laws  of  those  States  were  in  this  respect  in  violation  of  that 
provision  in  their  constitutions  which  guarantees  freedom  of  re- 
ligious profession  and  worship  to  all  mankind.  But  this  view 
has  not  been  sustained  by  the  courts,  (hp) 

If  a  contract  is  commenced  on  Sunday,  but  not  completed 
till  a  subsequent  day,  or  if  it  merely  grew  out  of  a  transaction 
which  took  place  on  Sunday,  it  is  not  for  this  reason  void,  (hq) 
Thus,  if  a  note  is  signed  on  Sunday,  its  validity  is  not  impaired 
if  it  be  not  delivered  on  that  day.  (hr)  Whether  a  contract  en- 
tered, into  on  Sunday  will  be  rendered  valid  by  a  subsequent 
recognition,  is  not  clear  upon  the  authorities.  {lis) 

When  a  contract  of  sale  is  made  on  Sunday  and  the  prop- 
erty is  delivered  to  the  vendee,  but  the  price  is  not  paid,  the 
question  will  arise  whether  the  property  so  delivered  becomes 
the  property  of  the  vendee,  and  whether  he  will  be  allowed  to 
retain  it  without  paying  the  price.     We  are  inclined  to  think 


proved  that  it  was  made  before  sunset,  t?.  Whitney,  24  Vt.  187;  Butler  v.  Lee, 

The  jiresumption  is  that  it  was  made  on  11    Ahi.  885;  Bloxsome  v.    Williams,  3 

that  part   of  the   day    in  which   it   was  B.  &  C.  232.     And  see  Smith  i-.  Sparrow, 

lawful   to   do   it.      Hiller  v.    English,  4  4  Bing.  84. 

Strobh.  486.     See  also,  Hill  r.  Dunham,         (//y)"  Hilton  r.  Houghton,  35  Me.  143; 

7  Gray,  543.  Lovcjoy  v.  WhijiplcriS  Vt.  379;  Com- 

{hn)  Trary  v.  Jenks,  15  Pick.  465.  monwcalth  !\   Kcndig,  2  Penn.  St.  448; 

(lio)  Fox  r.  Abel,  2  Conn.  541.  Clough   ?;.    Davis,   9   N.  H.  500;  Hill  r. 

(hp)  Commonwealth  v.  Wolf,  3  S.  &  R.  Dunham,  7  Gray,  543. 
48;  City  Council  v.  Benjamin,  2  Strobh.         (lis)  See  Adams  v.  Gay,  19  Vt.    358; 

508;    Specht   v.    The   Commonwealth,  8  Alien  d.  Deming,  14  N.  H.  433 ;  Shippey 

Penn.  St.  312.  v.  Eastwood,  9  Ala.  198.     And  see  next 

(Ik/)  Stackpole  v.  Svmonds,  3  Foster,  note. 
229 ;  Adams  v.  Gay,  19   Vt.  358  ;  Goss 

[273] 


262  h 


THE   LAW   OF    CONTRACTS. 


[part  II. 


that  both  of  these  questions  must  be  answered  in  the  afRrma- 
tive,  though  there  is  some  conflict  in  the  authorities.  {/U) 

A  question  has  been  made  also  whether  the  invalidity  of  a 


(ht)  In  Smith  v.  Bean,  15  N.  H.  577, 
Parker,  C.  J.,  referring  to  a  contract  of 
sale  made  on  Sunday,  said  :  "  It  is  gener- 
ally said  of  such  an  illegal  contract,  that 
it  is  void.  If  this  were  so,  and  the  con- 
tract, in  the  broad  sense  of  the  term,  were 
void,  no  i)ropcrty  would  pass  by  it ;  the 
vendor  miglit  reclaim  the  property  at  will, 
and,  being  his  property,  it  would  be  sub- 
ject to  attachment  and  levy  by  his  credi- 
tors, in  the  same  manner  as  if  the  attempt 
to  sell  liad  never  been  made.  But  this  is 
not  what  is  intended  by  such  phraseology. 
The  transaction  being  illegal,  the  law 
leaves  the  parties  to  suffer  the  conse- 
quences of  their  illegal  acts.  The  contract 
is  void,  so  far  as  it  is  attempted  to  be 
made  the  foundation  of  legal  proceedings. 
The  law  will  not  interfere  to  assist  the 
vendor  to  recover  the  price.  The  contract 
is  void  fur  any  such  purpose.  It  will  not 
sustain  an  action  by  the  vendee  upon  any 
warranty  or  fraud  in  the  sale.  It  is  void 
in  that  respect.  The  principle  shows  that 
the  law  will  not  aid  the  vendor  to  recover 
the  possession  of  the  property,  if  he  have 
parted  with  it.  The  vendee  has  the  pos- 
session, as  of  his  own  property,  by  the 
assent  of  the  vendor ;  and  the  law  leaves 
the  parties  wliere  it  iinds  them.  If  the 
vendor  should  attempt  to  retake  the  prop- 
erty without  process,  the  law,  finding  that 
the  vendee  iiad  a  possession  which  could 
not  be  controverted,  would  give  a  remedy 
for  the  violation  of  that  possession.  When, 
then,  it  is  said  that  the  contract  is  void, 
the  language  is  used  with  reference  to  the 
question,  whether  there  is  any  legal  remedy 
upon  it."  But  in  the  well-considered  case 
of  Adams  v.  Gay,  19  Vt.  353,  it  was 
held  that,  in  all  cases  of  contracts  entered 
into  upon  Sunday,  if  cither  p:irty  have 
done  any  thing  in  execution  of  a  contract, 
it  is  (oinpctmit  for  him,  upon  another  day, 
to  demaiKl  of  the  other  ()  irt  a  return  of 
the  tiling  delivered,  or,  where  that  is  im- 
prncticable,  compensation  ;  and,  if  the 
other  jiarty  refuse,  the  oiiginal  contract 
becomes  tln-rcliy  nllirincd,  imd  the  same 
rights  and  lia!)iliti(;s  are  induced  as  if  the 
contract  bad  been  made  upon  tlic  latter 
day.  This  is  an  indis[)cnsablc  o.\cc[)tion 
t/j  the  gi'ncial   rule  in    regard    to    illegal 

[271] 


contracts,  in  order  to  secure  parties  from 
fraud  and  overreaching,  which  would 
otherwise  be  practised  upon  Sunday  by 
those  who  know  their  contracts  are  void, 
and  that  they  are  not  liable  ciciliter  for 
even  frauds  practised  upon  that  day.  In 
Williams  v.  Paul,  6  Bing.  653,  the  de- 
fendant kept  a  heifer  which  he  had  bought 
of  a  dro\4r  on  Sunday,  and  afterwards 
made  a  promise  to  pay  for.  ffcld,  that 
having  kept  the  beast,  he  was  liable  at  all 
events  on  a  quantum  meruit,  notwithstand- 
ing the  contract  made  on  Sunday.  But 
in  Simpson  v.  Nicholls,  3  M.  &  W.  240, 
where,  to  a  count  for  goods  sold  and  de- 
livered, the  defendant  pleaded  that  they 
were  goods  sold  and  delivered  to  him  by 
the  plaintiff,  in  the  way  of  his  trade,  on  a 
Sunday,  contrary  to  the  statute ;  and  the 
plaintiff  replied  that  the  defendant,  after 
the  sale  and  delivery  of  the  goods,  kept 
them  for  his  own  use,  without  returning 
or  offering  to  return  them,  and  had  tliere- 
by  become  lialtle  to  pay  so  much  as  they 
were  reasonably  worth,  the  court  held  that 
the  replication  was  bad,  and  doubts  were 
expressed  whether  Williams  v.  Paul  was 
correctly  decideil.  In  Dodson  v.  Harris, 
10  Ala.  566,  where  a  horse  was  sold  on 
Sunday,  and  a  note  taken  for  the  pur- 
chase-money on  the  same  day,  it  was  held 
that  both  the  contract  and  the  note  were 
void,  and  though  the  purchaser  retained 
th.e  horse  in  his  ])ossession  without  objec- 
tion or  demand  by  the  seller,  the  law  will 
not  imj)lij  a  jirumise  to  paj^  the  stipulated 
price,  or  what  the  horse  is  reasonably 
worth.  But  the  contract  being  void,  no 
property  passed  to  the  vendee,  and  he 
would  be  chargeable  in  trover  upon  proof 
of  demand  and  refusal,  or  in  assumpsit 
u])on  an  ex])ress  ])romise  to  pay,  subse- 
quently made,  in  consideration  of  the  re- 
tention of  the  horse.  In  Scarfe  r.  Morgan, 
4  M.  &  W.  270,  it  was  held  that  where  a 
contract,  the  execution  of  which  gave  a 
lien  on  property,  was  made  and  executed 
on  Sunday,  although  the  contract  was 
void,  llic  lien  attached.  See  further,  Sum- 
ner V.  Jones,  24  Vt.  317;  IJloxsome  v. 
Williams,  3  B.  &  C.  232;  Moore  i-.  Ken- 
dall, 1  Chand.  33. 


CH.  III.] 


DEFENCES. 


*263 


contract  made  on  Sunday  can  be  set  up  against  an  innocent 
party,  as  the  innocent  indorsee  of  a  note  made  on  Sunday. 
We  think  not;  but  this  question  is  not  settled.  (//?/)  But  it 
seems  that  an  official  bond,  executed  on  Sunday,  is  not  void 
as  to  the  parties  to  be  thereby  protected,  {hv) 


G.    Of  maintenance  and  champerty. 

Maintenance  and  champerty  are  offences  at  common  law ; 
and  contracts  resting  upon  them  are  void.  But  those  offences, 
if  not  less  common  in  fact,  as  it  may  be  hoped  that  they  are, 
are  certainly  less  frequent  in  their  appearance  before  judicial 
tribunals  than  formerly;  and  recent  decisions  have  considera- 
bly qualified  the  law  in  relation  to  them.  Still,  however,  they 
are  offences,  and  contracts  which  rest  upon  them  are  void. 
Maintenance  in  particular,  seems  now  to  be  confined  to  the 
intermeddling  of  a  stranger  in  a  suit,  for  the  purpose  of  stirring 
up  strife  and  continuing  litigation,  (i)     Nor  is  *any  one  liable 


{hu)  See  Bloxsome  v.  "Williams,  3  B.  & 
C.  232 ;  Fennell  v.  Kiddle,  5  B.  &  C.  406  ; 
Begbie  v.  Levi,  1  Cromp.  &  J.  180;  Allen 
V.  Deming,  14  N.  H.  133 ;  Saltinarsh  v. 
Tuthill,  13  Ala.  390. 

(/»')  Commonwealth  v.  Kendig,  2  Penn. 
St.  448. 

{i)  See  on  this  subject,  Masters  v.  Mil- 
ler, 4  T.  R.  340;  Flight  v.  Leman,  4  Q. 
B.  883;  Bell  v.  Smith,  5  B.  &  C.  188; 
Williamson  v.  Henley,  6  Bing.  299.  It 
has  been  considered  maintenance  for  an 
attorney  to  agree  to  save  a  party  harmless 
from  costs,  provided  he  be  allowed  one 
half  of  the  proceeds  of  the  suit  in  case  of 
success,  /h /e  Masters,  4  Dowl.  18.  And 
see  Harrington  v.  Long,  2  Mylne  &  K.  590. 
But  one  may  lawfully  agree  to  promote  a 
suit,  where  he  has  reasonable  ground  to 
believe  himself  interested,  although  in  fact 
he  is  not  so.  Findon  v.  Parker,  11  M.  & 
W.  675.  In  Call  v.  Calef,  13  Met.  362, 
it  appeared  that  A  had  an  interest  in 
the  exclusive  use  in  Manchester,  N.  H., 
of  a  certain  patent  machine,  and  B  had 
an  interest  in  the  exclusive  use  of  the  same 
machine  in  Lowell.  S  was  using  said 
machine  in  Manchester,  without  right.  A 
gave  to  B  a  power  of  attorney,  authorizing 
him  to  take  such  steps  in  A's  name  as  B 


might  judge  to  be  necessary  or  expedient, 
by  suit  at  law  or  otherwise,  to  prevent  S 
from  using,  letting,  or  selling  said  machine 
in  Manchester,  and  also  authorizing  B  to 
sell  to  S  the  right  to  use  said  machine  in 
Manchester.  And  by  a  parol  agreement 
between  A  and  B,  B  was  to  have,  as  his 
compensation  for  his  services  under  said 
power  of  attorney,  one  half  of  what  he 
should  recover  or  receive  of  S.  B  ren- 
dered services  under  said  power,  for  which 
he  was  entitled  by  said  parol  agreement 
to  $25.  A  afterwards  assigned  his  right 
to  the  use  of  said  machine  to  C,  with  no- 
tice of  B's  claim  on  A,  and  with  authority 
to  C  to  revoke  said  power  of  attorney  to 
B,  upon  paying  B  $25.  C  promised  B 
to  pay  him  said  sum,  and  B  consented  to 
the  revocation  of  the  power  of  attorney. 
B  afterwards  brought  an  action  against  C 
to  recover  said  sum  of  S25.  Held,  that 
the  parol  agreement  between  A  and  B 
was  not  illegal  and  void  on  the  ground  of 
maintenance  and  champerty,  but  was  a 
valid  agreement,  since  the  unauthorized 
use  of  the  patent  in  either  place  would 
diminish  the  value  and  profits  of  the  pa- 
tent in  the  other,  and  therefore  B  had  a 
direct  interest  in  preventing  the  violation 
of  the  patent  right;  that  C's  promise  to 

[275] 


264* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


to  this  charge  who  gives  honest  advice  to  go  to  law,  or  ad- 
vances money  from  good  motives  to  support  a  suit,  or  if  he 
stands  towards  the  person  who  is  the  party  to  the  suit  in  any 
intimate  relation,  as  of  landlord,  father  or  son,  or  master,  or 
husband,  (j) 

Champerty  is  treated  as  a  worse  offence;  for  by  this  a 
stranger  supplies  money  to  carry  on  a  suit,  on  condition  of  shar- 
ing in  the  land  or  other  property  gained  by  it.  And  contracts 
of  this  sort  are  set  aside  both  at  law  and  in  equity.  And  any 
agreements  to  pay  part  of  the  sum  recovered,  whether  by  com- 
mission or  otherwise,  on  consideration  either  of  money  ad- 
vanced to  maintain  a  suit,  or  services 'rendered,  or  information 
given,  or  evidence  furnished,  come  within  the  definition  of 
champerty,  (k)  And  this  has  also  been  extended  *to  cover 
many  cases  of  the  purchase  of  a  doubtful  title  to  land,  by  a 
stranger,  of  one  not  in  possession,  and  of  land  which  he  who 
has  possession  holds  adversely  to  the  title  purchased.  (/) 


pav  B  said  sum  was  on  a  good  and  suffi- 
cient consideration  ;  and  that  the  action 
could  1)0  maintained. 

ij)  Ferine  v.  Dunn,  3  Johns.  Ch.  508; 
Thalhiracr  v.  Brinckerhoff,  3  Cowen, 
6-17. 

{k)  Stanley  v.  Jones,  7  Bing.  369 ; 
Thurston  v.  Pcrcival,  1  Pick.  41.5;  La- 
throp  I'.  Amherst  Bank,  9  Met.  489,  an 
excellent  case  on  this  suliject ;  Byrd  v. 
Odem,  9  Ala.  755  ;  Satterlee  v.  Frazcr,  2 
Sandf.  141  ;  Ilolloway  r.  Lowe,  7  Porter, 
488  ;  Key  v.  Vattier,  \  Ham.  58  ;  Rust  r. 
Larue,  4"Litt.  417.  It  has  heen  held  iu 
Kentucky,  that  a  contract  hy  a  client  to 
pay  his  "attorney  "a  sum  c<jiial  to  one 
tenth  of  the  amount  recovered,"  was  not 
void  for  champerty.  Kvaus  r.  Bell,  G 
Dana,  479  ;  Wilhite  v.  Koherts,  4  Dana, 
172. 

(/)  This  was  forbidden  Iiy  the  English 
Stat.  32  Henry  8,  c.  9,  against  huying  up 
pretended  tiilcs,  which  was  at  an  early 
day  enacted  in  sonn-  American  {States, 
un'd  in  others  adoj)ted  hy  i)raclicc.     !Sec 

[27G] 


Brinley  v.  Whiting,  5  Pick.  353;  Whita- 
ker  V.  Cone,  2  Johns.  Cas.  58  ;  Belding  v. 
Pitkin,  2  Caincs,  147  ;  McGoon  i-.  An- 
ken}',  11  III.  558.  But  see  Crcsinger  v. 
Lessee  of  Welch,  15  Ohio,  156  ;  Edwards 
V.  Parkhurst,  21  Vt.  472;  Dunbar  v. 
McFall,  9  Humph.  505.  The  English 
statute  of  32  Hen.  8,  c.  9,  on  the  subject 
of  champerty  is  not  in  force  in  Mississippi. 
In  order,  therefore,  to  avoid  a  contract  on 
the  ground  of  champerty,  the  common 
law  ofl'cnce  must  be  complete,  to  consti- 
tute which  it  must  not  only  be  proved  that 
there  was  adverse  possession  at  the  time 
of  sale,  but  that  the  purchaser  had  knowl- 
edge of  such  adverse  ]iossession  ;  this  Is 
especially  the  case  where  the  land  granted 
was  in  forest  and  wild  at  the  time  of  the 
grant.  Sessions  v.  Peynolds,  7  Smedes 
&  M.  132.  In  nnmy  States  such  a  trans- 
action never  was  considered  illegal.  See 
Eri/,/.le  r.  Veach,  1  Dana,  211  ;  Stoevcr 
?•.  Whitman,  6  Binn.  416;  Iladduck  v. 
Wilmartii,  5  N.  II.  181. 


en.  III.]  DEFENCES.  *265 


SECTION    XII. 


OF   FRAUD. 


We  have  had  repeated  occasion  to  remark,  that  fraud  avoids 
every  contract,  and  annuls  every  transaction  ;  and  to  illustrate 
this  principle  in  its  relation  to  many  of  the  kinds  of  contracts 
which  we  have  already  considered.  But  there  are  some  general 
remarks  on  the  subject  of  fraud,  especially  when  considered  as 
a  defence  to  an  action  brought  upon  a  contract,  which  we  would 
now  make,  avoiding  a  repetition  of  what  has  been  already  said, 
as  far  as  may  be. 

It  is  sometimes  asserted  that  the  distinction  in  the  civil  law 
between  dolus  malus  and  dolus  bonus  is  unknown  to  the  com- 
mon law  ;  and  it  is  true  that  we  have  no  such  distinction  ex- 
pressed in  words  which  are  an  exact  translation  of  the^  Latin 
words.  But  it  is  also  true  that  the  distinction  is  itself,  substan- 
tially, a  part  not  only  of  the  common  law,  but  necessarily  of 
every  code  of  human  law.  For  it  is  precisely  the  distinction 
between  that  kind  and  measure  of  craft  and  cunning  which  the 
law  deems  it  impossible  or  inexpedient  to  detect  and  punish, 
and  therefore  leaves  unrecognized,  and  *that  worse  kind  and 
higher  degree  of  craft  and  curming  which  the  law  prohibits,  and 
of  which  it  takes  away  all  the  advantage  from  him  by  whom 
it  is  practised. 

The  law  of  morality,  which  is  the  law  of  God,  acknowledges 
but  one  principle,  and  that  is  the  duty  of  doing  to  others  as  we 
would  that  others  should  do  to  us,  and  this  principle  absolutely 
excludes  and  prohibits  all  cunning  ;  if  we  mean  by  this  word 
any  astuteness  practised  by  any  one  for  his  own  exclusive  ben- 
efit. But  this  would  be  perfection  ;  and  the  law  of  God  re- 
quires it  because  it  requires  perfection  ;  that  is,  it  sets  up  a  per- 
fect standard,  and  requires  a  constant  and  continual  effort  to 
approach  it.  But  human  law,  or  municipal  law,  is  the  rule 
which  men  require  each  other  to  obey ;  and  it  is  of  its  essence 

VOL.  II.  *  24  [  277  ] 


266*  THE   LAW    OF    CONTRACTS.  [PART  II. 

that  it  should  have  an  effectual  sanction,  by  itself  providing 
that  a  certain  punishment  should  be  administered  by  men,  or 
certain  adverse  consequences  take  place,  as  the  direct  effect  of 
a  breach  of  this  law.  If  therefore  the  municipal  law  were 
identical  with  the  law  of  God,  or  adopted  all  its  requirements, 
one  of  three  consequences  must  flow  therefrom ;  either  the  law 
would  become  confessedly,  and  by  a  common  understanding, 
powerless  and  dead  as  to  part  of  it ;  or  society  would  be  con- 
stantly employed  in  visiting  all  its  members  with  punishment ; 
or,  if  the  law  annulled  whatever  violated  its  principles,  a  very 
great  part  of  human  transactions  would  be  rendered  void. 
Therefore  the  municipal  law  leaves  a  vast  proportion  of  un- 
questionable duty  to  motives,  sanctions,  and  requirements  very 
different  from  those  which  it  supplies.  And  no  man  has  any 
right  to  say,  that  whatever  human  law  does  not  prohibit,  that 
he  has  a  right  to  do ;  for  that  only  is  right  which  violates  no 
law,  and  there  is  another  law  besides  human  law.  Nor,  on  the 
other  hand,  can  any  one  reasonably  insist,  that  whatever  one 
should  do  or  should  abstain  from  doing,  this  may  properly  be 
made'a  part  of  the  municipal  law,  for  this  law  must  necessarily 
fail  to  do  all  the  great  good  that  it  can  do  and  therefore  should, 
if  it  attempts  to  do  that  which,  while  society  and  human  nature 
remain  what  they  are,  it  cannot  possibly  accomplish. 

It  follows  that  a  certain  amount  of  selfish  cunning  passes 
*unrecognized  by  the  law ;  that  any  man  may  procure  to  him- 
self, in  his  dealings  with  other  men,  some  advantages  to  which 
he  has  no  moral  right,  and  yet  succeed  perfectly  in  establishing 
his  legal  right  to  them.  But  it  follows  also,  that  if  any  one 
carries  this  too  far ;  if  by  craft  and  selfish  contrivance  he  inflicts 
injury  upon  his  neighbor  and  acquires  a  benefit  to  himself,  be- 
yond a  certain  point,  the  law  ste})s  in,  and  annuls  all  that  he 
lias  (lone,  as  a  violation  of  law.  The  practical  question,  then, 
is,  where  is  this  point;  and  to  this  question  the  law  gives  no 
specific  answer.  And  it  is  somewhat  noticeable,  that  the  com- 
mon law  not  only  gives  no  definition  of  fraud,  but  perhaps  as- 
serts as  a  principle,  that  there  shall  be  no  definition  of  it.  And 
the  reason  of  tiiis  rule  is  easily  seen.  It  is  of  the  very  natujre 
and  essence  of  fraud  to  elude  all  laws,  and  violate  them  in  fact, 
[  27b  ]  • 


CII.  III.]  DEFENCES.  *267 

without  appearing  to  break  them  in  form  ;  and  if  there  were  a 
technical  definition  of  fraud,  and  every  thing  must  come  within 
the  scope  of  its  words  before  the  law  could  deal  with  it  as 
fraud,  the  very  definition  would  give  to  the  crafty  just  what 
they  wanted,  for  it  would  tell  them  precisely  how  to  avoid  the 
grasp  of  the  law.  Whenever,  therefore,  any  court  has  before  it 
a  case  in  which  one  has  injured  another,  directly  or  indirectly, 
by  falsehood  or  artifice,  it  is  for  the  court  to  determine  in  that 
"Case  whether  what  was  done  amounts  to  cognizable  fraud. 
Still,  this  important  question  is  not  left  to  the  arbitrary,  or, 
as  it  might  be,  accidental  decision  of  each  court  in  each  case  ; 
for  all  courts  are  governed,  or  at  least  directed,  by  certain  rules 
and  precedents,  which  we  will  now  consider. 

In  the  first  place,  it  is  obvious  that  the  fraud  must  be  mate- 
rial to  the  contract  or  transaction,  which  is  to  be  avoided  be- 
cause of  it ;  for  if  it  relate  to  another  matter,  or  to  this  only  in 
a  trivial  and  unimportant  way,  it  affords  no  ground  for  the  ac- 
tion of  the  court,  (m)  It  must  therefore  relate  *distinctly  and 
directly  to  this  contract ;  and  it  must  affect  its  very  essence  and 
substance,  (w)     But,  as  before,  we  must  say  that  there  is  no 


(m)  Thus,  it  seems  that  a  misrcpresen-  about  there,"  and  the  latter,  relying  upon 

tation  by  a  vendor  of  a  horse,  as  to  the  the  truth  of  that  representation,  made  the 

place  wlicre  he  bought  it,  is  not  such  a  purchase  ;  and  after  ascertaining  by  actual 

material  fraud  as  will  avoid  the  sale  of  experiment  that  tlie  land  was  not  what  it 

the  horse.     Geddes  v.  Pennington,  5  Dow,  had  been  represented  to  be,  he  applied  to 

159.     In  Taylor  v.  Fleet,  1  Barb.  471,  it  the  vendor,  within  a  reasonable  time,  to 

is  said  that  in  order  to  avoid  a  contract  rescind  the  bargain,  who  refused  to  do  so. 

of  sale  on  the  ground  of  misrepresentation,  Held,  that  this  furnished  a  sufficient  grounl 

there  must  not  only  have  been  a  misrepre-  for  the  interference  of  a  court  of  equity 

sentation  of  a  material  fact  constituting  to    rescind    the    contract,    even    though 

the  basis  of  the  sale,  but  the  purchaser  there  was  no  intention  on  the  part  of  the 

must  have  made  the  contract  upon  the  faitli  vendor  to  deceive  the  purchaser.     As  to 

and   credit   of  such   representation.     At  the  necessity  of  materiality,  see  Camp  v. 

least  he  must  so  far  have  relied  upon  it  as  Pulver,  5  Barb.  91. 

that  he  would  notliavc  made  the  jjurchase         (?))  Thus,  in  Green  r.  Gosden,  4  Scott, 

if  such  representation  had  not  been  made.  N.  K.  1.3,  3  Man.  &  G.  446,  to  a  count  in 

In  that  case  a  person  about  to  purchase  a  debt  on  a  promissory  note,  the  defendant 

farm  was  ignorant  of  the  actual  character  pleaded  that  the  note  was  obtained  from 

and  capabilities  of  the  land,  and  had  no  him  by  the  plaintiffs  and  others  in  collu- 

means  of  obtaining  such  knowledge  ex-  sion  with  them,  by  fraud,  covin,  and  mis- 

cept  by  information  to  be  derived  from  representation,   wherefore    tlie   note   was 

others ;  and  the  owner,  with  a  knowledge  void  in  law  ;  it  was  held,  that  this  plea 

that  the  purchaser's  object  was  to  obtain  was  not  sustained  by  evidence,  that  the 

an  early  farm,  and  that  his  farm  was  not  note   was   given   by  the    defendant   and 

as  early  as  the  lands  lying  in  the  neigh-  another,  as  sureties,  for  a  sum  advanced  to 

borhood,  represented   to  such   purchaser  a  third  person  by  the  plaintiffs  who  falsely 

"  that  there  was  no  earlier  land  anyv/here  held   themselves   out  to  the   world  as    a 

[279] 


267- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


positive  standard  by  which  to  determine  whether  the  fraud  be 
thus  material  or  not.  Nor  can  we  give  a  better  rule  for  decid- 
ing the  question  than  this;  if  the  fraud  be  such,  that,  had  it 
not  been  practised,  the  contract  would  not  have  been  made,  or 
the  transaction  completed,  then  it  is  material  to  it ;  but  if  it  be 
shown  or  made  probable  that  the  same  thing  would  have  been 
done  by  the  parties,  in  the  same  way,  if  the  fraud  had  not  been 
practised,  it  cannot  be  deemed  material.  Whether  the  fraud  be 
material  or  otherwise,  seems  to  be,  on  the  decided  weight  of  au- 
thority, a  question  for  the  jury  and  not  a  question  of  law ;  (o) 


society  formed  and  acting  under  certain 
rules  and  regulations  ;  the  fraud  proved 
not  having  such  a  relation  to  the  particu- 
lar transaction  as  to  amount  to  fraud  in 
point  of  law.  So  in  Vane  v.  Cobbold,  1 
Exch.  798,  in  an  action  by  an  allottee  of 
a  railway  company  for  the  recovery  of 
his  deposit,  it  appeared  that  the  company 
issued  a  prospectus,  which  stated  the  cap- 
ital to  consist  of  60,000  shares  of  £25 
each,  and  the  plaintitf,  after  having  paid 
his  deposit,  executed  the  subscribers' 
agreement,  which  contained  the  usual 
terms  as  to  the  disposition  of  the  deposits  ; 
at  tiie  time  when  he  executed  the  deed, 
the  deposits  upon  18,160  shares  only  had 
been  paid,  although  35,000  shares  had 
been  allotted,  which  fact  was  not  commu- 
nicated to  him.  Held,  that  the  withhold- 
ing of  the  al)0ve  fact  did  not  amount  to 
such  a  fraud  as  to  avoid  the  deed,  and 
that  the  plaintiff  was  not  entitled  to  re- 
cover back  his  deposit.  In  Edwards  v. 
Owen,  15  Ohio,  500,  it  was  /leld  that  a 
special  action  on  the  case  may  be  sus- 
tained against  a  debtor,  for  fraudulently 
representing  himself  Insolvent,  and  there- 
by inducing  his  creditor  to  (iischargc  a 
promissorv  note  for  less  than  its  value. 

(o)  Wcstl)ury  v.  Al)erdcin,  2  M.  &  W. 
267  ;  Liiiilciiaii  ;;.  Dcsborough,  8  B.  «&.  C. 
580;  Ilugiicnin  v.  Ilayley,  G  Taunt.  186; 
Biilault  V.  Wales,  20  Mo.  546.  If  the 
fraud  was  material  to  the  contract,  it  has 
been  8aid  that  it  is  not  necessary  that  it 
shoulcl  have  been  practised  inalo  uiiiiiio. 
Moens  ?■.  llcyworth,  10  M.  &  W.  155, 
where  Lord  AhiiKjc.r  said :  "  'J'he  fraud 
wliicii  viiiates  ji  contract,  and  gives  a 
party  a  right  to  recover,  docs  not  in  all 
cases  neccssMrily  imply  moral  tiirpiliidr. 
There  may  be  a  ini.srepresentatioii  as  to 

[  280  ] 


the  facts  stated  in  the  contract,  all  the  cir- 
cumstances in  which  the  party  may  believe 
to  be  true.  In  policies  of  insurance,  for 
instance,  if  an  insurer  makes  a  misrepre- 
sentation, it  vitiates  the  contract ;  such  con- 
tracts are,  it  is  true,  of  a  peculiar  nature, 
and  have  relation  as  well  to  the  rights  of 
the  parties  as  the  event.  In  the  case  of  a 
contract  for  the  sale  of  a  public-house,  if 
the  seller  represent  by  mistake  that  the 
house  realized  more  than  in  fact  it  did,  he 
would  be  defrauding  the  purchaser,  and 
deceiving  him  ;  but  that  might  arise  from 
his  not  having  kept  proper  books,  or  from 
non-attention  to  his  affairs  ;  yet,  as  soon  as 
the  other  party  discovers  it,  an  action  may 
be  maintained  for  the  loss  consequent  upon 
such  misrepresentation,  inasmuch  as  he 
was  thereby  induced  to  give  more  than 
the  house  was  worth.  That  action  might 
be  sustained  upon  an  allegation  that  the 
representation  was  false,  although  the 
party  making  it  did  not  know  at  the  time 
he  made  it  that  it  was  so."  And  see  Lin- 
denau  r.  Dcsborough,  supra  ;  Maynard  v. 
Ilhodes,  5  Dow.  &  K.  206  ;  Everett  v.  Dcs- 
borough, 5  Ding.  503  ;  Elton  v.  Larkins, 
5  C.  &  r.  80.  But  it  has  been  held  that  if 
a  fact  is  collateral  only,  and  the  statement 
of  it,  though  made  at  the  time  of  entering 
into  the  contract,  is  not  embodied  in  it, 
the  contract  cannot  be  set  aside  merely  on 
the  ground  tliat  such  statement  was  un- 
true;  it  must  be  shown  that  the  party 
making  it  knew  it  to  be  untrue,  and  that 
the  other  was  thereby  induced  to  enter 
into  the  contract.  jMocns  v.  llcyworth, 
10  M.  &  W.  147.  And  see  McDonald  v. 
Trafton,  15  Me.  225;  Cunningham  v. 
Sniiili,  10  (Jratt.  255;  Wilson  u.  Butler, 
4  r.iu''.  N.  C.  748. 


en.  III.] 


DEFENCES. 


*268-*269 


but  it  is  *obvious  that  in  many  cases  the  jury  cannot  answer  this 
question  without  instructions  from  the  court. 

In  the  next  place,  the  fraud  must  work  an  actual  injury.  If 
it  be  only  an  intended  fraud,  which  is  never  carried  into  effect, 
or  if  all  be  done  that  was  intended,  but  the  expected  conse- 
quences do  not  result  from  it,  the  law  cannot  recognize  it.  (p) 
And  if  there  be  a  fraud,  and  it  be  actually  injurious,  the  injured 
party  can  recover  only  the  damage  directly  attributable  to  the 
fraud,  (<7)  and  not  an  increase  of  this  damage  *caused  by  his  own 
indiscretion  or  mistake  in  relation  to  it.  (r)  And  if  no  damage  be 
caused  by  the  fraud,  no  action  lies,  (s)  Though  the  law  can- 
not lay  hold  of  a  merely  intended  fraud,  yet  it  will  recognize  as 
a  fraud  a  statement  which  is  literally  true,  but  substantially 
false  ;  for  the  purpose  and  effect  of  the  thing  will  prevail  over 
its  form ;  as  if  one  asserts  that  another,  whom  he  recommends, 
has  property  to  a  certain  amount,  knowing  all  the  while, 
that  although  he  possesses  this  property,  he  owes  for  it  more 
than  it  is  worth,  (i)      And  there  are  indeed  cases  in  which  the 


{j))  Hemingway  i'.  Hamilton,  4  M.  & 
W.  115.  Lord  Abinger  there  said  :  "  Sup- 
pose a  man  contraets  in  writing  to  sell 
goods  at  a  certain  price,  and  afterwards 
delivers  them,  could  tlie  buyer  plead, 
that  at  the  time  of  the  contract  the  seller 
fraudulently  intended  not  to  deliver  them, 
but  to  dispose  of  them  otherwise  1  "  In 
Feret  v.  Hill,  15  C.  B.  207,  26  Eng.  L.  & 
Eq.  261,  it  was  lii-ld  that  an  intention  ex- 
isting in  the  mind  of  one  of  the  parties  to  a 
contract,  to  use  the  thing  therein  contracted 
for,  in  an  illegal  manner,  would  not  ren- 
der the  contract  illegal,  although  he  fraud- 
ulently induced  the  other  party  to  enter 
into  the  contract,  by  stating  that  he  wanted 
the  property  for  a  legal  purpose.  See  as 
to  this  case,  Canhatn  v.  Barry,  15  C.  B. 
597,  29  Eng.  L.  &  Eq.  290.  See  also, 
Abbey  v.  Dewey,  25  Penn.  St.  413. 

(q)  Per  Lord  Ellenborough,  in  Vernon 
V.  Keycs,  12  East,  632.  Where  an  action 
was  brought  to  recover  the  value  of  cer- 
tain horses,  alleged  to  have  died  from  eat- 
ing corn  mi.Kcd  with  arsenic,  which  the 
plaintiff  bought  from  the  defendant,  it  was 
held,  that  notwithstanding  the  defendant 
had  fraudulently  concealed  from  the  plain- 
tiff the  fact  that  arsenic  was  so  mixed 
with  the  corn,  yet,  if  the  plaintiff  was  in- 
formed of  the  act  before  he  gave  it  to  his 

24* 


horses,  he  could  only  recover  damages  to 
the  value  of  the  corn.  Stafford  v.  New- 
som,  9  Ired.  507.  In  Tuckwell  v.  Lam- 
bert, 5  Cusb.  23,  the  purchaser  of  a  vessel, 
falsely  and  fraudulently  represented  by  the 
seller  as  eighteen  instead  of  twenty-eight 
years  old,  having  sent  her  to  sea  before  he 
had  knowledge  that  such  representation 
was  false,  and  the  vessel  being  afterwards 
condemned  in  a  foreign  port,  it  was 
held,  that  the  purchaser  was  entitled  to 
recover  his  actual  damages,  occasioned  by 
sending  the  vessel  to  sea,  not  exceeding 
the  value  of  the  vessel. 

(r)  Thus,  in  Corbett  v.  Brown,  5  C.  & 
P.  363,  it  was  lield,  that  a  tradesman  can 
only  recover  against  a  person  making  a 
false  representation  of  the  means  of  one 
who  referred  to  him,  such  damage  as  is 
justly  and  immediately  referable  to  the 
false  representation.  Therefore,  if  the 
tradesman  gives  an  indiscreet  and  ill- 
judging  credit,  he  cannot  make  the  referee 
answerable  for  any  loss  occasioned  bv  it. 

(s)  Morgan  v.  Bliss,  2  Mass.  112  ;  Ful- 
ler V.  Hodgdon,  25  Me.  243  ;  Ide  v.  Gray, 
11  Vt.  615  ;  Farrar  v.  Alston,  1  Dev.  69. 

(t)  Corbett  v.  Brown,  8  Bing.  33,  1 
Moore  &  S.  85.  In  this  case  the  de- 
fendant's son  having  purchased  goods 
from  the  plaintiffs  on  credit,  they  wrote  to 

[281] 


270* 


THE   LAAV    OP   CONTRACTS. 


[part  II. 


intention  seems  to  constitute  the  fraud,  and  to  have  the  force 
and  effect  of  fraud.  For  if  one  buys  on  credit,  but  does  not  pay, 
still  the  title  of  the  goods  is  in  him ;  but  if  one  buys  on  credit, 
intending  not  to  pay,  this  is  an  actual  fraud,  and  it  avoids  the 
sale  entirely,  so  that  no  property  passes  to  the  purchaser,  (w)  If 
the  question  were  res  nova,  perhaps  it  might  be  doubted  whether 
the  *rule  established  by  these  cases  is  correct.  It  is  clear  that  if 
a  purchaser  makes  false  representations  of  his  ability  to  pay, 
his  property,  or  credit,  the  sale  is  void,  and  no  title  passes  as 
between  the  original  parties  to  the  contract,  (v)  But  it  is 
equally  true,  that  the  mere  insolvency  of  the  purchaser,  and  his 
utter  inability  to  pay  for  goods  when  purchased,  although  well 
known  to  himself,  will  not  avoid  the  sale,  if  no  false  representa- 
tions or  means  are  used  to  induce  the  vendor  to  part  with  his 
goods,  (w) 

In  the  next  place,  it  must  appear  that  the  injured  party  not 
only  did  in  fact  rely  upon  the  fraudulent  statement,  {x)  but  had 
a  right  to  rely  upon  it  in  the  full  belief  of  its  truth ;  for  other- 


the  defendant,  requesting  to  knowwhcther 
his  son  had,  as  he  stated,  £300  capital, 
his  own  property,  to  commence  business 
with  ;  to  which  the  defendant  replied,  tiiat 
his  son's  statement  as  to  the  £300  was 
perfectly  correct,  as  the  defendant  had  ad- 
vanced him  the  money.  It  was  proved 
that,  at  the  time  of  the  advance,  the  de- 
fendant li;nl  taken  a  promissory  note  from 
his  son  for  £300,  payable  on  demand, 
with  interest,  which  interest  was  paid. 
Six  months  after  the  communication  to 
the  plaintiffs,  the  defendant's  son  became 
bankrupt.  Held,  that  it  was  properly  left 
to  tiie  jury  to  say  whether  the  representa- 
tion made  by  the  defendant  was  false 
within  his  own  knowledge  ;  and,  the  jury 
having  found  a  verdict  for  him,  the  court 
granted  a  new  trial.  Denny  v.  Gilman, 
2G  Mc.  149,  also  shows  that  a  rci)re- 
scntation  may  be  literally  true,  and  yet  if 
made  with  intent  to  deceive,  and  it  does 
deceive  another  to  his  injury,  the  author 
may  be  liable.  It  is  perhaps  on  this 
ground  that  a  second  vendee  of  land,  who 
takes  ills  <]•■(•([  with  knowledge  of  a  prior 
unrecorded  deed,  cannot  hold  the  cslatc, 
ultiiough  be  complies  with  the  Idler  of  tlie 
Htatute  bv  iiisl  jiulting  bis  deed  on  record. 
Sec  Ludlow  I'.  (;ill,  1  I).  Chip.  49. 
(u)  ficc  Karl  of  Bristol  v.  Wilsmoro,  1 

[282] 


B.  &  C.  514;  Ash  v.  Putnam,  1  Hill, 
302  ;  Ferguson  v.  Carrington,  9  B.  &  C. 
59.  And  see  Load  v.  Green,  15  M.  &  W. 
216. 

{v)  Gary  v.  Hotailing,  1  Hill,  311  ; 
Andrew  v.  Dieterich,  14  Wend.  31  ;  John- 
son V.  Peck,  1  Woodb.  &  M.  334 ;  Lloyd 
V.  Brewster,  4  Paige,  537. 

{w)  Cross  I'.  Peters,  1  Greenl.  376. 
And  see  Conyers  v.  Ennis,  2  Mason,  236  ; 
and  the  excellent  case  of  Powell  v.  Brad- 
lee,  9  Gill  &  J.  220;  Smith  v.  Smith,  21 
Penn.  St.  367.  To  avoid  a  sale  of  goods 
on  credit,  it  is  not  sufficient  that  the  pur- 
chaser did  not  intend  to  jiay  for  them  at 
the  time  ac/reed  upon.  He  nuist,  wh'en  ho 
buys,  intend  never  to  pay  for  tliem  to  pre- 
vent the  title  from  passing.  Bidault  v. 
AVales,  20  Mo.  540  ;  Biicklev  v.  Artchor, 
21  Barb.  585;  Mitchell  y.  "Worden,  20 
Barl).  253. 

[x)  It  is  not  necessary  that  a  vendor 
should  rely  solelij  u])on  the  fraudulent 
statements  of  the  defendant  as  to  the  sol- 
vency of  a  third  person,  in  order  to  give 
a  rigiit  of  action.  It  is  sufficient  if  tho 
g<)0<ls  were  jtartcd  wilh  u])on  such  reju'e- 
sentations,  and  would  not  have  been  but 
for  them.  Addington  v.  Allen,  11  Wend. 
374  ;  Young  v.  Hall,  4  Gu.  95. 


CH.  III.]  DEFENCES.  *271 

wise  it  was  his  own  fault  or  folly,  and  he  cannot  ask  of  the  law 
to  relieve  him  from  the  consequences,  [y)  If  however  the 
plaintiff  mainly  and  substantially  relied  upon  the  fraudulent 
representation,  he  will  have  his  action  for  the  damage  he  sus- 
tains, although  he  was  in  parf  influenced  by  other  causes.  This, 
in  England,  where  such  an  action  cannot  be  brought  unless  the 
misrepresentation  be  in  writing,  it  is  maintainable  if  the  sub- 
stantial misrepresentation  be  in  writing,  although  the  plaintiff 
was  also  influenced  by  statements  of  the  defendant  which  were 
not  in  writing,  [ya) 

Where  a  party  is  obliged  to  rely  upon  the  statements  of  another, 
and  not  only  may,  but  should  repose  peculiar  confidence  in  him, 
this  is  in  the  nature  of  a  special  trust,  and  the  law  is  very  jeal- 
ous of  a  betrayal  of  this  trust,  and  visits  it  with  great  severity. 
This  principle  is  carried  to  its  utmost  extent  in  the  case  of  per- 
sons charged  expressly  with  trusts,  either  by  the  cestui  que  trust, 
or  others  for  him,  or  by  the  act  of  the  law ;  as  we  have  shown 
in  speaking  of  trustees. 

*On  the  same  ground,  and  also  because  the  law  especially 
protects  those  who  cannot  protect  themselves,  all  transactions 
with  feeble  persons,  whether  they  are  so  from  age,  sickness,  or 
infirmity  of  mind,  are  carefully  watched.  The  whole  law  of  in- 
fancy illustrates  this  principle ;  and  applies  it  in  many  cases  by 
avoiding  on  this  account  transactions  as  fraudulent,  which 
would  not  have  been  so  characterized  had  both  parties  been 
equally  competent  to  take  care  of  themselves,  [z) 

We  have  seen  that  the  intention  is  sometimes  the   test   of 


{y)  If  therefore  the  party  to  whom  false  an  instrument  whicli  he  signs,  and  there- 
statements  were  made  linew  tlicm  to  be  fore  has  no  right  to  rely  upon  the  state- 
fiilse,  or  suspected  them  to  be  so,  and  did  ments  of  the  other  party.  Lewis  v.  Jones, 
not  at  all  rely  upon  them  ;  or  if  the  state-  4  B.  &  C.  506  ;  llussell  v.  Branham,  8 
ments  consisted  of  mere  expressions  of  Blackf.  277.  And  see  Starr  v.  Bennett, 
opinion,  upon  which  he  had  no  legal  right  5  Hill,  303.  If  the  truth  or  falsehood  of 
to  rely,  the  contract  is  not  avoided  by  the  the  representations  might  have  been  tested 
fraudulent  intent  of  the  other  party.  See  by  ordinary  vigilance  and  attention,  it  is 
Clopton  V.  Cozart,  13  Smedes  &  M.  363  ;  the  party's  own  folly  if  he  neglected  to 
Anderson  v.  Burnett,  .5  How.  Miss.  165  ;  do  so,  and  he  is  remediless.  Moore  v. 
Connersville  I'.  Wadleigh,  7  Blackf.  102.  Turbeville,  2  Bibb,  602;  Saunders  v. 
And  it  is  upon  this  ground  that  a  misrepre-  Hattcrman,  2  Ired.  32;  Farrar  v.  AIs- 
sentation  as  to  the  legal  effect  of  an  agree-  ton,  1  Dev.  69. 

ment  does  not  constitute  such  a  fraud  as  (ija)  Tatton  v.  Wade,  18  C.  B.  371. 

■will  avoid  the  instrument,  since  every  per-  (c)  Malin  v.  Malin,  2  Johns.  Ch.  238; 

son  is  supposed  to  know  the  legal  effect  of  Blachford  v.  Christian,  1  Knapp,  77. 

[  283  ] 


272* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


fraud  ;  but,  on  the  other  hand,  this  intention  is  sonnetiines  im- 
plied by  the  law ;  for  it  seems  now  to  be  quite  settled,  that  if 
one  injures  another  by  statements  which  he  knows  to  be  false, 
he  shall  be  held  answerable,  although  there  be  no  evidence  of 
gain  to  himself,  or  of  any  interest  in  the  question,  or  of  malice 
or  intended  mischief,  (a)  And  on  the  other  hand,  if  the  state- 
ment be  false  in  fact,  and  injurious  because  false,  if  it  were 
believed  to  be  true  by  the  party  making  it,  it  is  not  a  fraud  on 
his  part,  (b)     If  the  statement  be  in  fact  *false,  and  be  uttered 


{a)  Foster  v.  Charles,  6  Bing.  396,  7  id. 
105.  This  was  an  action  for  making  false 
statements  concerning  an  agent  whom  the 
defendant  recommended,  and  knew  his 
statements  to  be  false.  Tindal,  C.  J.,  said  : 
"  It  has  been  urged  that  it  is  not  sufficient 
to  show  that  a  representation  on  which  a 
plaintiff  has  acted  was  false  within  the 
knowledge  of  the  defendant,  and  that 
damage  has  ensued  to  the  plaintiff,  but 
that  the  plaintiff  must  also  show  the 
motive  which  actuated  the  defendant.  I 
am  not  aware  of  any  authority  for  such  a 
position,  nor  that  it  can  be  material  what 
the  motive  was.  The  law  will  infer  an 
improper  motive  if  what  the  defendant 
says  is  Ailse  within  his  own  knowledge, 
and  is  the  occasion  of  damage  to  the  plain- 
tiff." See  also,  Corbett  v.  Brown,  8 
Bing.  3.3,  1  Moore  &  S.  85,  that  if  a 
representation  is  false  within  tlie  defend- 
ant's own  knowledge,  fraud  is  to  be  infer- 
red. And  see  Polhill  v.  Walter,  3  B.  & 
Ad.  114,  as  explained  in  Freeman  v. 
Baker,  5  B.  &  Ad.  797  ;  Hart  v.  Tal- 
madge,  2  Day,  381.  Young  v.  Hall,  4 
Ga.  95,  is  a  strong  case  to  show  that  the 
defendant  need  not  intend  to  derive  any 
benctit  fi-om  his  fniiul  in  order  to  render 
him  liaide.  See  Stiles  v.  White,  11  Met. 
350 ;  Wcatherford  r.  Fishback,  3  Scam.  1 70. 
In  W^atson  r.  I'oul.son,  Exch.  1851,  7  I^ng. 
L.  &  Kq.  585,  it  was  lu/cl,  tliat  if  a  man 
tolls  an  untruth,  knowing  it  to  be  such,  in 
order  to  induce  another  to  alter  his  con- 
dition, who  does  accordingly  alter  it,  and 
thereby  sustains  damage,  the  j)arty  making 
the  false  statement  is  liable  in  an  action 
for  deceit,  alih()U;;li  in  making  the  false 
representation  no  fraud  or  injiu'v  was  in- 
tended by  liiui.  Murray  v.  Maiui,  'J  ICxch. 
53S,  is  to  the  same  ('(rect.  See  also, 
'J'urnbuU  r.  Ciidsdcn,  2  Strobli.  IC.].  11  ; 
Smith  r.  Milchcll,  C.  (Ja.  45H. 

(b)  Collins  r.  Kvans,  5  Q.  B.  820  ;  Hay- 
craft  y.  Creasy,  2  East,  92;  Kawlings  c. 

[  ^«"l  ] 


Bell,  1  C.  B.  951 ;  Thom  v.  Bigland,  8 
Exch.  725,  20  Eng.  L.  &  Eq.  470  ;  Orm- 
rod  V.  Huth,  14  M.  &  W.  651.  In  this 
last  case,  cotton  was  sold  by  sample,  upon 
a  representation  that  the  bulk  corresponded 
with  the  samples,  but  no  warranty  was 
taken  by  the  purchaser,  and  the  Inilk  of 
the  cotton  turned  out  to  be  of  inferior 
quality,  and  to  have  been  falsely  packed, 
though  not  by  the  seller.  Held,  that  an 
action  on  the  case  for  a  false  and  fraudu- 
lent representation  was  not  maintainable, 
without  showing  that  such  representation 
was  false  to  the  knowledge  of  the  seller, 
or  that  he  acted  fraudulently  or  against 
good  faith  in  making  it.  And  Tindal,  C. 
J.,  in  delivering  the  judgment  of  the  Court 
of  Exchequer  Chamber,  said  :  "  The  rule 
which  is  to  be  derived  from  all  the  cases 
appears  to  us  to  be,  that  where,  upon  the 
sale  of  goods,  the  purchaser  is  satisfied 
without  requiring  a  warranty  (which  is  a 
matter  for  his  own  consideration),  he  can- 
not recover  upon  a  mere  representation  of 
the  quality  by  the  seller,  unless  he  can 
show  that  the  representation  was  bottomed 
in  fraud.  If,  indeed,  the  rejiresentation 
was  false  to  the  knowledge  of  the  party 
making  it,  this  would  in  general  be  con- 
clusive evidence  of  fraud  ;  but  if  the  rep- 
resentation was  honestly  made,  and  be- 
lieved at  the  time  to  be  true  by  the  party 
making  it,  though  not  true  in  point  of 
fact,  we  think  this  does  not  amount  to 
fraud  in  law,  but  that  the  rule  of  caveat 
ein/ilnr  a])])lies,  and  the  representation  it- 
self docs  not  fui'iiish  a  ground  of  action. 
And  although  the  cases  may  in  appear- 
ance raise  some  dilference  as  to  the  effect 
of  a  false  assertion  or  rejuvscntation  of 
lille  in  the  seller,  it  will  be  found,  on  ex- 
amination, that  in  each  of  those  cases 
lIuTc  was  cither  an  assertion  of  title  em- 
bodied in  the  contract,  or  a  reiiresentation 
of  title  which  was  false  to  the  knowledge 
of  the  seller.     The  rule  wc  have  drawn 


en.  III.]  DEFENCES.  *273 

for  a  fraudulent  purpose,  which  is  in  fact  accomplished,  it  has 
the  whole  effect  of  fraud  in  annulling  the  contract,  although  the 
person  uttering  the  statement  did  not  know  it  to  be  false,  but 
believed  it  to  be  true,  (c)  If  the  falsehood  be  known  to  the 
party  making  the  statement,  malice  or  self-interest  will  be  in- 
ferred, (d)  A  party  will  not  be  held  liable  as  for  fraud,  if  the 
statement  be  of  a  matter  collateral  to  the  contract,  unless  it  is 
proved  to  have  been  *made  fraudulently,  (e) 

If  a  misrepresentation  be  embodied  in  a  contract,  it  would, 
for  obvious  reasons,  be  deemed  more  important,  and  exert  a 
greater  influence,  than  if  it  lie  without  the  contract,  and  be 
connected  with  it  only  collaterally,  and  by  force  of  circum- 
stances. On  a  ground  somewhat  similar,  a  distinction  has  been 
drawn  between  extrinsic  and  intrinsic  circumstances,  which 
may  sometimes  be  of  practical  use.  The  rule  seems  to  be,  that 
a  concealment  or  misrepresentation  as  to  extrinsic  facts,  which 
by  affecting  the  market  value  of  things  sold,  or  in  any  such 
way,  affects  the  contract,  are  not  fraudulent,  while  the  same 
concealment  of  defects  in  the  articles  themselves  would  be 
fraudulent.  (/)     But  it  is  perhaps  enough  to  say  of  this,  that  a 

from  the  cases  appears  to  us  to  be  support-  Foster,  4  Scam.  569  ;  Parham  v.  Rail- 
ed so  clearly  by  the  early,  as  well  as  the  dolph,  4  How.  Miss.  435  ;  Dunbar  v. 
more  recent  decisions,  that  we  think  it  Boncsteel,  3  Scam.  32  ;  Miller  v.  Howell, 
unnecessary  to  bring  them  forward  in  re-  1  id.  499  ;  Craig  r.  Blow,  3  Stew.  448 ; 
view ;  but  to  satisfy  ourselves  with  saj'ing  Van  Arsdalc  v.  Howard,  5  Ala.  596 ; 
that  the  exception  must  be  disallowed,  Munroe  r.  Pritchett,  16  Ala.  785  ;  Juzan 
and  the  judgment  of  the  Court  of  Ex-  v.  Toulmin,  9  Ala.  662. 
chequer  affirmed."  See  also,  Tryon  v.  (c)  Taylor  v.  Ashton,  11  M.  &  W. 
Whitmarsh,  1  Met.  1  ;  Stone  v.  Denny,  4  401. 

Met.  151 ;  Russell  v.  Clark,  7  Cranch,  69  ;  '  (d)  Thus  in  Collins  v.  Denison,  12  Met. 
Young  V.  Covell,  8  Johns.  25  ;  Hopper  v.  549,  it  was  held,  that  in  an  action  for  de- 
Sisk,  1  Smith,  Ind.  102,  1  Carter,  176;  ceit  in  the  sale  of  a  horse,  when  proof  is 
Fooks  V.  Waples,  1  Harring.  Del.  131  ;  given  that  the  defendant  knowingly  made 
Boyd  V.  Browne,  6  Barr,  316;  Lord  y.  folse  representations  to  the  plaintiff  con- 
Goddard,  13  How.  198;  Weeks  u.  Bur-  cerning  the  horse,  at  the  time  of  the  sale, 
ton,  7  Vt.  67;  Wells  v.  Jewett,  11  How.  and  that  the  plaintiff  was  induced  by  those 
Pr.  Rep.  242,  254 ;  Ashlin  v.  White,  1  representations  to  buy  the  horse,  and  con- 
Holt,  387  ;  Shrewsbury  v.  Blount,  2  Man.  tiding  in  them  did  buy  him,  tlie  jury  are 
&  G.  475.  Many  cases,  however,  seem  authorized  and  required  to  find  that  the 
to  hold  that  a  false  statement  of  a  material  defendant  made  the  representations  with 
fact,  though  made  bona  jide,  will  avoid  a  the  intent  thereby  to  induce  the  plaintiff  to 
contract,  and  especially  if  the  statement  buy  the  horse  ;  and  the  plaintiff  cannot  le- 
be  of  a  fact  which  the  defendant  ought  to  gaily  be  required  to  give  any  further  proof 
know,  and  which  the  other  party  had  a  of  such  intent  of  the  defendant.  See  Bar- 
right  to  expect  the  defendant  did  know,  ley  v.  Walford,  9  Q.  B.  197;  Boyd  v. 
See  Buford  v.  Caldwell,  3  Mo.  477;  Browne,  6  Barr,  310. 
Snyder  v.  Findley,  Coxe,  48  ;  Thomas  v.  (e)  See  ante,  p.  267,  note  («). 
McCann,  4  B.  Mon.  601;  Lockridge  v.  (/)  Laidlaw  y.  Organ,  2  Wheat.  195, 

[285] 


274" 


THE   LAW   OF   CONTRACTS. 


[part  II. 


fraud  relating  to  external  and  collateral  matters  is  treated  by 
the  law  with  less  severity  than  one  which  refers  to  things  inter- 
nal and  essential. 

In  general,  concealment  is  not  in  law  so  great  an  offence  as 
misrepresentation,  (g-)  whatever  it  may  be  morally.  It  *is  cer- 
tain, however,  that  the  doctrine  of  fraud  extends  to  the  suppres- 
sion of  the  truth  in  many  cases,  as  well  as  to  the  expression  of 
what  is  false.  For  although  one  may  have  a  right  to  be  silent 
under  ordinary  circumstances,  there  are  many  cases  in  which 
the  very  propositions  of  a  party  imply  that  certain  things,  if  not 


holds  that  a  vendee  is  not  bound  to  give 
information  of  extrinsic  circumstances, 
which  ■  niiy:lit  influence  the  price  of  the 
article,  ahhouph  he  l^nows  the  same  to  be 
exchisivcly  within  his  own  knowledge. 
See  antfi,  vol.  1,  p.  461,  note  (/).  See 
also,  Blydenburgh  v.  AVelsh,  1  Baldw. 
331 ;  Barnett  v.  Stanton,  2  Ala.  181.  But 
see  Frazer  v.  Gervais,  Walker,  Miss.  72. 
See  also.  Hough  i\  Evans,  4  McCord, 
169,  as  to  tlie  duty  of  the  vendor  to  dis- 
close a  latent  defect,  not  known  to  the 
buyer.  But  this  may  arise  from  the  law 
peculiar  to  that  State,  that  a  sound  price 
implies  a  sound  article. 

(g)  Concealment,  to  be  actionable, 
must  of  course  be  of  such  facts  as  the 
party  is  bound  to  communicate.  Irvine 
V.  Kirkpatrick,  House  of  Lords,  3  Eng.  L. 
&  Eq.  17.  And  see  Otis  v.  Raymond,  3 
Conn.  413 ;  Van  Arsdale  i'.  Howard, 
.')  Ala.  .596 ;  Eichelberger  ?'.  Barnitz,  1 
Yeatcs,  307.  A  purchaser  is  not  bound 
to  disclose  his  knowledge  of  a  fraud  which 
makes  the  title  of  tlic  vendor  to  the  prop- 
erty better  than  he  himself  supposes,  where 
the  means  of  knowledge  are  e(pially  open  to 
both.  Kintzing  v.  McElrath,  5  Penn.  St. 
467.  But  see  Stevens  v.  Fuller,  8  N.  H. 
463.  In  Hailton  v.  Mathews,  10  Clark  & 
F.  934,  a  party  became  surety  in  a  bond  for 
the  fidelity  of  a  commission  agent  to  his 
cmjdoyers.  After  some  time  the  employ- 
ers discovered  irregularities  in  the  agent's 
accounts,  and  put  the  bond  in  suit.  Tiie 
surety  llien  instituted  a  suit  to  avoid  the 
bond,  on  thi",  ground  of  concealincnt  by 
tiie  employers  of  materi;\l  circuinstanccs 
an'ecting  the  agent's  credit  prior  to  the 
date  of  tiie  bond,  and  whieli,  if  eoiumiini- 
cated  to  tlu;  siiretv,  would  have  prevented 
liim  from  undertaiiing  the  obligation.  On 
the  trial  of  an  issue  whetiier  the  surety 
was  induced  to  sign  the  bond  by  undue 

[  28G  ] 


concealment  or  deception  on  the  part  of 
the  employers,  the  presiding  judge  directed 
the  jury  that  the  concealment,  to  be  un- 
due, must  be  wilful  and  intentional,  with 
a  view  to  the  advantages  the  employers 
were  thereby  to  gain.  Held,  by  the  Lords 
(reversing  the  judgment  of  the  Court  of 
Session),  that  the  direction  was  wrong  in 
point  of  law.  Mere  non-communication 
of  circumstances  aflFecting  the  situation  of 
the  parties,  material  for  the  surety  to  be 
acquainted  with,  and  within  the  knowl- 
edge of  the  person  obtaining  a  surety 
bond,  is  undue  concealment,  though  not 
wilful  or  intentional,  or  with  a  view  to  any 
advantage  to  himself.  See  Prentiss  v. 
Russ,  16  Me.  30.  If  a  broker  sell  prop- 
erty to  a  person,  knowing  it  to  be  subject 
to  the  lien  of  a  fieri  facias,  and  conceal  the 
fact,  and  send  the  party  to  investigate  re- 
specting tlie  incumbrances  on  the  prop- 
erty in  a  direction  whence  he  knows  cor- 
rect information  cannot  be  obtained,  al- 
though his  false  and  fraudulent  representa- 
tions are  made  by  actions  rather  than 
words,  he  is  liable  to  an  action  on  the 
case  for  deceit.  Chisolm  v.  Gadsden,  1 
Strobh.  220.  But  where  the  defendant, 
in  an  action  for  deceit  in  the  sale  of  a 
slave,  had  been  told  that  lie  was  unsound, 
but  did  not  believe  it,  it  was  held  that  he 
was  not  boiuid  to  disclose  it.  Ilamrick  v. 
^Hogg,  1  13cv.  3,')1.  As  to  evidence  of 
fraudulent  concealment,  see  Fleming  r. 
Siocum,  18  Johns.  403.  In  George  v. 
Johnson,  6  Humph.  36,  it  was  Iield,  that 
where  a  jiarty,  during  a  negotiation  for 
the  sale  of  property,  stated  that  the  other 
contracting  party  must  take  the  ])r()perty 
at  liis  own  risk,  such  statenu'ut,  thougli 
lu'gativing  a  warranty,  woidd  not  e.\oner- 
ate  the  \->nrty  from  a  liability  for  a  suppres- 
sion of  the  tnitli,  or  the  suggestion  of 
falseliood. 


en.  III.] 


DEFENCES. 


*275 


told,  do  not  exist.  (//)  This  is  peculiarly  the  case  in  contracts 
of  insurance ;  where  the  insured  is  bound  to  state  all  facts 
within  his  knowledge  which  would  have  an  influence  upon  the 
terms  of  the  contract,  and  arc  not  known,  or  may  be  supposed 
by  him  not  to  be  known,  to  the  insurer,  (i)  In  these  cases,  and 
in  others  which  come  within  this  principle,  the  suppressio  veri 
has  the  same  effect  in  law  as  the  expressio  falsi. 

The  next  rule  of  which  we  would  speak  is  one  which  is  fre- 
quently of  very  difficult  application.  It  is  the  rule  which  Mis- 
criminates  between  the  mere  expression  of  opinion  and  the 
statement  of  a  fact,  {j)  This  is  often  a  question  for  the  jury ; 
but,  so  far  as  it  is  matter  of  law,  it  may  be  said  that  a  false  rep- 
resentation, in  order  to  have  the  full  effect  of  fraud,  must  relate 
to  a  substantial  matter  of  fact,  and  not  merely  to  a  matter 
which  rests  in  opinion,  or  estimate,  or  judgment,  [k)     One  rea- 


[h)  Kidney  v.  Stoddard,  7  Met.  252, 
furnishes  an  excellent  illustration  of  sueh 
a  concealment  as  is  actionable.  There  a 
father  by  letter  recommended  his  minor 
son  as  worthy  of  credit,  &c.  lie  did  not 
state  that  he  was  a  minor.  A.  saw  the 
letter,  and  on  the  strength  of  it  trusted  the 
minor  for  goods  for  trade  to  a  large 
amount.  The  jury  were  told  that  if  the 
father  concealed  the  fad  of  the  minority  of  the 
son,  with  the  view  of  (jivinrj  him»a  credit, 
knowing  or  believing  that  if  tltat  fact  had 
been  stated,  he  would  not  have  obtained 
the  credit,  he  was  liable  in  law  for  the 
damage  A.  sustained,  and  this  ruling  was 
affirmed  by  the  whole  Co.urt.  And  see 
Jackson  v.  Wilcox,  1  Scam.  344.  So, 
where  it  was  agreed  between  the  vendors 
and  vendee  of  goods  that  the  latter  should 
pay  10s.  per  ton  beyond  the  market  price, 
wliich  sum  was  to  be  applied  in  liquidation 
of  an  old  debt  due  to  one  of  the  vendors  ; 
and  the  payment  of  the  goods  was  guar- 
anteed by  a  third  person,  but  the  bargain 
between  the  parties  was  not  communicated 
to  the  surety ;  it  was  held  that  that  was  a 
fraud  on  the  surety,  and  rendered  the 
guaranty  void.  Pidcock  v.  Bishop,  3  B. 
&  C.  605. 

(i)  Lindeneau  v.  Desborough,  8  B.  &  C. 
586 ;  Bufe  v.  Turner,  6  Taunt.  338  ;  an 
excellent  case  on  the  subject  of  conceal- 
ment. See  further,  Clark  v.  Man.  Ins. 
Co.  8  How.  235;  Fletcher  v.  Common- 
wealth Ins.  Co.  18  Pick.  419  ;  Walden  v. 
Louisiana  Ins.  Co.  12  La.  134;  Lyon  v. 


Commercial  Ins.  Co.  2  Rob.  La.  266; 
New  York  Bowery  Ins.  Co.  v.  New  York 
Ins.  Co.  17  Wend.  359. 

(j)  Where  a  person,  having  land  for 
sale,  gave  an  authority  in  writing  to  sell 
it  upon  certain  terms,  containing  the  fol- 
lowing clause  :  —  "I  will  guaranty  that 
there  is  45,000,000  feet,  board  measure,  of 
pine  timber,  on  the  township  ;  and  the 
purchaser  may  elect,  within  thirty  days  of 
the  purchase,  to  take  it  at  a  survey  of  all 
the  standing  pine  timber  at  one  dollar  per 
thousand,  or  pay  the  said  §45,000 ;  "  it  was 
held  that  this  did  not  amount  to  a  repre- 
sentation that  there  were  in  fact  forty-five 
millions  of  feet  of  timber  on  the  land. 
Hammatt  v.  Emerson,  27  Me.  308.  So 
in  Sandford  v.  Handy,  23  Wend.  260,  it 
was  held  that  a  vendor  of  land  is  not  liable 
for  an  expression  of  opinion  of  its  value; 
but  he  is  for  a  false  representation  as  to 
its  location,  if  the  purchaser  have  not  an 
opportunity  at  tiie  time  of  seeing  the  land. 
So  also,  he  is  liable  for  a  misrepresentation 
as  to  the  cost  of  the  land. 

(t)  Thus,  misrepresentations  by  one 
contracting  party  to  the  other  as  to  the 
value  or  quantity  of  a  commodity  in  mar- 
ket, where  correct  information  on  the  sub- 
ject is  equally  within  the  power  of  both 
parties,  with  equal  diligence,  do  not,  in 
contemplation  of  law,  constitute  fraud. 
Foley  V.  Cowgill,  5  Blackf  18.  And  the 
same  principle  was  applied  in  Baily  v. 
INlerrell,  3  Bulstr.  94,  where  a  carrier 
brought  an  action  of  deceit  for  represent- 

[  287  ] 


276* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


son  is,  the  difficulty  of  proving  that  a  mere  statement  of  opinion 
is  false,  for  no  one  can  know  what  another  thinks,  with  any  cer- 
tainty, unless  the  opinion  is  of  some  tangible  matter  of  fact 
plainly  before  one's  eyes,  and  then  it  \v*ould  generally  be  a  false- 
hood as  to  fact.  Another  reason  is,  that  if  one  person  has  an 
opinion,  so  may  another ;  and  if  any  one  relies  on  mere  opin- 
ion, instead  of  ascertaining  facts,  it  is  his  own  folly.  But  this 
rule  must  not  be  pressed  beyond  its  reason.  For  though  the 
statement  be  in  form  only  of  an  opinion  ;  yet  if  that  opinion 
was  one  on  \vhich  the  other  party  was  justified  in  relying,  either 
by  the  relations  existing  between  the  parties,  (/)  or  by  the  nature 
of  the  case,  and  it  can  be  made  to  appear  that  the  opinion  ex- 
pressed was  not  in  fact  held,  it  is  not  easy  to  see  why  this 
should  not  be  regarded  as  a  false  statement  of  a  fact,  or  rather 
why  it  is  not,  strictly  speaking,  a  false  statement  of  a  fact. 

*The  misrepresentation  need  not  be  made  by  the  party  whom 
it  benefits,  in  order  to  constitute  a  fraud  as  against  him.  (m)     It 


ing  that  a  load  was  only  8  cwt.,  when  it 
was  20  cwt.,  whereby  two  of  his  horses 
were  killed.  Judgment  was  arrested,  be- 
cause the  carrier  might  have  weighed  the 
load  himself.  —  But  false  representations 
by  a  vendor  of  real  estate  as  to  its  income 
or  profits  will  invalidate  the  sale.  Irving* 
i\  Thomas,  18  Me.  418;  Hutchinson  v. 
Morley,  7  Scott,  341.  And  see  Madde- 
ford  V.  AustwicU,  1  Simons,  89  ;  Wilson 
V.  Wilson,  6  Scott,  r)40;  Dobell  v.  Ste- 
vens, 3  B.  &  C.  G23. 

(0  Sec  Shaeffer  v.  Sleade,  7  Blackf. 
178. 

(m)  And  it  is  for  this  reason  that  if  A 
trusts  B  upon  the  fraudulent  recommen- 
dation of  C,  A  is  not  left  to  his  action  for 
damages  against  C  for  the  deceit,  but  the 
fraud  of  C  invalidates  the  contract  be- 
tween A  and  H,  and  gives  A  the  same 
right  to  ix'takc  the  goods  as  if  the  fraud 
had  proceeded  directly  from  B  him- 
self. Fitzsiinmons  v.  Joslin,  21  Vt.  129, 
is  n  very  interesting  and  valu.able  case 
upon  this  ])oiiit.  In  that  case  the  credi- 
tors of  a  trader  who  was  insolvent,  liut 
will)  wished  to  purchase  goods,  being  un- 
wiiiing  to  extend  to  him  furtiier  credit, 
told  bim  that  tiicy  did  not  like  to  sell  to 
him  if  hi!  coidd  buy  elsewhere,  and  gave 
hiin  the  name  of  another  merchant,  and 
authoii/ed  hini  to  refer  to  them,  llcat- 
tem|)tcd  to  ])uriliase  of  this  merchant,  and, 

[288] 


being  asked  for  references,  gave  the  names 
of  his  original  creditors,  and  was  told  to  call 
again  in  half  an  hour.  He  did  call  again 
in  the  course  of  the  day,  and  the  purchase 
w-as  effected.  No  inquiry  was  made  by  the 
vendor  of  the  purchaser,  as  to  his  circum- 
stances, nor  did  he  give  any  assurances 
whatevet  relative  thereto.  On  the  same 
daj%  and  after  the  purchase  was  effected, 
the  purchaser  met  one  of  his  original  cred- 
itors, who  told  him  that  he  had  been  called 
upon  by  the  vendor,  and  that  "  he  had 
given  as  good  an  account  of  him  as  he 
could  and  not  make  himself  liable,"  — 
"  that  he  had  told  him  that  he,  the  pur- 
chaser, was  a  clever  fellow,  and  was  doing 
a  thriving  business  in  Vergennes,  and  that 
he,  the  creditor,  had  sold  liim  goods,  and 
he  paid  well,  and  he  was  ready  to  sell  him 
more."  At  tlie  time  of  this  transaction, 
the  ])urchascr  was  in  arrears  to  these  same 
original  creditors,  to  the  amount  of  sev- 
eral hundred  dollars  each,  and  their  de- 
mands had  actually  been  placed  in  the 
hands  of  their  attorney  at  Vergennes, 
where  the  |)urchaser  resided,  for  collec- 
tion ;  and,  as  soon  as  they  learned  that 
this  last  purchase  had  been  ctl'ected,  they 
sent  instructians  to  the  attorney  to  attach 
the  goods,  as  the  jirojierty  of  the  ]nir- 
chaser,  upon  their  arrival  at  the  ])lace  of 
destination.  1'liis  was  done,  and,  as  soon 
as  tlie  vendor  was  informed  of  the  insol- 


CH.  III.] 


DEFENCES. 


*211 


may  be  his  by  adoption  ;  as  if  a  seller  knew  that  a  false  state- 
ment had  been  made  by  a  third  party,  which  was  known  to  the 
buyer,  and  was  operating  upon  his  mind,  and  inducing  him  to 
complete  the  purchase ;  [n)  if  the  seller  *only  permits  the  buyer 
to  act  under  this  delusion,  he  makes  the  falsehood  his  own,  and 
it  is  his  fraud,  (o)  And  it  is  hardly  necessary  to  repeat,  what 
may  be  inferred  from  the  general  principles  of  agency,  that  a 
principal  may  commit  a  fraud  by  an  agent ;  or  may  even  be 
affected  by  the  fraud  of  his  agent,  although  personally  hon- 
est, {p) 

We  have  already  seen  that,  generally,  wherever  one  has  a 
right  to  rescind  a  contract,  and  exercises  that  right,  he  must 
restore  the  other  party  to  the  same  condition  that  he  would 
have  been  in  if  the  contract  had  not  been  made,  [q)     But  where 


vency  of  the  purchaser,  which  was  witliin 
a  week  after  the  attachment,  he  demanded 
the  goods  of  the  sheriff,  offering  to  pay- 
freight;  hut  the  sheriff  refused  to  surrender 
them.  The  attachment  was  made  upon 
suits  in  favor  of  the  several  original  cred- 
itors ;  and  it  did  not  appear  that  either  of 
these  creditors,  except  the  one  above 
mentioned,  iiad  made  any  representation 
whatever  in  relation  to  the  matter.  And 
it  was  held,  that  the  purchaser  was  respon- 
sible for  the  representations  made  by  his 
creditor,  and  that  the  vendor,  having  been 
cheated  and  deceived  by  means  for  which 
the  purchaser  was  legally  responsible, 
might  snstam  trover  against  the  sheriff  to 
recover  the  value  of  the  goods  so  attached, 
(n)  Crocker  v.  Lewis,  3  Sumner,  8.  In 
this  case  it  was  held  that  a  representation 
made  by  A  to  B,  and  communicated  by 
B  to  C,  who,  relying  thereupon,  contracts 
with  A,  by  which  he  is  defrauded,  shall 
have  the  same  effect  to  avoid  the  contract 
as  if  made  directly  by  A  to  C.  See  also, 
Bowers  v.  Johnson,  10  Smedes  &  M.  169  ; 
Hunt  V.  Moore,  2  Barr,  105.  So  fraudu- 
lent representations  by  A  to  B  concerning 
another's  credit  or  solvency,  if  communi- 
cated to  C,  who,  relying  upon  them, 
trusts  such  third  person,  may  give  C  a 
right  of  action  against  A  as  much  as  if 
the  communication  had  been  addressed  to 
C  in  person.  For  the  foundation  of  such 
an  action  is  not  privity  of  contract,  but 
the  author  of  the  fraudulent  misrepresen- 
tations is  guilty  of  a  tort,  and  is  answera- 
ble for  the  damage  suffered  by  any  one 

VOL.  II.  25 


from  such  tortious  contract.  Gerhard  v. 
Bates,  2  Ellis  &  B.  476,  20  Eng.  L.  &  Eq. 
129  ;  Pilmore  v.  Hood,  5  Bing.  N.  C.  97. 
In  this  last  case,  the  defendant  being  about 
to  sell  a  public-house,  falsely  represented 
to  B  who  had  agreed  to  purchase  it,  that 
the  receipts  were  £180  a  month ;  B  having, 
to  the  knowledge  of  defendant,  communi- 
cated this  representation  to  plaintiff",  who 
became  the  purchaser  instead  of  B,  held, 
that  an  action  lay  against  defendant  at 
the  suit  of  plaintiff.  See  also.  Weather- 
ford  V.  Fishback,  3  Scam.  17Q.  But  in 
McCracken  v.  West,  17  Ohio,  16,  it  was 
held  that  if  A  write  a  letter  to  B,  desiring 
him  to  introduce  the  bearer  to  such  mer- 
chants as  he  may  desire,  aad  describing 
him  as  a  man  of  property,  and  the  bearer 
do  not  deliver  the  letter  to  B,  but  use  it 
to  obtain  credit  with  C,  C  cannot  maintain 
an  action  for  deceit  against  A,  though  the 
representations  in  the  letter  are  untrue. 

(o)  See  Warner  r.  Daniels,  1  Wbodb.  & 
M.  90 ;  Harris  v.  Delamar,  3  Ired.  Eq. 
219;  Bowers  v.  Johnson,  10  Smedes  & 
M.  173;  Lawrence  v.  Hand,  23  Missis. 
105. 

(7))-Fitzsimmons  v.  Josliii,  21  Vt.  129. 
In  this  case,  Redjield,  J.,  ably  reviews  the 
decided  cases,  and  pointedly  condemn.s.  the 
cases  of  Cornfoot  v.  Fowke,  6  M.  &  W. 
358  ;  and  Langridge  v.  Levy,  2  M.  &  W. 
519,  4  id.  336,  as  impound.  See  also. 
Fuller  V.  Wilson,  3  Q.  B.  58  ;  ancf  Cross 
V.  Sackctt,  2  Bosw.  617.  And  see  ante, 
vol.  1,  pp.  62,  63,  and  notes. 

('/)  Burton  v.  Stewart,  3  Wend.  236; 

[289] 


278* 


THE   LAW   OF   CONTRACTS. 


[part  IL 


the  right  to  rescind  springs  from  discovered  fraud,  there  is  an 
exception  to  the  rule ;  the  defrauded  party  does  not  lose  his 
right  to  rescind  because  the  contract  has  been  partly  executed, 
and  the  parties  cannot  be  fully  restored  to  their  former  posi- 
tion ;  (r)  but  he  must  rescind  as  soon  as  *circumstances  permit, 
and  must  not  go  on  with  the  contract  after  the  discovery  of  the 
fraud,  so  as  to  increase  the  injury  necessarily  caused  to  the 
fraudulent  party  by  the  rescission,  (s)     In  other  words,  if  he 


Thayer  v.  Turner,  8  Met.  550 ;  Kimball 
V.  Cunninsliam,  4  Mass.  502  ;  Perley  v. 
Balch,  23  Pick.  283.  See  also  ante,  p. 
192,  n.  (o).  But  in  Stevens  v.  Austin,  1 
Met.  557,  where  B  received  the  promissory 
note,  etc.,  of  A  for  goods  which  A  fraud- 
ulently obtained  of  him  and  sold  to  C, 
who  had  knowledge  of  the  fraud ;  it  \vas 
held  that  B  might  maintain  an  action  of 
trover  for  the  goods  against  C  without 
restoring  the  note  to  A.  And  Slimv,  C.  J., 
said  :  "  The  question  is  wliether  the  plain- 
tiff was  bound  to  tender  back  the  note  and 
money  he  had  received  before  he  could 
bring  his  action.  We  think  he  was  not. 
Not  to  the  defendant ;  for  the  plaintiff  liad 
received  nothing  of  him.  Nor  could  the 
defendant  raise  the  question,  whether  the 
plaintiff  had  made  restoration  to  Foster 
or  not.  It  was  res  inter  alios,  with  which 
the  plaintiff  had  no  concern,  and  was 
■wholly  irrelative  to  the  issue  between  the 
parties."  Generally  an  offer  to  return  the 
proj)crty  received  is  as  eflfectual  as  actually 
returning  it.  See  Howard  v.  Cadwalader, 
5  Blackf.  225 ;  Newell  v.  Turner,  9  Por- 
ter, 420.  Barnett  v.  Stanton,  2  Ala.  181. 
I3ut  see  Carter  v.  Walker,  2  Rich.  40.  In 
Bacon  v.  Brown,  4  Bibb,  91,  it  was  held 
that,  in  an  action  for  damages  for  deceit  in 
a  sale  of  personal  pro])crty,  it  was  not 
necessary  to  return,  or  offer  to  return  tlio 
property.  Aliter,  if  the  buyer  disallirms 
the  contract,  and  sues  for  the  2>r ice  paid. 

(/•)  Tiius,  where  a  vendor  received,  in 
part  payment  for  goods,  the  note  of  a 
tliird  jierson,  and  for  the  other  part  an 
order  iVom  the  vendee  on  another  j)orson, 
wliich  order  was  duly  jiaid,  it  was  hild  that 
tlie  vendor  having  taken  i\ni  note  iqion  the 
false  and  fraudulent  rc])rescntations  by  the 
vendee  that  the  maker  was  solvent,  miglit 
return  tlie  nolo  to  the  vendee,  and  niain- 
tnin  iissunipsit  for  the  balance  of  the 
amount  of  the  goods  sold  above  the  order, 
without  rcMirning  the  order  idso,  and  that 
the  defeniiaiit  was  not  entitled  to  be  j)laced 

[290] 


entirely  in  statu  quo.  Martin  v.  Roberts,  5 
Cush.  126.  Had  the  vendor  sought  by 
replevin  to  recover  all  the  articles  sold,  in 
specie,  perhaps  he  would  have  been  obliged 
to  return  all  the  consideration  received. 
In  Frost  v.  Lowry,  15  Ohio,  200,  it  was 
held,  that  if  A  obtains  goods  of  B  by  false 
pretences,  and  gives  therefor  an  accepted 
draft  upon  C,  an  accommodation  acceptor, 
it  is  not  necessary  for  B  to  i-eturn  the  draft 
to  A,  in  order  to  rescind  the  sale,  and  re- 
cover back  the  goods.  And  so  if  a  per- 
son effect  a  compromise  of  his  debts,  by 
fraudulent  representations,  and  procure  a 
discharge  of  the  same  by  paying  a  percent- 
age thereon,  and  an  action  be  brought  to 
recover  the  balance,  on  the  groimd  of 
fraud,  it  is  not  necessary,  as  preliminary 
to  the  right  of  recovery,  that  the  plaintiff 
repay  or  offer  to  repay  the  percentage 
received.  The  doctrine  of  the  rescission 
of  contracts  does  not  apply  to  such  a  case. 
Pierce  v.  Wood,  3  Foster,  519. 

(s)  Thus,  in  Masson  r.  Bovet,  1  Denio, 
C9,  it  was  held  that  where  a  party  has 
l)een  led  to  enter  into  a  contract  by  the 
fraud  of  the  other  party,  he  may,  upon 
discovering  the  fraud,  rescind  the  contract, 
and  recover  whatever  he  has  advanced 
u])on  it,  provided  he  does  so  at  the  earliest 
moment  after  he  has  knowledge  of  the 
fraud,  and  returns  whatever  he  has  him- 
self received  upon  it.  In  that  case  the 
defendant,  being  the  plaintiff  in  a  judg- 
ment, and  about  to  cause  land  of  the  judg- 
ment debtor  to  be  sold  on  execution, 
fraudulently  re])resented  to  the  plaintiff 
that  the  land  to  be  sold  was  free  from  any 
])rior  encumbrance,  wlien  in  truth  it  was 
subject  to  older  liens  to  more  than  its 
i\'nlue,  and  thereby  induced  him  to  become 
the  ])urchaser  at  the  sheriff's  sale  for  a 
,  considerable  sum,  and  received  from  him 
in  payment  of  his  bid  the  note  of  a  third 
])ci'son  held  by  the  ]daintilf  for  a  larger 
sum  than  the  amount  bid,  giving  back  his 
own  note  for  the  balance.    It  was  held 


en.  III.] 


DEFENCES. 


*279 


rescinds  on  the  ground  of  fraud,  he  must  do  so  at  once  on  dis- 
covering the  fraud  ;  (l)  *for  he  is  not  bound  to  rescind,  and  any 
delay,  especially  if  it  be  injurious  to  the  other  party,  would  be 
regarded  as  a  waiver  of  his  right.  Cases  often  sav  that  fraud 
makes  a  contract  absolutely  void,  (ta)  but  by  this  it  cannot  be 
meant  that  the  innocent  party  cannot  waive  the  fraud,  and  in- 
sist upon  the  contract.  And  such  a  waiver  would  be  inferred 
from  his  continuing  to  treat  as  his  own  the  property  which 
came  to  him  by  reason  of  the  fraud,  (w)  The  mere  lapse  of 
time,  if  it  be  considerable,  goes  far  to  establish  a  waiver  of  this 
right ;  and  if  it  be  connected  with  an  obvious  ability  on  the 
part  of  the  defrauded  person  to  discover  the  fraud  at  a  much 
earlier  period,  by  the  exercise  of  ordinary  care  and  intelligence, 
it  would  be  almost  conclusive,  [v) 

The  fraudulent  party  cannot  himself  assert  his  fraud,  and 
claim  as  his  right  any  advantages  resulting  from  it.  To  per- 
mit him  to  do  so  would  be  to  contradict  the  plainest  principles 
of  law.     No  man  can  be  permitted  to  found  any  rights  upon 


that  the  plaintiff,  who  had  immediately 
upon  the  discovery  of  tlie  fraud,  offered  to 
give  up  the  note  received  by  him,  and  to 
assign  the  certificate  of  sale,  could  main- 
tain replevin  in  the  detinet  against  defend- 
ant, for  the  note  so  transferred  to  the  de- 
fendant by  him. 

(t)  Thus,  where  A  engaged  to  carry 
away  certain  rubbish  for  B  at  a  specijied 
sum,  but  found  upon  commencing  his 
work  that  B  had  made  fraudulent  repre- 
sentations as  to  the  quantity  of  rubbish, 
but  nevertheless  went  on  with  the  work, 
and  then  sought  to  recover  more  than  the 
sum  specified  by  the  contract,  it  was  held 
that  by  going  on  with  the  work  he  had 
waived  the  fraud,  and  could  not  recover 
except  upon  the  special  contract.  Selway 
V.  Fogg,  5  M.  &  W.  83.  Saratoga  R.  E. 
V.  Row,  24  Wend.  74,  is  very  analogous, 
and  see  Herrin  v.  Libbey,  36  Me.  350.  So 
if  a  party  defrauded  brings  an  action  on 
the  contract  to  enforce  it,  he  thereby 
waives  the  fraud  and  affirms  the  contract. 
Ferguson  v.  Carrington,  9  B.  &  C.  59 ; 
Kimball  v.  Cunningham,  4  Mass.  502. 
See  also,  AVhitney  v.  Allaire,  4  Denio, 
554 ;  Lloyd  ;;.  Brewster,  4  Paige,  537. 
So  if,  after  a  party  has  acquired  a  knowl- 
edge of  facts  tending  to  affect  a  contract 


with  fraud,  he  offers  to  perform  it  on  a 
condition  which  he  has  no  right  to  exact, 
he  thereby  waives  the  fraud,  and  cannot 
set  it  up  in  an  action  on  the  contract. 
Blydenburgh  v.  Welsh,  Baldw.  331.  And 
see  Lamerson  v.  Marvin,  8  Barb.  10.  But 
in  Adams  v.  Shelby,  10  Ala.  478,  it  was 
held  that  when  a  party,  by  fraud,  obtains 
possession  of  property,  under  a  contract 
which  he  had  not  complied  with  on  his 
part,  an  offer  by  the  defrauded  party  to 
make  a  new  contract,  which  is  not  acceded 
to,  is  not  a  waiver  of  any  right  he  had 
against  the  other  for  the  fraud  practised. 

(ta)  Flynn  v.  Williams,  7  Ired.  32. 

(«)  Thus,  in  Campbell  v.  Fleming,  1 
A.  &  E.  40,  it  was  held,  that  if  a  party 
be  induced  to  purchase  an  article  by  fraud- 
ulent representations  of  the  seller  respect- 
ing it,  and  after  discovering  the  fraud  con- 
tinue to  deal  witli  the  article  as  his  own, 
he  cannot  recover  back  the  money  from 
the  seller.  And  semhle  that  the  right  to 
repudiate  the  contract  is  not  afterwards 
revived  by  the  discoveiy  of  another  inci- 
dent in  the  same  fraud. 

(y)  See  Veazie  v.  Williams,  3  Story, 
612.  But  see  Attwood  v.  Small,  6  Clark 
&  F.  234  ;  Irvine  v.  Kirkpatrick,  House  of 
Lords,  3  Eng.  L.  &  Eq.  17. 

[291] 


280*  THE   LAW   OP   CONTRACTS.  [PART  II. 

his  own  wrong;  (iv)  and  it  would  seem  to  be  an  inference  from 
this,  that  if  both  parties  are  in  fault,  the  law  will  not  interfere 
between  them  ;  and  this  is  so,  if  both  parties  are  actually  fraud- 
ulent, although  the  beginning,  and  the  greater  fraud,  may  be  on 
one  side  or  the  other,  (x) 

The  general  rule,  that  equity  gives  relief  only  where  the  law 
cannot,  seems  not  applicable  to  cases  of  fraud  ;  for  there  equity 
and  law  have,  in  some  cases  at  least,  a  concurrent  jurisdiction. 
But  where  the  injured  party  confines  his  claim  to  damages,  he 
should  bring  his  action  at  law.  If  he  seeks  to  set  aside  the 
contract  entirely  on  this  ground,  he  must  either  wait  until  sued 
upon  the  contract,  and  then  interpose  this  defence  at  law,  or 
by  his  bill  in  equity  seek  for  an  injunction,  or  other  proper 
remedy.  There  is  one  distinction,  *  however,  which  rests  upon 
cases  of  authority,  but  is  in  its  own  nature  so  far  technical  that 
we  have  some  doubts  whether  it  would  now  be  generally 
adopted.  It  is  this  ;  that  while  in  a  suit  on  a  simple  contract, 
fraud  is  a  good  and  complete  defence,  it  is  not  pleadable  in  bar 
to  an  action  founded  upon  a  specialty.  Some  of  the  courts 
which  have  recognized,  and  perhaps  enforced  this  distinction, 
have  doubted  its  reasonableness ;  and  in  that  mingling  of  law 
and  equity  jurisdiction,  which  has  made  much  progress,  and 
threatens,  or  promises,  to  make  more,  we  think  this  distinction 
will  disappear,  (y) 

(w)  Jones  V.  Yates,  9  B.  &  C.  532,  per  position.     And  Shaiv,  C.  J.,  in  delivering 

Lord  Tenterclen;  Taylor  v.  Weld,  5  Mass.  the  judgment  of  the  court  said  :  "  It  was 

116;  Ayrcs  v.  Hevvett,  19  Me.  281  ;  IIol-  argued  on  the  part  of  the  plaintitl^",  tliat 

lis  y.  Morris,  2  Ilarring.  Del.  128.    There-  whatever  might  be  the  effect  of  the  al- 

foreone  who  gives  a  fraudulent  bill  of  sale  Icged  fraud  in  defence  of  a  suit  on  a  sim- 

to  defraud  his  creditors  cannot  set  it  aside,  pie  contract,  such  a  fraud  is  not  pleadable 

Bcssey  i'.  Windliain,  6  Q.  B.  1G6  ;    Nich-  in  bar  of  an  action  on  a  deed  or  specialty. 

ols  V.  Patten,  18  Me.  231.  Several  cases  arc  cited  in  support  of  this 

(x)  Warinirton    v.   Aken,    1    McLean,  position,  from  the  decisions  of  the  courts 

4C() ;  Goiidy  t\  Gebhart,    1    Oliio    State,  of  New  York,  and  the  point  seems  to  bo 

202;    NelliH    r.    Clark,    20    Wend.    24;  there  so  settled  by  a  series  of  cases.     It 

Smith  V.  llubbs,  1  Fairf.  71 ;  Hoover  v.  is  a  little  remarkable,  however,  that  the 

I'ierce,  27  Missis.  13.  origiinil  case,  which  constitutes  the   coni- 

{(/)  Any  Hucli  distinction  is  denied  in  mencement  of  tliis  series,  is  hardly  an  au- 
Ma,ssachusctts.  See  Hazard  i\  Irwin,  18  thority  for  tiie  jioint.  Dorian  v.  Samniis, 
Pick.  9.'>.  In  that  (!ase  it  was /«•/{/ that  in  2  Johns.  179,  note.  Tiie  case  was  debt 
an  action  on  a  contract  imdcr  seal,  in  on  bond,  for  tiie  jjrice  of  a  slave ;  the  dc- 
which  one  of  the  contracting  parties  is  fcndaut  relied  on  tiie  fact  that  tlic  negro 
seeking  to  enforce  the  contract  against  tiic  was  free,  and  not  tiu!  property  of  the 
other,  the  dcfcndatit  may  plea<l  that  thi;  j>laintiir,  when  lie  sold  her;  a  mere  fail- 
contract  was  obtained  i)y  fraud  and  im-  ure  of  consideration,  and  witli  no  aver- 

[292] 


CII.  III.] 


DEFENCES. 


281 


It  is  said  that  the  law  never  presumes  fraud.  If  this  maxim 
is  regarded  merely  as  an  expression  of  the  horror  with  which 
the  law  regards  fraud,  and  its  unwillingness  to  suppose  that 
any  one  can  be  guilty  of  a  thing  so  base,  it  may  be-  useful. 
And  if  it  means  no  more  than  that  the  law  never  presumes 
fraud  without  any  evidence,  as  it  will  sometimes  presume  pay- 
ment or  title  from  lapse  of  time,  it  is  true.  But  this  language 
is  sometimes  used  when  nothing  more  is  meant  than  that  it 
will  not  too  readily  admit  fraud  upon  slight  evidence ;  and 
when  it  might  be  taken  to  mean,  what  certainly  is  not  true, 
that  the  law  will  never  imply  fraud  where  it  is  not  directly 
proved,  or  will  not   call  and   treat  as  constructive  fraud  that 


ment  of  fraudulent  representation.  The 
court  ask,  '  can  a  defendant  in  a  court  of 
law  get  rid  of  a  bond,  given  on  a  sale  of  a 
chattel,  on  the  ground  of  failure  of  con- 
sideration 1  There  is  no  allegation  that 
the  plaintiff  sold  the  chattel  fraudulently 
and  knowing  that  he  had  no  title.  There 
is  no  case  in  which  a  bond  can  be  set 
aside  but  where  the  consideration  was 
void  in  law,  or  where  there  was  fraud.' 
But  it  was  afterwards  ruled,  that  fraud 
cannot  be  pleaded  to  a  specialty  in  a 
court  of  law,  not  affecting  the  execution 
of  the  bond  itself;  but  these  decisions  are 
founded  mainly  on  the  consideration  that 
a  more  adequate  remedy,  and  one  better 
adapted  at  once  to  discover  the  fraud  and 
to  relieve  against  it,  is  afforded  in  equity. 
In  one  of  the  late  cases  on  the  subject. 
Chief  Justice  Savage  says :  '  I  confess  I 
can  see  no  very  good  reason  why  this  de- 
fence should  be  excluded  from  a  court  of 
law,  and  the  party  sent  into  a  court  of 
equity;  but  so  the  point  has  always  been 
decided.'  Stevens  v.  Judson,  4  Wend. 
473.  But  whatever  may  have  been  de- 
cided elsewliere,  we  think  it  has  long  been 
a  settled  rule  in  Massachusetts,  that  such 
a  fraud  as  that  set  forth  in  tliis  case  is  a 
good  defence  as  well  to  an  action  founded 
on  a  deed  as  any  other  ;  it  is  rather  acted 
on  as  a  settled  rule,  than  discussed  and 
decided  in  any  particular  case.  The  cases 
cited  on  the  argument  are  cases  in  which 
the  judgment  of  the  court,  upon  great 
consideration,  proceeded  upon  this  as  a 
settled  rule  of  law.  Bliss  v.  Thompson, 
4  Mass.  492  ;  Somes  v.  Skinner,  16  Mass. 
348;  Somes  v.  Brewer,  2  Pick.  191. 
The  second  of  the  above  cases  was  a  real 
action,  involving  a  question  of  title,  and 

25* 


the  deed,  by  which  the  plaintiff  conveyed 
to  the  defendant,  being  shown  to  have 
been  obtained  by  imposition  and  fraud,  it 
was  held  that  no  title  passed.  The  last 
of  the  above  cases  assuined  the  same  rule 
to  be  a  settled  rule  of  law ;  but  the  case 
was  distinguishable  in  this,  that  the  first 
grantee,  who  obtained  the  deed  from  the 
plaintiff  by  fraud  and  imposition,  had  con- 
veyed the  land  to  a  bona  fide  purchaser 
without  notice,  and  so  it  was  held,  that  as 
against  him  the  rule  did  not  apply.  The 
general  doctrine  was  also  settled  in  a  case 
in  which  the  opinion  was  given  by  Par- 
sons, C.  J.  It  is  directly  in  point.  It  was 
on  covenant,  and  the  defendant  pleaded 
that  it  was  obtained  by  fraud  and  imposi- 
tion, and  the  defence  was  held  good.  The 
question  as  to  the  relative  jurisdiction  of 
courts  of  law  and  equity  is  there  consider- 
ed. The  learned  judge  concludes  this 
part  of  the  case  thus  :  '  But  when  a  court 
of  law  has  regularly  the  f^ict  of  fraud  ad- 
mitted or  proved,  no  good  reason  can  be 
assigned  why  relief  should  rfot  be  obtained 
there,  although  not  always  in  the  same 
way  in  which  it  may  be  obtained  in  equi- 
ty.' Boynton  v.  Hubbard,  7  Mass.  119. 
The  court  are  all  of  opinion,  that  in  an 
action  on  a  contract,  though  under  seal, 
in  which  a  party  is  seeking  to  enforce  a 
contract  against  the  other  contracting  par- 
ty, a  plea  and  proof  that  such  contract 
was  obtained  by  fraud  and  imposition 
would  constitute  a  good  defence  at  law, 
and  of  course,  tiiat  had  this  been  a  suit 
against  Penman,  he  might  have  made  this 
defence  at  law."  To  the  same  effect  is 
Hoitt  V.  Holcomb,  3  Foster,  535 ;  Hewia 
V.  Libbey,  36  Me.  350. 

[293] 


282*  THE   LAW   OF   CONTRACTS.  [PART  II. 

which  is  not  proved  to  be  actual  fraud,  (z)  There  is  such  a 
phrase  in  use  as  legal  fraud ;  meaning  not  fraud  which  the  law 
allows,  but  that  which  the  law  for  good  reasons  calls  fraud, 
although  neither  the  dictionary  nor  morality  would  give  it  that 
name.  The  doctrine  on  this  subject  is  not  yet  fully  settled.  It 
would  often  be  very  harsh,  and  apparently  very  unjust,  to  inflict 
all  the  consequences  of  fraud  upon  one  who  had  made  a  mate- 
rial misstatement  in  ignorance,  only  because  of  his  own  error ; 
but  it  would  seem  to  be  still  more  unjust  to  permit  all  the 
consequences  of  this  false  statement  to  fall  and  rest  on  him 
whose  only  fault  was  in  believing  that  one  told  the  truth,  who 
in  fact  was  telling  *that  which  was  false.  In  our  first  volume 
we  have  considered  this  subject  somewhat  in  connection  with 
the  law  of  agency.  In  general,  we  should  say  that  where  one 
states  what  is  not  true,  and  injurious  consequences  result  to 
another,  the  municipal  law,  although  as  we  have  said,  not 
identical  with  the  law  of  morality,  may  well  borrow  some  light 
from  it.  The  question  should  be  asked,  first,  whether  the  state- 
ment was  made  in  actual  ignorance,  and  then,  whether  this 
ignorance  was  innocent.  Nor  would  it  be  enough  to  give  such 
a  falsehood  immunity,  that  the  ignorance  was  not  intentional 
and  wilful,  if  it  arose  from  the  unquestionable  negligence  of 
the  party.  Such  a  case  as  that  would  fall  within  all  the  rea- 
son, and  we  think  all  the  law,  of  intentional  falsehood.  But 
we  go  further ;  and  say  that  if  the  ignorance  might  have  been 
avoided  by  such  care,  and  such  intelligence,  and  such  investi- 
gation, as  the  party  making  the  statement  was  bound  to  have 
and  use,  then  he  is  responsible  for  its  effects,  (a)     But  while 

(z)  It  is  frcMjucntly  Kaid  tliat  courts  of  and  paid  over  tlic  proceeds  to  the  dcfend- 
cquity  can  act  tnore  upon  j)resuniptivc  ant.  Tlie  goods  jiroved  not  to  belong  to 
evidence  of  fraud  than  courts  of  hiw,  but  the  dcfcn<hint,  and  tlie  true  owner  rccov- 
thc  consideration  of  tliat  sulject  in  detail  cred  their  value  of  the  auctioneer.  The 
is  foreign  to  tlie  object  of  the  present  hitter  was  allowed  to  recover  of  the  de- 
work.  See  Warner  v.  Daniels,  1  Woodb.  fendant  for  having  falsely  re])resente(l 
&M.  90;  1  Story,  K(j.  Jur.  §  190;  Kosc-  himself  to  be  the  true  owner,  although 
velt  V.  I'"ijlton,  2  CJowen,  1^9;  Neville  v.  there  was  no  evidence  of  any  fraud,  or 
Wilkinson,  1    IJro.  Ch.  .')4.'{.  malice,  or  knowledge  that  he  was  not  the 

((/)   And  the  casc!  of  Adamson  »\Jarvis,  true  ownci'.     And  this  was  placed  on  the 

4  IJing.  <)(),  well  illustrates  this  i)riniiple.  ground  of  an  implied  contract  on  the  part 

There  the  defendant  gave  the  plaintill',  an  of  tiie  defendant  to  iii(lcnuilfi/  a  person  for 

auctioneer,  an  order  ami  authority  to  sell  doing  what  he  had  employed  him  to  do. 

certain  goods,  re|ircseiiting  himself  to  be  And  false  statements  by  a  vendor  of  land 

the  true  owner.     The  plaintill'  S(jld  them,  of  the  quantity,  qualitv,  or  boundaries  of 


CH.  III.]  DEFENCES.  *283 

we  admit  that  he  to  whom  a  deliberate  assertion  is  made,  of  a 
fact  material  to  his  conduct  and  his  interests,  has  a  right  to 
demand  that  earnest  inquiry  and  careful  scrutiny  should  pre- 
cede such  assertion,  and  that  in  their  absence  he  who  makes  it 
must  be  held  responsible  for  it,  we  stop  short  of  the  doctrine, 
that  whoever  asserts  what  he  does  not  know  to  be  true,  is 
in  the  same  category  with  him  who  asserts  what  he  knows  to 
be  false.  This  would  be  to  say  that  wilful  falsehood  and  mere 
mistake  are  the  same  thing  in  the  law ;  which  cannot  be  true. 
Although  it  may  *be  true  that  when  a  loss  must  fall  either  on 
one  who  misleads  or  one  who  is  misled,  it  shall  be  cast  by  the 
law  on  the  first  rather  than  the  last,  still,  this  is  not  because 
of  fraud,  actual,  constructive,  or  legal,  but  simply  because  each 
party  should  bear  the  consequences  of  his  own  acts. 

It  is  certain  that  misrepresentation  may  not  imply  fraud  in 
fact,  because  it  may  spring  wholly  from  mistake  ;  and  nothing 
would  be  gained  by  calling  a  misrepresentation  which  is  inno- 
cent in  fact,  fraudulent  in  law.  It  is  enough  to  say,  that  mate- 
rial misrepresentations  which  go  to  the  substance  of  a  contract, 
avoid  that  contract,  whether  they  are  caused  by  mistake  and 
occur  wholly  without  fault,  or  are  designed  and  fraudulent,  (aa) 

This  principle  is  carried  so  far,  that  if  one  acquires  property 
by  a  purchase  founded  upon  his  misrepresentations,  especially  if 
they  be  not  only  false  but  fraudulent,  he  acquires  no  right  in 
the  property,  but  the  seller  may  retake  it  in  the  same  manner  as 
if  it  had  been  stolen ;  that  is,  with  all  reasonable,  necessary 
force,  (ab) 

the  premises  sold,  if  material,  and  relied  this  chapter;  as  in  Buford  v.  Caldwell,  3 

upon  by  the  other  party,  will  avoid  the  Mo.  477;  Parham  v.  Kandolph,  4  How. 

sale,  whether  the  vendor  knew  them  to  be  Missis.  435  ;  Lockridge  v.  Foster,  4  Scam. 

false    or    not.      Warner    v.    Daniels,    1  569  ;  Snyder  v.  Findlcy,  Coxe,  48  ;  Warner 

Woodb.  &  M.  90;  Ainslic  v.  Medlycott,  v.  Daniels,  1  Woodb.  &M.  90.    We  add  to 

9  Yes.  13;  Shackelford  v.  Handley,  1  A.  these  Smith  v.  Babcock,  2  Woodb.  &  M. 

K.  Marsh.  .500;   Munroe  v.  Pritchctt,  16  246;  Mason  v.  Crosby,  1  Woodb.  &  M. 

Ala.  785.  342  ;  Doggctt  v.  Emerson,  3  Story,  700  ; 

{aa)  This  principle  is  asserted  or  im-  Thomas  v.  McCann,  4  B.  Mon.  601. 
plied  in  many  of  the  cases  already  cited  in         [ah)  Ilodgeden  v.  Hubbard,  18  Vt.  504. 

[295] 


284  THE  LAW  OF  CONTRACTS.  [PART  II. 


CHAPTER    IV. 

STATUTE    OF  FRAUDS. 

The  Statute  of  Frauds  and  Perjuries,  passed  in  the  twenty- 
ninth  year  of  Charles  the  Second,  was  intended  as  an  effectual 
prevention  of  all  the  more  common  frauds  practised  in  society. 
But  a  great  diversity  of  opinion  as  to  its  effect  has  existed  both 
in  England  and  in  this  country.  Provisions  substantially 
similar,  however,  have  been  made  by  the  States  of  this  country, 
although  in  no  one  State,  is  the  English  statute  exactly 
copied.  The  questions  which  have  arisen  under  this  statute 
are  almost  innumerable ;  and  the  great  variety  of  cases  leave 
some  of  them  as  yet  unsettled.  But  the  statute  has  had  a 
most  important  operation  upon  a  great  variety  of  contracts ; 
especially  upon  those  of  sale  and  guaranty ;  and  we  must  en- 
deavor to  present  the  results  of  the  widely  extended  adjudica- 
tions on  the  subject. 

The  two  sections  which  peculiarly  affect  the  law  of  con- 
tracts, are  the  fourth  and  the  seventeenth.  By  the  fourth  sec- 
tion it  is  enacted  that  "  no  action  shall  be  brought  whereby  to 
charge  any  executor  or  administrator  upon  any  special  promise, 
to  answer  damages  out  of  his  own  estate ;  or  whereby  to 
charge  the  defendant  upon  any  special  promise  to  answer  for 
the  debt,  default,  or  miscarriages  of  another  person  ;  or  to  charge 
any  person  upon  any  agreement  made  upon  consideration 
of  marriage ;  or  upon  any  contract  for  the  sale  of  lands,  tene- 
ments, or  hereditaments,  or  any  interest  in  or  concerning  them  ; 
or  uj)on  any  agreement  that  is  not  to  be  perfornKxl  within  the 
sj)ace  of  one  year  from  the  making  thereof;  unless  the  agree- 
ment upon  which  such  action  shall  be  brought,  or  some  memo- 
randnm  or  note  thereof,  shall  be  in  writing  and  signed  by  the 
party  to  b(!  charged  therewith,  or  some  other  person  thereunto 
[  2'JG  ] 


CH.  IV.] 


STATUTE   OF   FRAUDS. 


*285-*286 


by  hira  lawfully  authorized."  By  the  seventeenth  section  it 
is  enacted  that  *  "  no  contract  for  the  sale  of  any  goods,  wares, 
or  merchandises,  for  the  price  of  ten  pounds  sterling  or  up- 
wards, shall  be  allowed  to  be  good,  except  the  buyer  shall  ac- 
cept part  of  the  goods  so  sold,  and  actually  receiv.e  the  same, 
or  give  something  in  earnest  to  bind  the  bargain,  or  in  part 
payment,  or  that  some  note  or  memorandum  in  writing  of 
the  said  bargain  be  made  and  signed  by  the  parties  to  be 
charged  by  such  contract,  or  their  agents  thereunto  lawfully 
authorized." 

It  is  obvious  that  the  most  general  purpose  of  these  sections 
is,  to  permit  no  party  to  bind  himself  except  by  a  written 
promise,  signed  by  him ;  because  this  will  secure  an  exact 
statement  and  the  best  evidence  of  the  terms  and  conditions  of 
the  promise.  Let  us  then  first  consider  what  signing  is  held  to 
be  sufficient ;  then  what  the  agreement  must  contain  and  ex- 
press ;  and  then  how  it  must  be  framed. 

It  was  decided  in  the  time  of  Lord  Hardwicke,  that  a  sub- 
stantial signing  of  the  agreement  was  sufficient,  although  it 
was  not  literal  and  formal,  [h)  Hence,  if  the  agreement  be  not 
itself  signed,  but  a  letter  alluding  to  and  acknowledging  the 
agreement  is  signed,  this  is  sufficient,  [c)     It  is  not,  *  however, 


(b)  See  Welford  v.  Beazely,  3  Atk. 
503. 

(c)  Tawney  v.  Crowther,  3  Bro.  Ch. 
161,  318  ;  Saunderson  v.  Jackson,  2  B.  & 
P.  238 ;  Shippey  v.  Derrison,  5  Esp.  190  ; 
Phillimore  v.  Barry,  1  Camp.  .513;  Allen 
V.  Bennet,  3  Taunt.  169;  De  Boil  v. 
Thomson,  3  Beav.  469  ;  Macrory  v.  Scott, 
5  Exch.  907  ;  Gale  v.  Nixon,  6  Cowen, 
445;  Parker  v.  Parker,  1  Gray,  409  ;  Too- 
mer  v.  Dawson,  Cheves,  68.  And  the  let- 
ter may  be  sent  to  the  plaintiff'  himself,  or 
the  acknowledgment  may  be  contained 
in  a  letter  sent  to  a  third  person.  Wel- 
ford V.  Beazely,  3  Atk.  503.  And  the  in- 
dorsement of  an  unsigned  contract  of  sale 
by  the  vendee  for  the  purpose  of  transfer 
will  operate  as  a  signature.  Norman  v. 
Molett,  8  Ala.  546.  In  Jackson  v.  Lowe, 
1  Bing.  9,  the  purchaser  of  100  sacks  of 
good  English  seconds  flour,  at  45s.  a 
sack,  wrote  to  the  vendors  as  follows  :  "  I 
hereby  give  you  notice,  that  the  flour  you 
delivered  to  me,  in  part  performance  of 


my  contract  with  you  for  100  sacks  of 
good  English  seconds  flour,  at  45s.  per 
sack,  is  of  so  bad  a  quality  that  I  cannot 
sell  it,  or  make  it  into  salable  bread.  The 
sacks  of  flour  are  at  my  shop,  and  you 
will  send  for  them,  otherwise  1  shall  com- 
mence an  action."  To  which  the  vendors 
answered  by  their  attorney  :  "  Messrs.  L. 
and  L.  consider  they  have  performed 
their  contract  with  you  as  far  as  it  has 
gone,  and  are  ready  to  complete  the  re- 
mainder ;  and,  unless  the  flour  is  paid  for 
at  the  expiration  of  one  month,  proceed- 
ings will  be  taken  for  the  amount."  Held, 
that  the  jury  were  warranted  in  conclud- 
ing tliat  the  contract  mentioned  in  the  ven- 
dors' answer  was  tlie  same  as  that  partic- 
ularized in  the  purchaser's  letter,  and  that, 
therefore,  the  two  writings  constituted  a 
sufficient  memorandum  of  the  contract 
under  the  17th  section  of  the  statute  of 
frauds.  And  see  Fyson  v.  Kitton,  Q.  B. 
1855,  30  Eng.  L.  &  Eq.  374.  So  in  Do- 
bell  V.  Hutchinson,  3  A.  &  E.  355,  the 

[297] 


287* 


THE   LAW   OF   CONTRACTt^. 


[part  II. 


enough  that  the  agreement  be  written  by  the  party  *  himself 
unless  he  also  signs  it.  (d)     If,  however,  he  writes  his  name  in 


purchaser  of  lands  by  auction  signed  a 
memorandum  of  the  contract,  indorsed 
on  the  particulars  and  conditions  of  the 
sale,  and  referring  to  them.  Afterwards 
he  wrote  to  the  vendor,  complaining  of  a 
defect  in  the  title,  referring  to  the  contract 
expressly,  and  renouncing  it.  The  ven- 
dor wrote  and  signed  several  letters,  men- 
tioning the  property  sold,  the  names  of 
the  parties,  and  some  of  the  conditions 
of  sale,  insisting  on  one  of  them  as  cur- 
ing the  defect,  and  demanding  the  execu- 
tion of  the  contract.  Held,  that  these 
letters  might  be  connected  with  the  par- 
ticulars and  conditions  of  sale,  so  as  to 
constitute  a  memorandum  in  writing, 
binding  the  vendor  under  the  statute  of 
frauds,  although  neither  the  original  con- 
ditions and  particulars,  nor  the  memo- 
randum signed  by  the  purchaser,  men- 
tioned, or  were  signed  by,  the  vendor. 
In  Boydell  r.  Drummond,  2  Camp.  157, 
11  East,  142,  the  paper  containing  the 
signature  was  held  not  to  refer  with  suffi- 
cient certainty  to  the  paper  containing 
the  terms  of  the  contract.  —  Where  there 
is  a  prior  insufficient  or  unsigned  writ- 
ten contract,  the  plaintiff  cannot  avail 
himself  of  a  subsequent  letter  from  the  de- 
fendant, in  which,  though  the  order  for 
goods  be  recognized,  the  terms  of  the 
contract  are  renounced  and  disaffirmed. 
Thus,  in  Cooper  v.  Smith,  15  East,  103, 
there  was  a  defective  memorandum  of  a 
bargain  for  the  sale  of  goods  ;  but  the  de- 
fendant wrote  a  letter,  in  which,  though 
he  admitted  the  order,  he  insisted  that  the 
goods  had  not  been  delivered  in  time  ; 
and  it  was/i^W,  that  the  letter  did  not  sup- 
ply the  defects  of  the  memorandum,  and 
that  it  was  not  competent  for  the  plaintiff 
to  prove,  by  jiarol  testimony,  that  it  was 
not  stipulated  that  the  goods  should  lie 
delivered  within  a  given  time.  And  this 
case  wa.s  recognized  in  Richards  v.  Por- 
ter, 0  B.  &  C.  4.'J7.  There  A  sent  to 
B,  on  the  25th  of  January,  an  invoice  of 
five  pockets  of  ho|)S,  and  delivered  the 
hops  to  a  carrier  to  be  conveyed  to  B. 
In  tiie  invoice,  A  was  descriiicd  as  the 
seller  and  B  as  the  purchaser  of  the  hops. 

{(I)  Hawkins  v.  Holmes,  1  P.  Wms.  770; 
.Sell)y  »•.  Sclby, .')  Mcriv.  2;  Hubert  v.  Mo- 
renu,  12,1.  J{.  Moore,  21 G;  Anderson  v. 
Harold,  H)  (.>hio,  .'JO'J ;  Hubert  v.  Turner, 
4  Scott,  N.   It.  480 ;  Bailey  v.  Ogdeii,  ;! 

[298] 


B  afterwards  wrote  to  A  as  follows  : 
"  The  hops  I  bought  of  A  on  the  23d 
January  are  not  yet  arrived.  I  received 
the  invoice  ;  the  last  were  longer  on  the 
road  than  they  ought  to  have  been  ;  how- 
ever, if  they  do  not  arrive  in  a  few  days,  I 
must  get  some  elsewhere."  Held,  that 
the  invoice  and  this  letter,  taken  together, 
did  not  constitute  a  note  in  writing  of  the 
contract  to  satisfy  the  statute  of  frauds. 
To  the  same  effect  is  Archer  v.  Baynes,  5 
Exch.  625.  There  the  defendant  verbally 
agreed  to  purchase  of  the  plaintiff  certain 
barrels  of  flour.  The  defendant  after- 
wards wrote  to  the  plaintiff,  stating  that 
he  had  received  some  barrels,  which  were 
not  so  fine  as  the  sample,  and  were  not 
the  barrels  he  had  bought,  and  that  he 
would  not  have  them.  In  answer  the 
plaintiff  wrote  as  follows  :  "  Annexed  you 
have  invoice  of  the  flour  sold  you  last  Fri- 
day. I  am  very  much  astonished  at  your 
finding  fault  with  the  flour.  It  was  sold 
to  you  subject  to  your  examining  the  bulk  ; 
and  it  was  not  until  after  you  had  exam- 
ined it,  and  satisfied  yourself  both  of  the 
quality  and  condition,  that  you  confirmed 
the  purchase.  What  was  forwarded  you 
was  the  same  you, saw.  Under  these  cir- 
cumstances, you  cannot,  therefore,  object 
to  fulfil  your  agreement."  The  defend- 
ant replied  as  follows :  "  I  beg  to  say, 
the  barrels  I  have  received  is  not  the  same 
I  saw.  I  took  a  sample  with  me  from  the 
sample  I  have,  and  the  barrels  I  saw 
was  quite  as  fine  as  I  compared  them 
with,  nor  was  they  lumpy.  Now  the  bar- 
rels I  have  received  is  all  very  lumpy,  and 
none  of  them  so  fine  as  the  same.  If 
you  will  take  them  back  and  pay  charges, 
I  will  with  pleasure  send  them.  There 
must  be  some  mistake  about  them." 
Held,  that  the  letters  did  not  constitute  a 
sufficient  note  or  memorandum,  in  writing, 
of  the  contract,  within  the  17tli  section  of 
the  statute  of  fraiuls.  Aldcmmi,  B.,  said  : 
"  No  doubt  if  the  letter  of  the  plaintiff 
of  the  3d  of  October,  and  of  the  defend- 
ant in  answer,  taken  together,  contained 
a  suflicicnt  contract,  nanu'ly,  one  that 
would  express  all  its  terms,   they  would 

Johns.  399.  And  a  fori  ion',  a  mere  alter- 
ation of  the  inslnimcTit  in  the  handwriting 
of  the  jiarty  sought  to  be  charged,  will  not 
be  sufficient.  Hawkins  i\  Holmes,  1  P, 
Wms.  770. 


CII.  IV.] 


STATUTE    or    FRAUDS. 


-287 


any  part  of  the  agreement,  it  may  be  taken  as  his  signature, 
provided  it  was  there  written  for  the  purpose  of  giving  authen- 
ticity to  the  instrument,  and  thus  operating  as  a  signature  ;  (c) 


constitute  a  memorandum  in  writing  with- 
in the  statute.  We  have  no  difficuUy, 
therefore,  in  coming  to  the  conclusion  that 
these  letters  may  be  looked  at  for  the 
purpose  of  seeing  whether  or  not  they 
contain  a  sufhcient  contract,  to  take  the 
case  out  of  tlie  statute ;  but  looking  at 
them,  we  do  not  think  tliey  do.  They 
do  not  express  all  the  terms  of  the  con- 
tract :  and  the  case  is  in  truth  gov- 
erned by  Richards  i\  Porter,  which  was 
cited  in  the  course  of  the  argument,  and 
in  which  Lord  Tenterden  gave  a  similar 
decision  as  to  a  document  of  a  simihir 
nature  which  was  then  before  him.  There 
is  a  distinct  i-efusal  on  the  part  of  the  de- 
fendant to  accept  the  flour  whicli  he  had 
bought  of  the  plaintiff".  It  is  clear  from 
the  letters  that  he  had  bought  the  flour 
from  the  plaintiff'  upon  some  contract  or 
other ;  but  whether  he  bought  it  on  a  con- 
tract to  take  the  particular  barrels  of  flour 
which  he  had  seen  at  the  warehouse,  or 
whether  he  had  bought  them  on  a  partic- 
ular sample  whicli  had  been  delivered  to 
him,  on  the  condition  that  they  should 
agree  with  that  sample,  docs  not  appear; 
and  that  which  is  in  truth  the  dispute  be- 
tween the  parties  is  not  settled  by  the  con- 
tract in  writing."  See  also,  Kent  v.  Hus- 
kinson,  3  B.  &  P.  233;  Smithy.  Surman, 
9  B.  &  C.  .561  ;  Blair  v.  Snodgrass,  1 
Sneed,  1.  The  letter,  it  seems,  must  be 
sent,  and  the  memorandum  completed  be- 
fore the  action  is  brought.  Bill  v.  Ba- 
ment,  9  M.  &  W.  36.  In  that  case,  Mar- 
tin, arguendo,  contended  tliat  a  memoran- 
dum written  after  the  commencement  of 
the  action  was  sufficient.  But  Parke,  B., 
said :  "  With  regard  to  the  point  which 
has  been  made  by  Mr.  Martin,  that  a 
memorandum  in  writing  after  action 
brought  is  sufficient,  it  is  certainly  quite 
a  new  point,  but  I  am  clearly  of  opinion 
that  it  is  untenable.  There  must,  in  or- 
der to  sustain  the  action,  be  &  good  contract 
in  existence  at  the  time  of  action  brought ; 
and  to  make  it  a  good  contract  under  the 
statute,  there  must  be  one  of  the  three 
requisites  tliercin  mentioned."  But  see 
Frickcr  v.  Thomlinson,  1  Man.  &  G.  772. 
(e)  Thus,  in  Propert  v.  Parker,  1  Russ. 
&  M.  625,  it  was  held,  that  if  the  defend- 
ant himself  write  the  agreement  for  the 
purchase  of  a  leasehold  house,  and  states 


his  own  name  in  the  third  person,  as 
"Mr.  A.  B.  has  agreed ;"  this  is  a  good 
contract  within  the  statute  of  frauds 
though  he  does  not  otherwise  sign  the 
agreement;  the  Master  of  the  Rolls  ob- 
serving that  "what  the  statute  of  frauds 
requires  is,  that  the  party  who  is  sought 
to  be  cliarged  shall,  by  writing  his  own 
name,  have  attested  tliat  he  has  entered 
into  tlie  contract."  So  in  Johnson  v. 
Dodgson,  2  M.  &  W.  653,  where  the  de- 
fendant wrote  in  his  own  book  a  memo- 
randum of  the  contract,  and  requested  the 
otiier's  signature,  this  was  held  to  be  a 
sufficient  acknowledgment  of  the  contract, 
and  his  name  was  considered  as  signed, 
though  not  appearing  at  the  end,  but  in 
the  body  of  the  memorandum.  And 
Lord  Abinger  said :  "  The  statute  of 
frauds  requires  that  there  should  be  a  note 
or  memorandum  of  the  contract  in  writ- 
ing, signed  by  the  party  to  be  charged. 
And  the  cases  have  decided  that,  although 
the  signature  be  in  the  beginning  or  mid- 
dle of  the  instrument,  it  is  as  binding  as 
if  at  the  foot  of  it ;  the  question  being 
always  open  to  the  jury,  whether  the  par- 
ty, not  having  signed  it  regularly  at  the 
foot,  meant  to  be  bound  by  it  as  it  stood, 
or  whether  it  was  left  so  unsigned  because 
he  refused  to  complete  it.  But  when  it  is 
ascertained  that  he  meant  to  be  bound  by 
it  as  a  complete  contract,  the  statute  is 
satisfied,  there  being  a  note  in  writing 
showing  the  terms  of  the  contract,  and 
recognized  by  him.  I  think  in  this  case 
the  requisitions  of  the  statute  are  fully 
complied  with."  Again,  in  Merritt  v. 
Clason,  12  Johns.  102;  s.  c.  nom.  Cla- 
son  V.  Bailey,  14  id.  484,  it  was  held,  that 
a  memorandum  of  a  contract  for  the 
purchase  of  goods,  written  by  a  broker 
employed  to  make  the  purchase,  in  his 
book,  in  the  presence  of  the  vendor,  the 
names  of  the  vendor  and  vendee  and  the 
terms  of  the  purchase  being  in  the  body  of 
the  memorandum,  but  not  subscribed  by 
the  parties,  is  a  sufficient  memorandum 
within  the  statute  of  frauds.  See  also, 
Ogilvie  V.  Foljambe,  3  Meriv.  53 ;  Penni- 
man  v.  Hartshorn,  13  Mass.  87  ;  Knight 
V.  Crockford,  1  Esp.  190;  Saunderson  v. 
Jackson,  2  B.  &  P.  238.  And  it  is  not 
necessary  that  the  name  sliould  be  written 
after  the  writing  of  the  agreement.     One 

[299] 


287- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


but  not  otherwise.  (/)  But  an  entry  by  the  seller  in  his  order 
book,  on  the  fly-leaf  of  which  at  the  beginning,  his  name  was 
written,  and  a  signature  by  the  buyer  at  the  foot  of  the  entry, 
was  held  to  be  a  signature  by  both  parties,  (fa) 


may  write  the  contract  on  a  piece  of 
paper  on  which  his  name  has  been  pre- 
viously placed.  The  dcHvery  of  the  mem- 
orandum sliows  tlie  intention  tliat  the 
name  should  operate  as  a  signature.  And 
therefore,  where  the  defendant  had  writ- 
ten, signed,  and  delivered  a  complete 
memorandum,  and  afterwards,  at  the 
plaintiff's  request,  made  an  alteration  on 
the  paper,  for  the  purpose  of  correcting  a 
mistake,  and  redelivered  the  paper  to  the 
plaintiff,  it  was  held,  that  a  signature  to 
this  alteration  was  unnecessary,  because 
authenticated  by  the  signature  ah'eady  on 
the  paper.  Bluck  v.  Gompertz,  7  Exch. 
862.  And  Pollock,  C.  B.,  said :  "  We 
think  that  words  introduced  into  a  paper 
signed  by  a  party,  or  an  alteration  in  it, 
may  be  considered  as  authenticated  by  a 
signature  already  on  the  paper,  if  it  is  plain 
that  they  were  meant  to  be  so  authenti- 
cated. The  act  of  signing  after  the  intro- 
duction of  the  words  is  not  absolutely 
necessary." 

(/)  Thus,  in  Stokes  v.  Moore,  1  Cox, 
219,  where  an  agreement  was  made  for 
the  renewal  of  a  lease  by  the  defendant  to 
the  plaintiff,  and  the  defendant  wrote  in- 
structions to  an  attorney,  from  whence  the 
same  was  to  be  prepared,  in  the  words 
following :  "  The  lease  renewed,  Mrs. 
Stokes  to  pay  the  king's  tax,  also  to  pay 
Moore  £24  a  year,  half  yearly;"  it  was 
held,  that  this  was  not  a  memorandum 
signed  within  the  statute.  And  Skijner, 
C.  B.,  said  :  "  The  question  in  this  case 
is,  whether  the  written  note  stated  in  the 
pleadings  is  such  an  agreement  as  is  with- 
in the  meaning  of  the  statute  of  frauds. 
These  are  instructions  to  the  attorney  for 
the  pre|)aration  of  the  lease.  This  is  no 
formal  signature  of  the  defendant's  name, 
but  one  term  of  tlie  instructions  is,  that 
the  rent  is  to  be  )i:iid  to  Moore;  and  the 
question  is,  whether  the  name  so  inserted 
and  written  by  the  defendant  is  a  sufh- 
cient  signing,  'i'hc  purport  of  the  statute 
is  manifest,  to  avoiil  all  parol  agreements, 
and  that  none  should  have  cfiect  i)ut  those 
signed  in  the  manner  therein  specified. 
It  is  argiii'd  that  tlic  name  being  inserted 
in  any  part  (»f  tlie  writing  is  a  stinicient 
Hignaturc.  The  meaning  of  the  statute 
is,  that  it  should  amount  to  an  ackuowkdij- 

[300] 


ment  by  the  party  that  it  is  his  agreement, 
and  if  the  name  does  not  give  such  authen- 
ticity to  the  instrument,  it  does  not  amount 
to  what  the  statute  requires.  Here  the 
insertion  of  the  name  has  not  this  effect. 
This  memorandum  might  be  drawn  sub- 
ject to  additions  or  alterations,  and  docs 
not  appear  to  be  the  final  agreement  of 
the  parties,  and  indeed,  as  far  as  we  can 
admit  parol  evidence,  it  is  proved  not  to 
be  so,  for  the  subject  of  repairs  is  not 
mentioned  in  the  instructions ;  which 
shows  that  the  ends  of  the  statute  are  not 
to  be  obtained,  if  so  informal  a  paper  is  to 
be  admitted  as  a  written  agreement.  No 
case  has  been  adduced  in  point,  but  it  has 
been  compared  to  the  case  of  wills,  where 
a  name  written  in  the  introduction  has 
been  considered  as  a  signature,  but  that 
seems  to  me  a  very  different  case.  The 
cases  on  wills  have  been  where  the  instru- 
ment, importing  to  be  the  final  instrument 
of  the  party,  has  been  formally  attested, 
and  it  is  in  its  nature  complete,  and  the 
only  question  has  been,  whether  the  form 
of  the  statute  has  been  complied  with. 
In  the  present  case  I  think  it  is  by  no 
means  so,  and  it  would  be  of  very  dan- 
gerous tendency  to  admit  the  memoran- 
dum to  be  an  agreement  within  the  stat- 
ute." Eyre,  B.  "  I  think  this  cannot  be 
considered  such  a  signature  as  the  statute 
requires.  The  signature  is  to  have  the 
effect  of  giving  authenticity  to  the  whole 
instrument,  and  if  the  name  is  inserted  so 
as  to  have  that  effect,  I  do  not  think  it  sig- 
nifies much  in  what  part  of  the  instrument 
it  is  to  be  found  :  it  is  perhaps  difficult 
except  in  the  case  of  a  letter  with  a  post- 
script, to  find  an  instance  where  a  name 
inserted  in  the  middle  of  a  writing  can 
well  have  that  effect ;  and  there  the  name 
being  generally  found  in  a  jjarticular 
place  by  the  common  usage  of  mankind, 
it  may  very  probal)ly  have  the  effect  of  a 
legal  signature,  and  extend  to  the  whole ; 
but  I  do  not  understand  how  a  name  in- 
serted in  the  body  of  an  instrument,  and 
aj)]illralilr  to purticntar pitrposfn,  can  amount 
to  such  an  autiicntication  as  is  required  by 
the  statute."  See  also,  (^abot  c.  ilaskins, 
3  I'ick.  H.'t ;  Cowie  r.  Kcinfry,  lOJur.  789. 
(/;<)  Sari  r.  Bounlillon,  1  C.  B.  N.  S. 
188. 


CII.  IV.]  STATUTE    OF   FRAUDS.  *288-*289 

The  fact  of  the  *delivery  of  the  instrument,  as  a  promise? 
would  have  much  weight  in  determining  this  question.  If  one 
wrote,  "  In  *consideration  of,  &c.,  I,  A.  B.,  promise  to  C.  D. 
&c.,"  and  kept  the  paper  in  his  own  hands  without  signature,  it 
might  be  supposed  that  he  delayed  signing  it  because  he  was 
not  ready  to  make  his  promise  and  bind  himself.  So,  if  he  gave 
it  to  the  other  party  to  examine  and  see  if  it  was  acceptable  to 
him,  or  for  any  similar  purpose,  it  would  not  be  held  to  be 
signed  by  him.  But  if  he  gave  the  instrument  written  as  above 
distinctly  as  his  promise,  then  the  signature  would  be  held  suf- 
ficient. Generally,  this  question  could  be  determined  by  a 
construction  of  the  instrument  itself,  aided  however  by  the  res 
gestce  which  were  admissible  as  evidence.  In  some  of  our 
States,  the  word  of  the  statute  is  not  "  signed,"  but  "  sub- 
scribed ;  "  and  where  this  word  is  used,  it  is  said  that  the  signa- 
ture must  be  at  the  end.  (§■)  One  may  sign  in  the  place  where 
a  witness  usually  signs,  and  under  that  name,  and  yet  intend  to 
sign  as  principal,  and  would  of  course  be  so  regarded ;  but  it 
has  been  also  held  that  if  one  signs  actually  as  a  witness,  and 
with  no  other  intention,  yet  with  a  full  knowledge  of  the  con- 
tents of  the  paper,  and  an  approbation  of  them,  it  would  be  a 
sufficient  signature  to  bind  the  paity  to  the  performance  of  any 
acts  contained  in  the  instrument  which  were  necessarily  to  be 
performed  by  him  in  order  to  carry  the  instrument  into  effect.  (A) 
And  where  one  is  in  the  habit  of  using  instruments  with  his 
name  printed  in  them,  this  will  be  his  signature,  [l)     And  so  if 

(17)  Davis  V.  Shields,  24  Wend.  322,  26  any  other  form  of  signature  could  be  sub- 
id.  341  ;  Vielie  v.  Osgood,  8  Barb.  130.  stituted  in  lieu  of  writing,  would  be  going 
But  see  contra,  James  v.  Patten,  id.  344.  a  great  way,  considering  how  many  in- 

(h)  Welford  v.  Beazely,  3  Atk.  503,  1  stances  may  occur  in  which  the  parties 

Ves.  6  ;  Coles  v.  Trecothick,  9  Ves.  234.  contracting  are  unable  to  sign.     If  indeed 

But  see    Gosbell  v.  Archer,  2  A.  &  E.  this  case  had  rested  merely  on  the  printed 

500.  name,  unrecognized  by,  and  not  brought 

(i)  Saunderson  v.  Jackson,  3  Esp.  180,  home  to,  the  party,  as  having  been  printed 

2  B.   P.  238.     In    Schneider   v.   Norris,  by  him,  or  by  his  authority,  so  that  the 

2  M.  &  S.  286,  it  was  held  that  a  bill  of  printed  name  had  been  unappropriated  to 

parcels  in  which  the  name  of  the  vendor  the   particular   contract,    it    might    have 

was  printed,  and  that  of  the  vendee  writ-  afforded  some  doubt  whetlier  it  would  not 

ten  by  the  vendor,  was  a  sufficient  memo-  be  intrenching  upon  the  statute  to  have 

randum  of  the  contract  within  the  statute  admitted  it.     But  here  there  is  a  signing 

of  frauds  to  chai-ge  the  vendor.    And  Lord  by  the  party  to  be  charged  by  words  re- 

Ellenhoroitgh  said:    "I   cannot  but  think  cognizing  the  printed  name  as  much  as  if 

that  a  construction,  which  went  the  length  he  had  subscribed  his  mark  to  it,  which  is 

of  liolding  that  in  no  case  a  printing  or  sti'ictly  the  meaning  of  signing,  and  by 

VOL.  II.  26.  [  301  ] 


290" 


THE   LAW   OF   CONTRACTS. 


[part  II. 


he  writes  it  in  *pencil.  (j)  And  it  is  now  quite  settled  that  the 
agreement  need  not  be  signed  by  both  parties,  but  only  by  hira 
who  is  to  be  charged  by  it.  [k]      And  he  is  estopped  from  deny- 


that  the  party  has  incorporated  and 
avowed  the  thing  printed  to  be  his  ;  and 
it  is  the  same  in  substance  as  if  he  had 
written  Norris  &  Co.  with  his  own  hand. 
He  has  by  his  handwritinjy  in  effect  said, 
I  aclinowledge  what  I  have  written  to  be 
for  tlie  purpose  of  exhibiting  ni}-  recogni- 
tion of  the  within  contract.  I  entertained 
the  same  opinion  at  the  trial,  and  cannot 
say  that  it  has  been  changed  by  the  argu- 
ment. It  appears  to  me,  therefore,  that 
the  printed  name  thus  recognized  is  a  sig- 
nature sufficient  to  talce  this  case  out  of 
the  statute."  Le  Blanc,  J. :  "  Suppose 
the  defendant  had  stamped  the  bill  of 
parcels  with  his  own  name,  would  not  tliat 
have  been  sufficient  ?  Such  a  stamping, 
as  it  seems  to  me,  if  required  to  be  done 
by  the  party  himself  or  by  his  authority, 
would  afford  the  same  protection  as  sign- 
ing." 

(j)  Merritt  v.  Clason,  12  Johns.  102; 
B.  c.  nom.  Clason  v.  Bailey,  14  Johns. 
484;  Draper  v.  Pattina,  2  Speers,  292; 
McDowell  V.  Chambers,  1  Strobh.  Eq. 
347  ;  Geary  v.  Physic,  5  B.  &  C.  234. 

(Ic)  It  has  been  questioned  whetlicr  the 
correct  interpretation  of  the  statute  does 
not  require  the  signature  of  both  partifts. 
In  Lawrenson  v.  Butler,  1  Sch.  &  L.  13, 
Lord  Redesdale  thought  that  specific  per- 
formance of  a  contract  should  not  be 
enforced  against  one  party  unless  the 
other  was  bound  also.  "  I  confess,"  said 
he,  "  I  have  no  conception  that  a  court  of 
equity  ought  to  decree  a  specific  perform- 
ance in  a  case  where  nothing  has  been 
done  in  pursuance  of  the  agreement,  ex- 
ce])t  where  both  parties  had  by  the  agree- 
ment a  right  to  comjjel  a  specific  pcr- 
formance,  according  to  the  advantage 
whidi  it  migiit  be  supposed  that  tiiey 
were  to  derive  from  it ;  because  otherwise 
it  would  follow  that  the  court  would  de- 
cree a  spccilic  ])erformance  wiierc  the 
party  calleil  upon  to  perform  might  i)C  in 
this  situation,  that  if  the  agreement  was 
disuflvantagCDUs  to  him  he  would  be  lial)lc 
to  the  perforinaiice,  and  yet  if  advanta- 
geous to  liiin  he  couhl  not  compel  a  per- 
fonnanc(!.  This  is  not  c(|uity,  as  it  seems 
to  me.  If  indeed  tlicre  was  a  concealment, 
or  an  igiujnince  of  tiii;  facts,  on  the  one 
part,  and  tliat  thereby  the  other  [larty  was 
led  into  u  situation  from  wiicncc  lie  could 

[302] 


not  be  extricated,  then  he  would  have  a 
right  to  have  the  agreement  executed  cij 
pres ;  that  is,  a  new  agreement  is  to  be 
made  between  the  parties."  And  see 
note  to  Sweet  v.  Lee,  3  Man.  &  G.  462. 
But  it  is  now  well  settled  that  the  signa- 
ture of  the  party  charged  in  the  action 
satisfies  the  requirement  of  the  statute. 
Hatton  V.  Gray,  2  Ch.  Cas.  164  ;  Colman 
V.  Upcott,  Vin.  Abr.  tit.  Contract  and 
Agreement  (I),  pi.  17  ;  Seton  v.  Slade,  7 
Ves.  265  ;  Fowle  r.  Freeman,  9  id.  3.51  ; 
Martin  v.  Mitchell,  2  Jac.  &  W.  426  ; 
Laythoarp  v.  Bryant,  2  Bing.  N.  C.  735  ; 
Egerton  v.  Mathews,  6  East,  307 ;  Allen 
V.  Bennet,  3  Taunt.  169;  Schneider  v. 
Norris,  2  M.  &  S.  286  ;  Ballard  v.  Walker, 
3  Johns.  Cas.  60;  Clason  y.  Bailee',  14 
Johns.  484;  McCrea  v.  Purmort,  16 
Wend.  460;  Shirley  v.  Shirley,  7  Blackf. 
452 ;  Penniman  v.  Hartsiiorn,  13  Mass. 
87  ;  Douglass  v.  Spears,  2  Nott  &  M'C. 
207  ;  Barstow  v.  Gray,  3  Greenl.  409.  In 
Plight  V.  BoUand,  4' Buss.  298,  where  a 
bill  was  filed  by  an  infant  for  the  specific 
performance  of  a  contract,  Sir  John  Leach 
said  :  "  No  case  of  a  bill  tiled  by  an  infant 
for  the  specific  performance  of  a  contract 
made  by  him  has  been  found  in  the  books. 
It  is  not  disputed,  that  it  is  a  general  prin- 
ciple of  courts  of  equity  to  interpose  only 
where  the  remedy  is  mutual.  The  plain- 
tif^''s  counsel  principally  rely  upon  a  sup- 
j)osed  analogy  afforded  by  cases  under  the 
statute  of  frauds,  where  the  plaintiff  may 
obtain  a  decree  for  specific  performance  of 
a  contract  signed  by  the  defendant,  al- 
though not  signed  by  the  plaintiff.  It 
must  be  admitted  that  such  now  is  the 
settled  rule  of  the  court,  although  seriously 
questioned  by  Lord  Redcadale  upon  the 
ground  of  want  of  mutuality.  But  these 
cases  arc  supported,  first,  because  the  stat- 
ute of  frauds  only  requires  the  agreement  to 
be  signed  by  the  |)arty  to  be  charged  ;  and 
next,  it  is  said  that  the  ]ilaintiff,  by  the 
act  of  tiliTig  the  bill,  has  made  the  remedy 
mutual.  Neither  of  these  reasons  apply 
to  the  case  of  an  infant."  In  Penly  v. 
Stewart,  5  Sandf.  101,  the  principle  of  the 
decisions  upon  this  ])oint  was  thus  stated 
hy  Mdnon,  ,].  :  "This  construction,"  said 
he,  "  has  proceeded  not  on  the  ground 
that  contracts  need  not  be  mutual,  but 
that   the  statute,  in  certain  cuumcratcd 


CH.  IV.] 


STATUTE    OF    FRy^UDS. 


•291-*292 


ing  the  *execution  of  the  instrument  on  the  ground  that  it  wants 
the  signature  of  the  other  party.  (/) 

The  signature  may  be  made  by  an  agent ;  (m)  and  the  agent 
may  write  his  own  name  instead  of  his  principal's ;  (n)  and  a 
ratification  of  the  signature  would  have  the  same  *effect  as  an 
original  authority,  (o)     But  the  agency  must  be  an  agency  for 


cases,  has  taken  away  the  power  of  en- 
forcing contracts,  which  would  otherwise 
be  mutually  binding,  unless  the  parties 
against  whom  they  are  sought  to  be  en- 
forced have  subscribed  some  note  or 
memorandum  thereof  in  writing.  If  a 
mutual  contract  is  made,  and  one  of  the 
parties  to  it  gives  the  other  a  memoran- 
dum, in  pursuance  of  the  statute,  but  neg- 
lects to  take  from  that  other  a  correspond- 
ing memorandum,  he  has  but  himself  to 
blame  if  he  is  unable  to  compel  its  per- 
formance, while  he  is  bound  to  the  other 
party.  The  difficulty  is  not  that  the  con- 
tract, as  originally  entered  into,  is  not 
mutual,  but  that  one  of  the  parties  has  not 
the  evidence  which  the  statute  has  made 
indispensable  to  its  enforcement.  It  nec- 
essarily follows,  however,  from  the  provis- 
ion of  the  statute,  that  all  inquiry  as  to 
whether  or  not  a  contract  was  originally 
mutual,  is  immaterial.  It  may  be  en- 
forced against  the  party  who  has  sub- 
sci'ibed  a  note  or  memorandum  of  it, 
though  the  other  party,  by  not  having 
signed,  is,  by  the  express  words  of  the 
statute,  freed  from  its  obligation."  By 
the  New  York  Revised  Statutes,  Part  2, 
ch.  7,  tit.  1,  ^  8,  it  is  enacted,  that  "every 
contract  for  the  leasing  for  a  longer  period 
than  one  year,  or  for  the  sale  of  any  lands 
or  any  interest  in  lands,  shall  be  void, 
unless  the  contract,  or  some  note  or  mem- 
orandum thereof,  expressing  the  consid- 
eration, be  in  writing,  and  be  subscribed 
by  the  jiarfjj  hi/  whom  the  lease  or  sale  is  to 
be  made."  For  the  construction  of  this 
section,  see  Miller  v.  Pelletier,  4  Edw.  Ch. 
102;  Coles  v.  Bowne,  10  Paige,  526; 
Champlin  v.  Parish,  11  Paige,  405  ;  Na- 
tional Fire  Insurance  Co.  «».  Loomis,  1 1 
Paige,  431;  Worrall  v.  Munn,  1  Seld. 
229. 

(/)  Sec  cases  cited  in  preceding  note. 

{ill)  Hawkins  v.  Chace,  19  Pick.  502  ; 
Hanson  v.  Kowe,  6  Foster,  327.  And 
where  a  testator  from  illness  was  unable 
to  write,  and  his  signature  was  made  by 
having  his  hand  guided,  this  was  held  a 
signature.    Wilson  v.  Beddard,  12  Simons, 


28.  The  law,  however,  will  not  presume 
the  authority  to  sign,  but  the  agent  must 
have  an  authority  directly  deducible  from 
his  employment,  or  a  special  authority  to 
do  that  particular  thing.  Hawkins  v. 
Chace,  19  Pick.  502;  Dixon  y.  Broom- 
field,  2  Chitt.  205  ;  Hodgkins  v.  Bond,  1 
N.  II.  284  ;  Pitts  v.  Beckett,  13  M.  &  W. 
743.  In  Graham  v.  Musson,  5  Bing.  N. 
C.  603,  the  defendant,  the  purchaser  of 
goods,  requested  one  Dyson,  the  agent  of 
the  seller,  to  write  a  note  of  the  contract 
in  the  defendant's  book.  Dyson  did  so, 
and  signed  the  note  with  his  own  name. 
Held,  that  such  note  was  not  sufficient, 
under  the  statute  of  frauds,  to  bind  the 
defendant.  And  per  Vanghan,  J.,  "The 
plaintiffs'  case  fails  in  their  not  showing 
that  Dyson  was  the  defendant's  agent ;  it 
is  unnecessary,  therefore,  to  enter  into  the 
authorities  which  have  been  cited.  Dyson 
was  agent  for  the  plaintiffs,  and  the  de- 
fendant, in  requesting  him  to  make  the 
entry  in  his  book,  probably  sought  to  fi.K 
the  plaintiffs,  but  not  to  appoint  Dyson 
as  agent  for  himself."  And  the  agent 
cannot  delegate  his  authority  to  sign. 
Blore  V.  Sutton,  3  Meriv.  237  ;  Henderson 
V.  Barnewall,  1  Young  &  J.  387. 

(n)  And  in  such  case  parol  evidence  is 
admissil)le  to  show  the  authority  and  bind 
the  principal.  Truman  v.  Loder,  11  A. 
&  E.  589.  In  this  case  Lord  Denman 
said  :  "  Parol  evidence  is  always  neces- 
sary to  show  that  the  party  sued  is  the' 
person  making  the  contract,  and  bound 
by  it.  Whether  he  does  so  in  his  own 
name  or  in  that  of  another,  or  in  a  feign- 
ed name,  and  whether  the  contract  be 
signed  by  his  own  hand  or  hy  that  of  an 
agent,  are  inquiries  not  different  in  their 
nature  from  the  question  who  is  the  per- 
son who  has  just  ordered  goods  in  a  shop. 
If  he  is  sued  for  the  price,  and  his  iden- 
tity made  out,  the  contract  is  not  varied 
by  appearing  to  have  been  made  by  him 
in  a  name  not  his  own."  And  see  Wil- 
liams v:  Bacon,  2  Gray,  387. 

(o)  Maclean  v.  Dunn,  4  Bing.  722. 

[303] 


292- 


TIIE   LAW   OF   COXTRACTS. 


[part  ir. 


this  purpose ;  for  it  would  not  be  deemed  the  signature  of 
a  principal  by  an  agent,  although  the  party  actually  writing  the 
name  was  for  some  purposes  the  agent  of  the  other,  if  it  was 
apparent  from  the  paper  itself  that  it  was  intended  to  complete 
the  paper  by  the  actual  signature  of  the  principal  himself,  (p) 
Nor  can  one  of  the  contracting  parties  be  the  agent  of  the 
other  for  this  purpose,  (q)      Though  an  auctioneer  (/-)   or  bro- 


{p)  Thus,  in  Hubert  v.  Turner,  4  Scott, 
N.  R.  486,  an  agreement  was  drawn  by 
the  defendants'  agent,  which  recited  in  the 
usual  way  the  names  of  the  contracting 
parties,  and  at  the  end  were  these  words, 
"  as  witness  our  hands  ;  "  but  it  was  never 
in  fact  signed.  Held,  that  it  was  not  suf- 
ficient to  bind  the  defendants.  And  see 
supra,  n.  {  f}. 

(q)  Wright  i".  Dannah,  2  Camp.  203  ; 
Raynor  r.^Linthorne,  2  C.  &  P.  124.  In 
Farebrother  v.  Simmons,  5  B.  &  Akl.  333, 
where  an  auctioneer  wrote  down  tlie  de- 
fendant's name  by  his  authority  opposite 
to  the  lot  purchased,  it  was  held,  that  in 
an  action  brought  in  the  name  of  tlie 
auctioneer,  the  entry  in  such  book  was 
not  sufficient  to  take  tlic  case  out  of  the 
statute.  And  Abbott,  C.  J.,  said :  "  The 
question  is,  whether  the  writing  down  the 
defendant's  name  by  tlie  plaintiff,  with 
the  authority  of  the  defendant,  be  in  law 
a  signing  by  tlie  defendant's  agent.  In 
general,  an  auctioneer  may  be  considered 
as  the  agent  and  witness  of  both  parties. 
But  the  difficulty  arises,  in  this  case,  from 
the  auctioneer  suing  as  one  of  the  con- 
tracting parties.  Tlie  case  of  Wright  v. 
Dannah  seems  to  me  to  be  in  point,  and 
fortifies  the  conclusion  at  which  I  have 
arrived,  namely,  that  the  agent  contem- 
plated by  the  legislature,  who  is  to  bind 
a  defendant  by  iiis  signature,  must  be 
some  third  person,  and  not  the  other  con- 
tracting party  upon  the  record."  And  in 
Coleman  ;•.  Oarrignes,  18  Barb.  Go,  it 
was  held,  that  a  brother  employed  to 
make,  or  dose  a  iiargain,  for  the  sale  of 
real  estate,  is  not  authorized  to  sign  the 
name  of  his  principal  to  a  contract  for  the 
sale  of  real  estate  so  us  to  take  it  out  of 
the  statute  of  frauds.  The  court  say,  "An 
agent  witliin  the  meaning  of  tlie  statute 
of  frauds,  w!io  can  sign  the  name  of  the 
own(;r  of  land-;  to  a  contract  for  its  sale,  is 
not  one  whi)  has  a  mere  authority  to  nnikc 
a  bargain  Cor  the  sale;  but  one  who  is 
made  the  owner's  agent  to  sl(jn  his  name 

[  .'JOd  ] 


to  the  contract.  That  agency  may  be  by 
parol,  but  it  is  not  included  in  a  mere  au- 
thority to  sell."  But  see  Bird  v.  Boulter, 
4  B.  &  Ad.  443,  in  which  Farebrother  v. 
Simmons  is  somewhat  questioned. 

(r)  It  was  formerly  questioned  whether 
auction  sales  were  within  the  provisions 
of  the  statute  of  frauds.  See  Simon 
V.  Motivos,  1  W.  Bl.  599,  3  Burr.  1921. 
But  it  is  now  well  settled  that  they  are. 
Hinde  v.  Whitehouse,  7  East,  5.58 ;  Blag- 
den  V.  Bradbear,  12  Ves.  466  ;  Ken  worthy 
V.  Schofield,  2  B.  &  C.  945  ;  Brent  v. 
Green,  6  Leigh,  16  ;  Davis  v.  Rowell,  2 
Pick.  64  ;  Burke  v.  Halev,  2  Oilman,  614  ; 
White  V.  Crew,  16  Ga.  '416.  It  was  the 
doctrine  of  the  early  cases  that  the  auc- 
tioneer's authority  to  sign  for  both  vendor 
and  purchaser  was  confined  to  sales  of 
personal  property.     Stansfield  v.  Johnson, 

1  Esp.  101  ;  Buckmaster  v.  Harrop,  7  Ves. 
341  ;  Walker  v.  Constable,  1  B.  &  P.  306. 
But  it  is  now  well  settled  that  he  is  to  be 
regarded  as  the  agent  of  both  jiarties 
equally  in  sales  of  real  and  of  personal 
property.  Coles  y.  Trecothick,  9  Ves.  234, 
249  ;  Emmerson  v.  Ileelis,  2  Taunt.  38  ; 
White  V.  Proctor,  4  Taunt.  209  ;  Ken- 
worthv  V.  Schofield,  2  B.  &  C.  945; 
M'Coinb  v.  Wright,  4  Johns.  Ch.  659; 
!Morton  ?;.  Dean,  13  Wet.  385;  Adams  v. 
McMillan,  7  Port.  73  ;  Meadows  r.  Mea- 
dows, 3  M'Cord,  458;  Doty  v.  Wilder, 
15  111.  407  ;  Cleaves  v.  Foss,  4  Grecnl.  1  ; 
Alna  V.  Piummer,  id.  248;  Anderson  v. 
Chick,  Bailey,  Eq.  118.  The  doctrine 
formerly  prevailed  that  sales  of  land  by 
sheriffs,  and  by  masters  in  chancery  under 
decrees  of  the  court,  were  not  witliin  the 
statute.  Attorney-General  v.  Day,  1  Ves. 
218;  Blagden  v. 'Bradbear,  12  Ves.  466  ; 
Tate  V.  Greenlee,  4  Dev.  149.  But  this 
also  lias  been  since  oyei'rule<l,  and  sales  of 
this  description  are  now  put  ui)()n  the  same 
footing  with  other  auction  sales.  Simonds 
r.  (,'ailiu,2  Cannes, 61  ;  Jackson  i-.  (Ratlin, 

2  Johns.  248  ;  Ennis  r.  Waller,  3  Blackf. 
472;    Robinson    v.  Garth,  6   Ala.  2U4  j 


CII.  IV.] 


STATUTE    OF    FRAUDS. 


^293 


ker's  (.9)  mny  be  for  either.     And  for  *the  purposes  of  the  fourth 
and  seventeenth  sections,  the  agent  may  be  authorized  by  parol; 


Barney  v.  Patterson,  6  Harris  &  J.  182  ; 
Christie  v,  Simpson,  1  Rich.  407;  Elfe  v. 
Gadsden,  2  id.  37.3  ;  Evans  v.  Asliley,  8 
Mo.  177;  Alexander  v.  Merry,  9  id.  514. 
—  It  is  to  be  borne  in  mind  tliat  the  rule 
stated  in  the  text,  that  an  auctioneer  is  to 
be  con.sidered  the  agent  for  both  parties, 
rests  upon  a  mere  presumption  of  fact, 
whicli  may  be  rebutted  by  tlie  particular 
circumstances  of  the  case.  Thus,  where 
a  party,  to  whom  money  was  due  from 
the  owner  of  goods  sold  by  auction, 
agreed  with  the  owner,  before  the  auction, 
that  the  goods  wliich  he  might  purchase 
should  be  set  against  the  debt,  and  he  be- 
came the  pur<-haser  of  goods,  and  was 
entered  as  such  by  the  auctioneer,  it  was 
hdd  that  he  was  not  bound  by  the  printed 
conditions  of  sale,  which  specified  that 
purchasers  should  pay  a  part  of  the  price 
at  the  time  of  the  sale,  and  the  rest  on 
delivery.  And  Lord  Denman  said  :  ''  No 
doubt  an  auctioneer  may  be  agent  for 
both  parties  ;  but  here  the  bargain  was, 
that  what  the  defendant  should  buy  was 
to  be  set  off  against  the  legacy.  We  do 
not  overrule  tlie  former  cases  ;  but  we 
consider  them  inapplicable.  The  auc- 
tioneer is  not  ex  vi  termini  agent  for  both 
parties;  that  depends  upon  the  facts  of 
the  particular  case."  —  The  auctioneer's 
clerk  is  also  regarded  as  the  agent  of  both 
parties.  Bird  v.  Boulter,  1  Nev.  &  M. 
313;  Frost  v.  Hill,  3  Wend.  386;  Smith 
V.  Jones,  7  Leigh,  165;  Hart  v.  Woods, 
7  Blackf.  568.  But  see  contra,  Meadows 
V.  Meadows,  3  M'Cord,  458 ;  Entz  v. 
Mills,  1  McMullen,  453  ;  Doty  v.  Wilder, 
13  111.  407. 

(s)  Rucker  ik  Cammeyer,  1  Esp.  105  ; 
Hicks  r.  Hankin,  4  Esp.  114;  Chapman 
V.  Partridge,  5  Esp.  256;  Hinder.  While- 
house,  7  East,  558 ;  Hinckley  v.  Arey,  27 
Me.  362.  But  the  broker  must  be  known 
by  the  party  dealing  with  him  to  be  a 
broker,  acting  in  the  capacity  of  broker, 
and  not  as  principal.  Shaw  y.  Finney, 
13  Met.  453.  In  that  case  one  Hatha- 
way, a  broker,  whose  business  was  to 
buy  and  sell  fish,  as  well  for  himself  as 
for  others,  was  authorized  by  the  plain- 
tiffs to  buy  fish  for  them,  and  bargained 
with  the  defendant  for  a  quantity  of  fish, 
intending  to  buy  for  the  plaintiffs,  but  not 
intimating  to  the  defendant  that  he  was 
not  buying  for  himself,  and  made  the  fol- 
lowing written  memorandum  of  the  bar- 

26* 


gain:  "October  21,  1846.  F.  agrees  to 
sell  H.  his  fare  of  fish,  at  $2.50  per  quin- 
tal, as  they  lay,  or  to  go  on  flakes  one 
good  day,  at  $2.62^  ;  and  to  have  the  re- 
fusal of  them  until  Friday  evening,  23d 
instant."  Hathaway  gave  notice  to  the 
defendant,  before  Friday  evening,  that  he 
would  take  the  fish  at  $2.62^,  they  to  be 
put  on  flakes  one  good  day  :  the  defend- 
ant refused  to  deliver  the  fish  to  Hatha- 
way, and  the  plaintifts  brought  this  ac- 
tion against  him  for  a  breach  of  the  con- 
tract. JJeld,  that  the  case  was  within  the 
statute  of  frauds,  and  that  the  action  could 
not  be  maintained.  And  Wilde,  J.,  said  : 
"  It  is  contended  for  the  plaintift's,  that 
this  was  a  contract  between  them  and  the 
defendant,  and  that,  although  Hathaway 
was  employed  by  the  plaintiff's  only  as 
their  agent,  yet,  when  the  defendant  dealt 
with  him,  lie  became  his  agent  also,  and 
that  his  memorandum  of  the  agreement 
took  the  case  out  of  the  statute  of  frauds. 
....  Cases  were  cited  from  the  English 
authorities,  as  to  similar  contracts  made 
by  brokers ;  but  these  authorities  are  not 
applicable  to  the  present  case.  A  broker 
in  England  is  a  known  legal  public  officer, 
governed  bj^  statute  ;  and  those  who  deal 
with  him  are  to  find  out  who  his  princi- 
pals are.  He  cannot  act  as  principal  with- 
out violating  his  oath  ;  and  he  is  also  lia- 
ble to  a  penalty  if  he  does.  1  Tomlin's 
Law  Dictionary,  274.  Hathaway  was 
engaged  in  buying  and  selling  fish,  as  well 
for  himself  as  for  others  ;  and  it  does  not 
distinctly  appear  whether  this  purchase 
was  made  wholly  for  the  plaintifts  or  not. 
But  however  this  may  have  been,  the  de- 
fendant did  not  deal  with  Hathaway  as  a 
broker  or  agent,  but  as  the  contracting 
party ;  and  if  the  defendant  had  himself 
signed  the  memorandum,  he  would  not 
have  been  liable  in  this  action  by  the  plain- 
tiffs ;  for  the  contract  was  in  terms  a  con- 
tract with  Hathaway."  With  respect  to 
the  entry  of  the  broker  in  his  private  book, 
and  the  bought  and  sold  notes  delivered 
by  him  to  the  parties,  the  law  is  not  al- 
together settled.  It  seems  to  be  settled 
that  the  bought  and  sold  notes  constitute 
a  sufficient  memorandum,  without  any  en- 
try in  the  broker's  book.  Dickinson  v. 
Lilwal,  1  Stark.  128;  Rucker  v.  Cam- 
meyer, 1  Esp.  105;  Chapman  y.  Partridge, 
5  id.  256  ;  Hawcs  v.  Forster,  1  Moody  & 
R.  368  ;  Goom  v.  Aflalo,  6  B.  &  C.  117  , 

[305] 


294* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


although  for  the  first  and  third,  *  which  relate  to  real  property, 
his  authority  must  be  in  writing.  (/) 

As  to  the  question  what  the  written  agreement  must  contain, 
the  general  answer  is,  all  that  belongs  essentially  to  the  agree- 
ment, (ti)  and  more  than  this  is  not  needed  ;  nor  can  parol  evi- 
dence be  received  to  supply  any  thing  which  is  wanting  in  the 


Sivewright  v.  Archibald,  17  Q.  B.  103,  6 
Enjj.  L.  &  Eq.  286.  But  for  this  purpose 
the  bonglitanil  sold  notes  must  correspond. 
Cumminu:  v.  Roebuck,  Holt,  N.  P.  172; 
Grant  v.  Fletcher,  5  B.  &  C.  436  ;  Gregson 
V.  Buck,  4  Q  B.  737  ;  Thornton  v.  Kemp- 
ster,  5  Taunt.  786;  Peltier  v.  Collins,  3 
Wend.  4.59.  Where  the  broker  has  made 
an  entry  of  the  contract  in  his  book,  and 
has  also  delivered  bought  and  sold  notes 
to  the  parties,  there  has  been  a  conflict  of 
opinion  as  to  whether  the  entry  in  the 
broker's  book  or  the  bought  and  sold 
notes  constitute  the  contract.  But  the 
Court  of  Queen's  Bench,  in  the  recent 
case  of  Sivewright  v.  Archibald,  17  Q.  B. 
103,  6  Eng.  L.^fe  Eq.  286,  held  that  the 
entrj-  is  in  such  case  the  binding  contract. 
See  further  upon  this  point,  Townend  v. 
Drakefoid,  I  Car.  &  K.  20  ;  per  Parke,  B., 
in  Pitts  V.  Beckett,  13  M.  &  W.  746  ;  Hey- 
man  v.  Meal,  2  Camp.  337  ;  Thornton  v. 
Charles,  9  M.  &  W.  802  ;  Thornton  v. 
Meux,  Moody  &  M.  43  ;  Hawes  v.  Fors- 
ter,  1  Moody"  &  R.  368;  Mews  v.  Carr,  1 
H.  &N.  484. 

(0  Clinan  v.  Cooke,  1  Sch.  &  L.  22  ; 
Coles  r.  Trecothick,  9  Ves.  250 ;  Mort- 
lock  V.  BuUer,  10  Ves.  292 ;  Graham  v. 
Musson,  7  Scott,  769  ;  Waller  v.  Hendon, 
2  Eq.  Cas.  Abr.  50,  pi.  26;  Vin.  Abr. 
tit.  Contract  and  Agreement,  (H),  pi. 
45;  McWhortcr  r.  McMahan,  10  Paige, 
386;  Lawrence  v.  Taylor,  5  Hill,  107; 
AVorrall  v.  Mtinn,  1  Sold.  229  ;  Ahui  v. 
Plummer,  4  Grcenl.  258;  Johnson  v. 
Somcrs,  1  Humph.  268. 

(u)  Scagood  f.  Meale,  Prcc.  in  Ch. 
560  ;  Rose  /;.  Cimynghame,  1 1  Ves.  550  ; 
Clerk  V.  Wright,  i  Atk.  12;  Montacutc 
V.  Maxwell,  I  P.  Wnis.  618;  Roberts  v. 
Tucker,  3  ICxch.  6.32  ;  Archer  r.  Bayncs, 
5  Kx'li.  6^5;  J'arkhur.st  !\  Van  Cort- 
laiidt,  1  .Johns.  (;h.  273  ;  Bailey  v.  Og- 
dcn,  .3  Julins.  .399  ;  Waterman  r.  Meigs, 
4  Ciisb.  497;  Morton  r.  Dean,  13  Met. 
38.')  ;  l{urk(!  r.  Haley,  2  Gilnian,  614  ; 
Adamn  r.  APMillati,  7  I'ort.  73;  Aliccl  r. 
Rndclifl",  I.I  .loliiis.  297;  Barickman  ?•. 
Kuykendall,  6  P.lackf.  21.  — It  must  con- 
tain the  niimis  of  the  parties.     Champion 

[30G] 


V.  Plummer,  5  Esp.  240,  4  B.  &  P.  253. 
In  this  case  the  plaintitf  had  ])urchased  of 
the  defendant  certain  merchandise,  which 
the  defendant  refused  to  deliver.  The 
only  memorandum  of  the  bargain  was  a 
short  note  written  by  the  plaintiff's  clerk 
in  a  common  memorandum-book,  which 
was  signed  by  the  defendant,  but  made  no 
mention  of  the  name  of  the  plaintiff. 
And  Mansfield,  C.  J.,  said  :  "  How  can 
that  be  said  to  be  a  contract,  or  memoran- 
dum of  a  contract,  which  cloes  not  state 
who  are  the  contracting  parties  1  By  this 
note  it  does  not  at  all  appear  to  whom  the 
goods  were  sold.  It  would  prove  a  sale 
to  any  other  person  as  well  as  to  the 
plaintiff;  there  cannot  be  a  contract  with- 
out two  parties,  and  it  is  customary  in  the 
course  of  business  to  state  the  name  of  the 
purchaser  as  well  as  of  the  seller  in  every 
bill  of  parcels.  This  note  does  not  ap- 
pear to  me  to  amount  to  any  memoran- 
dum in  writing  of  a  bargain."  And  see, 
to  the  same  effect,  Wheeler  v.  Collier, 
Moody  &  M.  123  ;  Jacob  v.  Kirk,  2 
Moody  &  R.  221  ;  Sherburne  v.  Shaw,  1 
N.  H.  157 ;  Webster  r.  Ela,  5  N.  H.  540 ; 
Nichols  V.  Johnson,  10  Conn.  192.  —  It 
must  contain  a  full  and  complete  descrip- 
tion of  the  subject-matter  of  the  contract. 
Kay  V.  Curd,  6  B.  Mon.  100.  In  Nichols 
V.  Johnson,  10  Conn.  192,  "  B.'s  right  in 
C.'s  estate  "  was  held  a  sufiicient  descrip- 
tion. And  see  the  cases  cited  in  the  be- 
ginning of  this  note.  —  If  a  price  has  been 
agreed  upon,  that  must  be  stated  in  the 
memorandnm.  Elmore  v.  Kingscote,  5 
B.  &  C.  583  ;  Acebal  v.  Levy,  10  Bing. 
376 ;  Blagden  v.  Bradbear,  12  Ves.  466  ; 
Smith  V.  Arnold,  5  Mason,  414;  Ide  v. 
Stanton,  15  Vt.  685;  Adams  );.  M'Mil- 
hin,  7  Port.  73  ;  Waul  v.  Ivirkman,  27 
Missis.  823.  But  where  a  contract  is  en- 
tered into  without  any  agreement  as  to 
jirice,  the  memorandum  is  sullicient  with- 
out any  spccilication  of  price.  Hoadly  v. 
M'Laine,  10  Bing.  482.  So  an  order  for 
goods  "on  nxxlcrate  terms,"  is  a  sulli- 
cient memorandum  within  the  statute  of 
frauds.  Ashcroft  v.  Morrin,  4  Man.  &  G. 
450. 


ClI.  IV.] 


STATUTE    OF   FRAUDS. 


*295 


writing,  to  make  it  the  written  agreement  on  whieh  the  parties 
rely,  (ua)  But  much  *question  has  been  made  whether  the  con- 
sideration is,  in  this  respect,  an  essential  part  of  the  agree- 
ment, (u)  By  the  early  decisions  of  the  English  courts,  since 
abundantly  confirmed,  it  was  settled  in  that  country  that  the 
consideration  must  be  expressed,  (w)      Or,  in  other  words,  that 


(ua)  Salmon  Falls  M.  Co.  v.  Goddard, 
14  How.  446. 

(v)  Ex  parte  Minet,  14  Ves.  189;  Ex 
jxirte  Gardom,  15  id.  286;  Morris  v.  Sta- 
cey,  Holt,  N.  P.  1.53. 

(lo)  Wain  v.  Warlters,  5  East,  10.  'In 
this  case  the  defendant  was  sought  to  be 
charged  upon  the  following  undertaking  : 
"Messrs.  Wain  &  Co.,  1  will  engage  to 
pay  you  hy  half  past  four  this  day,  tifty-six 
pounds  and  expenses  on  bill  that  amount 
on  Hall.  (Signed)  Jno.  Warlters."  It 
was  objected  by  the  defendant,  that  though 
the  promise,  which  was  to  pay  the  debt  of 
another,  was  in  Krilimj,  as  required  by  the 
statute  of  frauds,  yet  that  it  did  not  ex- 
press the  consideration  of  the  defendant's 
promise,  which  was  also  required  by  the 
statute  to  be  in  writing ;  and  that  this 
omission  could  not  be  supplied  by  parol 
evidence  ;  and  that  for  want  of  such  con- 
sideration aiipearing  upon  the  face  of  the 
written  memorandum,  it  stood  simply  as 
an  engagement  to  pay  the  debt  of  another 
without  any  consideration,  and  was  there- 
fore nudum  pactum  and  void.  And  the 
court  were  of  this  opinion.  Lord  Ellen- 
horouyh  said  :  "  In  all  cases  where  by  long 
habitual  construction  the  words  of  a  stat- 
ute have  not  received  a  peculiar  interpre- 
tation, such  as  they  will  allow  of,  I  am 
always  inclined  to  give  to  them  their 
natural  ordinary  signification.  The  clause 
in  question  in  the  statute  of  frauds  has  the 
word  agreement.  And  the  question  is, 
whether  that  word  is  to  be  understood  in 
the  loose,  incorrect  sense  in  which  it  may 
sometimes  -be  used,  as  synonymous  to 
promise  or  undertaking,  or  in  its  more 
proper  and  correct  sense,  as  signifying 
a  mutual  contract  on  consideration  be- 
tween two  or  more  parties  ?  The  latter 
appears  to  me  to  be  the  legal  construction 
of  the  word,  to  which  we  are  bound  to  give 
its  proper  effect;  the  more  so  when  it  is 
considered  by  whom  that  statute  is  said  to 
have  been  drawn,  by  Lord  Hide,  one  of 
the  greatest  judges  who  ever  sat  in  West- 
minster Hall,  who  was  as  conqjetent  to 
express  as  he  was  able  to  conceive  the 
provisions  best  calculated  for  carrying  into 


effect  the  purposes  of  that  law.  The  per-  ^ 
son  to  be  charged  for  the  debt  of  another 
is  to  be  charged  in  the  form  of  the  pro- 
ceeding against  him,  upon  his  special 
promise;  but  without  a  legal  consideration 
to  sustain  it,  that  promise  would  be  nu- 
dum pactum  as  to  him.  The  statute  never 
meant  to  enforce  any  promise  which  was 
before  invalid  merely  because  it  was  put 
in  writing.  The  obligatory  part  is  indeed 
the  promise  which  will  account  for  the 
word /jrow/se  being  used  in  the  first  part 
of  the  clause,  but  still,  in  order  to  charge 
tlie  party  making  it,  the  statute  proceeds 
to  require  that  the  agreement,  by  which 
must  be  understood  the  agreement  in  re- 
spect of  ichich  the  promise  uxm  made,  must 
be  reduced  into  writing.  And  indeed  it 
seems  necessary  for  effectuating  the  object 
of  the  statute  that  the  consideration  should 
be  set  down  in  writing  as  well  as  the 
promise ;  for  otherwise  the  consideration 
might  be  illegal,  or  the  promise  might 
have  been  made  upon  a  condition  prece- 
dent, which  the  party  charged  may  not 
afterwards  be  able  to  prove,  the  omission 
of  which  would  materially  vary  the  prom- 
ise, by  turning  that  into  an  absolute 
promise  which  was  only  a  conditional 
one  ;  and  then  it  would  rest  altogether  on 
the  conscience  of  the  witness  to  assign 
another  consideration  in  the  one  case,  or 
to  drop  the  condition  in  the  other,  and 
thus  to  introduce  the  very  frauds  and  per- 
juries which  it  was  the  object  of  the  act  to 
exclude,  by  requiring  that  the  agreement 
should  be  reduced  into  writing,  by  which 
the  consideration  as  well  as  the  promise 
would  be  rendered  certain."  This  decis- 
ion has  been  sustained  in  all  the  subse- 
quent cases  in  England.  See  Stadt  v. 
Lill,  9  East,  348  ;  Lyon  v.  Lamb,  Fell  on 
Guaranties,  App.  No.  3  ;  Jenkins  v.  Rey- 
nolds, 3  Brod.  &  B.  14 ;  Saunders  v. 
Wakefield,  4  B.  &  Aid.  595  ;  Morlev  v. 
Boothby,  3  Bing.  107;  Cole  v.  Dyer,  1 
Cromp.  &  J.  461 ;  James  v.  Williams,  3 
Nev.  &  M.  196;  Clancy  v.  Piggott,  4  id. 
496;  Kaikes  v.  Todd,  8  A.  &  E.  846; 
Sweet  V.  Lee,  3  Man.  &  G.  452 ;  Bain- 
bridge  V.  Wade,  16  Q.  B.  89  ;  Powers  v. 

[  307  ] 


296*-297'' 


THE   LAW    OF   CONTRACTS. 


[part  II. 


an  agreement  in  *\vriting,  signed  by  the  parties,  did  not  satisfy 
the  requirements  of  the  statute,  if  it  set  forth  all  the  promises  of 
the  parties,  but  did  not  state  the  consideration  for  them.  In 
this  country,  it  was  doubted  whether  the  consideration  was  in 
fact  an  essential  part  of  the  agreement ;  and  in  some  States  the 
judicial  decisions  have  not  only  denied  this,  but  the  statutes 
have  expressly  declared  the  statement  of  the  consideration  un- 
necessary, (x)  And  if  an  action  be  brought  on  such  *agree- 
raent,  the  consideration  may  be  proved  by  extrinsic  evidence. 


Fowler,  4  Ellis  &  B.  571,  30  Eng.  L.  & 
Eq.  225.  It  will  be  seen  that  the  above  de- 
cisions depend  upon  the  technical  mean- 
ing attached  to  the  word  "  agreement." 
Therefore  in  cases  arising  under  the 
seventeenth  section  which  does  not  con- 
tain the  word  "  agreement,"  it  has  been 
held  that  the  consideration  need  not  be 
expressed.  Egerton  i\  INIatliews,  6  East, 
307.  And  see  per  Alderson,  B.,  in  IMar- 
shall  V.  Lynn,  6  M.  &  W.  118. 

(x)  The  leading  case  in  this  country  in 
opiiosition  to  Wain  v.  Warlters,  is  Pack- 
ard v.  Ricliardson,  17  Mass.  122.  In  tiiat 
case  the  action  was  brought  on.  an  under- 
taking of  the  defendants  indorsed  on  a 
promissory  note,  and  in  the  words  follow- 
ing :  "  AVe  acknowledge  ourselves  to  be 
holden  as  surety  for  the  payment  of  the 
within  note."  And  the  defendants  were 
held  liable.  Parkev,  C.  J.,  after  stating 
that  part  of  the  fourth  section  of  the  stat- 
ute upon  which  tiic  question  arose,  said  : 
"  The  obvious  purpose  of  the  legislature 
would  seem  to  i)e,  to  protect  men  from 
hasty  and  inconsiderate  engagements,  they 
receiving  no  beneficial  consideration  ;  and 
against  a  misconstruction  of  iheir  words 
by  tiic  testimony  of  witnesses,  who  would 
generally  be  in  tiie  employment  and  under 
tlie  iiiHuence  of  the  party  wishing  to  avail 
himself  of  such  engagements.  To  remove 
this  mischief,  the  promise  or  engagement 
shall  be  in  writing  and  signed  ;  in  order 
that  it  may  be  a  deliiierate  act,  instead 
of  the  effect  of  a  sudden  impulse,,  and 
may  be  certain  in  its  jiroof,  instead  of 
depending  upon  tlic  loose  memory  or 
biased  reiollcction  of  a  witness.  The 
agreement  shall  be  in  writing;  what 
agreement?  Tlie  agreement  to  pay  a 
delit,  which  he  is  under  no  legal  or  moral 
oblig.'ition  to  pay,  but  which  he  sliall 
l)e  iield  to  j)ay,  if  he  agrees  to  do  it, 
and  signs  sui'h  agreement.  This  ap|)cars 
to  be  the  whcde  object  and  design  of  the 

[.•308] 


legislature  ;  and  this  is  effected  without  a 
formal  recognition  of  a  consideration ; 
which,  after  all,  is  more  of  a  technical 
requisition  than  a  substantial  ingredient  in 
this  sort  of  contracts.  And  it  would  seem 
further,  that  the  legislature  cliose  to  pre- 
vent an  inference  that  the  whole  contract 
or  agreement  must  be  in  writing  ;  for  it  is 
provided  that  some  memorandum  or  note 
thereof  in  writing  shall  be  sufficient.  What 
is  this  but  to  say,  that  if  it  appear  by  a 
written  memorandum  or  note,  signed  by 
the  party,  that  he  intended  to  become  an- 
swerable for  the  debt  of  another,  he  shall 
be  bound,  otherwise  not.  How  then  is  it 
possible,  with  these  expressions  in  the  stat- 
ute, to  insist  upon  a  formal  agreement, 
containing  all  the  motives  or  inducements 
which  influenced  the  party  to  become 
bound  ?  Yet  such  is  the  decision  of  the 
Court  of  King's  Bench  in  the  case  of 
Wain  V.  Warlters."  And  the  learned 
judge  then  proceeded  to  a  minute  exami- 
nation of  the  decided  cases,  and  arrived  at 
the  conclusion  that  the  principle  declared 
in  Wain  v.  Warlters  ought  not  to  be  sanc- 
tioned. See  to  the  same  cfi'ect,  Sage  v. 
Wilcox,  6  Conn.  81  ;  Tufts  i-.  Tufts,  3 
Woodb.  &  M.  45G;  Reed  r.  Evans,  17 
Ohio,  128;  Gillighan  v.  Boardman,  29 
Me.  79.  Adkins  v.  Watson,  12  Texas, 
199.  And  sec  How  v.  Kemball,  2  Mc- 
Lean, 103.  Hargroves  r.  Cooke,  15  Ga. 
321.  See  also,  Mass.  Bev.  Stat.  ch.  74, 
§  2.  In  some  States  also  the  language 
of  the  statute  has  been  changed,  the  word 
promise  or  some  other  word  being  substi- 
tuted for  the  word  agreement.  And  the 
English  doctrine  resting  u])on  the  techni- 
cal meaning  of  the  \>'(n\\  agreement  has 
consciiucntly  been  repudiated  in  those 
States.  Viulctt  r.  I'atton,  :^  Cranch,  142 ; 
'J'aylor  i\  lioss,  3  Yerg.  330;  Gilman  v. 
Kiblcr,  5  IKimph.  19;  Wren  v.  Bearce,  4 
Smedes  &  M.  91. 


CII.  IV.] 


STATUTE   OF   FRAUDS. 


*298 


[n  other  States,  however,  the  English  rule  has  prevailed ;  (y) 
but  it  has  been  held,  and  is  undoubtedly  the  prevailing  rule* 
that  although  the  consideration  be  not  named  as  such,  if  it  can 
be  distinctly  collected  from  the  whole  instrument  what  it  really 
was,  this  satisfies  the  statute,  (z) 

Of  the  form  of  the  agreement,  it  need  only  be  said  that  it 
must  be  adequately  expressive  of  the  intent  and  obligation  of 
the  parties.  It  may  be  one  or  many  pieces  of  paper ;  provided 
that  the  several  pieces  are  so  connected  by  mutual  *reference 
or  otherwise  that  there  can  be  no  uncertainty  as  to  the  mean- 
ing and  effect  of  them  all,  when  taken  together  and  viewed 
as  a  whole,  (a)  But  this  connection  of  several  parts  cannot  be 
established  by  extrinsic  evidence,  [b)     If  there  is  an  agreement 


(y)  Sears  v.  Brink,  3  .Johns.  210  ;  Rog- 
ers V.  Kneeland,  10  Wend.  218;  Packer 
V.  Willson,  15  id.  343;  Bennett  v.  Pratt, 
4  Denio,  275  ;  Staats  v.  Howlett,  id.  559  ; 
Wyman  v.  Gray,  7  Harris  &  J.  409  ;  El- 
liott V.  Giese,  7  Harris  &  J.  457 ;  Edelen 
V.  Gough,  5  Gill,  103 ;  Henderson  v. 
Johnson,  6  Ga.  390.  And  such  is  now 
the  statute  law  of  New  York.  See  2  Rev. 
Stat,  part  2,  ch.  7,  tit.  2,  sect.  2. 

(:)  Bainbridge  v.  Wade,  16  Q.  B.  89,  I 
Eng.  L.  &  Eq.  236 ;  Steele  v.  Hoe,  14  Q. 
B.  431 ;  Goldshede  v.  Swan,  1  Exch.  154 ; 
Kennaway  v.  Treleavan,  5  M.  &  W.  498 ; 
Chapman  v.  Sutton,  2  C.  B.  634 ;  Haigh 
V.  Brooks,  10  A.  &  E.  309;  Newbury  v. 
Armstrontr,  6  Bing.  201  ;  Sliortrcde  v. 
Cheek,  3  Nev.  &  M.  866  ;  Peate  r.  Dicken, 
1  Cromp.  M.  &  R.  322 ;  Lvsaght  v. 
Walker,  5  Bligh,  n.  s.  1  ;  Jarvis  v.  Wil- 
kins,  7  M.  &  W.  410;  Rogers  r.  Knee- 
land,  10  Wend.  218,  13  Wend.  114;  Mar- 
quand  i'.  Hipper,  12  Wend.  520;  Water- 
bury  V.  Graham,  4  Sandf.  215;  Laing  v. 
Lee,  1  Spencer,  337.  In  the  following 
cases  the  consideration  did  not  sufficiently 
appear.  Raikcs  v.  Todd,  8  A.  &  E.  846 ; 
James  v.  AVilliams,  3  Nev.  &  M.  196; 
Bentham  v.  Cooper,  5  M.  &  W.  621  ; 
Clancy  v.  Piggott,  4  Nev.  &  M.  496 ;  Jen- 
kins V.  Reynolds,  6  J.  B.  Moore,  86 ; 
Hawes  i'.  Armstrong,  1  Scott,  661  ;  Price 
V.  Richardson,  15  Rl.  &  W.  539;  Wain  v. 
Warlters,  5  East,  10;  Morley  v.  Boothby, 
3  Bing.  1U7;  Saunders  v.  "Wakelicld, '4 
B.  &  Aid.  595  ;  Jenkins  ;;.  Reynolds,  3 
Brod.  &  B.  14.  Even  "value  received" 
has  been  said  to  be  enough.     Watson  v. 


McLaren,  19  Wend.  557  ;  Day  v.  Elmore, 
4  Wise.  190;  Cooper  v.  Dedrick,  22  Barb. 
516.  The  consideration  may  be  collected 
from  the  whole  instrument,  and  may  be 
inferred  from  its  character  as  well  as  its 
terms.  It  need  not  therefore  be  expressed 
in  a  guaranty  written  upon  a  contempora- 
neous agreement  expressing  a  considera- 
tion ;  for  the  agreement  and  the  guaranty 
of  its  performance  being  contemporaneous, 
the  consideration  for  the  one  enures  to  and 
sustains  the  otlier.  Bailey  v-  Erceman,  11 
Johns.  221.  Hanford  v.  Rogers,  11  Barb. 
18.  So  too,  if  the  agreement  ujjon  which 
the  contemporaneous  guaranty  is  written 
itself  imports  a  consideration  ;  as  if  it  be 
an  instrument  under  seal,  or  a  promissory 
note.  Leonnard  r.  Vredenburgh,  8  Johns. 
29;  Manrow  v.  Durham,  3  Hill,  584; 
Childs  V.  Barnum,  11  Barb.  14.  The 
words  "value  received"  have  been  held 
sufficiently  to  ex])ress  a  consideration. 
Watson  V.  McLaren,  19  Wend.  557; 
Douglass  V.  Howland,  24  Wend.  35;  Ed- 
elen V.  Gough,  5  Gill,  103.  Where  the 
words  import  either  a  past  or  a  concurrent 
consideration,  the  latter  construction  will 
be  given.  See  cases  cited  at  the  begin- 
ning of  this  note. 

(a)  Brettel  v.  Williams,  4  Exch.  623  ; 
Tawney  i-.  Crowther,  3  Bro.  Ch.  318; 
Saunderson  v.  Jackson,  2  B.  &  P.  238 ; 
Foster  v.  Hale,  3  Ves.  696  ;  5  id.  308  ; 
Western  v.  Russell,  3  Ves.  &  B.  187 ;  Al- 
len V.  Bennet,  3  Taunt.  169;  Ida  v. 
Stanton,  15  Vt.  685;  Toomer  v.  Dawson, 
Cheves,  68. 

(6)  Clinan  v.  Cooke,  1   Sch.  &  L.  22 ; 

[309] 


298- 


THE   LAW   OF   CONTRACTS. 


[part  ir. 


on  one  paper,  and  something  additional  on  another,  and  a  sig- 
nature on  another  paper,  that  is  not  a  written  and  signed  agree- 
ment, unless  these  several  parts  require  by  their  own  statement 
the  union  of  the  others ;  for  if  they  may  be  read  apart,  or  in 
other  connections,  evidence  is  not  admissible  to  prove  that  they 
were  actually  intended  to  be  read  together.  In  general,  the 
written  agreement  must  be  certain  ;  but  it  may  be  certain  in 
itself;  (c)  that  is,  it  may  itself  declare  the  purposes  and  prom- 
ises of  the  agreement  definitely ;  or  it  may  be  capable  of  being 
made  certain  by  reference  to  a  certain  standard,  (d)  If  a  con- 
tract be  in  its  nature  entire,  and  in  one  part  it  satisfies  the  stat- 
ute, and  in  others  does  not,  then  it  is  altogether  void,  (e)     But 


Brodie  v.  St.  Paul,  1  Vcs.  326  ;  Ide  v. 
Stanton,  15  Vt.  6S5 ;  Parklmrst  v.  Van 
Cortlandt,  1  Johns.  Ch.  273. 

(c)  Abeel  v.  Radcliff,  13  Johns.  297  ; 
Dodge  V.  Lean,  id.  .508;  Nichols  v.  John- 
son, 10  Conn.  192. 

((/)  Owen  V.  Thomas,  3  Mylne  &  K. 
353.  In  this  case  an  agreement  in  writ- 
ing- for  the  sale  of  a  house  did  not  by  de- 
scription ascertain  the  particular  house, 
but  it  referred  to  the  deeds  as  being  in  tlie 
possession  of  a  person  named  in  the  agree- 
ment. The  court  held  the  agreement  suf- 
ficiently certain,  if  it  could  be  ascertained, 
by  an  inquiry  before  the  master,  that  the 
deeds  in  the  possession  of  the  person 
named  referred  to  the  house  in  question. 

(e)  Cooke  v.  Tombs,  2  Anstr.  420  ;  Lea 
V.  Barber,  id.  425,  n. ;  Cliater  v.  Beckett, 
7  T.  II.  201  ;  Vaughan  v.  Hancock,  3  C. 
B.  766  ;  Lexinston  y.  Clarke,  2  Vent.  223; 
Mechelcn  v.  WaUacc,  7  A.  &  E.  49; 
Thomas  v.  Williams,  10  B.  &  C.  664; 
Ilarman  v.  liceve,  18  C.  B.  587  ;  Loomis 
V.  Newhali,  15  Pick.  159.  In  Irvine  v. 
Stone,  6  Cush.  .508,  it  was  Iheld  that  a  con- 
tract for  the  purchase  of  coals  at  Phila- 
delphia, anil  to  pay  for  the  freight  of  the 
Kaine  to  Boston,  if  void  by  the  statute  of 
frauds  as  lo  tlie  sale,  is  void  also,  and  can- 
not lie  enforced,  as  to  the  freight ;  though 
the  latter  part,  if  it  stood  alone,  would  not 
he  within  the  stnlute.  The  declaration  in 
this  case  contained  tlie  common  contils, 
and  al«)  a  special  count.  Ami  Milcul/',,}., 
after  .showing  that  the  plaiiitill'  could  not 
recoveroii  the  sp(!cial  count,  on  the  ground 
of  variaiici',  said  :  "  The  remaining  «|ue.s- 
tion  is,  whether  the  good  part  of  the  con- 
tract before  us  can  bo  sejiaratcd  from  the 

[;)io] 


bad,  so  that  the  plaintiff  can  enforce  the 
part  which  is  good,  on  his  general  counts. 
And  we  are  of  opinion  that,  from  the  na- 
ture of  the  contract,  this  cannot  be  done. 
It  is  in  its  nature  entire.  The  part  which 
respects  the  transportation  stands  wholly 
on  the  other  part  which  respects  the  sale, 
and  which  is  invalid  ;  and  both  must  fall 
together.  The  transporting  of  the  coal, 
apart  from  the  sale  of  it,  was  of  no  bene- 
fit to  the  defendants,  and  could  not  have 
been  contemplated  by  either  party  as  a 
thing  to  be  paid  for  or  to  be  done,  except 
in  connection  with  the  sale.  The  case 
therefore  does  not  fall  within  the  principle 
advanced  by  the  counsel  for  the  plaintiff, 
and  sustained  by  the  authorities.  The 
good  part  of  the  contract  cannot  practi- 
cally be  severed  from  the  bad,  and  sepa- 
rately enforced."  So  where  an  agreement 
was  made  for  the  sale  by  the  plaintiff  to 
the  defendant  of  the  plaintiff's  crop  of 
hemp  then  on  hand,  and  in  like  manner 
his  crops  to  be  raised  the  two  succeeding 
years,  it  was  held  that  the  whole  contract 
came  within  the  statute  of  frauds,  as  a 
contract  not  to  be  performed  within  the 
space  of  one  year;  and  that  the  part  of 
the  contract  which  related  to  the  crop  of 
hemp  on  hand  could  not  be  severed  from 
the  rest.  So  in  Thayer  v.  liock,  13  Wend. 
53,  it  was  helil  that  a  contract  made  as 
well  for  the  sale  of  real  as  of  personal  prop- 
erty, which  is  entire,  founded  upon  one 
and  the  same  consideration,  and  is  not  re- 
duced to  writing,  is  void,  as  well  in  re- 
spect to  the  personal  as  the  real  jjropcrty, 
the  subject  of  the  contract.  See  also,  ante, 
vol.  1,  p.  370.     And  see  next  note. 


CH.  IV.] 


STATUTE    OF    FRAUDS. 


*299-*300 


if  these  *parts  are  severable,  then  it  may  be  good  in  part,  and 
void  in  part.  (/) 

If  a  contract  in  writing  be  sued,  it  may  be  shown  in  defence 
that  the  contract  has  been  altered,  orally,  by  agreement.  But  if 
the  plaintiff  sues  on  a  written  contract,  and  must  show  oral 
alteration  in  order  to  maintain  his  action,  this  is  no  compliance 
with  the  statute,  (fa) 

*Let  us  now  look  at  the  particular  clauses  of  the  fourth  and 
seventeenth  sections. 

The  first  clause  relates  to  the  promise  of  an  executor  or  ad- 
ministrator to  answer  damages  out  of  his  own  estate.  In  re- 
gard to  this  it  has  been  held,  that  where  an  executor  gives  a 
bond  to  the  judge  of  probate  to  pay  debts  and  legacies,  this  is 


(/)  Mayfield  v.  Wadsley,  3  B.  &  C. 
357.  In  Wood  v.  Benson,  2  Cromp.  &  J. 
94,  an  action  was  brought  by  tlie  clerk  of 
the  Manchester  Gas  Works  on  the  follow- 
ing guaranty,  signed  by  the  defendant : 
"I,  the  undersigned,  do  hereby  engage  to 
pay  the  directors  of  the  Manchester  gas 
works,  or  their  collector,  for  all  the  gas 
which  may  be  consumed  in  the  Minor 
Theatre,  and  by  the  lamps  outside  the 
theatre,  daring  the  time  it  is  occupied  by 
my  brother-in-law,  Mr.  Neville ;  and  I  do 
also  agree  to  pay  for  all  arrears  which 
may  be  now  due."  The  declaration  con- 
tained the  common  counts.  It  was  ob- 
jected by  the  defendant,  1st,  that  there  was 
no  consideration  apparent  on  the  face  of 
the  instrument  for  the  promise  to  pay  the 
arrears ;  and,  2d,  that  tlie  agreement  being 
therefore  void  as  to  part  under  the  statute 
of  frauds,  was  void  as  to  the  whole.  And 
in  support  of  the  second  objection,  he  cited 
Leaw.  Barber,  Lexington  v.  Clarke,  Chatcr 
V.  Beckett,  and  Thomas  v.  Williams.  But 
the  objection  was  not  sustained.  BayJey,  B., 
said  :  "  I  take  it  to  be  perfectly  clear  that  an 
agreement  may  be  void  as  to  one  part, 
and  not  of  necessity  void  as  to  the  other. 
There  are  many  cases  in  the  books  where 
a  contract  has  been  held  good  in  part  and 
bad  in  part.  A  bond  may  be  good,  though 
the  condition  is  good  in  part  and  illegal 
in  part.  I  am  therefore  of  opinion  that  it 
by  no  means  follows  that,  because  jou 
cannot  sustain  a  contract  in  the  whole, 
you  cannot  sustain  it  in  part,  provided 
your  declaration  be  so  framed  as  to  meet 
the  proof  of  that  part  of  the  contract  which 
is  good.    In  each  of  the  cases  referred  to 


for  the  purpose  of  showing  that  the  con- 
tract, if  void  in  part,  was  void  in  tofo,  there 
was  a  failure  of  proof.  The  declaration 
in  each  of  those  cases  stated  the  entire 
promise,  as  well  that  part  which  was  void 
as  that  which  was  good.  I  think,  there- 
fore, that  these  cases  are  to  be  supported  on 
the  principle  of  the  failure  of  jiroof  of  the 
contract  stated  in  the  declaration  ;  but  that 
they  do  not  establish  that,  if  you  can  sep- 
arate the  good  part  from  the  bad,  you  may 
not  enforce  such  part  of  the  contract  as  is 
good.  I  am,  therefore,  of  opinion  that  the 
verdict  must  stand  for  the  amount  of  the 
gas  subsequently  supplied."  To  the  same 
effect  is  Rand  v.  Mather,  11  Cush.  1. 
That  was  an  action  for  work  and  labor  on 
three  houses  belonging  to  the  defendant. 
The  plaintiff  began  his  work  under  a  con- 
tract with  one  Whiston,  who  was  building 
the  houses  for  the  defendant.  Whiston 
failed,  and  the  plaintiff  refused  to  go  on 
with  his  work.  The  defendant  then  told 
the  plaintiff  to  proceed  with  his  work,  and 
he  would  pay  him  for  what  he  had  done, 
as  well  as  for  what  he  should  do.  The 
plaintiff  then  went  forward  and  finished 
ids  work.  The  declaration  contained  the 
common  counts.  It  was  objected  by  the 
defendant  that  as  a  part  of  the  contract 
was  clearly  within  the  statute  of  frauds, 
the  whole  must  fail.  But  the  objection 
was  overruled,  and  the  court  held,  in  con- 
formity with  Wood  V.  Benson,  that  the 
plaintiff  M'as  entitled  to  recover  for  the 
work  done  subsequent  to  the  defendant's 
promise. 

{fa)  Dana  v.  Hancock,  30  Vt.  616. 

[311] 


30i*  THE   LAW   OF    CONTRACTS.  [PART  II. 

an  admission  of  assets,  and  estops  him  from  denying  them ; 
and  therefore  a  promise  by  him  to  pay  a  debt  of  the  testator 
will  be  taken  to  pay  it  out  of  sufficient  assets,  and  therefore  not 
to  be  a  promise  "  to  answer  damages  out  of  his  own  estate,"  and 
consequently  not  within  the  statute ;  and  it  need  not  be  in  writ- 
ing, (g)  In  those  States  in  which  the  written  agreement  or 
memorandum  should  contain  the  consideration,  some  new  con- 
sideration must  be  shown ;  but  a  very  slight  consideration 
suffices. 

There  is  said  to  be  this  difference  between  an  executor  and 
an  administrator.  An  executor  derives  his  title  from  the  will 
of  his  testator,  and  the  office  and  interest  are  completely  vested 
in  him,  by  the  testator's  death,  and  his  promise  is  within  the 
statute,  although  made  before  probate  of  the  will.  But  an  ad- 
ministrator derives  title  from  the  probate  ;  and  if  he  make  a 
promise  in  expectation  of  administration,  but  before  the  actual 
grant,  this  promise  is  not  within  the  statute,  although  he  sub- 
sequently becomes  administrator.  (/?) 

The  second  clause  relates  to  a  promise  "  to  answer  for  the 
debt,  default,  or  miscarriage  of  another  person."  This  clause 
covers  all  guaranties,  and  is  of  great  importance  in  reference  to 
them.  Its  general  effect  is,  to  make  it  necessary  that  all  col- 
lateral j)romises  should  be  in  writing.  The  distinction  between 
those  Avhich  are  collateral  and  those  which  are  original  has  al- 
ready been  considered ;  and  it  is  sufficient  to  say  in  this  con- 
nection, that  only  when  the  promise  is  distinctly  collateral,  is  it 
within  this  clause  of  the  statute.  (?)     *Nor  is  it  then  material 

(7)  Stelibins  V.  Sniitli,4  Pick.  97.     But  at  matmity,  and  were  afterwards  paid  by 

sec  Silsbcc  I'.  Injralls,  10  id.  ."iaG.  tbe  jjlaintitr.     It  was  objected  by  tiie  de- 

(/()  Toinliiison  v.  Gill,  Anibl.  3.30.  fbiidant  tbat  tlie  promise  was  witbin  tbc 

(/)   In  tbc  absence  of  evidence  sbowin;;  statute  of  frauds,    as    being   a   colhUeral 

distinctly  tliat  a  ))roinise  is  colhiteral,  it  promise,  and  was  tbercfore  not   bindinj^;, 

will    be   treated    as    an    ()iif,^inal  promise.  l)ecause  no  consideration  appeared  on  tbe 

I'tiis  ])oiiit  is  well  illustrated  by  tbe  case  face  of  tbc  written  instrument.     But  tbe 

of  JJeaman  v.  J{ussell,  '20  Vt.  205.     Tbat  objection  was  not  sustained.     And  lliill, 

was   an    action  on    a  written    instrument  J.,  said:    "  Altbou{j;b  tbc  decisions  ujion 

Bif^ned    by    tbe    flcfcndant,    wbcreby    be  tbe  clause  of  tbe  statute  relied  upon  by 

ntjrctd  witb  tbe  ])laiiitiirt(>  iniUinnil'y  biin  tbe  rlcfcndant  are  not  all  reconcilable  wiib 

for  si;;ninf,',  tot;etlier  witb  tbri'c  otlicr  per-  cacli  oilier,  yet  it  seems  agreed  in  all  tbc 

sons,  two  promissory  notes  payable  to  tbc  cases,  tbat  if  tbe  jiromise  is  not  colhitt'ral 

Bank  of  Kulbiud.     It  appeared   tbat  tbe  to  tbe  liability  of  some  otlier  ])erson  jo  tbc 

notes  in  (pn-siiou  were  discounletl  by  tbc  same  ])arty,  it  is   not  witbin  tbe  statute. 

Bunk  of  Hutlaud;  tbat  tliey  were  not  jiaid  Eastwood  v  Kcnyon,  11  A.   &  E.   438. 


CII.  IV.] 


STATUTE   OF  FRAUDS. 


-301 


whether  the  promise  is  made  before  or  after  the  delivery  of  the 
goods,  {j) 

From  the  very  definition  of  a  collateral  promise,  it  follows 
that  there  must  be  some  one  who  owes  the  debt  directly.  There 
must  exist  an  original  liability,  as  the  foundation  for  the  collat- 
eral liability.  And  one  of  these  liabilities  must  be  entirely  dis- 
tinct from  the  other.  If  therefore  the  creditor  trusted  to  one  of 
the  parties  more  than  to  the  other,  but  did  in  fact  trust  to  one 
together  with  the  other,  it  is  not  within  the  statute.  And  in 
ascertaining  whether  this  original  and  distinct  liability  exists, 
and  then  a  collateral  one  founded  upon  it,  the  court  will  look  to 
the  intentions  of  the  parties,  as  they  may  be  inferred  from  all 
the  circumstances  of  the  case  and  of  the  parties,  [k)     At  the 


In  this  case,  unless  there  was  some  person 
liable  to  indemnify  the  plaintiff  for  sij;niiig 
the  notes  to  the  Bank  of  Rutland,  other 
than  the  defendant-,  his  undertaking  was 
an  original  and  not  a  collateral  one.  Does 
it  appear  from  tlie  writing  offered  in  evi- 
dence, either  in  connection  with  the  notes 
or  witiioiU  them,  that  any  other  person 
than  the  defendant  was  in  any  manner 
liable  to  the  plaintiff?  If  the  plaintiff  had 
signed  the  notes  with  the  other  makers  of 
them,  as  their  surety  and  at  their  request, 
the  law  would  have  imjilied  a  promise 
from  them,  to  indemnify  him.  But  there 
is  no  evidence  that  he  signed  as  surety. 
For  auglit  tliat  appears,  the  liability  to  the 
Bank  of  Rutland  might  have  been  incurred 
for  the  sole  benefit  of  the  defendant,  and 
he  might  have  agreed  to  indemnify  the 
other  signer*  in  the  same  manner  that  he 
did  the  plaintiff".  Besides,  there  is  no  proof 
that  the  plaintiff  signed  the  note  at  the  re- 
quest of  the  other  signers.  The  writing 
shows  that  he  signed  at  tiie  request  of  the 
defendant,  and  on  his  promise  to  indem- 
nify him  ;  and  this  fact  would  be  calcu- 
lated to  relint  any  presumption  that  he 
signed  at  the  request  of  the  others,  even 
if  his  name  had  appeared  on  the  notes 
as  surety.  In  the  absence  of  all  evidence 
that  there  was  a  liability  of  any  other 
person  to  the  plaintiff,  to  which  the  de- 
fendant's promise  could  have  been  col- 
lateral, it  must  be  treated  as  an  original 
promise  not  within  the  statute." 

(j)  Matson  v.  Wharam,  2  T.  R.  80; 
Jones  V.  Cooper,  Cowp.  227  ;  Peckham  i\ 
Faria,  3  Doug.  .13  ;  Bronson  v.  Stroud,  2 
McMullan,  372*. 

VOL.  II.  27 


(Jc)  Keate  v.  Temple,  1  B.  &  T.  158.  In 
this  case  the  defendant,  the  first  lieutenant 
of  his  majesty's  ship  the  Boijne,  applied  to 
the  plaintiff',  a  slop-seller,  to  furnish  .^.he 
crew  with  new  clothes,  saying  that  he  would 
see  him  paid  at  the  pay  table.  The  plain- 
tiff having  supplied  the  clothes,  and  the 
Boijiip.  having  been  afterwards  burnt  and 
the  crew  dispersed,  this  action  was  brought 
against  the  defendant  to  recover  the 
amount.  The  plaintiff' having  obtained  a 
verdict  for  £576  7s.  M.,  a  new  trial  was 
ordered.  And  Eijre,  C.  J.,  upon  the  occa- 
sion of  making  the  rule  for  a  new  trial  abso- 
lute, placed  much  stress  upon  the  fact  that 
clothes  to  so  large  an  amount  were  fur- 
nished, and  also  upon  the  peculiar  relation 
in  which  the  defendant  stood  to  the  crew. 
"  There  is  one  consideration,"  said  he, 
"independent  of  every  thing  else,  which 
weighs  so  strongly  with  me,  that  I  should 
wish  this  evidence  to  be  once  more  sub- 
mitted to  a  jury.  The  sum  recovered  is 
,£576  7s.  8c?.  And  this  against  a  lieuten- 
ant in  the  navy  ;  a  sum  so  large  that  it 
goes  a  great  way  towards  satisfying  my 
mind  that  it  never  could  have  been  in  the 
contemplation  of  the  defendant  to  make 
himself  liable,  or  of  the  slop-seller  to  fur- 
nish the  goods  on  his  credit,  to  so  large  an 
amount.  I  can  hardly  think  that  had  the 
Boijne  not  been  burnt,  and  the  plaintiff 
been  asked  whether  he  would  have  the 
lieutenant  or  the  crew  for  his  paymaster, 
but  that  he  would  have  given  the  prefer- 
ence to  the  latter From  the  nature 

of  the  ease  it  is  apparent  that  the  men 
were  to  pay  in  the  first  instance ;  the  de- 
fendant's words  were,  '  I  will  see  you  paid 

[313] 


302*-303* 


THE   LAW    OP    CONTRACTS. 


[part  II. 


same  time,  however,  it  must  be  *  remembered  that  the  expres- 
sions used  by  the  parties  are  the  first  and  the  most  direct  evi- 
dence of  their  intention ;  and  the  proper  effect  and  construction 
of  the  various  expressions  used  in  transactions  of  this  kind 
are  well  illustrated  by  Lord  Holt.  (/) 

It  is  quite  certain,  as  has  been  said,  that  the  party /or  whom 
the  promise  has  been  made  must  be  liable  to  the  party  to 
whom  it  is  made ;  [m)  and  it  is  equally  necessary  that  he  *  con- 


at  the  pay  table ;  are  you  satisfied  1 '  and 
the  answer  then  was,  '  Perfectly  so.'  The 
meaning  of  which  was,  that  however  un- 
willing the  men  might  be  to  pay  them- 
selves, the  officer  would  take  care  that 
they  should  pay.  The  question  is,  whether 
the  slop-man  did  not  in  fact  rely  on  the 
power  of  the  officer  over  the  fund  out  of 
which  the  men's  wages  were  to  be  paid, 
and  did  not  prefer  giving  credit  to  that 
fund,  rather  than  to  the  lieutenant,  who, 
if  #6  are  to  judge  of  him  by  others  in  the 
same  situation,  was  not  likely  to  be  able 
to  raise  so  large  a  sum."  So  in  the  case 
of  Norris  v.  Spencer,  18  Me.  324,  the 
court  declare  that  whether  the  contract  of 
one  who  engages  to  be  responsible  for 
another,  is  to  be  regarded  as  an  original 
and  joint,  or  as  a  collateral  one,  must  de- 
pend upon  the  intention  of  the  parties,  to 
be  ascertained  from  the  nature  of  it,  and 
the  language  used.  And  see  Moses  v. 
Norton,  36  Me.  113;  Beebe  v.  Dudley,  6 
Foster,  249. 

(/)  Watkins  v.  Perkins,  1  Ld.  Raym. 
224.  "  If,"  said  he,  "A  promise  B,  being 
a  surgeon,  that  if  B  cure  D  of  a  wound, 
he  will  see  him  paid ;  tiiis  is  only  a  prom- 
ise to  pay  if  1)  docs  not,  and  therefore  it 
ought  to  1)C  in  writing  by  the  statute  of 
frauds.  But  if  A  ])romisc  in  such  case 
that  he  will  be  B's  payniastcr,  whatever 
he  shall  deserve,  it  is  iniincdiatcly  tiic  debt 
of  A,  and  he  is  liable  without  writing." 
And  in  Norris  v.  Spencer,  18  Me.  324, 
already  cited,  where  a  written  contract 
was  made  in  form  between  two,  and  signed 
by  the  parties  named,  and  at  the  same  time 
a  tiiinl  p(;rson  added,  "  1  agree  to  be  se- 
curity for  the  jiromisor  in  tiie  above  con- 
tract," with  his  signature,  the  latter  was 
held  as  a  joint  promisor. 

{ill)  It  is  now  well  settled  that,  in  or- 
der to  bring  a  jjromise  witiiiii  this  cbuise 
of  tiic  statuti^,  it  must  lie  made  to  tiio 
party  to  whom  the  jici'son  undertaken  for 
is  liable.     "  'i'iie  statute,"  says  I'arkc,  B., 

[314] 


in  Ilargreaves  v.  Parsons,  13  M.  &  W. 
561,  "applies  only  to  promises  made  to 
the  persons  to  whom  anotlier  is  already,  or 
is  to  become,  answerable.  It  must  be  a 
promise  to  be  answerable  for  a  debt  of, 
or  a  default  in  some  duty  by,  that  otlier 
person  towards  the  promisee."  A  promise, 
therefore,  by  A  to  B  to  pay  a  debt  due 
from  B  to  C,  is  not  within  the  statute. 
This  last  point  was  first  presented  for  ad- 
judication in  Eastwood  v.  Kenyon,  11  A. 
&  E.  438.  The  facts'  in  that  case  were 
that  the  plaintiff"  was  liable  to  one  Black- 
burn on  a  promissory  note  ;  and  the  de- 
fendant for  a  consideration  promised  the 
jilaintiff"  to  pay  and  discharge  the  note  to 
Blackburn.  And  Lord  Denman  said,  "  If 
the  promise  had  been  made  to  Blackburn, 
doubtless  the  statute  would  have  applied; 
it  would  then  have  been  strictly  a  promise 
to  answer  for  the  debt  of  another ;  and 
the  argument  on  the  part  of  tlie  defendant 
is,  that  it  is  not  tlie  less  the  debt  of  another, 
because  the  promise  is  made  to  that  other, 
namely,  the  debtor,  and  not  to  the  credi- 
tor, the  statute  not  having  in  terms  stated 
to  whom  the  promise,  contemplated  by  it, 
is  to  be  made.  But  upon  consideration 
we  are  of  opinion  that  the  statute  applies 
only  to  promises  made  to  tlie  person  to 
whom  another  is  answerable.  We  are 
not  aware  of  any  case  in  wliicli  the  point 
has  arisen,  or  in  which  any  attempt  has 
been  made  to  put  that  construction  upon 
the  statute  which  is  now  sought  to  be  es- 
tablished, and  which  wo  think  not  to  be 
the  true  one."  And  see,  to  the  same 
effect,  Ilargreaves  v.  Parsons,  13  M.  & 
W.  .")61  ;  Pearce  r.  Blagrave,  C.  B.  185.5, 
30  Eng.  L.  &  Eq.  510;  Pratt  v.  Hum- 
phrey, 22  Conn.  317  ;  i^arker  ?;.  Bucklin, 
2  Dcnio,  45;  Westfall  v.  Parsons,  16 
Barb.  645  ;  Preble  r.  iJaldwin,  6  Cush. 
54!)  ;  Alger  v.  Scoville,  1  Gray,  391, 
And  in  New  York  it  has  been  held 
that  the  ci'cditor  may  sue  oti  such  a 
promise  raude  to  his  debtor  on  the  ground 


CH.  IV.] 


STATUTE  OF  FRAUDS. 


%304 


tinue  liable  after  the  making  of  the  promise.  In  other  words, 
the  promise  of  the  party  undertaking  must  not  have  *the  effect, 
prior  to  its   performance,  of  discharging   the    party  originally 


that  he  is  the  person  for  whose  benefit 
the  contract  is  made.  See  Barker  v. 
BiiclvHn,  2  Denio,  45.  But  see  contra, 
Curtis  V.  Brown,  5  Cush.  488.  It  has 
been  made  a  question,  whether  a  promise 
by  A  to  indemnify  B  for  guaranteeing  a 
debt  due  from  C  to  D  is  within  the  statute. 
It  is  clear  upon  the  authorities  already 
cited  that  such  a  promise  is  not  within  the 
statute,  as  being  a  promise  to  answer  for 
the  debt  of  C.  For  that  purpose  it  must 
have  been  made  to  D,  to  wiiom  the  debt 
was  due.  And  upon  this  ground  it  was 
held,  when  the  question  was  first  presented 
in  Thomas  v.  Cook,  8  B.  &  C.  728,  that 
such  a  promise  was  not  within  the  statute. 
And  Binjley,  J.,  said  :  "  A  promise  to  in- 
demnify does  not,  as  it  appears  to  me,  fall 
within  either  the  words  or  the  policy  of 
the  statute  of  frauds."  And  see,  to  the 
same  effect,  Jones  v.  Shorter,  1  Ga.  294  ; 
Chapin  v.  Merrill,  4  Wend.  657.  But  in 
the  more  recent  case  of  Green  v.  Cress- 
well,  10  A.  &  E.  453,  a  different  view 
was  taken  of  the  question,  namely,  that 
the  person  for  whom  the  guaranty  is  given 
is  under  an  implied  contract  to  indemnify 
his  guarantor,  and  that  A's  promise  to 
indemnify  is  collateral  to  this,  and  there- 
foi"e  within  the  statute.  And  the  same 
view  was  adopted  in  Kingsley  v.  Balcome, 
4  Barb.  131.  But  in  other  cases  it  is  held 
that  such  a  contract  is  not  within  the 
statute,  even  upon  this  last  view.  See 
Holmes  v.  Knights,  10  N.  H.  175  ;  Dunn 
V.  West,  5  B.  iVIon.  376 ;  Lucas  r.  Cham- 
berlain, 8  id.  276.  The  question  would 
seem  to  depend  upon  the  time  when  the 
promise  of  C,  the  person  for  whom  the 
guaranty  is  given,  arises.  And  this  again 
will  depend  upon  the  particular  circum- 
stances of  the  case.  If  these  are  such  as 
to  authorize  the  inference  that  C  made  an 
actual  promise  to  indemnify  his  guarantor 
at  the  time  when  the  undertaking  of  A 
was  given,  or  prior  thereto,  the  reasonable 
presumption  is  that  the  promise  of  A  was 
intended  to  be  collateral.  If,  on  the  other 
hand,  there  is  nothing  in  the  case  from 
which  an  actual  promise  by  C  can  lie  in- 
ferred, and  he  can  only  be  made  liable  on 
a  promise  raised  by  operation  of  law,  from 
B's  having  been  compelled  to  pay  money 
on  his  account,  it  would  seem  to  be  clear 
that  the  promise  of  A  must  be  original. 


For  the  promise  of  C  arises  upon  a  sub- 
sequent and  independent  fact,  after  the 
promise  of  A  has  become  a  complete  and 
valid  contract.  —  Upon  the  principle  stated 
in  the  text,  it^'as  Iield  in  Bushel!  v.  Bcavan, 
1  Bing.  N.  C.  103,  that  a  promise  by  A 
that  B  should  guarantee  the  debt  of  C 
was  not  witliin  the  statute.  In  that  case 
the  defendant  undertook  that  one  Mac- 
queen  should  guarantee  to  tlie  plaintiff 
the  payment  of  certain  freight  duo  to  him 
under  a  charter-party  from  one  Lcmpill. 
And  Ti/idal,  C.  J.,  said  :  "  The  contract 
appears  to  us  not  to  be  a  contract  to  an- 
swer for  the  debt,  default,  or  miscarriage 
of  any  other  person,  but  a  new  and  im- 
mediate contract  between  the  defendant 
and  the  plaintiffs.  If  JNIr.  Macqueen  had 
signed  the  guaranty,  that  guaranty'  would, 
indeed,  have  been  within  the  statute  of 
frauds  ;  for  his  is  an  express  guaranty  to 
be  answerable  for  the  freight  due  under 
the  charter-party,  if  Lempill  did  not  pay 
it.  But  no  person  could  be  answerable  on 
the  promise  to  procure  his  signature  but 
the  defendant.  Lempill  had  never  en- 
gaged to  get  tiie  guaranty  of  Mac(iueen, 
nor  had  Macqueen  engaged  to  give  it. 
There  was,  therefore,  no  default  of  any 
one  for  which  the  defendant  made  liimself 
liable  ;  but  he  did  so  simply  upon  his  own 
immediate  contract.  For  as  to  any  de- 
fault of  Lempill  in  paying  the  freight,  the 
action  on  the  undertaking  of  the  defend- 
ant could  not  be  dependent  on  that  event; 
for  it  would  have  been  maintainable  if  the 
guaranty  were  not  signed  at  any  time  after 
the  day  on  which  the  defendant  engaged 
it  should  be  given,  that  is,  long  before  the 
time  when  the  freight  became  payable." 
The  same  principle  was  applied  in  Jar- 
main  V.  Algar,  2  C.  &  F.  249.  There  the 
defendant  promised  to  execute  a  bail  bond 
in  an  action  by  the  plaintiff  against  one 
Flack,  in  consideration  that  the  plaintiff 
would  not  cause  Flack  to  be  arrested. 
The  defendant's  promise  was  held  not  to 
be  within  the  statute,  because  Flack,  the 
person  undertaken  for,  was  not  liable.  It 
should  be  observed,  however,  that  Mr. 
Justice  C'oiven,  in  Carville  v.  Crane,  5 
Hill,  483,  was  of  opinion  that  these  two 
cases  proceeded  upon  too  literal  a  con- 
struction of  the  statute. 

[315] 


304- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


liable.  Thus,  if  goods  have  been  furnished  by  B  to  C,  and 
charged  to  the  latter,  and  A  now  becomes  responsible  for  them, 
and  B  thereupon  discharges  C,  looking  to  A  only,  and  does  this 
with  the  knowledge  and  consent  of  the  parties,  this  promise  of 
A  is  to  be  regarded  as  an  original  promise  by  way  of  substitu- 
tion for  the  promise  of  C  which  it  satisfies  and  discharges,  and 
not  as  collateral  to  the  promise  of  C.  (n)  On  the  other  hand, 
if  the  liability  of  the  original  party  is  to  continue  after  the  per- 
formance of  the  promise,  the  promise  is  equally  out  of  the  stat- 
ute. For  that  cannot  properly  be  called  a  promise  to  answer 
for  the  debt,  default,  or  miscarriage  of  another  person,  the  per- 
formance of  which  leaves  the  liability  of  that  other  person  the 
same  as  before,  (o) 

(n)  Thus,  where  the  defendant  promised     objected  that  the  promise  was  within  the 


to  pay  the  debt  of  his  son,  who  was  in 
custody  on  an  execution  at  tiie  suit  of  the 
plaintiff,  in  consideration  of  his  son's 
bein;^  discharged  out  of  custody  witli  the 
plaintiff's  consent,  it  was  held  that  the 
promise  was  not  within  the  statute,  be- 
cause by  such  discharge  the  debt  of  the 
son  was  extinguished.  Goodman  v.  Chase, 
1  B.  &  Aid.  297 ;  Lane  v.  Burghart, 
1  Q.  B.  933.  So  in  Curtis  v.  Brown, 
5  Cush.  488,  492,  Shaw,  C.  J.,  says: 
"When,  by  the  new  promise,  tlie  old 
debt  is  extinguislied,  the  promise  is  not 
within  the  statute  ;  it  is  not  then  a  prom- 
ise to  pay  the  debt  of  another,  whicli  has 
accrued,  but  it  is  an  original  contract,  on 
pood  consideration,  and  need  not  be  in 
writing."  And  see,  to  the  same  effect. 
Bird  V.  Gammon,  3  Bing.  N.  C.  883; 
Butcher  v.  Steuart,  11  M.  &  W.  S.")? ; 
Deckers.  Shaffer,  3  Ind.  187;  Emeriek 
V.  Sanders,  1  Wise.  77 ;  Draughan  v. 
Bunting,  9  Ired.  10;  Stanly  y.  Hendricks, 
13  id.  86;  Bason  v.  llughart,  2  Texas, 
476.  And  see  also,  ante,  vol.  1,  pp.  188, 
191. 

(o)  Stephens  v.  Squire,  5  Mod.  205, 
Comb.  3C2.  In  this  case  it  appeared  that 
an  action  had  been  brouglit  against  the 
defendant,  an  attorney,  and  two  others, 
for  appearing  for  tiie  j)iaintilf  without  a 
warrant.  Tiie  cause  was  carried  down  to 
be  tricfi  at  tiic  assizes  ;  and  tlic  dcfi'iidant 
proniiscd,  in  consideration  the  phiintilf 
would  not  j)rosecute  the  action,  that  lie 
would  pay  t<'n  pounds  and  costs  of  suit. 
And  now  an  action  was  brought  again-^t 
the  dcfi'iidant  upon  this  ])romis('.  Sir 
Bartliolomcw   Sliowcr,  for  tlie  defendant, 

[;jiG] 


statute.  Ilolt,  C.  J.,  "  No,  'tis  an  original 
promise,  and  himself  was  liable."  Shower, 
"  What  if  lumself  iiad  not  been  a  party, 
then  it  were  plainly  within  the  statute." 
Holt,  C.  J.,  "  Put  that  case  when  it 
comes ;  but  if  A  saitli,  do  not  go  on 
against  B,  &c.,  this  being  to  be  performed 
within  a  year,  it  will  bind  him  ;  'tis  like 
the  case  of  buying  goods  for  another  man, 
which  is  every  day's  practice.  But  if  A 
saiih,  do  not  go  on  against  B  and  I'll  give 
you  ten  pounds  in  full  satisfaction  of  that 
action,  that  might  be  within  tlie  statute ; 
but  here  he  appears  to  be  a  party  con- 
cerned in  the  former  action."  It  will  be 
seen  that  one  of  tlie  grounds  upon  which 
his  lordship  thought  tiie  case  to  lie  out  of 
the  statute,  was  that  tlie  defendant  was 
one  of  the  parties  originally  liable.  This 
position  will  lie  noticed  liereafter.  But  he 
was  also  of  opinion  that  the  case  would 
have  been  out  f)f  the  statute,  tliough  the 
defendant  had  not  Iieen  concerned  in  the 
former  action,  for  the  reason  that  it  did 
not  appear  that  the  ten  pounds  were  to 
be  paid  //;  satisfaction.  In  other  words  the 
liability  of  the  original  party  would  liave 
still  continued,  notwitlistandiiig  the  per- 
formance of  the  defendant's  promise. 
And  sec  Noyes  r.  Humphreys,  11  Grat. 
()3().  Tills  is  also,  we  think,  the  true 
ground  of  the  decision  in  Kead  v.  Nash,  1 
Wilson,  30.').  It  there  aj)iicarcd  that  one 
Tuack,  the  plaintiff's  testator,  had  brought 
an  action  of  assault  and  i)attery  against 
one  Johnson.  The  cause  being  at  issue, 
the  record  entered,  and  jii-Jt  coining  on  to 
be  tried,  the  defendant  Nash,  being  then 
present   in    court,    in   consideration    that 


CH    IV.]  STATUTE   OF   FRAUDS.  305-*306 

So,  if  the  debt  for  which  one  engages  to  answer,  is  to  be  kept 
alive,  but  to  be  lield  for  the  benefit  of  the  guarantor,  the  case  is 
out  of  the  statute.  Thus,  where  one  purchases  the  debt  of 
another  by  his  own  promise,  as  if  A  promised  to  pay  B  a  thou- 
sand dollars  in  three  months,  and  thereupon  B  transferred  to 
him  Cs  debt  to  B  for  twelve  hundred  dollars,  payable  in  a  year, 
this  certainly  is  a  purchase  of  a  debt,  and  not  a  promise  to  pay 
the  debt  of  another,  (p) 

It  may  indeed  be  stated  as  a  general  rule,  that  wherever  the 
main  purpose  and  object  of  the  promisor  is  not  to  answer  for 
another,  but  to  subserve  some  purpose  of  his  own,  his  promise 
is  not  within  the  statute,  although  it  may  be  in  form  a  promise 
to  pay  the  debt  of  another,  and  although  the  performance  of  it 
may  incidentally  have  the  effect  of  extinguishing  the  liability  of 
another,  (q)  There  are  several  'classes  of  cases  which  may  per- 
haps be  more  satisfactorily  explained  upon  this  principle  than 
upon  any  other.  Thus,  if  a  creditor  has  a  lien  on  certain  prop- 
erty of  his  debtor  to  the  amount  of  his  debt,  and  a  third  person, 
who  also  has  an  interest  in  the  same  property,  promises  the 
creditor  to  pay  the  debt  in  consideration  of  the  creditor's  relin- 
quishing his  lien,  this  promise  is  not  within  the  statute,  (r) 

Tuack  would  not  proceed  (o  trial,  but  (q)  This  rule  is  very  clearly  stated  and 
would  withdraw  his  record,  promised  to  fully  illustrated  hy  Sliatr,  C.  J.,  in  Nelson 
pay  him  fifty  pounds  and  costs.  It  was  v.  Boynton,  3  Met.  396.  He  there  says  : 
held  tiiat  the  defendant's  promise  was  out  "  The  terms  original  and  collateral  prom- 
of  the  statute.  It  has  sometimes  been  sup-  ise,  though  not  used  in  the  statute,  are 
posed  tliat  the  judgment  of  the  court  in  convenient  enough  to  distinguish  between 
this  case  proceeded  upon  the  ground  that  the  cases,  where  the  direct  and  leading 
a  promise  to  answer  for  a  tort  committed  object  of  the  promise  is,  to  become  the 
by  anotiier  was  not  within  the  statute,  surety  or  guarantor  of  another's  debt,  and 
And  some  of  the  language  attributed  to  those  where,  although  the  effect  of  the 
the  Lord  Chief  Justice  would  seem  to  jus-  promise  is  to  pay  the  debt  of  another,  yet 
tify  this  opinion.  But  so  far  as  the  decis-  the  leading  object  of  the  undertaker  is,  to 
ion  was  based  upon  this  ground,  it  cannot  subserve  or  promote  some  interest  or  pur- 
now  be  regarded  as  law,  as  we  shall  here-  pose  of  his  own.  The  former,  whether 
after  show.  made  before  or  after,  or  at  the  same  time 
(p)  Thus,  where  A  being  insolvent,  a  with  the  promise  of  the  principal,  is  not 
verbal  agreement  was  entered  into  between  valid,  unless  manifested  by  evidence  in 
several  of  his  creditors  and  B,  whereby  B  .writing;  the  latter,  if  made  on  good  con- 
agreed  to  pay  the  creditors  10s.  in  the  sideration,  is  unaffected  by  the  statute, 
pound,  in  satisfaction  of  their  debts,  which  because,  although  the  effect  of  it  is  to  re- 
thcy  agreed  to  accept,  and  to  assign  their  lease  or  suspend  the  debt  of  another,  yet 
debts  to  B  ;  —  it  was  held,  that  this  agree-  that  is  not  the  leading  object  on  the  part 
ment  was  not  within  the  statute  of  frauds,  of  the  promisor."  And  see  Alger  v. 
not  being  a  collateral  promise  to  pay  the  Scoville,  1  Gray,  391. 
debt  of  another,  but  an  original  contract  (r)  The  leading  case  upon  this  point  is 
to  purchase  the  debts.  Anstey  y.  Harden,  Williams  ?.'.  Leper,  3  Burr.  1886.  There 
4  B.  &  r.  12-4.  one  Taylor,  a  tenant  to  the  plaintiff,  being 

27*  [317] 


306- 


THE   LAAV   OF   CONTRACTS. 


[part  II. 


The  performance  of  the  promise,  it  is  true,  will  have  the  efi'ect 
of  discharging  the  original  debtor  ;  but  there  is  no  reason  to 
suppose  that  this  constituted,  in  any  degree,  the  inducement  to 
the  promise,  or  was  at  all  in  the  contemplation  of  the  promisor. 
So  if  A,  who  is  indebted  to  B,  assigns  to  him  in  payment  a 
debt  due  from  himself  to  C,  with  a  guaranty  that  C  shall  pay 
it  to  B  when  it  becomes  due,  the  transaction  is  not  within  the 
statute.  For  although  the  undertaking  of  A  is  in  form  a  prom- 
ise to  answer  for  the  debt  of  another,  his  object  is  merely  to  pay 
a  debt  of  his  own  in  a  particular  way.  (s)  And,  generally  a 
promise  to  pay  one's  own  debt,  to  a  third  party,  as  by  A,  to 
pay  to  C,  at  B's  request,  a  debt  due  from  A  to  B,  is  not  within 


in  arrear  for  rent,  and  insolvent,  conveyed 
all  his  etFccts  for  the  benefit-  of  his  credi- 
tors. They  employed  the  defendant,  as  a 
broker,  to  sell  tlie  effects  ;  and  accordingly 
he  advertised  a  sale.  On  the  morning  of 
the  sale,  the  plaintiff  came  to  distrain  the 
goods  in  tlie  house;  whereupon  the  de- 
fendant promised  to  pay  the  arrear  of  rent, 
if  he  would  desist  from  distraining  ;  and 
he  did  thereupon  desist.  Upon  these  facts 
the  court  held,  that  the  defendant's  promise 
was  not  within  the  statute.  To  the  same 
effect  is  Houlditch  v.  Milne,  3  Esp.  86. 
Thfere  the  phiintiff  had  in  his  possession 
certain  carriages  belonging  to  one  Copey, 
upon  which  lie  had  a  lien  for  repairs. 
The  defendant,  in  consideration  that  the 
plaintiff  would  relinquish  his  lien,  and 
give  ui>  the  carriages  to  him,  promised  to 
pay  the  plaintiff  "the  amount  due  him. 
And  Lord  Eldon  Juki  the  case  to  be  out 
of  the  statute,  on  the  principle  establisiied 
by  Williams  v.  Le})er.  And  see  furtlicr, 
Barrel!  v.  Tni.sscll,  4  Taunt.  117  ;  Siing- 
erland  v.  Morse,  7  Johns.  46.3  ;  Ilindman 
V.  Langford,  .3  Strobh.  207  ;  Blount  v. 
Hawkins,  I'J  Ala.  100;  Allen  v.  Thomp- 
son, 10  N.  II.  .'52,  cited  ante,  vol.  1,  p. 
497,  note  (.s)  ;  Kandle  v.  Harris,  G  Yerg. 
508,  cited  ante,  vol.  1,  p.  498,  note  [u). 

(s)  Thus,  in  Johnson  v.  Gilbert,  4  Hill, 
178,  the  defendant  Iieiiig  indeljted  to  one. 
Slierwood  in  the  sum  of  twenty-five  dol- 
lars, the  jihiintiff,  at  tiie  defendant's  re- 
quest, paid  that  deljt,  in  consideration 
whereof  ihc  defendant  transferred  to  the 
plaintiff  tlic  note  of  one  lOastinan,  ])ayabie 
to  liiinsclf.  The  defendant  also  indorsed 
upon  l^ie  note  a  guaranty  tliat  it  would  bo 
pai<l  ;  and  upon  tiiis  guaranty  the  action 
WU3  brought.     Jt  was  /icW  that  the  case 

[:J18J 


was  not  within  the  statute  of  frauds. 
Branson,  J.,  said  :  "  The  statute  of  frauds 
has  notliing  to  do  with  the  case.  That 
only  applies  where  the  person  makingthe 
promise  stands  in  the  relation  of  a  surety 
for  some  third  person,  who  is  the  principal 
debtor.  This  was  not  an  undertaking  by 
the  defendant  to  pay  the  debt  of  Eastman, 
but  it  was  an  agreement  to  pay  his  own 
debt  in  a  particular  way.  The  plaintiff 
had,  upon  request,  paid  a  debt  of  twenty- 
five  dollars,  which  the  defendant  owed  to 
Sherwood,  and  had  thus  made  himself  a 
creditor  of  the  defendant  to  that  amount. 
If  the  matter  had  not  been  otherwise 
arranged,  the  plaintiff  might  have  sued 
the  defendant,  and  recovered  as  for  so 
much  money  paid  for  him  on  request. 
But  the  plaintiff  agreed  to  accept  payment 
in  a  different  way,  to  wit,  by  the  transfer 
of  Eastman's  note  for  the  wood-work  of  a 
wagon,  witli  the  defendant's  undertaking 
that  the  note  should  be  paid.  The  de- 
fendant, instead  of  promising  tiiat  he 
would  pay  himself,  agreed  that  Eastman 
should  pay.  He  miglit  do  that,  whether 
Eastman  was  his  debtor  or  not ;  and  the 
fact  that  Eastman  was  a  debtor,  does  not 
change  the  character  of  the  defendant's 
undertaking,  and  make  it  a  case  of  surety- 
ship within  the  statute  of  frauds."  The 
same  point  was  decided  by  the  New  York 
Court  of  Aj)peals,  in  Brown  r.  Curtiss,  2 
Comst.  225  ;  and  DurJiam  v.  Main-ow,  id. 
.5.'3.'!.  It  is  to  be  observetl  also,  that  cases 
of  this  description  are  out  of  the  statute, 
upon  the  ])rinciplo  established  by  East- 
wood lu  Kenyon,  11  A.  &  E.  4.'!8 ;  and 
llargreaves  v.  Tarsous,  13  M.  &  W.  501. 
Sec  mijira,  note  (m). 


en.  IV.]  STATUTE    OF    FRAUDS.  *307-*308-*309 

the  statute,  (sa)  Nor  a  promise  to  pay  over  as  directed  money 
remitted  or  collected,  and  belonging  to  the  party  directing,  {sb) 

If  one  of  several  persons,  who  are  liable  jointly  *or  severally 
for  the  payment  of  the  same  debt,  promises  the  creditor  to  pay 
the  debt,  this  is  not  a  case  within  the  statute  ;  for  although  the 
performance  of  the  promise  will  have  the  effect  of  discharging 
others,  it  is  to  be  presumed  that  the  thing  in  the  contemplation 
of  the  promisor  was  his  own  discharge.  Thus,  in  the  case  of  a 
bill  of  exchange  for  which  several  persons  are  liable,  if  it  be 
agreed  to  be  taken  up  and  paid  by  one,  eventually  others  may 
be  discharged;  but  the  moving  consideration  is  the  discharge  of 
the  party  himself,  and  not  of  the  rest,  though  that  also  en- 
sues, (t)  Again,  it  is  now  well  settled  that  the  guaranty  of  a 
factor  selling  upon  a  del  credere  commission,  is  not  within  the 
statute.  This  may  be  referred 'to  the  same  principle.  Although 
such  a  contract  "  may  terminate  in  a  liability  to  pay  the  debt  of 
another,  that  is  not  the  immediate  object  for  which  the  consid- 
eration is  given."  (m) 

It  may  be  further  stated  that  this  clause  of  the  statute  does 
not  embrace  cases  in  which  the  liability  to  pay  the  debt  of 
another  arises,  by  operation  of  law,  out  of  some  transaction 
between  the  parties,  without  the  aid  of  any  special  promise. 
Thus,  if  A,  who  is  indebted  to  B,  sends  money  to  C  to  pay  the 
debt,  and  O  accepts  the  trust,  he  thereby  *becomes  liable  to  B 
for  the  debt  of  A.  (y)  So  if  property  is  delivered  to  B  clothed 
with  a  trust  for  the  payment  of  the  debt  of  C,  and  B  consents 
to  receive  the  property  subject  to  the  trust,  he  thereby  becomes 
liable  to  pay  the  debt,  (iv)      But  *in  cases  falling  within  this 

[sa)  Antonio  i:.  Clissey,  3  Rich.  201  ;  trine  in  the  English  and  American  law. 

Blunt  V.  Boyd,  3  Barb.  209;  Barkers.  See  ante,   vol.  1,   p.  79,   n.   (h),   and  p. 

Bucklin,  2  Denio,  45.  500,  n.  (iv). 

(sh)   Wyman  v.  Smith,  2  Sandf.  331 ;         (v)  Wyman   v.  Smith,  2    Sandf.   331. 

Prather  v.  Vineyard,  4  Gilman,  40.  And  see  Stocking  v.  Sage,  1  Conn.  519. 

[t)  Per  Lord  Ellenboroiigh,  in  Castling  {lo)  Drakeleyi;.  Deforest,  3  Conn.  272. 
V.  Aubert,  2  East,  325.  And  see  Files  v.  This  was  one  of  the  grounds  upon  which 
McLeod,  14  Ala.  611.  And  see  supra,  Williams  r.  Leper,  3  Burr.  1886,  was  de- 
note (o).  cided.     For  the  facts  of  the  case  see  supra, 

(u)  Per  ParJce,   B.,   in    Couturier    v.  n.  (r).     The  plaintiff  had  a  lien  upon  the 

Hastie,  8  Exch.  40,  16  Eng.  L.  &  Eq.  562.  goods  of  his  debtor  for  the  payment  of  his 

It  was  declared  by  the  Court  of  Exche-  debt ;  and  the  defendant,  in  consideration 

quer  in  this  case  that  such  a  contract  is  that   the   plaintiff  would    relinquish    the 

not  within  the  statute.     Such  may  now,  goods  to  him,  consented  to  receive  them 

therefore,  be  considered  as  the  settled  doc-  subject  to  the  lien.     Lord  Mansfield,  ia 

[319] 


SOO- 


THE  LAW   OF   CONTRACTS. 


[part  II. 


principle,  it  is  obvious  that  the  party  accepting  the  trust  can  be 
made   liable   only  to   the   extent  of  the  value   of  the  property 


dclivcririir  his  opinion,  said  :  "  This  case 
has  notliing   to   do   with   the    statute   of 
frauds.     Tlie  res  (jeshe  would  entitle  the 
plaintiff  to  his  action  against  the  defend- 
ant.    The  landlord  had   a  legal  pledge. 
He  enters  to  distrain  ;  he  has  the  pledge 
in   his   custody.      The   defendant   agrees 
that  the  goods  shall  be  sold,  and  the  plain- 
tiff paid  in  the  first  place.    The  goods  arc 
the  fund.     Tlic  question  is  not  between 
Taylor  and  the  plaintiff.      The  plaintiff 
had  a  lien  upon  the  goods.     Leper  was  a 
trustee   for   all   the   creditors ;    and    was 
obliged  to  pay  the  landlord,  who  had  the 
prior  lien.     This  has  nothing  to  do  with 
the  statute  of  frauds."     And  Wdmot,  J., 
said  :  "  Leper  became  the  bailiff  of  the 
hindlord ;    and   when   he    had    sold    the 
goods,  the  money  was  the  landlord's  (as 
for  as  45/.)    in    his    own    bailiffs    hands. 
Therefore   an     action   would    have   lain 
against  Leper  for  money  had  and  received 
to  the  plaintiffs  use."     The  principle  was 
stated   still  more   pointedly  by  Aston,  J., 
who  concurred  with  the  rest  of  the  court 
upon  this  ground  alone.      He  said  :  "  I 
look  upon  the  (/uods  here  to  be  the  debtor; 
and  I  think  that  Leper  was  not  bound  to 
pay  the  landlord  more  than  the  goods  sold 
for,    in   case   they   had  not  sold  for  45/. 
The  goods  were  a  fund  between  both  ;  and 
on  that  foot  I  concur."   The  case  of  Cast- 
ling  r.   Auliurt,  2   East,  325,  proceeded 
upon  the  same  ground.     There  the  plain- 
tiff held    certain     i)olicics    of    insurance 
which  lie   had   effected,  as  an   insurance 
broker,  for  the  use  of  one  Grayson,  and 
upon  tlic  futh  of  which  he  had  accepted 
bills  for    Grayson's  accommodation.      A 
loss  having  happened  on  the   policies  in 
question,    and    tiie    defendant,    who   was 
Grayson's  agent,  wishing  to   obtain  pos- 
session of  the  policies,  in  order  to  receive 
the  auKjunt   of  the  loss   from  the  under- 
writers,   prouii^cd,  in    consideration    tiiat 
the  jilainiiff  woulil  deliver  to  him  the  poli- 
cies, to  provide  funds  for  the  payment  of 
the  i)laiiititr8  acceptances.     The  ])olicies 
were  accordingly  dclivei'cd  to  the  defend- 
ant, who  received   fropi   the  underwriters 
more  than  suni<'ient  to  cover  the  plaintilf's 
acccptanees.      V>\)i>\\  (hoc   facts,  ihe  court 
lield  tlie  defendant  liable.     And  Lc  Ji/unr, 
J.,  snid  :  "  This  is  a  case  where  one  man 
having  «  fund   in   his    hands  whiili    was 
adefiinit(r   to  the  discharge  of  certain  in- 
cuuibranccH  ;  another  party  undertook  that 

[.*J20] 


if  that  fund  were  delivered  up  to  him,  he 
would  takeit  with  the  incumbrances;  this, 
therefore,  has  no  rehttion  to  the  statute  of 
frauds."     It  would  seem  that  some  of  the 
judges  held  the  defendant  liable  also  upon 
his  special  promise,  upon  the  other  prin- 
ciple established  by  Williams   r.  Leper, 
namely,  that  the  main  purpose  and  object 
of  the  defendant  in  making  the  promise, 
was  not  to  pay  the  debt  of  Grayson,  but 
to  subserve  a  purpose  of  his  own,  namely, 
to  get  possession   of  the   policies.      See 
supra.     But  if  the  facts  are  correctly  re- 
ported, it  would  seem  difficult  to  sustain 
the  decision  upon  this    ground.      For  it 
appears  that  the  defendant  was  acting  as 
Grayson's  agent,  and  that  he  received  the 
policies  on  Grayson's  account,  and  for  his 
benefit.    The  consideration  of  the  promise, 
therefore,  enured  entirely  to  the  benefit  of 
Grayson  ;  and  the  case,  in  this  view,  would 
seem  to  come  within  the  decision  in  Nelson 
V.  Boynton,  3  Met.  396,  where  it  was  held 
that  a  promise  to  pay  the  note  of  a  third 
person,  which  was  in  suit  and  secured  by 
an  attachment  of  his  property,  in  consid- 
eration of  the  holder's  discontinuing  the 
suit,  and  relinquishing  his  attachment,  was 
within  the  statute.     It  is  to  be  observed, 
however,  that  some  of  the  language  at- 
tributed to  Lord  Ellenhoroi((/h,  would  seem 
to  indicate  that  the  defendant's  name  was 
on  bills  accepted  by  the  plaintiff,  and  that 
his    object,   therefore,    in    undertaking  to 
provide  funds  for  their  payment,  was  his 
own  discharge.     Thus,  liis    lordship  said 
that  the  defendant,  in  making  the  promise, 
"  had  not  the  discharge  of  Grayson  princi- 
pally in  his   contemplation,  but  the  dis- 
charge of  himself.     That  was  his  moving 
consideration,   though   the    discharge    of 
Grayson  would  eventually  follow."     If  wo 
may  infer  from  this  that  the  defendant  was 
lialile  on  the  bills,  the  case  is  relieved  from 
all  diiliculty.     Sec  supra,  p.  305,  n.  (7). 
See  in  further  illustration  of  the  princi])le 
stated  in  the  text,  Edwards  r.  Kelly,  6  JM. 
&  S.  204.     There,  the  plaintiff,  for  rent- 
arrcar,  having  distrained  goods  which  the 
tenant  was  al)out  to  sell,  agreed  with  the 
defendants  to  deliver  up  the  goods,  and  to 
jicrmit   tlicm   to    be  sold    by    on(!   of  the 
dri'cndaiits  ibr  the  tenant,  upon  the  defend- 
ants'jointly  uiulertaking  to  pay  the  jilain- 
tilf  fhe   rent   due;    and   the  goods  were 
accordingly  delivered  to    the  defendants. 
Jlild,  that  the   case  was   not  within  the 


CIT.  IV.] 


STATUTE   OF   FRAUDS. 


*310 


received,  and  for  debts,  with  the  payment  of  which  the  property 
is  charged,  (x) 

It  has  been  made  a  question  whether  the  words  "  debt, 
default,  or  miscarriage,"  extend  to  a  liability  for  a  mere  tort. 
But  it  is  now  well  settled  that  they  do.  (y)  And  a  cove- 
nant  or  promise  under  seal,  is  said  not  to  be  within  the 
statute.  (/y«) 

The  third  clause  in  this  section,  which  declares  that  "  no  *ac- 
tion  shall  be  brought  upon  any  agreement  made  in  consider- 
ation of  marriage,  unless,"  &c.,  is  not  generally  adopted  in  this 
country.  It  has  already  been  said,  that  promises  to  marry 
are  not  within  the  statute.  (0)  But  all  promises  in  the  nature 
of  settlement,  advancement,  or  provision  in  view  of  marriage, 
are  within  the  statute,  and  must  be  in  writing,  [a)     And  a 


statute.  And  Lord  Ellenhoroiigh  said  : 
"  Perhaps  this  case  might  be  distinguished 
from  that  of  Williams  v.  Leper,  if  the 
goods  distrained  had  not  been  delivered 
up  to  the  defendants.  But  here  was  a  de- 
livery to  them  in  trust,  in  effect,  to  raise 
by  sale  of  the  goods  sufficient  to  satisfy  the 
plaintiff's  demand  ;  the  goods  were  put 
into  tlieir  possession  sulycct  to  this  trust. 
So  that  in  substance  this  was  an  under- 
taking by  the  defendants  that  the  fund 
should  be  available  for  the  purpose  of 
liquidating  the  arrears  of  rent."  And  see 
Bampton  v.  Paulin,  4  Bing.  264. 

(x)  See  Thomas  v.  Williams,  10  B.  & 
C.  664. 

[ij)  The  case  of  Eead  v.  Nash,  1  Wil- 
son, 305,  for  some  time  gave  countenance 
to  a  contrary  opinion.  But  the  doctrine 
stated  in  the  text  was  clearly  established 
by  Kirkham  v.  Marter,  2  B.  &  Aid.  61.3. 
There,  one  T.  E.  Marter  had  wrongfully 
and  without  the  license  of  the  plaintiff, 
ridden  the  plaintiff's  horse,  and  thereby 
caused  its  death.  Held,  that  a  promise  by 
the  defendant  to  pay  the  damages  thereby 
sustained,  in  consideration  that  the  plain- 
tiff would  not  bring  any  action  against  the 
said  T.  E.  Marter,  was  within  the  statute 
of  frauds,  and  must  be  in  writing.  And 
per  Abbott,  C.  J.,  "The  word  'miscar- 
riage' has  not  the  same  meaning  as  the 
word  '  debt,'  or  '  default ; '  it  seems  to  me 
to  comprehend  that  species  of  wrongful 
act,  for  the  consequences  of  which  the  law 
would  make  the  party  civilly  responsible. 


The  wrongful  riding  the  horse  of  another, 
without  his  leave  and  license,  and  thereby 
causing  his  death,  is  clearly  an  act  for 
which  the  party  is  responsible  in  damages  ; 
and,  therefore,  in  my  judgment,  falls  within 
the  meaning  of  the  word  '  miscarriage.'  " 
Ilolroyd,  J.,  "  I  think  the  term  miscairiaf/e 
is  more  properly  applicable  to  a  ground 
of  action  founded  upon  a  tort,  than  to  one 
founded  upon  a  contract ;  for  in  the  latter 
case  the  ground  of  action  is,  that  the  party 
has  not  performed  what  he  agreed  to  per- 
form ;  not  that  he  has  misconducted  him- 
self in  some  matter  for  which  by  law  he  is 
liable.  And  I  think  that  both  the  words 
jniscarriac/e  and  default  ajjply  to  a  promise 
to  answer  for  another  with  respect  to  the 
non-performance  of  a  duty,  though  not 
founded  upon  a  contract."  Best,  J., 
"  The  question  is,  whether  the  words  of 
the  act  are  large  enough  to  embrace  this 
case.  There  is  nothing  to  restrain  these 
words,  default  or  miscarriage ;  and  it  ap- 
pears to  me  that  each  of  them  is  large 
enough  to  comprehend  this  case."  And 
see  Turner  v.  Hubbell,  2  Day,  457. 

(i/a)  Douglass  v.  Howland,  24  Wend. 
35;  Bush  r.  Stevens,  id.  256  ;  Barnum  r. 
Childs,  1  Sandf  58,  1 1  Barb.  14.  And  the 
words  "  value  received  "  are  also  held  to 
have  this  effect,  in  Edelen  v.  Gough,  5 
Gill,  103. 

(z)  See  ante,  vol.  1,  pp.  546,  547.  And 
see  further,  Clark  v.  Pendleton,  20  Conn. 
495  ;  Ogdcn  v.  Ogden,  1  Bland,  287. 

(«)  See  ante,  vol.  I,  p.  554. 

[321] 


sir 


THE   LAW   OF   CONTRACTS. 


[part  ii. 


promise  to  marry  after  a  jDeriod  longer  than  one  year,  has  been 
held  to  be  within  the  last  clause  of  this  section,  (b) 

A  parol  promise  in  a  marriage  settlement,  although  not  itself 
enforceable  by  reason  of  the  statute,  has  been  held  to  be  a  suf- 
ficient consideration,  either  to  sustain  a  settlement  made  after 
marriage  in  conformity  with  the  promise,  (c)  or  a  new  promise 
made  in  writing  after  marriage,  (d)  And  where  instructions 
are  given  and  preparations  made  for  marriage  settlements,  and 
the  woman  is  persuaded  by  the  man  to  marry,  trusting  to  his 
verbal  promise  to  complete  them,  it  has  been  thought  that  equity 
ought  to  relieve  and  compel  performance,  (e) 

The  principal  questions  which  have  arisen  under  this  clause 
relate  to  the  sufficiency  of  the  written  promise.  It  is  enough  if 
contained  in  a  letter;  (/)  or  in  many  letters,  *which  may  be 
read  together  as  parts  of  a  correspondence  on  one  subject,  (g-) 
But  it  must  be  a  promise  to  the  other  party ;  and  therefore  a  letter 


(h)  See  ante,  vol.  1,  p.  547. 
(t)  Wood  V.  Savage,  Walk.  Ch.  471. 
But  see  ante,  vol.  1,  p.  554,  n.  (t). 

[d]  INIountacue  v.  Maxwell,  1  Stra.  236 ; 
Do  Beil  V.  Thomson,  3  Beav.  469,  s.  c. 
nom.  Hammcrsley  v.  De  Beil,  12  Clark  & 
F.  45  ;  Surconie'y.  Pinnifxer,  3  De  G.,  M. 
&  G.  571,  17  Eng.  L.  &  Eq.  212. 

(e)  Per  Story,  J.,  in  Jenkins  i:.  EI- 
driilge,  3  Story,  291.  But  see  Montacute 
V.  Maxwell,  1  P.  Wms.  618.  In  this 
case  tlie  plaintilf  hrougiit  a  bill  against 
the  defendant,  her  husband,  setting  forth 
that  tiie  defendant,  before  her  intermar- 
riage with  him,  j)romi.sed  that  slic  should 
enjoy  all  iier  own  estate  to  her  separate 
use ;  tliat  lie  had  agreed  to  execute  writ- 
ings to  tliat  purpose,  and  had  instructed 
counsel  to  draw  such  writings,  and  that 
when  they  were  to  be  married,  tlie  writings 
not  iieing  perfected,  tiie  defendant  desired 
this  might  not  delay  the  match,  in  regard 
liis  friends  being  there  it  miglit  sliame 
him ;  ijiit  engaged  tliat  upon  his  honor 
6lie  should  iiave  tlie  same  advantage  of  the 
agreement  as  if  it  were  in  writing,  drawn 
in  form  by  counsel,  and  executed;  where- 
upon llie  marriage  took  ell'ect.  To  this 
bill  the  defendant  pleaded  the  statute  of 
frauds.  And  the  Lonl  Chancellor  said  : 
"  Jn  discs  of  fraud,  ccpiity  siuiuld  relieve, 
even  iigainst  the  words  of  tiie  statute  ;  as 

[J22] 


if  one  agreement  in  writing  should  be  pro- 
posed and  drawn,  and  another  fraudu- 
lently and  secretly  brought  in  and  exe- 
cuted in  lieu  of  the  former ;  in  this  or  saeh 
like  cases  of  fraud,  equity  would  relieve; 
but  where  there  is  no  fraud,  only  relying 
upon  the  honor,  word,  or  promise  of  the 
defendant,  the  statute  making  these  prom- 
ises void,  equity  will  not  interfere ;  nor 
were  the  instructions  given  to  counsel  for 
preparing  the  writings  material,  since  after 
they  were  drawn  and  engrossed,  the  parties 
might  refuse  to  execute  them." 

(/■)  Seagood  r-.  Meale,  Prec.  in  Ch. 
560  ;  Wankford  v.  Fortherly,  2  Vern.  322; 
Bird  V.  Blosse,  2  Vent.  361.-  In  this  last 
case  a  father  wrote  a  letter  signifying  his 
assent  to  the  marriage  of  his  daughter 
with  one  J.  S.,  and  that  he  would  give 
lier  1,500/.  Afterwards  I)y  another  letter, 
upon  a  further  treaty  concerning  the  mar- 
riage, he  went  back  from  the  proposals  of 
his  lirst  letter.  But  subsecpiently  to  his 
writing  the  last  letter,  he  declared  that  he 
would  agree  to  what  was  ]iroposcd  in  his 
lirst  letter.  The  court  Iirld  that  tlu'  last 
declaration  had  set  the  terms  in  tiie  first 
letter  up  again  ;  and  that  the  niidert;iking 
therefore  was  sufliciently  evidenced  by 
writing  within  the  statute  of  frauds. 

{(j)  Sec  ante,  p.  285,  n.  (c). 


CH.  IV.]  STATUTE    OF    FRAUDS.  *312-*313 

from  a  father  to  his  daughter,  promising  her  an  advancement, 
which  is  not  shown  to  the  intended  husband,  nor  known  to  him 
until  after  marriage,  is  denied  to  be  a  promise  to  him  within 
the  meaning  of  the  statute,  (h)  So  if  in  such  a  letter  the  writer 
objects  to,  and  endeavors  to  dissuade  from  the  proposed  mar- 
riage. (/)  Whatever  be  its  form,  it  must  amount,  substantially, 
to  a  promise  mrde  to  the  party,  in  consideration  that  he  or  she 
will  marry  a  ceitain  other  party,  (j)  , 

The  fourth  clause  provides  that  "no  action  shall  be  brought 
upon  any  contract  or  sale  of  lands,  tenements,  or  hereditaments, 
or  any  interest  in  or  concerning  them,"  unless,  &c.  These 
words  are  very  general,  and  obviously  intended  to  have  a  wide 
operation  ;  but  they  have  been  somewhat  controlled  by  con- 
struction. Thus,  if  the  question  be,  whether  a  contract  for  the 
sale  of  growing  crops  be  a  contract  or  sale  of  "  any  interest  con- 
cerning lands,"  it  seems  to  be  answered  *in  conformity  with 
the  intention  of  the  parties.  If  grain  be  reaped,  and  stacked  or 
stored  in  barns,  it  becomes  certainly  a  chattel.  And  if  it  be 
growing  when  it  is  sold,  yet  if  the  sale  contemplates  its  sever- 
ance when  grown,  a^id  a  delivery  of  it  then,  distinct  from  the 
land,  it  is  in  the  contemplation  of  the  parties  a  mere  chattel, 
and  is  therefore  so  in  the  view  of  the  law,  so  far  at  least  as  this 
statute  is  concerned.  (A;)     And  *we  think  it  is  the  same  with 

(h)  Ayliffe  v.  Tracy,  2  P.  Wms.  65.  estate  will  come  to  you  at  my  death,  un- 
{i)  Douglas  V.  Vincent,  2  Vcrn.  202.  less  some  unforeseen  occurrence  should 
(j)  See  Randall  v.  Morgan,  12  Yes.  take  place;"  and  desired  his  letter  to  be 
67 ;  Ogden  r.  Ogden,  1  Bland,  284.  In  communicated  to  the  guardians.  The 
Maunsell  v.  White,  1  Jones  &  La  T.  539,  guardians  thereupon  consented  to  the  mar- 
it  appeared  that  upon  a  treaty  for  a  mar-  riage,  which  was  solemnized.  The  court 
riage  between  M.  &  E.,  a  minor,  M.  com-  held,  1st,  that  the  letter  did  not  amount  to 
municated  to  the  guardians  of  E.  a  letter  a  contract  by  H.  to  devise  the  T.  estates  to 
from  his  uncle,  H.,  stating  that  he  had,  by  M.,  and  that  H.  might  dispose  of  them  as 
his  will,  left  his  T.  estate  to  M.  The  he  pleased  by  his  will ;  2d,  that  supposing 
guardians  resolved  that  until  a  suitable  it  amounted  to  a  contract,  matters  con- 
settlement  should  be  made  by  H.,  of  real  nected  with  the  subsequent  conduct  of  M. 
estate,  upon  the  marriage,  in  the  usual  were  "unforeseen  occurrences ;"  and  that 
course  of  settlement,  it  was  not  advisable  H.  was  the  sole  person  to  determine 
that  it  should  take  place.  This  resolution  whether,  upon  their  happening,  he  would 
was  communicated  to  H.,  who  in  reply  alter  his  will. 

wrote  to  M. :  "  My  sentiments  respecting         (k)  This  is  the   rule   declared   by  the 

you    continue    unalterable;    however,    I  Supreme  Judicial  Court  of  Massachusetts, 

shall  never  settle  any  part  of  my  property  in  Whitmarsli  v.  "Walker,    1   Met.   313. 

out  of  my  power  so  long  as  I  exist.     My  That  was  an  action  founded  on  a  parol 

will  has  been  made  for  some  time  ;  and  I  agreement,  whereby  the  defendant  agreed 

am  confident  that  I  shall  never  alter  it  to  to  sell  to  the  plaintiff  two  thousandmul- 

your  disadvantage.     I  repeat  that  my  T.  berry  trees  at  a  stipulated  price.      The 

[323] 


314* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


growing  grass,  or  growing  trees,  or  fruits ;  although  some  cases 
take  a  distinction  in  this  *  respect  between  what  grows  sponta- 


trees,  at  the  time  of  the  agreement,  were 
growing  in  the  close  of  the  defendant. 
It  was  proved  at  the  trial,  that  the  plaintiff 
paid  the  defendant  in  hand  the  sum  of  ten 
dollars  in  part  payment  of  the  price 
thereof,  and  promised  to  pay  the  residue 
of  the  price  on  the  delivery  of  the  ti-ees, 
which  the  defendant  promised  to  deliver 
on  demand  ;  but  which  promise,  on  his 
part,  he  afterwards  refused  to  perform. 
The  defence  was  that  the  contract  was 
for  the  sale  of  an  interest  in  land  withia 
the  meaning  of  the  statute  of  frauds. 
Wilde,  J.,  said  :  "  Wo  do  not  consider 
the  agreement  set  forth  in  the  declaration, 
and  proved  at  the  trial,  as  a  contract  of 
sale  consummated  at  the  time  of  the  agree- 
ment ;  for  the  delivery  was  postponed  to 
a  future  time,  and  the  defendant  was  not 
bound  to  complete  the  contract  on  his 
part,  unless  the  plaintiff  should  be  ready 
and  willing  to  complete  by  the  payment 
of  the  stipulated  price.  Sainsbury  r.  JNIat- 
thews,  4  M.  &  W.  347.  Independently  of 
the  statute  of  frauds,  and  considering  the 
agreement  as  valid  and  binding,  no  prop- 
erty in  the  trees  vested  thereby  in  the 
plaintiff.  The  delivery  of  them  and  the 
payment  of  the  price  were  to  be  simulta- 
neous acts.  The  plaintiff  cannot  main- 
tain an  action  for  the  non-delivery,  without 
proving  that  he  offered,  and  was  ready  to 
coni])letc  the  payment  of  the  price ;  nor 
could  the  defendant  maintain  an  action 
for  the  price,  without  proving  that  he  was 
ready  and  offered  to  deliver  the  trees. 
According  to  the  true  construction  of  the 
contract,  as  we  understand  it,  the  defend- 
ant undertook  to  sell  the  trees  at  a  stipu- 
lated price,  to  sever  them  from  the  soil, 
or  to  permit  the  plaintiff  to  sever  them, 
and  to  deliver  them  to  him  on  demand  ; 
lie  at  the  same  time  jiaying  the  defendant- 
the  resiilue  of  the  price.  And  it  is  imma- 
terial whether  the  severance  was  to  be 
made  liy  the  plaintiff  or  the  defendant. 
♦For  a  license  for  the  plaintiff  to  enter  and 
remove  the  trees  would  pass  no  interest  in 
tlic  land,  and  wf)u!d,  witiiout  writing,  i)e 
valid, notwithstanding  the  statute  of  frauds. 
.  .  .  .  We  think  it  tlierefore  clear 
that,  giving  to  the  contract  tlu;  construc- 
tion already  stated,  the;  jdaintilf  is  cntilied 
to  recover.  If,  for  a  valuable  considera- 
tion, the  defendant  coiilractcil  to  sell  the 
trees,  to  rieliver  them  at  a  future  time,  he 
was  bound   to  sever  them  from  the  soil 

[;m] 


himself,  or  to  permit  the  plaintiff  to  do  it; 
and  if  he  refused  to  comply  with  his  agree- 
ment, he  is  responsible  in  damages." 
And  the  case  of  Nettleton  v.  Sikes,  8  Met. 
34,  is  to  the  same  et!ect.  It  was  there  held 
that  an  agreement  by  an  owner  of  land 
that  another  may  cut  down  the  trees  on 
the  land,  and  peel  them,  and  take  the 
bark  to  his  own  use,  is  not  within  the 
statute  of  frauds.  And  see  Baker  v.  Jor- 
dan, 3  Ohio  State,  438  ;  Smith  r.  Bryan, 
5  Md.  141.  The  same  view  has  beea 
taken  in  several  English  cases.  Thus, 
in  Smith  v.  Surman,  9  B.  &  C.  561, 
where  the  plaintiff,  being  the  owner  of 
trees  growing  on  his  land,  verbally  agreed 
with  the  defendant,  while  they  were 
standing,  to  sell  him  the  timber  at  so 
much  per  foot;  Littledale,  J.,  said:  "I 
think  that  the  contract  in  this  case  was 
not  a  contract  for  the  sale  of  lands,  tene- 
ments, or  hereditaments,  or  any  interest 
in  or  concerning  the  same,  within  the 
meaning  of  the  fourth  section.  Those 
words  in  that  section  relate  to  contracts 
(for  the  sale  of  the  fee-simple,  or  of  some 
less  interest  than  the  fee),  which  give  the 
vendee  a  right'to  the  use  of  the  land  for  a 
specific  period.  If,  in  this  case,  the  con- 
tract had  been  for  the  sale  of  the  trees, 
with  a  specific  liberty  to  the  vendee  to 
enter  the  land  to  cut  them,  I  think  it 
would  not  have  given  him  an  interest  ia 
the  land,  within  the  meaning  of  the  statute. 
The  object  of  a  party  who  sells  timber  is, 
not  to  give  the  vendee  any  interest  in  his 
land,  but  to  pass  to  him  an  interest  in  the 
trees,  when  they  become  goods  and  chat- 
tels. Here  the  vendor  was  to  cut  the 
trees  himself.  His  intention  clearly  was, 
not  to  give  the  vendee  any  projierty  in 
the  trees  until  they  were  cut  and  ceased  to 
be  part  of  the  freehold."  And  Parke,  J., 
dismissed  this  question  with  saying, 
"  The  defendant  could  take  no  interest  in 
the  land  by  this  contract,  because  he  could 
not  acquire  any  property  in  the  trees  till 
they  were  cut."  Again,  in  Sainsbury  v. 
Matthews,  4  M.  &  W.  343,  wlicre  the 
defendant,  in  the  month  of  June,  agreed 
to  sell  to  the  jdaintiff  the  jiotatoes  then 
growing  on  a  certain  (piantity  of  land  of 
tiic  defendant,  at  2s.  per  sack,  the  plaintiff 
to  have  them  atdiggii:gup  time  (October), 
and  to  find  diggers,  it  was  lu-ld  that  this 
was  not  a  contract  for  the  sale  of  an  in- 
terest iu  land,  within  the  meaning  of  tho 


en.  IV.] 


STATUTE   OF   FRAUDS. 


-314 


neously,  and  that  which  man  has  planted  or  sown  and  culti- 
vated, holding  that  only  emblements,  or  what  might  be 
emblements,  are  to  be  considered  as  chattels,  while  the  spon- 
taneous growth  of  the  land  remains  a  part  of  it ;  at  least,  until 


statute  of  frauds.     And  Parl-e,  B.,  said  : 
"  This  is  a  contract  for  the  sale  of  goods 
and  cliattcls  at  a  future  day,  the  produce 
of  certain  hind,  and  to  he  taken  away  at  a 
certain  time.     It  gives   no  right  to   the 
land  ;  if  a  tempest  had  destroyed  the  crop 
in  the  mean  time,  and  there  had  been  none 
to  deliver,   the  loss   would   clearly  have 
fallen  upon  the  defendant.     It  is  only  a 
contract  for  goods  to  be  sold  and  deliv- 
ered."   And  see  Evans  v.  Eoberts,  5  B. 
&  C.  829.     It  must  be  admitted,  however, 
that  the  English  courts  manifest  a  strong 
inclination,  in  the  more  recent  cases,  to 
hold  a  contract  to  be  within  the  statute  or 
not,  according  as  the  subject-matter  of  it 
consists  ot'frnctus  industriales,  or  the  spon- 
taneous productions  of  the   earth.      See 
Scorell   r.    Boxall,    1  Young  &  J.  396  ; 
Evans  v.  Roberts,  5  B.  &  C.  829  ;  Rod- 
well  V.  Phillips,  9  M.  &  W.  501  ;  Jones  v. 
Flint,  10  A.  &  E.  753.     The  same  rule  was 
very  authoritatively  declared  in  Ireland, 
in  the  case  of  Dunne  v.  Ferguson,  Hayes, 
540.     That  was  an  action  of  trover  for 
five  acres  of  turnips.     It  appeared  that  in 
October,  1830,  the  defendant  sold  to  the 
plaintiff  a  crop  of  turnips  which  he  had 
sown  a  short  time  previously.     In  Febru- 
ary, 1831,  and  previously,  while  the  tur- 
nips were  still  in  the  ground,  the  defendant 
severed   and    carried    away   considerable 
quantities  of  them,  which  he  converted  to 
his  own  use,  and  for  which  the  present 
action  was  brought.     No  note  in  writing 
was  made  of  the  bargain.     It  was  held 
that  the  plaintiff  was  entitled  to  recover. 
And  Jni/,  C.  B.,  said  :  "  The  general  ques- 
tion for  our  decision  is,  whether,  in  this 
case,  there  has  been  a  contract  for  an  in- 
terest concerning  lands,  within  the  second 
[fourth]  section  of  the  statute  of  frauds  ; 
or  whether  it  merely  concerned  goods  and  ■ 
chattels  ;  and  that  question  resolved  itself 
into   another,  whether  or  not  a  growing 
crop  is  goods  and  chattels.     The  decisions 
have  been  very  contradictory,  —  a  result 
which  is  always  to  be  expected  when  the 
judges  give  themselves  up  to  fine  distinc- 
tions.    In  one  case,  it  has  been  held  that 
a  contract  for  potatoes  did  not  require  a 
note  in  writing,  because  the  potatoes  were 
ripe  ;  and  in  another  case  the  distinction 

VOL.  II.  28 


turned  upon  the  hand  that  was  to  dig  them ; 
so  that  if  dug  by  A.  B.,  they  were  pota- 
toes ;  and  if  by  C.  D.,  they  were  an  in- 
terest  in  lands.     Such  a  course   always 
involves  the  judge  in  perplexity,  and  the 
cases    in    obscurity.      Another    criterion 
must,  therefore,  be  had  recourse  to ;  and 
fortunately,  the  later  cases  have  rested  the 
matter  on  a  more  rational  and  solid  foun- 
dation.    At  common  law,  growing  crops 
were  uniformly  held  to  be  c/ooJs  ;  and  they 
were  subject  to  all  the  legal  consequences 
of  being  goods,  as  seizure  in  execution, 
&c.     The  statute  of  frauds  takes  things  as 
it  finds  them  ;  and  provides  for  lands  and 
goods,  according  as  they  were  so  esteemed 
before  its  enactment.      In  this  way  the 
question  may   be   satisfactorily    decided. 
If,  before  the  statute,  a  growing  crop  had 
been  held  to  be  an  interest  in  lands,  it 
would  come  within  the   second   [fourth] 
section   of  the   act ;  but  if  it  were  only 
goods  and  chattels,  then  it  came  within 
the  thirteenth  [seventeenth]  section.     On 
this,  the  only  rational  ground,  the  cases  of 
Evans  v.  Eoberts,  5  B.  &  C.  828  ;  Smith 
V.  Surman,  9  B.  &  C.  561  ;  and  Scorell 
V.  Boxall,  1   Young  &  J.  396,  have  all 
been   decided.      And  as   we   think    that 
growing  crops  have  all  the  consequences 
of  chattels,  and  are,  like  them,  liable  to 
be  taken  in  execution,  we  must  rule  the 
points  saved  for  the  plaintiflF."     Such  also 
is  the  settled  rule  in  New  York.     Green 
V.   Armstrong,    1    Denio,  550 ;  Bank   of 
Lansingburgh   v.    Crary,    1    Barb.    542  ; 
Warren   v.   Leland,   2   Barb.   613.     For 
other  cases  upon  the  sale  of  growing  crops, 
see  Anonvmous,  1  Ld.  Rayni.  182  ;  Poul- 
ter  V.  Killingbeck,  1  B.  &  P.  397  ;  Wad- 
dington  v.  Bristow,  2  B.  &  P.  452  ;  Crosby 
V.  Wadsworth,    6   East,   602;  Parker  v. 
Staniland,  1 1  id.  362  ;  Newcomb  v.  Ramer, 
2  Johns.  421,  n.  (n) ;  Austin  v.  Sawyer, 
9   Cowen,   39 ;  Mcllvaine   v.   Harris,  20 
Mo.  457 ;  Warwick  v.  Bruce,  2  M.  &  S. 
205  ;  Emmerson  v.  Heelis,  2  Taunt.  38  ; 
Mavfield    y.    Wadsley,  3  B.    &  C.  357; 
Teal  V.  Autv,  2  Brod.  &  B.  99 ;  Knowles 
V.  Michel,    13   East,   249;  Earl   of  Fal- 
mouth V.  Thomas,  1   Cromp.  &  M.  89  ; 
Erskine  v.  Plummer,  7  Grceul.  447. 

[325] 


815*  THE   LAW   OF   CONTKACTS.  [PART  II. 

it  is  fully  ripe  and  ready  for  removal.  (/)  If,  by  the  same  con- 
tract, these  things  and  the  land  on  which  they  stand  are  sold,  it 
is  not  a  sale  of  land  and  chattels ;  for  then  they  pass  with  the 
realty  as  a  part  of  it,  and  the  contract  in  reference  to  them  is 
as  much  within  this  clause  of  the  statute  as  it  is  in  reference  to 
the  land  itself.  {?n)  Such  are  the  views  expressed,  as  we  think, 
by  the  highest  authorities,  and  supported  by  the  best  reasons. 
But  there  is  some  uncertainty  and  conflict  on  the  subject.  And, 
perhaps,  it  may  be  stated  as  a  general  rule,  that  if  the  parties 
appear  to  consider  the  land  merely  as  a  place  of  deposit  or  stor- 
ing for  the  vegetable  productions,  or  as  a  means  by  which  for  a 
time  they  may  be  improved,  they  are  so  far  disconnected  from 
it,  that  they  may  be  sold  as  chattels,  and  are  not  within  the 
statute.  And  it  is  only  when  the  parties  connect  the  land  and 
its  growth  together,  either  -by  express  words  or  by  the  nature  of 
the  contract,  that  the  growth  of  the  land  comes  within  the 
statute.  It  seems  to  be  settled  that  a  promise  to  pay  for  im- 
provements on  land,  is  only  a  promise  to  pay  fqr  work  and 
labor,  or  materials,  and  not  for  an  interest  in  lands,  and  there- 
fore need  not  be  in  writing,  (n)  And  a  contract  for  the  sale  of 
removable  fixtures  is  not  within  the  statute,  (o) 

*A  mere  license  to  use  land,  as  to  stack  hay  or  grain  upon  it 
for  a  time,  is  not  an  interest  in  lands  within  the  statute,  (p) 

(I)  See  preceding  note.  pay  for  all  over  one   hundred   and  ten 

[m)   Thayer   v.   Rock,  13   Wend.    5.3;  acres  at  the  rate  of  eight  dollars  per  acre. 

Mayfield   )•.    Wadsley,   3    B.   &  C.  357  ;  Held,  tiiat  the  agreement  was  not  within 

Earl  of  Falmouth  v.  Thomas,  1  Cromp.  tlie  statute. 

&  M.  89  ;  Michelen   v.  Wallace,  7  A.  &         (o)    Bostwick  ?;.  Leach,  3  Day,  476  ; 

E.  49 ;  Vauglian    v.  Hancock,  3   C.    B.  Ilallen   v.    Runder,  1    Cromp.,  M.  &  K. 

766;  Eorqtiet  v.  Moore,  7  Exch.  870,  16  266. 

Eng.  L.  &  Eq.  466.     But  this  rule  must         (p)  Carrington  v.  Roots,  2  M.  &  W. 

be  confined  to  cases  where  the  contract  248;    Riildle   r.    Brown,   20    Ala.   412; 

for  the  land,  and  the  crops  standing  upon  Mumford    r.   Whitney,    15    Wend.  380; 

it,  is  entire.     See  ante,  p.  312,  n.  {/c).  Whitmarsh  v.  "Walker,  1  ]Mct.  313  ;  Wood- 

(ji)    Frear   v.    Ilardcnbcrgh,    5    Joims.  ward  r.   Seely,    11    III.    157;  Stevens   v. 

272;  JJciiedict  r.  Beehce,  1 1  .Johns.  145;  Stevens,    11  'iMet.    251;    lloughtaling   v. 

Lower  v.  Winters,  7  Cowen,  203  ;   Gar-  lloughtaling,    5    Barb.    379 ;    Wolfe    v. 

rett  V.  Malonc,  8  Rich.  Law,  335.     The  Frost,  4  Sandf  Ch.  72 ;  Dubois  v.  Kelly, 

fdaintiff  conveyed  to  defendant  a  tract  of  10  Barb.  496.     And  sec  ante,  p.  23,  n.  (c). 

and  as  containing  oni;  hundred   and   ten  But  in  J5cnnett  ?'.  Scott,  18  Barb.  347,  it 

acres,  at  eight  d(illurs  per  acre,  and  it  was  is  Ik  Id  that  a  verbal  agreement  between  A 

verbally   agreed   iictween    tbcni    that    th(!  and  15  wbercliy  A  is  to  cut  the  wood  and 

land  should  Ix;  surveyed,  and  if  it  turned  brush  upon  the  land  of  B,  and  heap  tho 

out  that  it  contained  less   than  one  bun-  i>rusli,   tor   the    wood;  A    being   allowed 

drcd  and  ten  acres,  iilaintiff  should  refund,  until  the  ensuing  winter  to  draw  the  wood 

and  if  it  contained  more,  plaintitf  siiould  away  by  sleighing,  is  within  tho  statute  of 

[32G] 


CH.  IV.]  STATUTE   OF   FRAUDS.  *316 

But  that  only  is  a  license  in  this  respect,  which,  while  it  is  an 
excuse  for  a  trespass  as  long  as  it  is  not  revoked,  conveys  no 
rights  over  the  land,  and  subjects  it  to  no  servitude.  For  any 
contract  of  which  the  effect  is  to  give  to  one  party  an  easement 
on  the  land  of  another,  is  within  the  statute,  (q)  But  if  a  land- 
lord agrees  with  a  present  lessee  to  make  further  improvements 
on  the  estate,  for  an  additional  compensation,  this  has  been 
held  to  be  an  agreement  collateral  only  to  the  land,  and  not 
within  the  statute,  (r) 

Generally,  in  this  country,  and  in  England,  the  stock  of  a 
corporation  is  personal  property ;  (s)  and  this  is  so,  even  though 
the  whole  property  of  the  corporation  be  real,  and  the  whole  of 
its  business  relate  to  the  care  of  real  estate ;  if  it  be  the  surplus 
profit  alone  that  is  divisible  among  the  individual  members,  (t) 

But  where  lands  are  vested,  not  in  the  corporation,  but  in  the 
individual  shareholders,  and  the  corporation  has  only  the  power 
of  management,  in  that  case  the  stock  or  shares  are  real  prop- 
erty, (v)  And  it  would  follow  that  a  contract  for  the  sale  of 
this  stock,  or  for  these  shares,  is  within  the  statute,  as  a  contract 
for  the  sale  of  an  interest  in  lands. 

When  a  contract,  originally  within  this  clause  of  the  statute, 
has  been  executed,  and  nothing  remains  to  be  done  but  pay- 
ment of  the  consideration,  this  may  be  recovered  notwithstand- 
ing the  statute,  (v)  But  in  such  case  the  *declaration  should  be 
framed,  not  upon  the  original  contract,  but  upon  the  contract 
implied  by  law  from  the  plaintiff's  performance,  (iv) 

frauds,  and  void  as  an  agreement,  but  it         [v]  Thus,  if  a  verbal  contract  is  made 

operates  as  a  license  to  A  to  cut  the  wood,  for  the  conveyance  of  land,  and  the  hind 

and  seems  sufficient  to  vest  the  title  in  A  is    conveyed   accordingly,  the   statute  of 

to  the  wood  cut  under  it.  frauds  furnishes  no  defence  to  an  action 

(q)  Foot  V.  New  Haven  and  Northamp-  brought  to  recover  the  price.     Brackett  v. 

ton  Co.  23  Conn.  214;  Smart  v.  Harding,  Evans,  1  Cush.  79;  Preble  v.  Baldwin,  6 

C.  B.  185.5,  29  Eng.  L.  &  Eq.  252.     And  id.    549;  Linscott   v.   Mclntyre,  15    Me. 

see  cases  cited  in  preceding  note.  201  ;  Thaj-cr  v.  Viles,  23  Vt.  494  ;  Mor- 

(r)  Hoby  v.   Roebuck,  7   Taunt.   157;  gan  ^'.  Bitzenberger,  3  Gill,  350  ;  Thomas 

Donellan  r.  Reed,  3  B.  &  Ad.  899.  v.   Dickinson,   14   Barb.    90,    2    Kernan, 

(s)  Bligh  r.  Brent,  2  Young  &  C.  268 ;  364;   Gillespie   v.   Battle,    15    Ala.  276. 

Tippets   V.   Walker,  4   Mass.  595.     But  And  see  Moore  v.  Ross,  11  N.  H.  555; 

see  contra,   Welles   v.    Cowles,  2  Conn.  Holbrook  v.  Armstrong,  1  Fairf.  31  ;  per 

567.  Tindal,  C.  J.,  in  Souch  v.  Strawbridge, 

(0  Bligh  ?■.  Brent,  2  Young  &  C.  268 ;  2  C.  B.  808. 
Watson    r.  Spratlcy,   10  Exch.  222,  28         (w)  Cocking  v.   Ward,    1  C.  B.   858 ; 

Eng.  L.  &  Eq.  507.  '  Kelly  v.  Webster,  12  id.  283. 

(u)  Id. 

[  327  ] 


316-  THE   LAW   OF   CONTRACTS.  [PART  II. 

A  contract  to  convey  lands  for  certain  services  is  within  the 
statute ;  and  if  the  services  are  rendered,  the  contract  cannot 
be  enforced,  unless  in  writing.  Bat  a  quantum  meruit  will  lie 
for  the  services,  and  the  value  of  the  land  may  be  considered  by 
the  jury,  although  it  cannot  be  regarded  as  the  fixed  and  deter- 
minate measure  of  the  damages,  {iva) 

The  fifth  clause  of  this  section  declares  that  "  no  action  shall 
be  maintained  upon  any  agreement  that  is  not  to  be  performed 
within  the  space  of  one  year  from  the  making  thereof,  unless," 
&c.  Much  the  most  important  rule  in  reference  to  this  section, 
we  have  had  occasion  to  allude  to  already,  {x)  It  may  be 
stated  thus.  If  the  executory  promise  be  capable  of  entire  per- 
formance within  one  year,  it  is  not  within  this  clause  of  the  stat- 
ute. The  decision  of  this  question  does  not  seem  to  depend 
entirely  upon  the  understanding  or  intention  of  the  parties. 
They  may  contemplate  as  probable  a  much  longer  continuance 
of  the  contract,  or  a  suspension  of  it  and  a  revival  after  a  longer 
period ;  it  may  in  itself  be  liable  to  such  continuance  and  re- 
vival ;  and  it  may  in  this  way  be  protracted  so  far  that  it  is  not 
in  fact  performed  within  a  year ;  but  if,  when  made,  it  was  in 
reality  capable  of  a  full  and  bona  fide  performance  within  the 
year,  without  the  intervention  of  extraordinary  circumstances, 
then  it  is  to  be  considered  as  not  within  the  statute.  (//) 


(wa)  Ilam    v.    Goodrich,    37    N.    11.  nionce  on  the  30th  of  June  foUowinfr,  was 

185.  within  the  statnte.     So,  where  A,  on  the 

(x)  See  ante,    vol.    1,   p.  529,  n.  (ce),  20tli   of  July,  made   proposals   to   15    to 

2d  ed.  enter  his  service  as  bailiff  for  a  year,  and 

(y)  The  cases  which  have  arisen  upon  B  took  the  proposal  and  went  away,  and 
this  clause  of  the  statute  may  be  conven-  entered  into  A's  service  on  the  24th  of 
iently  arranged  in  three  classes.  1.  Where  July,  it  was  held  that  this  was  a  contract 
hy  tlie  fiTprcss  aqreemfnt  of  the  parties,  the  on  the  20tl),  and  so  not  to  be  performed 
performance  of  the  contract  is  not  to  be  within  the  space  of  one  year  from  the 
completed  within  one  year.  2.  Where  it  making,  and  witliin  the  4th  section  of  the 
ia  evident,  //•ow  the  suJiject- matter  of  the  con-  statnte  of  frauds.  Snellingv.  Lord  llunt- 
trart^  that  the  parties  in\d  in  contemplation  ingfield,  1  Cromp.  M.  &  11.  20.  And,  in 
a  longer  period  than  one  year  as  the  time  IJiri'h  v.  The  Earl  of  Liverjiool,  0  15.  & 
for  its  performance,  ."i.  When;  the  time  C.  31)2,  it  was  held  that  a  contract  whcre- 
for  tiie  performance  of  tlie  contract  is  by  a  coacliniaker  agreed  to  let  a  carriage 
made  to  depend  n])on  some  contingency,  fur  a  term  of  5  years,  in  consideration  of 
which  may  or  may  not  ha[)])en  witliin  one  receiving  an  annua!  payment  for  the  use 
year.  Cases  falling  within  llie  fust  class  of  it,  was  within  the  statute.  And  see 
are  denrlv  within  tlie  statute.  Thus,  in  Lower  v.  Winters,  7  Cowen,  263;  Derby 
Braccginlle  r.  Ii<;ald,  1  15.  &  Aid.  722,  it  v.  I'lielps,  2  N.  II.  515  ;  Hinckley  »'.  South- 
was  held  that  a  contract  made  on  tlie  gate,  11  Vt.  428;  Sciuire  /•.  Whipjile,  1 
27tli  of  Alay,  for  a  year's  service,  to  com-  id.    C'J ;  Foote  i'.  Emerson,  10  id.   338; 

[328] 


en.  IV-.] 


STATUTE   OF   FRAUDS. 


317-*318 


The  same  observation    may  be  made  in  respect  to  the  clause 
of  which  we  are  now  treating,  that  we  have  already  *had  occasion 


Pitcher  v.  Wilson,  5  Mo.  46  ;  Drummond 
V.  Bun-ell,  13  Wend.  .307;  Shute  v.  Dorr, 
5  id.  204;  Lockwood  i'.  Barnes,  3  Hill, 
130;  Hill  V.  Hooper,  1  Gray,  131  ;  Sweet 
V.  Lee,  4  Scott,  N.  II.  77  ;  Giraud  v.  Rich- 
mond, 2  C.  B.  835  ;  Lapham  v.  Whipple, 
8  Met.  59;  Tuttlc  v.  Swett,  31  Me.  555  ; 
Wilson  V.  Martin,  1  Denio,  602  ;  Pitkin 
r.  The  Long  Island  K.  11.  Company,  2 
Barb.  Ch.  221.  And  such  a  contract 
will  not  be  taken  out  of  the  statute  by 
the  mere  fact  that  it  rnay  be  put  an  end 
to  within  a  year  by  one  of  the  parties,  or 
a  third  jjerson.  Thus,  in  Harris  v.  Porter, 
2  Harring.  Del.  27,  where  the  defendant, 
a  mail  contractor,  made  a  sub-contract 
with  the  jilaintifF  to  carry  the  mail  for 
more  than  a  year,  it  was  contended  that 
the  contract  was  not  within  the  statute, 
because  the  contract  between  the  defend- 
ant and  the  postmaster-general  reserved  to 
the  latter  the  power  to  alter  the  route,  and 
thus  put  an  end  to  the  contract  at  any 
time ;  it  might,  therefore,  be  terminated 
within  a  year,  and  did  not  necessarily 
reach  beyond  it.  But  the  Court  said, 
"  Tiiis  was  a  contract  which  could  not 
possibly  be  performed  within  one  year  ;  by 
its  terms  it  was  to  continue  four  years. 
And  though  it  might  be  annulled  or 
put  an  end  to  by  tJie  postmaster-general 
within  the  year,  it  still  falls  within  the  act 
as  an  agreement  which,  according  to  its 
terms,  is  not  to  be  performed  witliin  the 
space  of  one  year."  Birch  v.  The  Earl  of 
Liverpool,  9  *B.  &  C.  392,  is  to  the  same 
effect.  But  if  it  is  merely  optional  with  one 
of  tlie  parties  whether  he  shall  perform  the 
contract  within  a  year  or  take  a  longer 
time,  the  contract  is  not  within  the  stat- 
ute. Therefore,  it  has  been  iield  that  an 
agreement  that  one  party  may  cut  certain 
trees  on  the  land  of  the  other,  at  any  time 
within  ten  years,  is  not  within  the  statute. 
Kent  V.  Kent,  18  Pick.  569.  So,  where 
the  plaintiff  and  defendant  entered  into  a 
contract  by  which  the  phiintitf  agreed  to 
labor  for  the  defendant  for  one  year,  but 
without  fixing  any  definite  time  for  tlie 
labor  to  commence,  it  was  hold  that  the 
contract  was  not  within  the  statute,  for 
the  plaintiff  had  a  right  to  commence  im- 
mediately. Russell  V.  Slade,  12  Conn. 
455.  And  see  liinscott  v.  Mclntire,  15 
Me.  201  ;  Plimpton  v.  Curtiss,  15  Wend. 
336.  In  regard  to  the  second  class  of 
cases,  naniely,  those  where  it  is  evident, 

28* 


from  the  subject-matter  of  the  contract,  that 
the  parties  had  in  contemplation  a  longer 
period  than  one  year  as  the  time  for  its 
performance,  although  there  is  no  express 
agreement  to  that  effect,  there  has  been 
more  doubt,  but  it  is  now  settled  that 
they  are  within  the  statute.  The  leading 
case  of  this  class  is  Boydell  v.  Drum- 
mond, 11  East,  142.  In  this  case  the 
plaintiff  had  proposed  to  publish  by  sub- 
scription a  series  of  large  prints  from 
some  of  the  scenes  in  S/ia/cspeare's  plays, 
after  pictures  to  be  painted  for  that  pur- 
pose, under  the  following  conditions, 
among  others,  namely,  that  seventy-two 
scenes  were  to  be  painted,  at  the  rate  of 
two  to  each  play,  and  the  whole  were  to 
be  published  in  numbers,  eacli  containing 
four  large  prints  ;  and  that  one  number  at 
least  should  be  annnalhj  published  after 
the  deliver}'  of  the  first.  The  defendant 
became  a  subscriber.  And  the  court  held 
that  the  contract  was  within  the  statute. 
The  same  point  is  well  illustrated  by  the 
case  of  Herrin  v.  Butters,  20  Me.  119. 
For  the  facts  of  ttiat  case,  see  ante,  vol.  1, 
p.  93,  n.  (e).  Whitman,  C.  J.,  in  delivei'- 
ing  the  opinion  of  the  court,  said  :  "  It  is 
urged,  that  the  defendant  might  have 
cleared  up  the  land,  and  seeded  it  down 
in  one  year,  and  thereby  have  performed 
his  contract.  This  may  have  been  within 
the  range  of  possibility  ;  but  whether  so  or 
not  must  depend  upon  a  number  of  facts, 
of  which  the  court  are  uninformed.  This, 
however,  is  not  a  legitimate  inquiry  under 
this  contract.  We  are  not  to  inquire 
what,  by  possibility,  the  defendant  might 
have  done,  by  way  of  fulfilling  his  contract. 
We  must  look  to  the  contract  itself,  and 
see  what  he  was  bound  to  do  ;  and  what, 
according  to  the  terms  of  the  contract,  it 
was  the  understanding  that  he  should  do. 
Was  it  the  understanding  and  intention  of 
the  parties  that  the  contract  might  be  per- 
formed within  one  year?  If  not,  the  case 
is  clearly  with  the  defendant.  But  the 
contract  is  an  entirety,  and  all  parts  of  it 
must  be  taken  into  view  together,  in  order 
to  a  perfect  understanding  of  its  extent 
and  meaning.  We  must  not  only  look  at 
what  the  defendant  had  undertaken  to  do, 
but  also  to  the  consideration  inrlucinghira 
to  enter  into  the  agreement.  The  one  is 
as  necessary  a  part  of  the  contract  as  the 
other;  and  if  either,  in  a  contract  wholly 
executory,  were  not  to  be  performed  in 

[329] 


319* 


THE   LAW   OF   CONTRACTS. 


[P^RT  II. 


to  make   of  other  clauses  in  the  fourth  section,  namely,  that 
when  a  contract,    originally  within   its   provisions,   *has   been 


one  year,  it  would  be  within  the  statute  of 
frauds.  Here  the  defendant  was  not  to 
avail  himself  of  the  consideration  for  his 
engagement,  except  by  a  receipt  of  the 
annual  profits  of  the  land,  as  they  might 
accrue,  for  the  term  of  three  years.  But 
■whether  this  be  so  or  not,  it  is  impossible 
to  doulit  that  the  parties  to  this  contract 
perfectly  well  understood  and  contem- 
plated, "that  it  was  to  extend  into  the  third 
year  for  its  performance,  both  on  the  part 
of  the  plaintiff  and  defendant.  Its  terms 
most  clearly  indicate  as  much ;  and  by 
them  it  must  be  interpreted."  In  the  case 
of  Moore  v.  Fox,  10  Johns.  244,  the  court 
say,  to  bring  the  case  within  the  statute,  it 
must  appear  to  be  an  express  and  specific 
agreement  that  the  contract  is  not  to  be 
performed  within  one  year,  and  cite  the 
case  of  Fenton  v.  Emblers,  3  Burr.  1278, 
where  the  same  language  is  used  by  the 
court.  But  in  the  case  of  Boydell  v. 
Drummond,  11  East,  142,  in  which  there 
was  no  express  and  specific  agreement, 
that  the  contract  should  not  be  performed 
within  a  year,  the  court  say,  that  the 
whole  scope  of  the  undertaking  shows 
that  it  was  not  to  be  performed  within  a 
year,  and  was  therefore  within  the  statute. 
This  seems  to  show,  very  clearly,  what  is 
to  be  understood  by  an  express  or  specific 
agreement,  that  a  contract  is  not  to  be  per- 
formed within  a  year.  In  the  case  of  Pe- 
ters V.  Wcstlwrough,  19  Pick.  364,  Mr.  Jus- 
tice Wilde,  in  delivering  the  opinion  of  the 
court,  says,  "  it  must  have  been  expressly 
stipulated  by  the  parties,  or  it  must  appear 
to  have  been  so  understood  by  them,  that  the 
.agreement  was  not  to  be  ])crformcd  within 
a  year.  But  who  can  doubt  what  the 
express  and  specilic  understanding  of  the 
parties  in  the  case  at  bar  was  ?  .and  that  it 
was  not  to  be  performed  within  one  year? 
Or  at  any  rate,  that  it  appears  to  have 
been  so  understood  by  them."  In  regard 
to  the  tliird  class  of  cases,  namely,  where 
the  time  for  the  iicrformance  of  the  con- 
tract is  made  to  dejiend  upon  some  con- 
tingency, which  may  or  may  not  happen 
within  a  year,  it  is  settled  that  tliey  do  not 
come  within  the  statute.  This  was  de- 
cided against  the  opinion  of  Unit,  C.  J., 
in  the  case  of  Peter  r.  (.'omjjton,  Skin. 
353.  Then;  the  defemlant  promised  for 
one  guinea  to  give  the  plaintiff  so  many 
puineas  on  the  day  of  liis  marriage.  And 
it  WU8  held  that  the  plaintiff  was  entitled 

[330] 


to  recover  although  the  agreement  was  not 
in  writing.  So,  in  Fenton  v.  Emblers,  3 
Burr.  1278,  where  the  defendant's  testator 
undertook,  by  his  last  will  and  testa- 
ment, to  bequeathe  the  plaintiff  a  legacy,  it 
was  held  that  the  undertaking  was  not 
within  the  statute,  because  tlie  time  for  its 
performance  depended  upon  the  life  of  the 
testator,  which  might  be  terminated  with- 
in a  year.  Again,  in  Wells  v.  Horton,  4 
Bing.  40,  where  A  being  indebted  to  the 
plaintiff,  promised  him  that  in  considera- 
tion of  his  forbearing  to  sue,  A's  execu- 
tor should  pay  him  £10,000;  it  was  held 
that  this  was  not  a  promise  required  by 
the  statute  of  frauds  to  be  in  writing. 
And  this  doctrine  has  been  carried  so  far 
as  to  include  a  case  where  one  undertakes 
to  abstain  from  doing  a  certain  thing, 
without  limitation  as  to  time,  on  the 
ground  that  such  a  contract  is  in  its  nature 
binding  only  during  the  life  of  the  party. 
Thus,  in  Lyon  v.  King,  11  Met.  411,  the 
defendant,  for  a  good  consideration,  prom- 
ised the  plaintiff  that  he  would  not  there- 
after engage  in  the  staging  or  the  livery- 
stable  business  in  Southbridge.  And  the 
court  held  that  the  contract  was  not  within 
the  statute.  Deioey,  J.,  said  :  "  The  con- 
tract might  have  been  wholly  performed 
within  a  year.  It  was  a  personal  engage- 
ment to  forbear  doing  certain  acts.  It  stip- 
ulated nothing  beyond  the  defendant's  life. 
It  imposed  no  duties  upon  his  legal  repre- 
sentatives, as  might  have  been  the  case 
under  a  contract  to  perform  certain  positive 
duties.  The  mere  fact  of  abstaining  from 
pursuing  the  staging  and  livery-stable 
business,  and  the  happening  of  his  death, 
during  the  year,  would  be  a  full  ]ierform- 
ancc  of  this  contract.  Any  sti|)ulations  in 
the  contract,  looking  beyond  tlie  year,  de- 
pended entirely  upon  the  contingency  of 
the  defendant's  lii'e ;  and  this  being  so,  the 
case  falls  within  the  class  of  eases  in  which 
it  has  been  held  tliat  the  statute  does  not 
apply."  So,  in  Foster  r.  McO'lIlenis,  18 
Mo.  88,  it  was  held  that  a  verbal  agree- 
ment not  thereafter  to  run  carriages  on  a 
I)artieular  route,  was  not  within  the  stat- 
ute. But  sec  Roberts  r.  Tucker,  3  Exch. 
632;  liolloway  r.  Hampton,  4  B.  Mon. 
41.').  For  other  cases  dcjicnding  upon  a 
contingency,  sce(iilbert  v.  Sykcs,  10  lOast, 
1.5()  ;  Souch  i\  Strawl)ridge,"  2  C.  B.  808; 
Dobson  ('.  Collis,  1  II.  &  N.  81  ;  M'Lccs 
V.  llale,  10  Wend.  42G;  Blake;;.  Cole,  22 


en.  IV.] 


STATUTE   OF   FRAUDS. 


*320 


entirely  executed  on  one  side,  and  nothing  remains  but  the  pay- 
ment of  the  consideration,  this  may  be  recovered,  notwithstand- 
ing tlie  statute,  (c)  But  whether  a  recovery  can  be  had  on  the 
original  contract,  or  only  on  a  quantum  mervit,  is  not  entirely  clear 
upon  the  authorities,  [a)  Upon  principle,  however,  we  should 
say  that  a  recovery  in  such  case  can  be  had  only  upon  a  quan- 
tum meruit,  (b) 

We  now  pass  to  the  seventeenth  section.  Let  us  first  in- 
quire what  satisfies  the  condition,  that  the  buyer  shall  accept 
and  actually  receive  a  part  of  the  goods.  Some  confusion 
has  arisen  on  this  subject,  from  a  want  of  discrimination  *  be- 
tween a  sale  at  common  law,  a  sale  as  affected  by  the  statute 
of  Elizabeth,  of  fraudulent  conveyances,  and  the   statute  of 


Pick.  97  ;  Peters  v.  "Westborough,  19  Pick. 
364 ;  llobert.s  i'.  The  RockboUom  Co.  7 
Met.  46 ;  Ellicott  v.  Peterson,  4  Md.  476  ; 
Clark  V.  Pendleton,  20  Conn.  495 ;  Howard 
V.  Burgen,  4  Dana,  137.  In  the  case  of 
Tolley  V.  Greene,  2  Sandf.  Ch.  91,  the 
Assistant  Vice-Chancellor  intimated  an 
opinion  that  a  contract  which  cannot  be 
performed  within  a  year,  except  upon  a 
contingency  which  neither  party,  nor  both 
together,  can  hasten  or  retard,  such  as  the 
death  of  one  of  them  or  of  a  tliird  person, 
is  not  within  the  statute.  But  we  are  not 
aware  that  such  a  distinction  finds  any 
support  in  the  decided  cases. 

{s)  This  point  was  adjudged  in  Donel- 
lan  V.  Head,  3  B.  &  Ad.  899.  In  that 
case  a  landlord  who  had  demised  premises 
for  a  terra  of  years,  at  £.50  a  year,  agreed 
with  his  tenant  to  lay  out  .£50  in  making 
certain  improvements  upon  them,  tiie  ten- 
ant undertaking  to  pay  him  an  increased 
rent  of  £5  a  year  during  the  remainder  of 
the  term  (of  which  several  years  were  un- 
expired), to  commence  from  the  quarter 
preceding  the  completion  of  the  work. 
And  it  was  held  that  this  was  not  within 
the  statute  of  frauds,  as  an  agreement  "  not 
to  be  performed  within  one  year  from  tlie 
making  thereof,"  no  time  being  fixed  for 
the  performance  on  the  part  of  the  land- 
lord. During  the  argument,  Parle,  J., 
interrupted  the  counsel  to  say  :  "  If  goods 
are  sold,  to  be  delivered  immediately,  or 
work  contracted  for,  to  be  done  in  less 
than  a  year,  but  to  be  paid  for  in  fourteen 
months,  or  by  more  than  four  quarterly 
instalments,  is  that  a  case  within  the  stat- 


ute ?  In  Bracegirdle  v.  Heald,  1  B.  & 
Aid.  722,  Abbott,  J.,  takes  the  distinction, 
that  in  the  case  of  an  agreement  for  goods 
to  be  delivered  by  one  party  in  six  months, 
and  to  be  paid  for  in  eighteen,  all  that  is 
to  be  performed  on  one  side  is  to  be  done 
witliin  a  year;  which  was  not  so  in  the 
case  then  before  the  court."  And  Little- 
dale,  J.,  in  delivering  the  judgment  of  the 
court  said,  "  As  to  the  contract  not  being 
to  be  performed  within  a  year,  we  think 
that  as  the  contract  was  entirely  execut- 
ed on  one  side  within  a  year,  and  as  it 
was  the  intention  of  the  parties,  founded 
on  a  reasonable  expectation,  that  it  should 
be  so,  the  statute  of  frauds  does  not  ex- 
tend to  such  a  case.  In  case  of  a  parol 
sale  of  goods,  it  often  happens  that  they 
are  not  to  be  paid  for  in  full,  till  after  the 
expiration  of  a  longer  period  of  time  than 
a  year ;  and  surely  the  law  would  not 
sanction  a  defence  on  that  ground,  when 
the  buyer  had  had  the  full  benefit  of  the 
goods  on  his  part."  For  other  cases  illus- 
trating this  point,  see  Cherry  i\  Hening, 
4  Exch.  631  ;  Souch  ik  Strawbridge,  2 
C.  B.  808  ;  Mavor  v.  Pyne,  3  Bing.  285 ; 
Lockwood  V.  Barnes,  3  Hill,  128  ;  Broad- 
well  V.  Getman,  2  Denio,  87  ;  Ilolbrook  v. 
Armstrong,  1  Fairf  31 ;  Conipton  v.  j\Iar- 
tin,  5  Rich.  14;  Bates  v.  Moore,  2  Bailey, 
614 ;  Johnson  v.  Watson,  1  Ga.  348  ;  Rake 
!'.  Pope,  7  Ala.  161 ;  Blanton  v.  Knox,  3 
Mo.  342 ;  Talmadge  v.  The  Rensselaer  & 
Saratoga  R.  R.  Co.  13  Barb.  493;  Stone 
V.  Dcnnison,  13  Pick.  1. 

(a)  See  cases  cited  in  pi-eceding  note. 

(b)  And  see  ante,  p.  316,  n.  {u-}. 

[331] 


321*  THE   LAW   OF   CONTRACTS.  [PART  II. 

Charles,  of  frauds  and  perjuries.  At  common  law,  if  the  seller 
makes  a  proposition  and  the  buyer  accepts,  and  the  goods  are 
in  the  immediate  control  and  possession  of  the  seller,  and 
nothing  remains  to  be  done  to  identify  them  or  in  any  way 
prepare  them  for  delivery,  the  sale  is  complete,  and  the  property 
in  the  goods  passes  at  once  and  perfectly ;  the  buyer  acquires 
not  a  mere  jus  ad  rem,  but  an  absolute  jus  in  re ;  and  he  may 
demand  delivery  at  once,  on  tender  of  the  price,  and  sue  for 
the  goods  as  his  own  if  delivery  be  refused  ;  the  seller  having 
no  right  of  property,  but  a  mere  right  of  possession,  by  way  of 
lien  on  the  goods  for  his  price,  (c)  Then  came  the  statute  of 
Elizabeth,  which,  aided  by  construction,  made  the  want  of  de- 
livery, or  of  transfer  of  possession,  evidence,  more  or  less  con- 
clusive, of  fraud,  which  vitiated  the  sale.  Here  then  grew  up 
many  questions  as  to  what  constituted  delivery,  and  what  was 
its  effect ;  and  we  have  seen  that  a  great  diversity  and  conflict 
of  adjudication  has  existed  upon  these  questions,  [d)  But  after 
the  statute  of  Elizabeth  came  the  statute  of  Charles,  of  frauds 
and  perjuries;  and  this  in  express  terms  requires,  i/z  order  to 
sustain  an  action,  both  delivery  and  acceptance  ;  and  the  ques- 
tions which  spring  up  under  this  statute  must  be  considered  as 
entirely  distinct  from  the  former  questions.  To  illustrate  this 
in  the  simplest  form,  let  us  suppose  that  A  orally  orders  B  to 
send  him  one  hundred  bales  of  cotton,  of  a  certain  quality  and 
price;  B  sends  the  goods  as  directed;  and  here  no  question 
can  exist  under  the  statute  of  Elizabeth  in  respect  to  the  pos- 
session, because  that  has  been  transferred  by  the  delivery;  but 
the  case  is  still  open  to  any  inquiry  as  to  fraud.  At  common 
law,  A  may  say  that  the  cotton  is  not  of  the  kind  or  quality 
that  he  ordered,  and  if  he  can  establish  this,  he  has  the  right  of 
sending  it  back  and  refusing  to  pay  for  it;  if  he  cannot,  the 
transaction  is  completed;  the  seller  cannot  reclaim  the  cotton, 
nor  tiie  buyer  refuse  the  price.  But  by  the  statute  of  frauds, 
the  buyer  may  at  once  send  the  cotton  *back,  and  refuse  pay- 
ment for  it,  although  precisely  what  he  ordered,  and  no  action 
can  b(;  brought  against  him   for  the  price.     Because,  by  this 

(c)  Sec  ante,  vol.  1,  pp.  440,  441.  {d)  Sec  ante,  vol.  1,  pp.  441,  442. 

[yy2] 


en.  IV.]  STATUTE   OF   FRAUDS.  *322 

statute  both  delivery  and  acceptance  are  requisite  ;  and  the 
delivery  is  to  be  made  by  one  party,  and  the  acceptance  by 
another;  and  the  consequence  of  this  is,  that  while  the  seller  is 
baund  by  his  delivery,  and  cannot  reclaim  the  goods,  the  buyer 
has  his  option  to  keep  the  goods  and  pay  for  them,  or  return 
them  and  not  pay.  The  statute  in  fact  postpones  the  comple- 
tion of  an  oral  contract  of  sale.  At  common  law,  it  is  finished 
when  one  makes  the  offer  of  sale  and  the  other  accepts.  By 
the  statute,  nothing  is  done  by  'this  offer  and  acceptance ; 
another  step  must  be  taken  ;  the  goods  themselves  must  be 
offered  and  accepted,  and  then  only  is  the  sale  completed.  It 
should  seem,  perhaps,  that  the  same  reason  would  give  the 
seller,  after  delivery  of  the  goods,  and  before  acceptance  of  them, 
the  same  right  to  withdraw  his  goods,  that  he  has  to  withdraw 
his  offer  before  an  acceptance  of  it ;  but  we  are  not  aware  of 
any  authority  to  this  effect. 

If  the  sale  be  complete,  and  the  bargain  is  for  immediate  de- 
livery ;  and  the  seller  asks  the  buyer  to  lend  him  the  chattel  for 
a  time,  to  which  the  buyer  assents  and  therefore  does  not  at 
once  take  it  away,  but  permits  the  seller  (the  plaintiff)  to  keep 
it,  this  has  been  recently  held  in  England  to  be  an  acceptance 
under  the  statute,  [da) 

In  regard  to  what  constitutes  a  delivery  under  the  statute, 
and  what  constitutes  an  acceptance,  there  have  been  many  de- 
cisions which  it  is  difficult  to  reconcile.  But  the  question  is 
often  one  of  fact  rather  than  of  law.  Indeed  it  is  always  a 
question  of  fact  for  the  jury,  whether  the  goods  were  delivered 
and  accepted ;  but  it  is  a  question  on  which  they  will  be 
directed  by  the  court ;  and  thus  the  question  becomes  a  mixed 
one,  of  fact  and  law. 

It  may  be  said,  in  general,  that  a  delivery  must  be  a  transfer 
of  possession  and  control,  made  by  the  seller,  with  the  purpose 
and  effect  of  putting  the  goods  out  of  his  hands.(e)     *This  is  a 

(da)  Marvin  v.    Wallis,  6  Ellis  &  B.  ker  v.  Wallis,  5  Ellis  &  B.  21  ;  Holmes  v. 

726.     See  also,  as  to  acceptance,  Taylor  Hoskins,    9   Exch.    753.     In   the   earlier 

r.  Wnkefiekl,  same  vol.  p.  76.5.  cases,    slight    acts    were    considered    as 

(e)  rhillips  V.  BistoUi,  2  B.  &  C.  511  ;  sufficiently  evidencing  the  actual  receipt 
Dole  V.  Stimpson,  21  Pick.  384  ;  Tern-  of  the  property  by  the  purchaser.  Chap- 
pest  V.  Fitzgerald,  3  B.  &  Aid.  680  ;  Par-  lin  v.  Kogers,  1  East,   192;    Hodgson  v. 

[333] 


323* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


sufficient  delivery,  whatever  be  its  form.     Hence  it  may  be  con- 
structive ;  as  by  the  delivery  of  a  key  of  a  *  warehouse,  (/)  or 


Le  Bret,  1  Camp.  233  ;  Anderson  r. 
Scott,  1  Camp.  23.5,  n. ;  Elmore  v.  Stone, 

I  Taunt.  458 ;  Blenkinsop  v.  Clayton, 
7    Taunt.    597 ;    Vincent    v.    Germond, 

II  Johns.  283.  But  the  later  cases  are 
much  more  strict.  Sec  Howe  v.  Palm- 
er, 3  B.  &  Aid.  321  ;  Tempest  v.  Fitz- 
gerald, id.  680  ;  Maherley  v.  Sheppard,  10 
Bing.  99 ;  Carter  v.  Toussaint,  5  B.  &*Ald. 
855  ;  Baldey  v.  Parker,  2  B.  &  C.  37 ; 
Holmes  v.  Hoskins,  9  Exch.  753,  28  Eng. 
L.  &  Eq.  564 ;  Cunningham  v.  Ash- 
brook,  20  Mo.  553.  "  To  constitute  de- 
livery," in  the  language  of  Parke,  B.,  in 
Bill  V.  Bament,  9  M.  &  W.  41,  "  the  pos- 
session must  have  been  parted  with  by  the 
owner,  so  as  to  deprive  him  of  the  right 
of  lien."  But  see  Dodsley  v.  Varley,  12 
A.  &  E.  632.  The  question,  what  con- 
stitutes a  sufficient  delivery  to  satisfy  the 
statute  was  much  discussed  i«  New  York, 
in  the  recent  case  of  Shindlcr  r.  Houston, 
1  Denio,  48,  1  Comst.  261.  In  that  case 
the  plaintiff  and  defendant  bargained  re- 
specting the  sale,  by  the  former  to  the  lat- 
ter, of  a  quantity  of  lumber,  piled  apart 
from  other  lumber,  on  a  dock,  and  in  the 
view  of  the  parties  at  the  time  of  the  bar- 
gain, and  which  had  been  before  that  time 
measured  and  inspected.  The  defendant 
offered  a  certain  price  per  foot,  which  being 
satisfactory  to  the  plaintiff,  he  said,  "  The 
lumber  is  yours."  The  defendant  then 
told  the  plaintiff  to  get  the  inspector's  bill 
of  the  lumber,  and  take  it  to  one  House, 
who  was  the  defendant's  agent,  and  who, 
he  said,  would  pay  the  amount.  This 
was  soon  after  done,  but  payment  was  re- 
fused. The  price  being  over  fifty  dollars, 
and  the  statute  of  frauds  being  relied  on, 
it  was  hfid  by  the  Supreme  Court,  in  an 
action  for  the  ])rice  of  the  lumber,  ui)on  a 
declaration  for  lumlier  sold  and  delivered, 
that  the  court  below  was  right  in  refusing 
to  charge  the  jury  that  the  projjcrty  did 
not  pass  at  the  time  of  the  bargain  ;  and 
that  the  facts  were  proiK-rly  sul)initted  to 
the  Jury,  with  instructions  that  they  might 
find  iin  alisoiutc  delivery  and  aeeeptaiue 
of  tlie  luinljcr  at  the  time  of  the  liaigain, 
and  that  the  p;iyment  was  [)ostponed,  and 
credit  given  therefor,  until  the  inspector's 
bill  should  be  fircsented  to  House.  But 
upon  appeal  to  the  Court  of  Ajjpeals,  the 


judgment  of  the  Supreme  Court  was  re- 
versed. And  Wright,  J.,  in  delivering 
his  opinion  in  the  latter  court,  said,  "  It 
is  to  be  regretted  that  the  plain  meaning 
of  the  statute  should  ever  have  been  de- 
parted from,  and  that  any  thing  short  of 
an  actual  delivery  and  acceptance  should 
have  been  regarded  as  satisfying  its  re- 
quirements, when  the  memorandum  was 
omitted  ;  but  another  rule  of  interpreta- 
tion, which  admits  of  a  constructive  or 
sym!)olical  delivery,  has  become  too  firmly 
established  now  to  be  shaken.  The  uni- 
form doctrine  of  the  cases,  however,  has 
been,  that  in  order  to  satisfy  the  statute 
there  must  be  something  more  than  mere 
words  —  that  the  act  of  accepting  and  re- 
ceiving required  to  dispense  with  a  note  in 
writing,  implies  more  than  a  simple  act 
of  the  mind,  unless  the  decision  in  tllmore 
V.  Stone,  1  Taunt.  458,  is  an  exception. 
This  case,  however,  will  be  found  upon 
examination  to  be  in  accordance  with 
other  cases,  although  the  acts  and  circum- 
stances relied  on  to  show  a  delivery  and 
acceptance,  were  extremely  slight  and 
equivocal ;  and  hence  the  case  was  doubt- 
ed in  Howe  v.  Palmer,  3  B.  &  Aid,  324, 
and  Proctor  v.  Jones,  2  C.  &  P.  534,  and 
has  been  virtually  overruled  by  subse- 
quent decisions.  Far  as  the  doctrine  of 
constructive  delivery  has  been  sometimes 
carried,  I  have  been  nnable  to  find  any 
case  that  comes  up  to  dispensing  with  all 
acts  of  parties,  and  rests  wholly  upon  the 
memory  of  witnesses  as  to  the  precise  form 
of  words  to  show  a  delivery  and  receipt  of 
the  goods.  The  learned  author  of  the 
Commentaries  on  American  Law,  cites 
from  the  Pandects  the  doctrine  that  the 
consent  of  the  party  upon  the  spot  is  a 
sufficient  possession  of  a  column  of  gran- 
ite, which  by  its  weight  and  magnitude, 
was  not  susceptible  of  any  other  delivery. 
But  so  far  as  this  citation  may  be  in  op- 
position to  the  general  ciuM-cnt  of  decisions, 
in  the  common  law  courts  of  England  and 
of  this  country,  it  is  sufficient  jicrhaps  to 
observe  tiiat  the  Koman  law  has  nothing 
in  it  analogous  to  our  statute  of  frauds. 
In  Elmore  v.  Stone,  expense  was  incurred 
by  direi'tion  of  the  buyer,  and  the  vendor, 
at  his  suggestion,  removed  the  horses  out 
of  the  sale  stable  into  another,  and  kept 


(/)  Wilkes  V.  Ferris,  5   Johns.  335  ;  Chappel  i'.  Marvin,  2  Aikens,  79. 
[334] 


CH. 


IV.] 


STATUTE    OF    FRAUDS. 


*324 


making  an  entry  in  the  books  of  the  warehouse  keeper,  (g)  or 
delivery,  with  indorsement,  of  a  bill  of  lading,  (h)  or  even  of  a 
receipt,  (i)  But  a  mere  delivery  by  the  seller,  and  acceptance 
by  the  buyer  of  the  seller's,  order  on  a  bailee,  does  not  seem  to 
satisfy  the  statute^ without  some  act  of  possession  and  accept- 
ance of  the  property  by  the  buyer,  or  the  assent  of  the  bailee  to 
hold  it  for  the  buyer,  (m)     Even  less  than  this,  may  be  a  delivery 


them  at  livery  for  him.  In  Chaplin  v. 
Rogers,  1  East,  192,  to  which  we  were  re- 
ferred on  the  argument,  the  buyer  sold 
part  of  the  hay,  which  the  purchaser  had 
taken  away ;  thus  dealing  with  it  as  if  it 
were  in  his  actual  possession.  In  the  case 
of  Jewett  V.  Warren,  12  Mass.  300,  to 
which  we  were  also  referred,  no  question 
of  delivery  under  the  statute  of  frauds 
arose.  The  sale  was  not  an  absolute  one, 
but  a  pledge  of  the  property.  The  cases 
of  Elmore  v.  Stone  and  Chaplin  v.  Rog- 
ers are  the  most  barren  of  acts  indicating 
delivery,  but  these  are  not  authority  —  for 
the  doctrine  that  words,  unaccompanied  by 
acts  of  the  parties  are  sufficient  to  satisfy 
the  statute.  Indeed,  if  any  case  could  be 
shown  which  proceeds  to  that  extent,  and 
this  court  should  be  inclined  to  follow  it, 
for  all  beneficial  purposes,  the  law  might 
as  well  be  stricken  from  our  statute-book ; 
for  it  was  this  species  of  evidence,  so  vague 
and  unsatisfactory,  and  so  fruitful  of 
frauds  and  perjuries,  that  the  legislature 
aimed  to  repudiate.  So  far  as  I  have 
been  able  to  look  into  the  numei'ous  cases 
that  have  arisen  under  the  statute,  the 
controlling  principle  to  be  deduced  from 
them  is,  that  when  the  memorandum  is 
dispensed  with,  the  statute  is  not  satisfied 
with  any  thing  but  unequivocal  acts  of  the 
parties ;  not  mere  words,  that  are  liable 
to  be  misunderstood,  and  misconstrued, 
and  dwell  only  in  the  imperfect  memory 
of  witnesses.  The  question  has  been,  not 
whether  the  words  used  were  sufficiently 
strong  to  express  the  intent  of  the  parties, 
but  whether  the  acts  connected  with  them, 
both  of  seller  and  buyer,  were  equivocal 
or  unequivocal.  The  best  considered  cases 
hold  that  there  must  be  a  vesting  of  the 
possession  of  the  goods  in  the  vendee,  as 
absolute  owner,  discharged  of  all  lien  for 
the  price  on  the  part  of  the  vendor,  and 
an  ultimate  acceptance  and  receiving  of 
the  property  by  the  vendee,  so  unequivo- 
cal that  he  shall  have  precluded  himself 
from  taking  any  objection  to  the  quantum 
or  quality  of  the  goods  sold.     But  will 


proof  of  words  alone  show  a  delivery  and 
acceptance  from  which  consequences  like 
these  may  be  reasonably  inferred  1  Espec- 
ially, if  those  words  relate  not  to  the 
question  of  delivery  and  acceptance,  but 
to  the  contract  itself?  A  and  B  verbally 
contract  for  the  sale  of  chattels,  for  ready 
money  ;  and  without  the  payment  of  any 
part  thereof,  A  says,  '  I  deliver  the  prop- 
erty to  you,'  or  '  It  is  yours,'  but  there 
are  no  acts  showing  a  change  of  posses- 
sion, or  from  which  the  facts  may  be  in- 
ferred. B  refuses  payment.  Is  the  right 
of  the  vendor,  to  retain  possession  as  a 
lien  for  the  price,  gone  ?  Or;  in  the  event 
of  a  subsequent  discovery  of  a  defect  in 
the  quantum  or  quality  of  the  goods,  has 
B  in  the  absence  of  all  acts  on  his  part 
showing  an  ultimate  acceptance  of  the 
possession,  concluded  himself  from  taking 
any  objection  ?  I  think  not.  As  Justice 
Coicen  remarks,  in  the  case  of  Archer  v. 
Zeh,  5  Hill,  205,  '  One  object  of  the  stat- 
ute was  to  prevent  perjury.  The  method 
taken  was  to  have  something  done  ;  not 
to  rest  every  thing  on  mere  oral  agree- 
ment.' The  acts  of  the  parties  must  be 
of  such  a  character  as  unequivocally  to 
place  the  property  within  the  power,  and 
under  the  exclusive  dominion  of  the  buyer. 
This  is  the  doctrine  of  those  cases  that 
have  carried  the  principle  of  constructive 
delivery  to  the  utmost  limit."  And  see 
Atwell  V.  Mayhew,  6  Md.  10. 

(q)  Harman  v.  Anderson,  2  Camp.  243. 
(A)  Peters   v.  Ballistier,  3    Pick.   495. 
See  next  note. 

(/)  Wilkes  V.  Ferris,  5  Johns.  335. 
And  see  Searle  v.  Keeves,  2  Esp.  598 ; 
Harman  v.  Anderson,  2  Camp.  243 ; 
Withers  v.  Lyss,  4  id.  237 ;  Tucker  v. 
Ruston,  2  C.  &  P.  86. 

(ki)  In  Farina  v.  Hone,  16  M.  &  W. 
119,  goods  were  shipped  by  the  plain- 
tiff from  abroad  to  this  country,  on  the 
verbal  order  of  the  defendant,  at  a  price 
exceeding  £10.  They  M'cre  sent  to  a 
shipping  agent  of  the  plaintitF,  in  Lon- 
don, who  received  them  and  warehoused 

[335] 


324- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


and'  acceptance,  where  the  goods  are  bulky  and  difficult  of 
access  or  removal,  as  a  quantity  of  timber  floating  in  a  boom, 
or  a  mass  of  granite,  or  a  large  stack  of  hay.  (j)  So  a  part 
may  be  delivered  for  the  whole,  and  in  general  a  delivery  of 
part  is  a  delivery  of  the  whole,  if  it  be  an  inj;egral  part  of  one 
whole,  (k)  but  not  if  many  things  are  sold  and  bought  as  dis- 
tinct articles,  and  some  of  them  are  delivered  and  some  are 
not.  (/)  If  several  owners  make  a  joint  sale,  and  one  of  them 
sells  a  part  of  his  portion,  this  delivery  is  said  to  satisfy  the 
statute  as  to  all.  (/«)  Whether  the  delivery  of  a  part  was  in- 
tended as  a  delivery  of  the  whole,  is  a  question  of  fact  for  the 
jury,  (lb) 

A  sale  by  sample  is  not  a  sale  with  delivery,  if  the  sample 
be  first  sent  and  afterwards  the  sale  completed.  But  after  a 
sale  is  made,  a  part  of  the  goods  may  be  delivered  nominally 
as  a  sample,  but  yet  so  as  to  make  it  a  part  delivery  and  ac- 
ceptance, (m)     We  think  that  if  the  seller  does  in  any  case, 


them  with  a  wharfinger,  informing  the  de- 
fendant of  their  arrival.  The  wharfinger 
handed  to  the  shipping  agent  a  delivery 
warrant,  whereby  the  goods  were  made 
deliverable  to  him  or  his  assignees  by 
indorsement,  on  payment  of  rent  and 
charges.  The  agent  indorsed  and  de- 
livered this  warrant  to  the  defendant,  who 
kept  it  for  several  months,  and  notwith- 
standing repeated  applieations,  did  not 
pay  the  price  of  or  charges  upon  tlie  goods, 
nor  return  the  warrant,  but  said  he  had 
sent  it  to  his  solicitor,  and  that  he  intend- 
ed to  resist  payment,  for  that  he  had  never 
ordered  the  goods  ;  and  tliat  they  would 
remain  for  the  present  in  bond  :  —  Held, 
that  there  was  no  such  delivery  to,  and 
acceptance  by  the  defendant  of  the  goods, 
as  to  satisfy  tlie  1 7th  section  of  the  statute 
of  frauds.  And  Padr,  ]5.,  said  :  "  This 
warrant  is  no  more  than  an  engagement 
by  tlie  wliarlinger  to  deliver  to  the  con- 
signee, or  any  one  lie  may  appoint ;  and 
the  wliarfinger  hohls  the  goods  as  the 
agent  of  tlie  consignee  (who  is  the  ven- 
dor's agent),  and  his  jiosscssion  is  that  of 
the  consignee,  until  an  assignnu'Ut  has 
taken  jilacc,  and  the  wliarlinger  has  at- 
torned, so  to  speak,  to  tbir  assignee,  and 
agreed  with  him  to  liolil  for  him.  Then, 
and  not  till  then,  the  wharfinger  is  the 
agent  or  bailee  of  the  assignee,  and  bis 
poascsbion  that  of  the  assignee,  and  then 

[  330  ] 


only  is  there  a  constructive  delivery  to 
him.  In  tlie  mean  time  the  warrant,  and 
the  indorsement  of  the  warrant,  is  nothing 
more  than  an  offer  to  hold  the  goods  as 
the  warehouseman  of  the  assignee."  And 
see  Bentall  v.  Burn,  3  B.  &  C.  423  ; 
Godts  V.  Eose,  17  C.  B.  229,  33  Eng. 
L.  &  Eq.  268;  Lackington  v.  Atherton, 
7  Man.  &  G.  360.  Symbolical  delivery 
is  only  effectual  where  it  can  be  followed 
by  an  actual  delivery.  Stevens  v.  Stew- 
art, 3  Calif.  140. 

(/)  Jewett  V.  Warren,  12  Mass.  300; 
Boynton  v.  Veazie,  24  Me.  286  ;  Gib- 
son r.  Stevens,  8  How.  384 ;  Calkins 
V.  Lockwood,  17  Conn.  1.54.  But  see 
Shindler  v.  Houston,  I  Denio,  48,  1 
Comst.  261. 

(k)  Slubey  v.  Ileyward,  2  II.  Bl.  504  ; 
Hammond  v.  Anderson,  4  B.  &  P.  69  ; 
Elliott  r.  Thomas,  3  M.  &  W.  170  ;  Scott 
V.  The  Eastern  Counties  Kailway  Co.  12 
M.  &  W.  33  ;  Biggs  v.  Whisking,  14  C. 
B.  19.5,  2.5  Eng.  E.  &  E(i.  2.57;  Mills  v. 
Hunt,  20  Wend.  431  ;  Davis  v.  Moore, 
13  Me.  424. 

(/)  Trice  V.  Lea,  1  B.  &  C.  1.56  ;  Sey- 
mour ('.  Davis,  2  Sandf.  239. 

(la)  Field  r.  ]{unk,  2  N.  J.  525. 

(///)  I'ratt  V.  Chase,  40  Me.  269. 

(/;()  In  other  words,  the  delivery  of  a 
6am|ile,  wITk-Ii  is  no  jiart  of  the  thing  sold, 
will  not  take  a  sale  out  of  the  statute,  but 


CII.  IV.]  STATUTE   OF   FRAUDS.  *325 

what  is  usual,  or  what  the  nature  of  the  case  makes  convenient 
and  proper,  to  ])ass  the  effectual  control  of  the  goods  from  him- 
self and  to  the  buyer,  this  is  always  a  delivery  ;  and  nothing 
less  than  this  is  so. 

In  like  manner  as  to  the  question  of  acceptance,  we  must 
inquire  into  the  intention  of  the  buyer,  the  nature  of  the  goods, 
and  the  circumstances  of  the  case.  If  the  buyer  intends  to  re- 
tain possession  of  the  goods,  and  manifests  this  intention  by  a 
suitable  act,  it  is  an  actual  acceptance  of  them  ;  (n)  although 
this  intention  may  be  manifested  by  a  great  variety  *of  acts,  in 
accordance  with  the  varying  circumstances  of  different  cases. 
He  has  a  right  to  examine  the  goods,  and  ascertain  their  qual- 
ity, before  he  determines  whether  to  accept  or  not ;  and  a  reten- 
tion by  him  for  a  time  sufficient  for  this  examination,  and  no 
more,  is  not  an  acceptance,  (o) 

It  is  a  question,  perhaps  of  some  difficulty,  how  far  such  in- 
tention on  the  part  of  the  buyer,  and  a  corresponding  act,  are 
consistent  with  his  reserving  the  right  of  making  any  future 
objection  to  the  goods,  on  the  score  of  quantity  or  quality,  and 
rescinding  the  sale  on  such  ground.  The  greater  number  of 
decisions  declare  such  reservation  to  be  incompatible  with 
acceptance  and  actual  receipt,  and  hold  therefore  that  while  the 
buyer  retains  this  right,  he  has  not  accepted  the  goods  under 
the  statute,  (p)  But  a  recent  decision  of  much  weight  insists 
upon  what  seems  to  be  the  opposite  doctrine,  (q)     "VVe  think, 

if  tlic  sample  be  delivered  as  part  of  the  This  was  an  action  l)ronjilit  to  recover  the 

bullc,  it  tiicn  binds  the  contract.     Talver  price  of  (ifry  qnartcrs  of  wiieat.     It  ap- 

V.  West,   Holt,  N.  P.    178;    Johnson    v.  pcarcd  that  on  t!ie  25tii  of  August,  1848, 

Smith,  Anthoi),  N.  V.  60  ;  id.  81,  2d  cd. ;  tiic  plaintilf  and  dcft-nilant  buiiiu-  at  March 

Hinde  v.  AViiitehousc,  7  East,  558  ;  Gard-  market,  the  plaintiti"  sold  the  wheat  to  the 

ner  r.  Grout,  2  C.  B.  n.  s.  340.  defendant  by  .sample.     The  defendant  said 

(w)  Baincs   v.  Jevons,  7  C.  &  P.  288  ;  that  he  would  send  one  Edgley,  a  general 

Saunders  r.  Tojjp,  4  Excii.  390.  carrier   and   ligiuernian,  on  the  following 

(o)  Percival  v.  Blake,  2  C.  &  P.  514  ;  morning,  to  receive  the  residue  of  tlie 
Kent  V.  Iluskinson,  3  B.  &  P.  233  ;  Phil-  wheat  in  a  lighter,  for  the  purpose  of  con- 
lips  V.  Bistolli,  2  B.  &  C.  511.  veying  it  by  water,  from  Marcli,  where  it 

ip)  Per  Parke,  J.,  in  Smith  v.  Surman,  then  was,  to  Wisheach  ;  and   the   defend- 

9  B.  &•€.  561,  577  ;  Norman  v.  Phillips,  ant  himself  took   the  sample   awav  with 

14  M.  &  W.  277  ;  Howe  v.  Palmer,  3  B.  him.     On  26th   August,  Edglcy  received 

&  Aid.  321;   Hanson  v.   Armitage,  5  B.  tlie  wheat  accordingly.     On  the  same  day 

&  Aid.   557;  Accbal    v.   Levy,   10   Bing.  the  defendant  sold  the  wheat,  at  a  proKt, 

376  ;  CunlitFe  v.  Harrison,  6  I5xch.  903;  bv  the  same  sam|)le,  to  one  Hamiison,  ut 

Curtis  V.  Pugh,  10  Q.  B.   Ill  ;  Outwater  Wisbeach  market.     Tlie  wheat  arrived  at 

V.  Dodge,  6  Wend.  397.  Wisbeach,.  in  due  course,  on   the  evening 

(q)   Morton  v.  Tibbet,   15   Q.  B.  428.  of  Monday,  the  28th  August,  and  was  ten- 

VOL.  11.  29  [  337  ] 


326" 


THE   LAW   OF   CONTRACTS. 


[part  II. 


however,  the  seemuig  coriflict 


"comes  from  confounding    two 
questions  which  are  distinct.     If  the  buyer  accepts  and  actually 


dered  by  Edglcy  to  Hampson  on  the  fol- 
lowiiic:  inorniiiL',  when  he  refused  to  take 
it,  on  the  ground  tliat  it  did  not  correspond 
■with  the  sainide.  Up  to  this  time  the  de- 
fendant had  not  seen  the  wheat  ;  nor  had 
any  one  examined  it  on  liis  behalf.  No- 
tice of  Hampson's  repudiation  of  his  con- 
tract was  given  to  the  defendant  ;  and  the 
defendant,  on  Wednesday,  the  30th  Au- 
pust,  sent  a  letter  to  the  plaintiff  repu-  , 
diating  his  contract  with  him  on  the  same 
gronnd.  There  being  no  memorandum 
in  writing  of  the  contract,  it  was  objected 
for  the  defendant  that  there  was  no  evi- 
dence of  acceptance  and  receipt,  to  satisfy 
the  requirements  of  the  statute  of  frauds. 
Pollock,  C.  B.,  before  whom  the  case  was 
tried,  overruled  the  objection,  and  a  ver- 
dict was  found  for  the  plaintiff.  After- 
wards, the  case  being  brought  before  the 
Queen's  Bench,  on  a  motion  to  enter  a 
nonsuit,  pursuant  lo  leave  reserved  at  the 
trial,  Lord  Cunipbell,  in  delivering  the  judg- 
ment of  the  court,  said  :  "  In  this  case  the 
question  submitted  to  us  is,  whether  there 
was  any  evidence  on  which  the  jury  could 
be  justified  in  finding  that  the  buyer  ac- 
cepted the  goods,  and  actually  received 
the  same  so  as  to  render  him  liable  as 
buyer,  although  he  did  not  give  any  thing 
in  earnest  to  bind  the  bargain,  or  in  part 
payment,  and  there  was  no  note  or  memo- 
ramUnn  in  writing,  of  the  bargain.  It 
would  be  very  difficult  to  reconcile  the 
cases  on  this  subject;  and  the  difference 
between  them  may  be  accounted  for  by  the 
exact  words  of  the  17th  section  of  the  stat- 
ute of  frauds  not  having  been  always  had 
in  recollection.  Judges,  as  well  as  coun- 
sel, have  supposed  tiiat,  to  disjjcnse  with 
a  written  memorandum  of  the  bargain, 
there  must  first  iiave  been  a  receipt  of  the 
goods  iiy  the  buyer,  and,  after  that,  an 
actual  acceptance  of  the  same.  Hence, 
perhaps,  has  arisen  the  notion  that  there 
must  have  been  such  an  acceptance  as 
would  prei'bide  the  buyer  from  questioning 
the  ijuaiitiiy  or  quality  oi'  the  goods,  or  in 
any  way  dis[)Uiing  tiiat  the  contract  has 
been  fully  performed  by  the  vendor.  But 
the  words  of  the  act  of  parliament  are ; 
|hi;re  his  lordship  stated  the  whole  of  the 
ITlli  section.]  It  is  reniurkalde  that,  not- 
withstanding the  importance  of  having  a 
wriitiii  ni'MMorandiim  of  tlic  iiargaiii,  ilic 
li'gi^hiture  appears  to  have  i)c:;n  willing 
that   this  might   ije  dispensetl  with,  when 


by  mutual  consent  there  has  been  part 
performance.  Hence,  the  payment  of  any 
sum  ia  earnest,  to  bind  the  barL'^ain,  or  in 
part  payment,  is  sufficient.  This  act  on 
the  part  of  the  buyer,  if  acceded  to  on  the 
part  of  the  vendor,  is  sutiicient.  The  same 
effect  is  given  to  the  corresponding  act  by 
the  vendor,  of  delivering  part  of  the  goods 
sold  to  the  buyer,  if  the  buyer  shall 
accept  such  part,  and  actually  receive  the 
same.  As  part  ])ayment,  however  minute 
the  same  may  be,  is  sufficient,  so  part  de- 
livery, however  minute  the  portion  m:iy 
be,  is  sufficient.  Tiiis  shows  conclusively 
that  the  condition  imposed  was  not  the 
complete  fulfilment  of  the  contract,  to  the 
satisfaction  of  the  buyer.  In  truth,  the 
effect  of  fulfilling  the  condition  is  merely 
to  waive  written  evidence  of  the  contract, 
and  to  allow  the  contract  to  be  estalilished 
by  parol,  as  before  the  statute  of  frauds 
passed.  The  question  may  then  arise, 
whether  it  has  been  performed,  either  on 
the  one  side  or  the  other.  The  acceptance 
is  to  be  something  which  is  to  ])recede, 
or  at  any  rate  to  be  contemporaneous 
with,  the  actual  receipt  of  the  gooils,  and 
is  not  to  be  a  sulisequent  act,  after  the 
goods  have  been  actually  received,  weigh- 
ed, measured,  or  examined.  As  the  act 
of  parliament  expressly  makes  the  accept- 
ance and  actual  receipt  of  any  ])art  of  the 
goods  sold  sufficient,  it  must  be  open  to 
the  buyer,  at  all  events,  to  object  to  the 
quantify  and  quality  of  the  residue,  and, 
even  wiiere  there  is  a  sale  by  sample,  that 
the  residue  offered  does  not  correspond 
with  the  sample.  We  are,  therefore,  of 
o|)inion  that,  whether  or  not  a  delivery  of 
the  goods  sold,  to  a  carrier  or  any  agent  of 
the  buyer,  is  sufficient,  still  there  may  be 
an  acceptance  and  receipt,  within  the 
meaning  of  the  act,  without  the  buyer 
having  examined  the  goods,  or  done  any 
thing  to  preclude  him  from  contending 
that  they  do  not  correspond  with  the  con- 
tract. The  acceptance,  to  let  in  ])arol  evi- 
dence of  the  contract,  a]ipcars  to  us  to  be 
a  different  acceptance  fiom  that  which  af- 
fords conclusive  evidence  of  the  contract 
having  been  fuKilled.  We  are,  therefore, 
of  opinion,  in  this  case,  that,  altliongh  the 
defendant  had  done  nothing  which  would 
have  ])reclurl<'(l  him  from  olijecting  that 
tiie  wheat  delivered  to  Ivlgley  was  not  ac- 
ciirding  to  the  contract,  there  was  evi- 
dence to  justify  the  jury  in  tiuding  that  the 


en.  IV.] 


STATUTE    OF   FRAUDS. 


*327 


receives  the  goods  with  a  *knowledge  of  their  deficiency  in  qual- 
ity, or  quantity,  and  without  objection,  he  waives  all  right  of 
future  objection  on  this  ground.  If  he  accepts  the  same  goods 
in  the  same  way,  without  a  knowledge  of  a  deficiency  which 
gives  him  a  right  of  objection,  and  subsequently  acquires  this 
knowledge,  he  cannot  return  the  goods  and  defend  against  an 
action  for  the  price,  under  the  statute,  because  the  whole 
requirement  of  the  statute  has  been  satisfied;  but  he  may,  at 
common  law,  whether  the  contract  of  sale  were  oral  or  written, 
on  the  ground  that  the  seller  did  not  send  or  deliver  to  him 
what  he  bought.     If  the  buyer  expressly  declares  that  he  reserves 


defcnrlant  accepted  nnd  received  it."  His 
lordship  then  ])rocceded  to  examine  most 
of  tiic  cases  cited  in  the  preceding  note, 
and  arrived  at  tiie  conclusion  that  they 
were  not  sufficiently  strong-  to  control  tiie 
action  of  the  court;  and  tlie  rule  for  a 
nonsuit  was  accordingly  discharged.  Since 
the  decision  of  this  case,  the  case  of  Hunt 
V.  Hccht,  8  Exch.  814,  20  Eng.  L.  &  Eq. 
524,  has  hecu  decided  in  the  Court  of  Ex- 
chequer. That  was  an  action  for  goods  sold 
and  delivered.  On  the  trial  it  ajjpeared 
that  one  of  the  defendants,  who  were  part- 
ners, called  on  the  ]ilaintiff,  a  hone-mer- 
chant, for  the  purjiose  of  haying  bones.  He 
there  saw  a  heap  containing  a  quantity  of 
the  kind  he  desired  to  huy,  but  intermixed 
with  others  which  were  until  for  manu- 
facturing purposes.  He  ultimately  agreed 
with  the  plaintiff  to  bny  the  heap,  if  the 
objectionable  bones  were  taken  out.  It 
was  arranged  between  them  that  the 
plaintiff  should  deliver  the  bones  at  Brew- 
er's Quay,  in  sacks,  marked  in  a  particular 
way ;  and  the  defendant  gave  the  plain- 
tiff a  shipping  note,  or  order,  directed  to 
the  whartinger,  requesting  him  to  receive 
and  ship  tiie  goods,  when  the  plaintiff 
should  send  them.  The  plaintiff  sent  the 
bags  accordingly,  marked  as  requested. 
They  were  delivered  at  the  wharf,  and 
received  by  the  wharfinger,  on  Wednes- 
day, the  9th  of  Feiirnary,  but  the  defend- 
ants did  not  hear  of  their  being  sent  until 
the  following  day,  when  the  invoice  was 
received.  The  defendants  then  examined 
the  bones  and  wrote  to  the  plaintiff  com- 
plaining of  their  quality,  and  declining 
to  accept  them.  U])on  this  evidence, 
Martin,  B.,  before  whom  the  case  was 
tried,  nonsuited  the  plaintiff.  And  the 
Court  of  Exchequer  held  that  the  nonsuit 


was  right.  PollocI:,  C.  B.,  said  :  "  The 
goods  were  received  by  the  person  ap- 
pointed liy  the  defendants,  but  they  were 
not  at  an}'  time  accepted.  The  defend- 
ants never  saw  them  when  they  were  in  a 
state  to  be  accepted,  because  they  had 
not  been  separated.  A  man  does  not  ac- 
cept Hour  by  looking  at  the  wheat  that  is 
to  be  ground.  The  article  must  be  in  a 
condition  to  be  accepted.  There  was  no 
evidence  of  any  acceptance  of  these  bones, 
for  the  defendants  never  saw  them  after 
the  separation  had  taken  place."  Alder- 
son,  B. :  "  If  a  man  buys  a  quaiititj'  out  of 
a  larger  bulk,  he  does  not  buy  it  until  it 
is  separated  from  the  rest ;  and  there 
must  be  an  acceptance  after  the  separa- 
tion. He  must  have  an  opportunity  of 
refusing  what  the  vendor  may  have  se- 
lected. Here  there  was  a  delivery,  but  no 
accc])tance."  Martin,  B.  :  "  The  question 
is  whether  the  defendants  accepted  part  of 
the  goods  sold,  and  actually  received  the 
same.  The  contract  was  for  such  bones 
in  the  heap  as  were  ordinarily  merchant- 
able, and  they  were  only  bound  to  accept 
such  merchantable  bones.  Directions 
were,  no  doubt,  given  to  the  whartinger, 
to  receive  the  bones,  and  in  one  sense  they 
were  received ;  but  tliis  was  not  an  ac- 
ceptance within  the  statute.  There  is  no 
acceptance  unless  the  purchaser  has  exer- 
cised his  option,  or  has  done  something 
that  has  deprived  him  of  his  option. 
Morton  v.  Tibbett  is  a  correct  decision, 
because  the  purchaser  had  there  dealt 
with  the  goods  as  his  own,  but  much  that 
is  said  in  that  case  may  be  open  to  doubt. 
The  decisions,  in  my  opinion,  show  that 
the  acceptance  must  be  after  the  purchaser 
has  exercised  his  option,  or  has  done  some- 
thing to  preclude  himself  from  doing  so." 

[339] 


328" 


THE   LAW    OF   CONTRACTS. 


[part  II. 


the  right  of  examining  and  objecting,  this,  perhaps,  should  be 
regarded  rather  as  a  conditional  acceptance,  which  becomes 
complete  and  actual  only  when  the  condition  has  been  satis- 
fied. 

A  question  has  been  made  whether  a  delivery  by  the  vendor 
to  a  carrier,  satisfies  the  statute.  The  general  question  of  the 
effect  of  delivery  to  a  carrier,  has  been  considered  in  the  chapter 
on  the  sale  of  personal  property.  (/")  Here,  it  is  only  necessary 
to  remark,  that  the  delivery  to  a  common  carrier  *has  been  held 
to  be  such  passing  of  the  property  out  of  the  possession  and 
control  of  the  seller,  as  satisfies  the  statute,  although  the  carrier 
is  for  some  purposes  the  agent  of  the  seller,  who  retains  his  lien, 
or  quasi  lien,  by  his  right  to  stop  the  goods  in  transitu,  (s)     We 


()•)  See  ante,  vol.  1,  p.  445. 

(s)  HcU-C  V.  Sattley,  3  Camp.  528. 
Tills  was  an  action  to  recover  the  price  of 
a  liogshead  of  {i;in.  The  plaintiffs  were 
spirit  merchants  in  London,  wlio  had  been 
in  the  habit  of  supplyinij;  spirits  to  the 
defendant,  a  publican,  near  Dartmouth, 
in  DevonslTirc.  In  tliese  previous  deal- 
ings, the  course  had  been  ilnr  the  plaintiff 
to  ship  the  goods  on  board  a  Dartmoutli 
trader,  in  the  river  Thames,  and  the 
defendant  bad  always  received  them. 
The  bogsbead  of  gin  in  cjuestion  was 
verbally  ordered  by  the  defendant  of  the 
plaintiff's  traveller,  and  was  shi|)pcd  in 
tlic  same  manner  as  the  others  bad  been. 
Tlicre  was  no  evidence  cither  that  it  had 
been  delivered  to  the  defendant  in  Devon- 
shire, or  that  lie  refused  to  accept  it.  On 
the  trial,  i)eforc  C/iainhre,  J.,  the  statute 
of  frauds  being  relied  on  in  defence,  the 
learned  judge  said:  "I  tbink,  under  the 
circumstances  of  this  case,  the  defendant 
must  be  considered  as  having  constituted 
the  master  of  the  ship  his  agent,  to  acci'pt 
and  receive  l/ie  i/aocls."  His  lordship  would 
Bcem  to  have  rested  bis  opinion,  in  some 
degree,  a\n>n  the  previous  course  of  deal- 
ing between  the  ])arties.  JJiit  the  case 
must  lie  considered  as  overruled  by  subse- 
(pient  decisions.  Thus,  in  Hanson  v. 
Armitage,  5  IJ.  &  Aid.  557,  it  api)eared 
that  the  iilainiKl's,  merchants  in  London, 
bad  bicii  ill  llie  habit  of  selling  goods  to 
the  defendant,  resident  in  the  country,  and 
of  deliveiing  (bein  to  a  wbarfniger  in 
London,  to  ix;  forwarded  to  the  defendant 
by  the  (ir^t  ship.  In  pursuance  of  a  )iar(d 
order  from    the   defendant,   goods    were 

[340] 


delivered  to,  and  accepted  by  tlie  wbarf- 
inger,  to  be  forwarded  in  the  usual  man- 
ner. Held,  that  this  not  being  an  accept- 
ance by  the  buyer,  was  not  sufficient  to 
take  the  case  out  of  the  statute.  And  in 
the  recent  case  of  Meredith  v.  Meigb,  2 
Ellis  &  13.  364,  the  facts  were  that  goods 
were  delivered  by  the  vendor,  in  Cornwall, 
on  board  a  ship  not  named  by  the  pur- 
chaser, and  a  bill  of  lading  was  signed  by 
the  captain,  making  them  deliverable  to 
carriers  at  Liverjjool,  named  by  the  pur- 
chaser, for  the  purpose  of  receiving  and 
forwarding  the  goods  to  him,  in  Stafford- 
shire. A  copy  of  the  bill  of  lading  was 
sent  to  the  carriers  at  Liverpool,  and  on 
the  25th  of  April  the  purchaser  received 
notice  of  the  shipment  of  the  goods,  and 
did  not  repudiate  the  contract  Ijcfore  the 
6tli  May,  when  he  received  information 
from  the  vendor  that  the  ship  and  the 
goods  were  lost  before  they  reached  Liver- 
pool. In  an  action  by  the  vendor  for  the 
])ricc  of  the  goods,  it  was  held,  that  there 
was  no  evidence  to  go  to  the  jury  of  an 
acceptance  atid  actual  receipt  of  the  goods 
by  the  defendant,  within  the  statute  of 
frauds.  And  Lord  Campliell  said  :  "  Con- 
sidering that  no  ship  was  named  by  the 
vendee,  the  mere  delivery  of  the  goods  on 
board  the  Marietta,  and  the  signing  the 
bill  of  lading  by  the  captnin,  was  not 
sutlicient  acceptance  and  receipt  wiiliin 
the  statute.  Hart  v.  Sattley,  3  Camp. 
5:iH,  if  it  be  supjioscd  to  lay  down  such 
law,  must  be  considered  to  have  been 
overturned  by  subse(picnt  decisions,  in 
which  1  concur."  Aiul  Cruiiijilon,  J.,  said: 
"  '.riie  delivery  of  goods  to  a  carrier  for 


CII.  IV.] 


STATUTE   OP   FRAUDS. 


529 


think  this  open  to  much  doubt;  and  certainly,  though  it  may 
be  a  delivery,  it  is  not  yet  an  acceptance  by  the  buyer.  But  if 
the  buyer  designates  a  person  as  his  carrier  (although  this  per- 
son's occupation  may  be  that  of  a  common  carrier),  and  directs 
the  seller  to  deliver  the  goods  as  the  buyer's,  to  this  person,  then 
it  might  be  held  that  the  delivery  was  made  to  the  buyer  through 
an  *agent,  and  an  acceptance  made  by  the  buyer  through  an 
agent,  (t)  But  whether  a  designation  of  the  carrier,  and  an 
order  to  deliver,  and  a  compliance  on  the  part  of  the  seller,  be 
s«ch  as  to  have  this  effect,  must  depend  upon  the  intentions 
and  acts  of  the  parties,  and  the  circumstances  of  each  case,  (m) 


the  purpose  of  being  carried,  or  to  a 
whartiiifier  to  be  forwarded  to  the  vendee 
by  the  tirst  ship,  in  the  "usual  manner,  is 
not  evidence  of  an  acceptance  and  receipt, 
■witl)in  the  statute  of  frauds."  And  see 
Acebal  v.  Levy,  10  Bing.  376. 

(/)  See  Coats  v.  Chaplin,  3  Q.  B.  483. 

(u)  In  Bushel  v.  Wheeler,  15  Q.  B. 
442,  n.,  the  defendant,  livinp;  at  Hereford, 
ordered  goods,  at  a  price  above  10/.,  of 
the  plaintiff,  living  at  Bristol,  and  di- 
rected that  they  should  be  sent  by  The 
Hereford,  sloop,  to  Hereford.  They  were 
sent  accordingly;  and  a  letter  of  advice 
was  also  sent  to  the  defendant,  with  an 
invoice,  stating  the  credit  to  be  three 
months.  On  their  arrival  at  Hereford, 
they  were  placed  in  the  warehouse  of  the 
owner  of  the  sloop,  where  the  defendant 
saw  them ;  and  he  then  said  to  tlie  ware- 
houseman that  he  would  not  take  them  ; 
but  he  made  no  communication  to  tlie 
plaintiff  till  the  end  of  five  months,  when 
he  repudiated  the  goods.  In  an  action 
for  the  price  of  the  goods,  the  judge  before 
whom  the  cause  was  tried,  liaving  in- 
structed the  jury  that  there  was  no  accept- 
ance and  actual  receipt  sufficient  to  satisfy 
the  statute  of  frauds,  it  was  lield,  that  this 
instruction  was  erroneous,  and  that  he 
should  have  left  them  to  find,  upon  these 
facts,  whether  or  not  there  had  been  such 
acceptance  and  actual  receipt.  And  Lord 
Denman  said  :  "  The  general  intention  of 
the  statute  is,  that  there  should  be  a  writ- 
ing; this,  as  well  as  the  exception  for  the 
case  of  delivery  and  acceptance,  has  been 
construed  literally.  Still,  it  must  be  a 
question  whether  there  has  been  an  accept- 
ance and  actual  receipt.  It  is  not  neces- 
sary tliat  the  purchaser  himself  should  form 
a  judgment  on  the  article  sent ;  he  may 

29* 


depute  another  to  do  so  ;  or  he  may  rely 
upon  the  seller.  The  defendant  here 
orders  the  goods  to  be  sent  by  a  particular 
vessel  which  he  names,  and  he  receives  the 
invoice,  which  states  a  three  months' 
credit.  He  allows  the  goods  to  remain 
till  that  credit  is  expired,  giving  no  notice 
to  the  seller,  though  he  did  say  to  his  own 
agent  tluit  he  would  not  take  them.  Now, 
such  a  lapse  of  time,  connected  with  the 
other  circumstances,  might  show  an  ac- 
ceptance ;  whether  there  was  an  accept- 
ance or  not,  is  a  question  of  fact.  I  do 
not  think  that  the  mere  taking  by  the 
carrier  is  a  receipt  by  the  vendee  ;  but  the 
jury  here  should  Iiave  been  allowed  to  ex- 
ercise a  judgment  on  the  question  whether 
there  was  an  actual  receipt."  Williams,  J. : 
"  When  it  is  once  settled  that  manual 
occupation  is  not  essential  to  an  actual 
receipt,  and  it  is  not  now  contended  that 
it  is,  it  becomes  a  question  whether  there 
have  been  circumstances  constituting  an 
actual  receipt.  The  larger  the  bulk,  the 
more  impracticable  it  is  that  there  should 
be  a  manual  receipt;  something  there 
must  be  in  the  nature  of  constructive 
receipt,  as  there  is  constructive  delivery. 
It  being  then  once  established  that  there 
may  be  an  actual  receipt  by  acquiescence, 
wlierever  such  a  case  is  set  up  it  becomes 
a  question  for  the  jury  whether  there  is  an 
actual  receipt.  And  all  the  facts  must  be 
submitted  to  their  consideration,  for  the 
determination  of  that  question."  Cole- 
ridge, J. :  "I  agree  that  the  acceptance 
must  be,  in  the  words  of  one  of  the  cases 
cited,  '  strong  and  unequivocal.'  IMalier- 
ley  V.  Sheppard,  10  Bing.  101.  But  that 
is  quite  consistent  with  its  being  construc- 
tive. Therefore,  in  almost  all  cases,  it  is 
a  question  for  the  jury,  whether  particular 

[341] 


330 


THE   LAW   OF   CONTRACTS. 


[part  II. 


It  has  been  much  doubted  whether  a  contract  for  the  sale  of 
stock  or  shares  in  a  corporation  or  joint-stock  company,  was 
within  the  statute.  The  question  is,  are  they  "  goods,  wares,  or 
merchandises?"  and  the  English  authorities  deny  this;(v)  in 


instances  of  acting  or  forbearing  to  act, 
amount  to  acceptance  and  actual  receipt. 
Here  goods  are  ordered  b}'  the  Aendee  to 
be  sent  by  a  particnhir  carrier,  and,  in 
effect,  to  a  particular  warehouse ;  and 
that  is  done  in  a  reasonable  time.  That 
comes  to  the  same  thing  as  if  they  had 
been  ordered  to  be  sent  to  the  vendee's 
own  house,  and  sent  accoi'dingly.  In  such 
a  case,  the  vendee  would  have  liad  the 
right  to  look  at  tlie  goods,  and  to  return 
them  if  they  did  not  correspond  to  order. 
But  here  the  vendee  takes  no  notice  of  the 
arrival,  and  makes  no  communication  to 
the  party  to  whom  alone  a  communication 
■was  necessary.  Tiie  question  must  go  to 
the  jury."  But  see  this  case  commented 
on,  in  Norman  v.  Phillips,  14  M.  &.  W. 
277.  In  Snow  v.  Warner,  10  Met.  132, 
it  was  held  tliat  goods  are  received  and 
accepted  by  the  purchaser,  within  the 
statute  of  frauds,  when  they  are  trans- 
ported l)y  the  seller  to  the  place  of  delivery 
appointed  by  the  agent  who  contracted 
for  them,  and  are  there  delivered  to  an- 
other agent  of  the  purchaser,  and  are  by 
him  shipped  to  a  port  where  the  purchaser 
had  given  him  general  directions  to  ship 
goods  of  tlie  same  kind.  And  Hnhhunl, 
J.,  in  tliat  case,  said  :  "  The  authorities 
cited  by  the  defendant's  counsel,  and  upon 
which  he  relies,  go  to  establish  the  doc- 
trine that  a  constructive  delivery  to  a 
wharfinger,  or  a  shipmaster,  or  to  other 
persons  engaged  in  receiving  tlie  goods  of 
others,  will  not  be  a  compliance  with  the 
statute  of  frauds,  to  bind  the  party  as  hav- 
ing accepted  the  goods.  There  was  also, 
apparently,  a  leaning  in  the  mind  of  Lord 
Chief  Justice  Ahhott,  to  the  opinion  that 
tlic  terms  of  tlie  statute  must  be  literally 
complied  witii  ;  that  is,  that  there  must 
be  an  acceptance  of  the  goods  by  the  ]iur- 
cliaser  biinsclf.  Jlaiison  v.  Armitage,  1 
Dowi.  &  H.  l-'il.  We  arc  fully  of  opin- 
ion that  the  acceptance  must  be  proved 
by  some  dear  and  une((iiivocal  act  of  the 

r)arty  to  ite  charged.  'I'lii;  statute,  by  its 
anguage,  rc(|uireH  it,  and  tiit;  construclion 
it  ha.s  received  gives  full  force  to  that 
language.  Hut  wc  cannot  say  tliat,  to 
bind  the  jiiirchascr,  tlie  accei)lance  can 
only  be  by  him  personally.     The  statute, 

[342] 


in  terms,  provides  that  an  agent  may  bind 
his  principal  by  a  memorandum  in  writing. 
If,  then,  an  agent  can  purchase,  we  think 
it  clearly  follows  —  there  being  no  prohib- 
itory clause  —  that  an  agent  duly  author- 
ized may  also  receive  property  purchased, 
and  thus  bind  the  principal.  It  is  in 
accordance  with  the  rights  and  duties  of 
principals  and  agents,  in  other  cases,  and 
for  the  furtherance  of  trade  and  commerce. 
In  the  present  case,  it  was  jiroved  that  the 
plaintiff's  transported  the  barrels  to  Boston, 
and  delivered  them  at  the  place  where  the 
purchaser's  agent  directed,  and  that  the 
agent  in  Boston  afterwards  shipped  them 
to  the  port  at  the  South,  where  the  de- 
fendant had  given  general  directions  to 
have  his  barrels  sent  ;  and  we  are  of 
opinion,  with  the  learned  judge  who  tried 
the  cause  in  the  court  below,  that  this  was 
a  sufficient  acceptance  of  the  goods,  within 
the  statute.  There  was  a  delivery  by  the 
vendors  to  an  agent  authorized  to  receive 
an  acceptance  by  him,  and  a  forwarding 
of  them  to  the  place  appointed  by  the 
principal.  These  acts  are  direct  and  un- 
equivocal, and  constitute  a  transfer  of  the 
property  from  the  seller  to  the  purchaser, 
who,  in  consequence  of  it,  is  bound  to  pay 
the  price  of  the  purchase." 

(p)  Humble  v.  Mitchell,  11  A.  &  E. 
205.  The  principle  upon  which  the 
English  cases  proceed  is  thus  explained 
by  Sir  h.  Shad  well  ,\n  Duncuft  v.  Albrecht, 
12  Simons,  189  :  "  It  is  impressed  ujion  my 
mind  that,  in  the  decisions  which  have 
been  made  with  respect  to  the  17th  sec- 
tion, it  has  been  held  to  apjily  only  to 
goods,  wares,  and  merchandises,  which 
are  capable  of  being  in  part  delivered.  If 
there  is  an  agreement  to  sell  a  ([uantity  of 
tallow  or  of  hemp, yon  may  deliver  a  jjart ; 
hilt  the  delivery  of  a  i>art  is  not  a  trans- 
action applicable,  as  I  apprehend,  to  such 
a  suliject  as  railway  shares.  They  have 
been  decided  not  to  be  land.  They  have 
been  decided  to  be,  in  ctlcct,  personal 
estate ;  but  not  personal  estate  of  the 
(juality  of  goods,  wares,  and  merchandises, 
wiiliiii  the  meaning  of  the  17lii  section." 
So  held  in  Vaupell  t\  Wooilwaril,  2  Sandf. 
Oil.  14;j,  14G,  n.  And  see  further,  Pick- 
ering V.  Appleby,  Coiuyns,  354 ;  Colt  v. 


on.  IV.] 


STATUTE   OF   FRAUDS. 


»331-*332 


some  degree,  on  the  ground  of  a  supposed  analogy  with  the 
bankrupt  law,  within  which  the  purchasing  of  stock  does  not 
bring  a  person,  unless  the  purchase  was  for  the  purpose  of  trad- 
ing in  it,  as  by  brokers.  But  it  has  been  decided,  in  this  *  coun- 
try, that  a  sale  of  stock  in  a  manufacturing  company  is  within 
the  statute ;  (w)  and  on  this  authority,  as  well  as  on  general 
principles,  we  should  suppose  that  the  sale  of  any  *  incorporated 


Nettcrvill,  2  V.  Wms.  304;  Kniglit  v. 
Barber,  1 G  M.  &  W.  66  ;  Heseltinc  v.  Sig- 
gcrs,  1  Exoli.  856. 

(w)  Tisdale  v.  Harris,  20  Pick.  9.  In 
this  case,  Sliaiv,  C.  J.,  said  :  "  Supposing 
this  a  new  question,  now  for  tlie  first  time 
calling  for  a  construction  of  the  statute, 
the  court  are  of  opinion  that,  as  well  by 
its  terms  as  its  general  policy,  stocks  are 
fairly  witliin  its  operation.  The  words 
'  goods '  and  '  merchandise,'  are  both  of 
very  large  signification.  Bona,  as  used  in 
the  civil  law,  is  almost  as  extensive  as 
personal  property  itself,  and  in  many 
respects  it  has  nearly  as  large  a  significa- 
tion in  the  common  law.  The  word  '  mer- 
chandise,' also,  including,  .in  general, 
objects  of  traffic  and  commerce,  is  broad 
enough  to  include  stocks  or  shares  in 
incorjiorated  companies.  There  arc  many 
cases  indeed  in  wliich  it  has  been  held,  in 
England,  tliat  buying  and  selling  stocks 
did  not  subject  a  person  to  the  operation 
of  the  bankrupt  laws,  and  hence  it  has 
been  argued  that  tiiey  cannot  be  considered 
as  merchandise,  because  bankruptcy  ex- 
tends to  persons  using  the  trade  of  mer- 
chandise. But  it  must  be  recollected  that 
the  bankrupt  acts  were  deemed  to  be  highly 
penal  and  coercive,  and  tended  to  deprive 
a  man  in  trade  of  all  Jiis  property.  But 
most  joint-stock  companies  were  founded 
on  the  hypothesis,  at  least^  that  most  of 
the  shareliolders  took  shares  as  an  invest- 
ment, and  not  as  an  oliject  of  traffic;  and 
the  construction  in  question  only  decided, 
that  by  taking  and  holding  such  shares 
merely  as  an  investment,  a  man  should 
not  be  deemed  a  merchant  so  as  to  sub- 
ject himself  to  the  highly  coercive  process 
of  the  bankrupt  laws.  Tiiesc  cases,  there- 
fore, do  not  hear  much  on  the  general 
question.  Tiie  main  argument  relied 
upon  by  those  who  contend  that  shares 
are  not  within  the  statute,  is  this:  that  the 
statute  provides  that  such  contract  shall 
not  be  good,  &c.,  among  other  things, 
except  the  purchaser  shall  accejit  part  of 
the  goods.     From  this  it  is  argued,  that 


by  necessary  implication,  tlie  statute  ap- 
plies only  to  goods  of  which  part  may  be 
delivered.  Tliis  seems,  however,  to  be 
rather  a  narrow  and  forced  construction. 
The  provision  is  general,  that  no  contract 
for  the  sale  of  goods,  &c.,  shall  be  allowed 
to  be  good.  The  exception  is,  wlien  part 
are  delivered ;  but  if  part  cannot  be  de- 
livered, then  the  exception  cannot  exist 
to  take  the  case  out  of  the  general  prohibi- 
tion. The  provision  extended  to  a  great 
variety'  of  objects,  and  the  exception  may 
well  be  construed  to  apply  only,  to  such  of 
those  objects  to  which  it  is  applicable, 
without  affecting  others,  to  which,  from 
their  nature,  it  cannot  ap])ly.  Tiiere  is 
nothing  in  the  nature  of  stocks,  or  shares 
in  companies,  which  in  reason  or  sound 
policy  should  exempt  contracts  in  respect 
to  them  from  those  reasonable  restrictions, 
designed  by  the  statute  to  prevent  frauds 
in  the  sale  of  other  commodities.  On  the 
contrary,  these  companies  have  become  so 
numerous,  so  large  an  amount  of  the 
property  of  the  conmiunity  is  now  invested 
in  them,  and  as  the  ordinary  indicia  of 
property,  arising  from  delivery  and  pos- 
session, cannot  take  place,  there  seems  to 
be  peculiar  reason  for  extending  the  pro- 
visions of  this  statute  to  them.  As  they 
may  properly  be  included  under  the  terms 
goods,  as  they  are  within  the  reason  and 
policy  of  the  act,  the  court  arc  of  opinion, 
that  a  contract  for  the  sale  of  shares,  in 
the  absence  of  the  other  requisites,  must 
be  proved  by  some  note  or  memorandum 
in  writing ;  and  as  there  was  no  such  • 
memorandum  in  writing  in  the  present 
case,  the  plaintiff  is  not  entitled  to  main- 
tain this  action."  And  see,  to  the  same 
effect,  Colvin  v.  Williams,  3  Harris  & 
J.  38;  Kortii  v.  Forest,  15  Conn.  400; 
Southern  Life  Ins.  &  Tr.  Co.  v.  Cole,  4 
Fla.  359.  But  the  decision  in  this  last 
case  was  based,  in  some  measure,  upon 
the  fact  that  the  Florida  statute  contains, 
in  addition  to  the  words  used  in  the 
English  statute,  the  words  "  personal 
property." 

[343] 


332-  THE  LAAV  OF  CONTRACTS.  [PART  II. 

stock  would  be  held  within  the  operation  of  the  statute,  (x) 
"Whether  a  sale  of  a  promissory  note  be  within  the  statute  is 
not  certain  upon  the  authorities,  [xa)  Indeed,  both  as  to  this 
question,  and  that  of  the  sale  of  shares  in  incorporated  compa- 
nies, our  notes  show  that  in  difTerent  States  different  rules  pre- 
vail. 

The  delivery  required  by  the  statute  may  be  subsequent  to 
the  agreement  of  sale,  (xb) 

We  will  next  inquire  what  giving  in  earnest,  or  in  part  pay- 
ment, satisfies  the  requirement  of  the  statute.  The  statute  bor- 
rows ''earnest"  from  the  common  law,  and  does  not  greatly 
vary  the  law  in  relation  to  it.  If  one  offers  a  watch  to  another 
for  one  hundred  dollars,  and  the  other  accepts,  and  forthwith 
tenders  the  money,  he  acquires  a  property  in  the  watch  at  com- 
mon law ;  if  he  accepts,  but  does  not  pay  or  tender  the  price, 
the  property  does  not  pass,  and  the  vendor  is  not  bound  by  the 
contract,  which  is  presumed  to  have  contemplated  payment  on 
the  spot,  (y)  But  if  the  buyer,  when  he  accepted  the  offer,  gave 
something  by  way  of  earnest,  and  it  was  accepted  as  such,  this 
bound  the  parties  at  common  law.  Neither  could  rescind  the 
sale ;  but  the  buyer  could  tender  the  price  at  any  time  and  de- 
mand the  goods,  and  the  seller  could  tender  the  goods,  and  after 
the  time  agreed  on  had  expired,  could  sue  for  the  price.  This 
remains  so  under  the  statute,  which  does  not  seem  to  add  any 
thing  to  the  force  or  effect  of  the  earnest. 

The  small  value  of  the  thing  given  as  earnest,  is  no  objection 
to  it,  but  it  would  seem  that  it  must  have  some  value.  A  dime 
or  a  cent  might  suffice,  but  not  a  straw  or  a  chip.  And  it  must 
be  actually  given  and  received  ;  merely  touching  or  crossing  the 
hand  with  it  is  not  enough ;  (z)  and  it  must  be  given  and  re- 
ceived as  earnest. 

Part  payment  has  the  same  effect  as  earnest.     But  it  must  be 

(i)  Sec  prcccfling  note.  tlie  United    States  were   not  witliin    tlio 

Ixa)  In   B.ildwin  v.  Williams,  3  Met.  statute. 
aCi,  it  was  decided  that  a  contract  for  the         {.fli)  McKnif;lit  v.  Dnnlop,  1  Sckl.  537  ; 

Biile    of   pronii.ssory   notes    is    witliin    the  Marsh  r.  Ilvde,  3  Gray,  .'i.'il. 
Btntutc.       I'lit  see  contra,  Wiiittcinore  v.         (//)   t>QC  (iiitr,  vol.  1,  ])|).  •43.'),  436. 
Gihl)R,  4  Foster,  484.     So  also,  in  Jk'ers         {z)  lilenkinsop    v.   Clayton,  7    Taunt. 

17.    (Vowel),    Dudley,  Ga.  28,  it  was  de-  Hdl. 
cidcd  that  treasury  checks  on  the  Uank  of 

[;3ii] 


CII.  IV.] 


STATUTE    OF   FRAUDS. 


*333 


an  actual  payment;  and  not  a  mere  agreement  that  something 
shall  be  considered  as  a  payment.  Thus,  if  the  seller  owes  the 
buyer,  and  part  of  the  contract  of  sale  is  that  the  debt  shall  be 
discharged  and  go  as  part  payment  of  the  price,  nevertheless 
the  contract  must  be  in  writing,  because  this  is  not  an  actual 
part  payment,  (a) 

A  question  of  considerable  difficulty  has  been  raised,  as  to 
whether,  and  how  far,  this  section  of  the  statute  of  frauds  ap- 
plies to  executory  contracts.  If  one  agrees  to  buy  at  a  *future 
time,  there  are  three  forms  which  the  contract  may  assume. 
One  is  to  buy  hereafter  what  is  now  existing;  a  second,  to  buy 
hereafter  what  is  not  now  existing,  but  is  to  be  supplied  here- 
after, for  the  sum  agreed  on,  which  is  to  be  regarded  only  as  the 
price  of  the  article ;  the  third  is,  to  buy  hereafter  an  article  to 
be  manufactured  by  the  seller,  and  the  bargain  implies  that  the 
money  to  be  paid  is  for  the  manufacturing,  as  well  as  for  the 
article. 

In  the  earlier  English  decisions,  it  seems  to  have'  been  held, 
for  some  time,  as  a  settled  rule  of  law,  that  no  executory  con- 
tract of  sale  was  within  this  section  of  the  statute,  {b)  But  this 
doctrine  was  overthrown  by  Lord  Lovghhorovgli,  who,  however, 
admitted  that  where  an  executory  contract  of  purchase  and  sale 
provided  for  work  and  labor  upon  the  article  previous  to  its 
delivery,  and  important  materials  to  be  furnished,  the  agreement 
was   not  within  the  statute,  (c)     The  ruling  of  Lord   Lough- 


(a)  Walker  v.  Nussej',  16  M.  &  W. 
302. 

(b)  Sec  Towers  v.  Osborne,  1  Stra. 
506;  Clayton  y.  Andrews,  4  Burr.  2101  ; 
Alexander  v.  Comber,  1  H.  Bl.  20. 

(c)  Rondeau  i-.  W.vatt,  2  H.  BI.  63.  In 
this  case  the  ]3lainiitF  and  defendant  en- 
tered into  a  verbal  ap;rcement  for  the  sale 
of  3,000  sacks  of  flour,  to  l)e  delivered  to 
the  plaintiH'  at  a  future  period  ;  and  this 
agreement  was  held  to  be  within  the  stat- 
ute. Lord  Loiii;}(boroii(/h,  in  delivering  tlie 
judgment  of  the  court  said  :  "  It  is  sin- 
gular that  an  idea  could  ever  prevail,  that 
this  section  of  the  statute  was  only  ap- 
plicable to  cases  where  the  bargain  was 
immediate,  for  it  seems  plain,  from  the 
words  made  use  of,  that  it  was  meant  to 
regulate  executory,  as  well  as  other  con- 


tracts. The  words  are,  'No  contract  for 
the  sale  of  any  goods,'  &c.  And,  indeed, 
it  seems  that  this  provision  of  the  statute 
would  not  be  of  much  use,  unless  it  were 
to  extend  to  executory  contracts  ;  for  it  is 
from  bargains  to  be  completed  at  a  future 
period,  that  the  uncertainty  and  confusion 
will  probably  arise,  which  the  statute  was 
desij:ned  to  ])revent.  The  case  of  Simon 
V.  Motivos,  3  Burr.  1921,  was  decided  on 
the  ground  that  the  auctioneer  was  the 
agent  as  well  for  the  defendant  as  the 
plaintiff,  and  theixfore  that  the  contract 
was  sufficiently  reduced  into  writing.  The 
case  of  Towers  v.  Sir  John  Osborne,  1 
Stra.  506,  was  plainly  out  of  the  statute, 
not  because  it  was  an  executory  contract, 
as  it  has  been  said,  l)Ut  because  it  was  for 
work  and  labor  to  be  done,  and  materials 

[345] 


334*  THE  LAW  OF  CONTRACTS.  [PART  IL 

borough  is,  however,  open  to  the  objection  that  it  conflicts  with 
what  seems  to  be  a  perfectly  well-established  principle  ;  that  if 
an  entire  and  inseparable  contract  be  in  part  within  the  statute 
and  in  part  without,  it  must  altogether  comply  with  the  terms  of 
the  statute,  or  no  action  can  be  brought  upon  it.  And  yet  he 
holds  that  an  agreement  for  *the  purchase  of  corn  to  be  de- 
livered hereafter,  is  not  within  the  statute,  if  any  threshing  is  to 
be  done  upon  it  in  the  mean  time,  because  the  price  of  the  corn 
will  pay  for  this  threshing. 

There  have  been,  since  that  time,  many  cases  turning  upon 
this  question,  and  it  is  impossible  to  reconcile  them  all  with 
any  acknowledged  principle  of  statutory  construction.  It  must, 
indeed,  be  impossible  to  frame  any  rules  which  shall  be  always 
applicable  without  difficulty  to  this  question  ;  but  this  difficulty 
may  arise,  as  is  remarked  by  the  Supreme  Court  of  Massachu- 
setts, [d)  "  not  so  much  from  any  uncertainty  'in  the  rule,  as 
from  the  infinitely  various  shades  of  different  contracts."  From 
general  principles,  however,  illustrated  by  recent  decisions,  we 
should  draw  the  following  rules.  A  pure  executory  contract  for 
the  sale  of  goods,  wares,  or  merchandises,  is  as  much  within  the 
statute,  as  a  contract  of  present  sa-le.  (e)  A  contract  for  an  ar- 
ticle not  now  the  seller's,  or  not  existing,  and  which  must  there- 
fore be  bought  or  manufactured  before  it  can  be  delivered,  will 
also  be  within  the  statute,  if  it  may  be  procured  by  the  seller 
by  purchase  from  any  one  or  manufactured  by  himself  at  his 
choice,  the  bargain  being  in  substance  as  well  as  form,  only, 
that  the  seller  shall,  on  a  certain  day,  deliver  certain  articles  to 
the  buyer  for  a  certain  price.  But  if  the  contract  states  or  im- 
plies that  the  thing  is  to  be  made  by  the  seller,  and  also  blends 
together  the  price  of  the  thing  and  compensation  for  work,  labor, 

and  otiicr  necessary  things  to  be  found,  be  performed  in  tbrcshinp:,  made,  tbouf^h 

wliicb  is  dilFi-rent  from  a  mere  contract  of  in  a  small  dcyrree,  a  pait  of  tlio  contract." 
sale,  to  wliicli  sjiccies  of  c(jntra(;t  alone  tlic         (<l)  In  (Jiirdiier  v.  Joy,  9  Mot.  177. 
Btatutc  is  aiiiilic.iiile.     In  Clayton  i\  An-         (')  Cooper  r.  KIston,  7  T.  11.  14;  Ben- 

drews,   4    Hiu'r.   'ilill,  wliicli    was   on   au  ncit   i\   Hull,   10  .foluis.  .'5(U  ;  Jackson  v. 

a'Tceiiient    to    (U^livcr    corn    at   a    future,  (Covert,  5  Wend.  l.'i'J;   Downs  c.  Ross,  23 

period,  tlier(^  was  also  some  work    tr)    be  \\\iiil.  270  ;  (Jarbutt  v.  Watson,  .5  B.  & 

perforni'-d,  for  it  was   necessary   that    tli(!  Aid.  (>l.'l;  Smitli  r.   Snrmnn,  9  B.  &  C. 

corn  should  lie  tlireslied   before  the  diiiv-  .'"iGl  ;   Cason  v.  Cbeely,  fi  Ga.  5.54;  Ilon- 

crv.     'I'iii-',   perhaps,    may  seem  to    be  a  dean  v.  Wyatt,  2  II.  J51.  03. 
very  nice  distinction,  but  Hlill  tlic  work  to 

[.•MO] 


en.  IV.] 


STATUTE    OF    FRAUDS. 


-334 


skill,  and  material,  so  that  they  cannot  be  discriminated,  it  is 
not  a  contract  of  pm'chase  and  sale,  but  a  contract  of  hiring  and 
service,  or  a  bargain  by  which  one  party  undertakes  to  labor  in 
a  certain  way  for  the  other  party,  who  is  thereupon  to  pay  him 
certain  compensation  ;  and  this  contract  is,  therefore,  not  within 
the  statute.  (/)      And  these  rules  will  be    found    to    reconcile 


(/)  This  clistinction  is  well  explained 
and  illustrated  in  Hij^ht  v.  Iiiplcy,  19 
Mc.  137.  In  that  case  the  defendant 
agreed  with  the  plaintiff  "to  furnisli,  as 
soon  as  ])rafticablc,"  1,000,  or  1,200  lbs. 
of  malleable  hoc  shanks,  ai;reeable  to  pat- 
terns left  witli  hiin ;  and  to  furnisli  a 
larger  amount  if  recjiiired  at  a  diminished 
price.  And  the  court  held  that  this  must 
be  considered  as  a  contract  for  the  manu- 
facture of  the  articles  referred  to,  and  so 
not  within  the  statute  of  frauds.  Shepleij, 
J.,  said  :  "  Id  may  be  considered  as  now 
settled,  that  tlie  statute  of  frauds  embraces 
executory  as  well  as  executed  contracts 
for  the  sale  of  goods.  But  it  docs  not 
prevent  parties  from  contracting  verbally 
for  the  manufacture  and  delivery  of  arti- 
cles. The  only  difficulty  now  remaining 
is,  to  decide  whether  the  contract  be  one 
for  the  sale,  or  for  the  manufacture  and 
delivery  of  the  article.  It  may  provide 
for  the  application  of  labor  to  materials 
already  existing  partially  or  wholly  in  the 
form  designed,  and  that  the  article  im- 
proved by  the  labor  shall  be  transferred 
from  one  ])arty  to  the  other.  In  such 
cases  there  may  be  difficulty  in  ascertain- 
ing the  intentions;  and  the  distinction 
may  be  nice,  whether  it  be  a  contract  for 
sale  or  for  manufacture.  The  decision  in 
the  case  of  Towers  v.  Osborne,  1  Stra. 
506,  is  esteemed  to  have  been  correct, 
while  the  reasons  for  it  are  rejected  as  er- 
roneous. The  chariot  bespoken  does  not 
appear  to  have  existed  at  tlie  time,  but  to 
have  been  manufactured  to  order.  In 
Garbutt  v.  Watson,  5  B.  &  Aid.  613,  the 
contract  was  'for  the  sale  of  100  sacks  of 
flour,  at  SOs.  ]ier  sack,  to  l)e  got  ready  by 
the  plaintiff  to  ship  to  the  defendant's 
order,  free  on  board,  at  Hull,  within  three 
weeks.'  There  was  an  attempt  to  exclude 
it  from  the  statute,  because  the  plaintiffs 
were  millers,  and  had  not  the  flour  then 
ground  and  prepared  for  delivery.  But 
tlxj  contract  did  not  provide  that  they 
should  manufacture  the  Hour;  tlicy  might 
have  jjurchased  it  from  others,  and  hiive 
fuUilled  all  its  terms.     It  was  decided  to 


bo  a  contract  for  the  sale  of  the  flour,  and 
within  the  statute.  If  the  contract  be  one 
of  sale,  it  cannot  be  material  wlicther  tlic 
article  be  then  in  the  jiossession  of  the 
seller,  or  whether  he  afterward  procure 
or  make  it.  A  contract  for  the  mtinufac- 
ture  of  an  article,  differs  from  a  contract  of 
sale,  in  this :  the  person  ordci  ing  the 
article  to  be  made  is  under  no  obligation 
to  receive  as  good  or  even  a  better  one  of 
the  like  kind  purchased  from  another  and 
not  nuide  f(jr  him.  It  is  the  peculiar  skill 
and  labor  of  the  other  party,  combined 
with  the  materials,  for  which  lie  contracted 
and  to  which  he  is  entitled.  Hence  it  has 
been  said,  that  if  the  article  exist  at  the 
time  in  the  condition  in  which  it  is  to  be 
delivered,  it  should  be  rcgartled  as  a  con- 
tract for  sale.  In  Crookshaiik  i'.  Burrell, 
IS  Johns.  58,  the  contract  was,  that  the  de- 
fendant should  make  the  woodwork  of  a 
wagon  for  the  plaintiff  by  a  certain  time; 
and  it  was  decided  not  to  be  a  contract  for 
sale.  In  the  case  of  Mixer  v.  Ilowarth,' 
21  Pick.  205,  the  contract  was,  that  the 
plaintiff  should  finish  for  the  defendant  a 
l)Uggy,  then  jxirtly  made;  and  it  was  de- 
cided not  to  be  a  contract  ibr  sale.  The 
contract  in  this  case  provides,  that  the  de- 
fendants should  'furnish,  as  soon  as  prac- 
ticable, 1,000  or  1,200  lbs.  of  nndleable  hoe 
shaid^s,  agreeably  to  patterns  left  with 
them.'  They  were  to  be  'ilelivered  at 
their  fm-naee.'  There  is  a  provision,  that 
the  defLMidants  may  immediately  receive 
orders  for  a  larger  amount,  say  2,000  lbs. 
more  than  heretofore  stated,  and  that  'the 
whole  amount  is  (in  such  case)  to  be 
charged  at  a  diminished  price.'  Taking 
into  consideration  all  the  i)rovisions  of  the 
contrac't,  there  can  bo  little  doubt  that  it 
was  the  intention  of  the  parties,  that  the 
defendant  should  manufacture  the  shanks 
at  their  furnace,  agreeably  to  certain  pat- 
terns which  hail  been  left  with  them. 
There  is  no  evidence  in  the  case  tending 
to  prove,  that  the  articles  were  then  exist- 
ing in  tlie  form  of  tlie  jiattern.  It  may  be 
fairly  inferred  that  they  were  not,  but  wero 
to  be  made  as  soon  as  practicable.     The 

[347  1 


ooO 


THE   LAW    OF    CONTRACTS. 


[part  ir. 


most  *of  the  recent  auThoritative  decisions  on  this  subject.     We 
think  also  that  this  will  be  found  to  be  the  true  meaning  and 


testimony  prescntctl  docs  not  tlien  prove  a 
contract  for  the  sale  of  gooils,  but  rather 
one  for  the  nirtnaf.icturc  of  certain  articles 
of  a  prcsorihed  pattern,  by  order  of  the 
phiintitt."  Airain.  in  Gardner  i:  Joy,  9 
Met.  177,  it  appeared  tliat  A  asked  B 
what  he  would  take  for  candles  ;  B  said  he 
•wonld  take  twenty-one  cents  per  pound ; 
A  said  he  would  take  one  ImndixHl  boxes  ; 
B  said  the  candles  were  not  manufactured, 
but  he  would  mannfaiture  and  deliver 
them  in  the  course  of  the  summer.  He'd, 
that  this  was  a  contmct  for  the  sale  of 
goods,  within  the  statute  of  frauds.  And 
Shatc,  C.  J.,  said  :  "  It  was  essentially  a 
contract  of  sale.  The  inquiry  was  for  the 
price  of  candles ;  the  quaniiry.  price,  and 
terms  of  sale  were  fixed,  and  the  mode  in 
which  they  should  be  put  up.  The  only 
reference  to  the  fact  that  they  were  not 
then  made  and  ready  for  delivery,  was  in 
regard  to  the  time  at  which  they  would  be 
ready  for  delivery ;  and  the  .fact  that  they 
were  to  be  manufactured,  was  stated- as  an 
indication  of  the  time  of  delivery,  which 
w:is  otherwise  left  unc-enain."  And  see 
Mixer  v.  Howanh,  21  Pick.  205  ;  Spencer 
r.  Cone,  1  Met.  283;  Lamb  v.  Crafts,  12 
id.  353  ;  Waterman  v.  Meiirs,  4  Cush.  497  ; 
Watts  V.  Friend,  10  B.  &  C.  446;  Cason 
t'.  Cheelv.  6  Ga.  554:  Bird  v.  Muhlin- 
brink,  l"Rich.  199;  Hardcll  c.  McClure, 
1  Chand.  271.  Until  quite  recently, 
however,  both  in  this  country  and  in 
England,  it  was  held  that  ali  contracts  for 
the  sale  of  articles  not  then  e-xistincr  in  the 
state  in  wliiih  they  were  to  be  delivered, 
were  out  of  the  statute.  See  Hondeau  r. 
"Wvatt,  2  II.  Bl.  63,  cited  supm ;  Groves 
r.  Buck,  3  M.  &  S.  17S;  Crookshank  v. 
Burrell,  17  Johns.  58;  Sewall  v.  Fitch,  8 
Cowen,  214.  And  sucii  tlie  Superior  Court 
of  the  City  of  New  York  has  recently  de- 
clared to  be  still  the  law  of  New  York. 
Kolx-rtson  v.  Vauiihn,  5  Sandf.  1.  In 
that  case  the  defendant  made  a  contract 
with  the  plaintitf  to  make  and  deliver  to 
liim,  at  a  .specified  time,  one  thousand 
molas.scs  shooks  and  heads.  And  this 
was  held  to  Ik;  a  contract  for  work  and 
labor, and  .<o  not  within  the  statute.  Dtur, 
J.,  said  :  "  We  certainly  think  that  this 
iMsc  is  within  the  mischief  that  tiie  statute 
of  frauds  was  desi^ined  to  ]>revent,  ami 
that  the  contract  iHtween  the  parlies  was 
sub!<tantially  a  contract  for  the  .*ale  of 
goodd  and  meri  handise,  and  nut  fur  work 

[348] 


and  labnr.  But  we  cannot  shut  our  eyes 
to  the  fact,  that  tlie  case  of  Sewall  v.  Fitch, 
S  Cow.  215,  as  the  counsel  for  the  defend- 
ant found  himself  under  the  necessity  of 
admitting,  is  not  distinguishable  from  the 
present ;  and  that  no  conflicting  decisions 
are  to  be  found  in  our  own  reports.  The 
contract,  which  the  Supreme  Court  in  that 
case  held  not  to  be  within  the  statute,  bore 
an  entire  analogy  to  that  between  the  par- 
ties now  before  us,  with  the  single  excep- 
tion that  it  related  to  nails  instead  of 
shooks.  It  is  true,  that  it-would  not  be 
easy  to  reconcile  Sewall  v.  Fitcli  with  the 
cases  in  England  and  in  ^Ias<achusetts,  to 
which  we  were  referred  ;  but  for  more  tiiaii 
twenty  years,  it  has  been  considered  as 
evidence  of  the  law  in  this  State  ;  and  as 
such,  has  doubtless  been  followed  in  nu- 
merous instances  by  inferior  tribunals. 
Under  these  circumstances  we  think  that 
it  belongs  only  to  the  court  of  idtimate 
jurisdiction  to  set  aside  the  authority  of 
the  decision,  and  correct  the  error  which 
it  probably  involves.  If  all  contracts  be- 
tween merchants  and  manufacturers  for 
the  purchase  of  goods,  to  he  thereafter  man- 
ufactured, are  to  be  excepted  from  the 
statute  of  frauds,  there  seems  to  be  little 
reason  for  retaining  at  all  those  provisions 
of  the  statute  whieh  relate  to  the  sale  of 
goods  to  be  delivered  on  a  future  day, 
since  it  is  hardly  possible  to  imagine  an 
exc<>ption  more  arbitrary  in  its  nature, 
and  more  contrary  to  the  policy  upon 
which  the  statute  is  admitted  to  be  found- 
ed. Such  an  exception,  emluacing,  as  it 
docs,  a  very  large  class  of  cases,  frequently 
of  great  amount  in  value,  is,  in  its  prin- 
ciple, equivalent  to  a  repeal;  and  either 
the  law  itself  should  be  abolished,  as  im- 
posing a  needless  restraint  upon  the  trans- 
action of  business,  or,  if  the  sound  policy 
of  the  law  must  be  admitted,  an  exception 
repugnant  to  its  spirit  and  destructive  of 
its  utility,  should  no  longer  be  permitted 
to  exist.  Anew  statute,  similar  to 9  Geo. 
4,  c.  14,  seems  to  be  reipiircil,  and  should 
the  attention  of  the  legislature  be  directed 
to  the  subject,  would  |)rol)ably  be  passed  ; 
but  we  arc  not  legislators,  and  as  judges, 
must  administer  the  law  as  wc  tind  it 
established."  And  see  Bronson  v.  Wiman, 
10  Bai-b.  JOG.  But  in  the  late  ca.<e  of 
Courtriuht  r.  Stewart,  19  Barb.  453,  it 
was  held  that  an  aLrrcemcnt  by  a  mechanic 
to  furnish  materials  and  do  the  carpenter 


CH.  IV.] 


STATUTE   OF   FRAUDS. 


336-*337 


effect  of  the  statute  of  9  Geo.  IV.  c.  14,  in  extension  of  the 
statute  of  frauds,  (g-) 

It  is  to  be  noticed,  that  while  some  of  the  sections  of  the 
*statute  of  frauds  declare  the  oral  contracts  which  they  are  in- 
tended to  prevent,  utterly  void,  the  fourth  section  only  provides 
that  no  action  shall  be  brought  upon  the  promises,  or  for  the 
purposes  therein  enumerated,  and  the  seventeenth,  that  no  con- 
tract specified  therein  shall  "  be  allowed  to  be  good,"  unless 
there  be  earnest,  part  payment,  part  delivery  and  acceptance,  or 
a  writing  signed.  The  distinction  is  sometimes  important ;  nor 
is  it  adequately  expressed  in  the  cases  which  say  that  these  oral 
contracts,  embraced  within  the  fourth  section,  are  not  void,  but 
voidable,  by  the  statute  of  frauds.  We  consider  them  neither 
void  nor  voidable.  If  they  were  good  at  common  law,  they 
remain  good  now,  for  all  purposes  but  that  expressly  negatived 
by  the  statute ;  that  is,  no  action  can  be  brought  upon  them, 
but  in  other  respects  they  are  valid  contracts,  (h)     The  nature 


work  and  turning  according  to  a  specified 
plan  and  specification,  for  buildings  to  be 
erected  upon  the  land  of  another,  is  not  a 
contract  for  the  sale  of  goods  within  the 
meaning  of  the  statute.  It  was  there  laid 
down  that  the  true  criterion  for  determin- 
ing whether  the  contract  is  for  the  sale  of 
(/oods  and  therefore  within  the  statute,  or 
for  tcork  and  labor  and  so  not  within  the 
statute,  is  to  inquire  whether  the  work  and 
labor  required  in  order  to  prepare  the  sub- 
ject-matter of  the  contract  for  delivery,  is 
to  be  done  for  the  vendor  himself  or  for 
the  vendee.  In  the  former  case  the  con- 
tract is  really  a  contract  of  sale,  while  in 
the  latter  it  is  a  contract  of  hiring. 

ig)  By  that  statute  it  is  enacted  that 
"  the  provisions  of  the  statute  of  frauds 
shall  extend  to  all  contracts  for  the  sale  of 
goods  to  the  value  of  10/.  or  upwards,  not- 
withstanding the  goods  may  be  intended 
to  be  delivered  at  some  future  time,  or 
may  not  at  the  time  of  such  contract  be 
actually  made,  procured,  or  provided,  or 
fit  or  ready  for  delivery,  or  some  act  may 
be  requisite  for  the  making  or  completing 
thereof,  or  rendering  the  same  fit  for  de- 
livery." 

(h)  Shaw  V.  Shaw,  6  Vt.  69;  Phil- 
brook  V.  Belknap,  id.  38.3 ;  Minns  v. 
Morse,  1 5  Ohio,  568 ;  Whitnc^y  v.  Coch- 
ran, 1    Scam.  209;  Dowdle  v.  Camp,  12 

VOL.  11.  30 


Johns.  451  ;  Sims  v.  Hutchins,  8  Smedes 
&  M.  328 ;  Souch  v.  Strawbridge,  2  C.  B. 
808;  Crane  v.  Gough,  4  Md.  316.  This 
point  is  well  illustrated  by  the  recent  case 
of  Leroux  v.  Brown,  12  C.  B.  801,  14 
Eng.  L.  &  Eq.  247.  That  was  an  action 
to  recover  damages  for  the  breach  of  a 
parol  contract  entered  into  at  Calais,  in 
France,  by  which  the  defendant,  who 
resided  in  England,  agreed  with  the 
plaintiff,  a  British  subject  residing  at 
Calais,  to  cmi)loy  the  plaintiff  as  the 
defendant's  agent,  to  collect  eggs  and 
poultry  at  Calais,  and  to  send  them  over 
to  the  defendant  in  England,  the  service 
to  be  one  year  from  a  future  day,  at  100/. 
a  year.  The  plaintiff  proved  that  by  the 
law  of  France,  this  contract,  though  not 
in  writing,  was  valid,  and  could  be  en- 
forced by  the  courts  in  that  country.  The 
defendant  set  up  the  4th  section  of  the 
statute  of  frauds  as  a  defence.  And  the 
question  was  whether  that  section  applied 
to  the  validity  of  the  contracts  embraced 
within  it,  or  only  to  the  mode  of  proce- 
dure upon  them.  The  court  held  that  the 
latter  was  the  true  construction  of  the 
statute,  and  therefore,  tliat  the  action 
could  not  be  maintained.  Jervis,  C.  J., 
said :  "  There  has  been  no  discussion  at 
the  bar  as  to  the  principles  which  ought  to 
govern  our  decision.    It  is  admitted  by  the 

[349] 


338* 


THE   LAW   OF   CONTRACTS. 


[part  il 


or  effect  of  the  *contract  is  not  changed  ;  but  the  statute  points 
out  certain  modes  of  confirming  or  verifying  the  contract,  which 
are  essential  to  the  maintenance  of  an  action  upon  it.  Hence, 
on  the  one  hand,  it  supphes  no  want,  as  of  consideration,  or,  in 
other  words,  makes  no  contract  good,  which  would  not  be  good 
without  it.     And,  on  the  other  hand,  the  contract  is  valid  as  to 


plaintiff's  counsel,  that  if  the  4th  section 
of  the  statute  of  frauds  applies,  not  to  the 
validity  of  the  contract,  but  only  to  the 
mode  of  procedure  upon  it,  then  that,  as 
there  is  no  '  apjreement,  or  memorandum, 
or  note  thereof,'  in  writing,  this  action  is 
not  maintainahle.  On  the  other  hand,  it 
is  not  denied  that,  if  that  section  applies 
to  the  contract  itself,  or,  as  Boullenois  says, 
to  the  '  solemnities  '  of  the  contract,  inas- 
much as  our  law  does  not  affect  to  regu- 
late foreign  contracts,  the  action  is  main- 
tainable. On  consideration,  I  am  of 
opinion  that  the  4th  section  does  not  apply 
to  the  '  solemnities '  of  the  contract,  but  to 
the  proceedings  upon  it;  and  therefore 
that  this  action  cannot  be  maintained. 
The  4th  section,  looking  at  it  in  contrast 
with  the  1st,  2d,  3d,  and  17th,  leads  to 
this  conclusion.  The  words  are,  '  No 
action  shall  be  brought  whereby  to  charge 
any  person  upon  any  agreement  that  is 
not  to  be  performed  within  the  space  of 
one  year  from  the  making  thereof,  unless 
the  agreement  upon  which  such  action 
shall  be  brought,  or  some  memorandum 
or  note  thereof  shall  be  in  writing,  and 
signed  by  the  party  to  be  charged  there- 
with, or  some  other  person  tiiereto  by  him 
lawfully  authorized.'  It  does  not  say, 
that,  unless  those  requisites  are  complied 
with,  the  contract  siiall  be  void,  but  only 
that  '  no  action  shall  be  brought  u))on  it; ' 
and,  as  put  i)y  Mr.  Ilonyman,  with  great 
force,  the  alternative,  re([uiring  tiie  '  agree- 
ment or  some  memorandum  tliereof  to 
be  in  writing,  shows  that  the  legislature 
contern])lated  a  contract,  good  before  any 
writing,  but  not  enforcealdo  without  the 
writing  as  evidence  of  it.  This  view, 
which  tlic  words  of  the  statute  jiresent,  is 
also,  I  think,  in  conformity  with  the  au- 
tiioritics.  The  cases  cited  by  the  very 
learne(l  author  of  llie  Law  of  Vendors  and 
I'urciiascrs,  and  the  practice  of  tlie  courts 
of  e()uity,  sliow  that  if  any  writing  lie  snli- 
i)e(|ucntiy  made  and  signed  liy  tbc  party 
to  be  charged  witli  the  agreement,  there  is 
U  Hullicient  comitiiance  witli  ihe  4tii  sec- 
tion to  enul)le  tlie  other  party  to  enforce 

[350] 


the  agreement.  Authority  and  practice, 
therefore,  are  both  in  conformity  with  the 
words  of  the  statute.  But  it  is  said  that 
the  cases  of  Carrington  r.  Roots,  2  M.  & 
W.  248,  and  Reade  v.  Lamb,  6  Exch.  130, 
are  inconsistent  with  this  view.  It  is  suf- 
ficient to  say  that  the  attention  of  the 
learned  judges  who  decided  those  cases 
was  not  directed  to  the  particular  point 
raised  by  the  present  case.  What  the 
court  said  in  those  cases  was,  that  for  the 
purposes  of  the  action  in  those  particular 
instances,  there  was  no  difl'erence  between 
the  etlect  of  the  4t]i  and  the  17th  sections. 
It  must  not  be  forgotten  that  the  meaning 
of  those  sections  has  been  explained  in 
other  cases.  In  Crosby  v.  Wadsworth,  6 
East,  602,  Lord  Ellenhoroiif/h  says  :  '  The 
statute,'  that  is,  the  4tli  section,  '  does  not 
expressly  and  immediately  vacate  such 
contracts,  if  made  by  parol ;  it  only  pre- 
cludes the  bringing  of  actions  to  enforce 
them.'  The  same  view  is  adopted  by 
Tindal,  C.  J.,  and  Boscunjiiet,  J.,  in  Lay- 
thoarp  V.  Bryant,  2  Bing.  N.  C.  735,  from 
whicli  it  appears  that  tiie  contract  is  good 
antecedent  to  any  writing,  and  that  the 
effect  of  the  4th  section  is,  not  to  avoid 
it,  but  to  bar  the  remedy  upon  it,  unless 
there  be  writing.  I  therefore  think  that 
an  action  on  the  contract  in  this  case  will 
not  lie  in  this  country,  because  the  4th 
section  rehitcs  merely  to  the  mode  of  pro- 
cedure, and  not  to  the  validity  of  the  con- 
tract. This  view  is  not  inconsistent  with 
what  has  been  cited  from  Boullenois,  who 
is  speaking  of  what  pertains  '  ad  vinculum 
ohllcjutionis  ct  solemnitatem,'  and  not  of 
what  relates  to  the  mode  of  jiroccdure." 
Taljhurd,  J.  :  "  1  think  Mr.  llonynian's 
argument,  drawn  from  Laythoarp  v.  Bry- 
ant and  those  cases  which  decide  that  the 
writing  rccpiircd  by  the  statute,  may  be  a 
letter  from  the  ])arty  to  be  chargeil,  to  a 
tiiird  jx'rsoii,  containing  the  terms  of  the 
agreement,  conclusively  shows  that  the 
4th  section  does  not  render  the  contract 
absolutely  void,  but  only  ap])lies  to  the 
mode  of  ]irocedure  ujion  it." 


CH.  IV.] 


STATUTE    OF   FRAUDS. 


•^339 


third  parties,  although  the  statute  has  not  been  complied 
with  ;  (i)  and,  if  the  contract  has  been  fully  executed,  the  statute 
has  no  power  over  it  whatever,  and  no  effect  upon  the  rights, 
duties,  and  obligations  of  the  parties.  (J) 

*Of  the  other  sections  of  this  statute  it  will  not  be  necessary 
to  say  much.  Those  which  relate  to  wills,  lie  entirely  without 
the  scope  of  this  work ;  and  those  in  relation  to  trusts,  almost 
as  much  so.  The  first,  second,  and  third  sections  relate  to 
leases,  and  these  sections  are  subject  to    so  many  important 


((■)  Caliill  V.  Bipelow,  18  Pick.  369; 
Bohannon  v.  Pace,  6  Dana,  194. 

(j)  Stone  V.  Dennison,  13  Pick.  1.  In 
this  case  the  phiintiff  and  defendant  liad 
entered  into  a  contract  hy  virtue  of  which 
tiie  phiintiff  was  to  enter  into  the  defend- 
ant's service  and  continue  for  several 
years,  at  a  stipulated  rate  of  compensa- 
tion. The  plaintiff  entered  into  the  de- 
fendant's service  accordingly,  and  con- 
tinued for  the  stipidated  time,  and  the  de- 
fendant paid  him  the  stipulated  compensa- 
tion. Subsequently  tliis  action  was  brought 
to  recover  an  additional  compensation, 
upon  a  quantum  mo-nit.  The  defendant 
interposed  the  executed  contract  as  a 
defence,  and  was  sustained  by  the  court. 
Shaw,  C.  J.,  said  ;  "  The  contract  has 
been  completely  performed  on  both  sides. 
The  defendant  is  not  seeking  to  enforce 
this  agreement  as  an  executory  contract, 
but  simply  to  show  that  the  plaintiff  is  not 
entitled  to  recover  upon  a  quantum  meruit, 
as  upon  an  implied  promise.  But  the 
statute  does  not  make  such  a  contract 
void.  The  provision  is,  that  no  action 
shall  be  brought,  whereby  to  charge  any 
person  upon  any  agreement,  which  is  not 
to  be  performed  within  the  space  of  one 
year,  unless  the  agreement  shall  be  in 
writing.  The  statute  prescribes  the  spe- 
cies of  evidence  necessary  to  enforce  the 
execution  of  such  a  contract.  But  where 
the  contract  has  been  in  fact  performed, 
the  rights,  duties,  and  obligations  of  the 
parties  resulting  from  such  performance 
stand  unaffected  by  the  statute.  In  the 
case  of  Boydell  v.  Drummond,  11  East, 
142,  a  case  was  put  in  the  argument,  of 
goods  sold  and  delivered  at  a  certain  price, 
by  parol,  upon  a  credit  of  thirteen  months. 
There,  as  a  part  of  the  contract  was  the 
payment  of  tlie  price,  which  was  not  to  be 
performed  within  the  year,  a  question  is 
made,  whether,  by  force  of  the  statute,  the 


purchaser  is  exempted  from  the  obligation 
of  the  agreement,  as  to  the  stipulated 
price,  so  as  to  leave  it  open  to  the  jury  to 
give  the  value  of  the  goods  only,  as  u]:>on 
an  implied  contract.  '  In  that  case,'  said 
Lord  Ellenborough,  '  the  delivery  of  the 
goods,  which  is  supposed  to  be  made 
witiiin  the  year,  would  be  a  complete  exe- 
cution of  the  contract,  on  the  one  part ; 
and  the  question  of  consideration  only 
would  be  reserved  to  a  future  period.'  If 
a  performance  upon  one  side  would  avoid 
the  operation  of  the  statute,  a  fortiori 
would  the  entire  and  complete  perform- 
ance on  both  sides  have  that  effect.  Take 
the  common  case  of  a  laborer,  entering 
into  a  contract  with  his  employer,  to- 
wards the  close  of  a  year,  for  another 
year's  service,  upon  certain  stipulated 
terms.  Should  either  party  refuse  to  per- 
form, the  statute  would  prevent  either 
party  from  bringing  any  action,  whereby 
to  charge  the  other  upon  such  contract. 
But  it  would  be  a  very  different  question, 
were  the  contract  fulfilled  upon  both  sides, 
by  the  performance  of  the  services  on  the 
one  part,  and  the  payment  of  money  on 
account,  from  time  to  time,  on  the  other, 
equal  to  the  amount  of  the  stipulated 
wages.  In  case  of  the  rise  of  wages 
within  the  year,  and  the  consequent  in- 
creased value  of  the  services,  could  the 
laborer  bring  a  quantum  meruit  and  recover 
more,  or  in  case  of  the  fi\ll  of  labor  and 
the  diminished  value  of  the  services,  could 
the  employer  bring  money  had  and  re- 
ceived, and  recover  back  part  of  the 
money  advanced,  on  the  ground,  that  by 
the  statute  of  frauds  the  original  contract 
could  not  have  been  enforced  ?  Such,  we 
think,  is  not  the  true  construction  of  the 
statute.  We  are  of  opinion,  that  it  has 
no  application  to  executed  contracts,  and 
that  the  evidence  of  this  contract  was 
rightly  admitted."    And  see  ante,  p.  319. 

[351] 


340*  THE  LAW   OP  CONTRACTS.  [PART  II. 

modifications  in  this  country,  the  provisions  respecting  them 
in  the  several  States,  being  not  only  diverse  from  the  statute, 
but  from  each  other,  that  an  examination  *of  the  questions 
which  have  arisen  under  the  English  statute,  and  of  the  adju- 
dication which  has  settled  these  questions,  would  not  be  of 
much  use. 

It  should  be  said,  however,  that,  equity  has  held  that  a  part 
performance  of  a  contract  takes  the  case  out  of  the  statute ; 
either  on  the  ground  of  fraud,  (k)  or  on  the  presumption  of  an 
unproved  agreement  which  satisfies  the  *requirements  of  the 
statute.  (Z)  Much  doubt  has  been  expressed  as  to  the  wisdom 
or  expediency  of  this  rule ;  (m)  but  it  seems  now  to  be  well 
established.  But  the  efforts  to  make  the  same  rule  operative 
at  law,  (n)  have  wholly  failed ;  and  the  dicta  which  assert  this 
rule  at  law,  have  been  overruled,  (o)  And  even  in  equity,  it  is 
established  with  some  qualifications,  or,  rather,  requirements. 
Thus,  the  equitable  rule,  is  mainly  applied,  if  not  wholly  con- 
fined to  contracts  for  the  sale  of  lands  or  some  interest  in  them ; 
and  nothing  is  a  part  performance  for  this  purpose,  which  is 
only  ancillary  or  preparatory;  (p)  it  must  be  a  direct  act  which 
is  intended  to  be  a  substantial  part  of  the  performance  of  an 
obligation  created  by  the  contract;  (q)  and  it  must  be  an  act 
which  would  not  have  been  done  but  for  the  contract ;  (r)  and 
it  must  be  directly  in  prejudice  of  the  party  doing  the  act,  who 
must  himself  be  the  party  calling  on  this  ground,  for  the  com- 
pletion of  the  contract,  (s) 

{k)  See   Roberts  on  Frauds,   p.    130,  ton,   15   Me.    14;  Jackson   v.  Pierce,   2 

et  seij.  Johns.  224. 

(/)    See  Koberts    on  Frauds,   p.    130,  (p)  See  Roberts  on  Frauds,  p.  139. 

et  seq.  (q)  Jones  v.  Petcrman,  3  S.  &  R.  543; 

(m)  See  Lindsay  v.  Lynch,  2   Sch.  &  Johnston  v.  Glanccy,  4  Bhickf.  94;  Mor- 

L.  1  ;  Forstcr  c  Hale,  3  Ves.  G96,  712.  phett  v.  Jones,  1  Swanst.  172;  Ex  parte 

(n)  Brodic  v.  St.  Paul,  1  Ves.  Jr.  326;  Hooper,  19  Ves.  477. 

Davenport  v.  Mason,  15  J[ass.  85.  (v)  Frame   v.    Dawson,   14  Ves.  386  ; 

(o)  Cooth  V.  Jackson,  6  Ves.  39;  Kid-  Guntcr  i'.  llalsey,  Aintd.  586;  Phillips  v. 

dcr  V.    Hunt,    1    Pick.   331  ;    Adams    v.  Thompson,  1  Johns.  Ch.  149. 

Townsend,  1  Met.  483;  Norton  v.  Pres-  (s)  Sec  Roberts  on  Frauds,  p.  138,  and 

Buckmaster  v.  Harrop,  7  Ves.  341. 

[352] 


CH.  v.]  ESTOPPELS.  340  a 


CHAPTER    V. 

OF  ESTOPPELS. 

Sect.  I. —  Of  Estoppels  in  general. 

Coke  defines  Estoppel,  as  existing,  when  "a  man's  owne  act 
or  acceptance,  stoppith  or  closeth  up  his  mouth  to  alleage  or 
plead  the  truth."  [a)  This  definition  is  accepted  by  Comyn.  [b) 
But  while  it  seems  to  justify  a  part  at  least  of  the  opprobrium 
which  has  been  cast  upon  estoppels,  it  does  not  appear  to  pre- 
sent a  just  view  of  them.  We  should  say  rather  that  an  estop- 
pel was  an  admission  or  a  declaration,  which  the  law  does  not 
permit  him  who  has  made  it  to  deny  or  disprove  for  his  own 
benefit,  and  to  the  injury  of  another. 

Estoppel  may  be  used  as  a  defence  against  a  party  who  is 
thus  precluded  by  his  act  or  statement  from  maintaining  his  ac- 
tion ;  or  it  may  be  used  by  a  plaintiff  to  prevent  or  avoid  a  de- 
fence which  is  open  to  a  similar  objection. 

The  law  of  estoppels,  especially  in  reference  to  deeds  and  real 


(a)  Co.  Litt.  352  a.      "Touching  es-  not  estop ;  an  estoppel  against  an  estop- 

toppels,  whicli  is  an  ancient  and  curious  pel  puts  the  matter  at  large.     Carpenter 

kind  of  learning,"  Coke,  in  the  passage  v.  Thompson,  3  N.  H.  204.     Where  ver- 

cited,  gives  tliese  among  other  rules  :  That  ity  is  apparent  in  the  same  record  there 

every  estoppel  ought  to  be  reciprocal,  that  the  adverse  party  shall  not  be  estopped  to 

is  to  bind  both  parties,  and  this  is  the  rea-  take  advantage  of  the  truth.     Sinclair  v. 

son  that  regularly  a  stranger  shall  neither  Jackson,  8  Covven,  543. 
take  advantage  nor  be  bound  by  an  estop-         [h)  Com.  Dig.  Estoppel,  A.  1.    Comyn, 

pel,  but  all  strangers  shall  take  benefit  of  same   title,   E.    1    to   10,  in   addition   to 

that  record  which  dotli  run  to  the  disabil-  Coke's  recapitulation,  says  there  is  no  es- 

ity  of  a  person.  And  see  Doe  v.  Errington,  toppel  by  a  record  coram  non  judice,  nor  by 

6  Bing.  N.  C.  79;  Lansing?;. Montgomery,  an  unauthorized  act  in  pais,  nor  if  an  in- 

2  Jolms.  382 ;  Worcester  v.  Green,  2  Pick,  terest  passes  from  a  party,  i.  e.  though 

425  ;   Langer   v.  Felton,  1  Kawle,   141  ;  lessor's  title  at  time  of  demise  may  not  be 

Wright  V.  Hazen,  24  Vt.  143.     It  must  disputed,  its  expiration  may  be  shown, 

be  certain  to  every  intent  and  not  be  taken  Doe  v.  Seaton,  2  Cromp.,  M.  &  R.  728  ; 

by  argument  nor  inference;  matter  alleged  Neave   v.   Moos,    1    Bing.  360,   8  J.  B. 

that  is  neither  ti'aversable  nor  material  docs  Moore,  389. 

30*  [353] 


340  b  THE  LAW  OF  CONTRACTS.  [PART  II. 

actions,  had  become  so  much  embarrassed  and  obscured  by  tech- 
nicalities, and  was  so  often  used  as  a  means  of  injustice,  that  it 
became  a  common  saying,  that  "  estoppels  are  odious  in  the 
law."  (c)  But  as  they  are  now  regulated  and  practised,  we 
should  say  that  there  was  but  little  ground  for,  and  but  little 
force  in,  this  principle. 

They  are  of  many  kinds;  which  may  be  arranged  in  three 
classes.  1.  Estoppels  by  Record.  2.  Estoppels  by  Deed.  3.  Es- 
toppels in  Pais. 


SECTION    II. 

ESTOPPEL   BY   RECORD. 

The  general  rule  on  this  point,  is,  that  no  man  shall  be  per- 
mitted to  make  any  averment  which  contradicts  the  record  of 
that  wherein  he  was  a  party.  It  is  as  ancient  as  the  Year- 
Books.  [d)  But  while  it  remains  true,  it  has  comparatively  lit- 
tle importance,  as  a  law  of  estoppel,  at  this  time. 

As  an  illustration  of  the  old  rule,  it  may  be  said,  that  if  any 
one  suffered  a  recovery  or  levied  a  fine  to  A  of  certain  land  of 
B  in  the  name  of  B,  the  record  would  bar  B  from  an  action  to 
recover  the  land,  nor  could  he  maintain  such  an  action,  unless 
he  previously  caused  the  record  to  be  falsified  or  amended,  by 
an  action  of  deceit,  (e)  So,  if  by  his  plea,  he  confessed  or  as- 
serted a  certain  tenure  of  land,  he  could  not,  even  in  another  ac- 
tion, deny  or  contradict  this  assertion  and  found  himself  upon  a 
different  termre.  (/)  So  he  might  be  estopped  by  omission; 
that  is,  by  not  denying  of  record ;  as,  if  A  were  sued  in  an  ac- 
tion of  waste  by  B,  and  pleaded  that  there  was  no  waste,  he 
could  not  afterwards  aver  that  he  was  not  in  the  land  by  the 
demise  of  B,  though  this  might  be  a  perfect  defence  if  he  could 
make  it.  {<^)     Now,  however,  there  is  little  force  in  this  principle 

(r.)  Lainpon  v.  Corkc,  5  B.  &  Aid.  COG  ;  Carlilc,  2  li.  &  Ad.  .302 ;  Cole  v.  Green, 

Owfii    n.    IJiiitliolomcw,     y    I'ick.     .'J20 ;  1  Lev.  309. 
Stciidiiiii.T  V.  Witriian,  1  K.  &  R.  4.'}8.  ( f)  1  Rol.  04,  1.  4,5. 

(d)  ;M»  II.  f.,  .32  1).  (ij)  1  Kol.  804,  1.  15. 

(e)  1  llol.  Al.r.  80.-J,l.  17,  20,  22.    Ilex  v. 


CH.  v.]  ESTOPPELS.  340c 

as  one  of  estoppel,  although  as  one  oi  evidence,  it  is  still  impor- 
tant, because  an  official  record  is  always  regarded  as  a  most  sol- 
emn and  weighty  evidence  ;  although  it  is  not  generally  absolute 
or  conclusive,  because  it  is  open  to  rebutter,  by  proof  of  fraud  or 
material  error,  (t) 

Perhaps  this  principle,  as  strictly  one  of  estoppel,  may  be  the 
foundation  of  one  rule  of  great  force  and  frequent  application. 
It  is,  that  matters  which  have  once  been  finally  determined  by 
adequate  judicial  authority,  shall  not  again  be  controverted  by 
any  persons  who  were  either  parties  or  privies  to  that  determi- 
nation. This  rule  we  have  already  stated  and  endeavored  to 
illustrate  in  the  tenth  section  of  the  preceding  chapter. 


sp:ction  III, 


OF   ESTOPPEL   BY   DEED. 

This  is  at  present  more  frequently  resorted  to  in  practice  than 
the  former  mode  of  estoppel ;  but  it  does  not  seem  to  demand, 
in  a  work  like  the  present,  a  full  exposition.  The  general  rule 
may  be  thus  illustrated.  A  party  to  a  bond,  or  to  an  indenture, 
or  to  a  deed  of  conveyance,  can  deny  nothing  which  the  bond 
in  its  condition,  or  the  indenture  or  deed  of  conveyance  in  their 
recitals,  aver,  {j)     But  the  seal  has  no  longer  the  solemnity  or 

[i]  This  question  has  arisen,  principally,  on  as  true,  it  is  conclusive  on  all.     Good- 

where  former  judgments,  or  some  facts  in-  title    v.    Bailey,    2    Cowp.    597;    Right 

cidcntally  disposed  of  in  or  by  a  former  v.  Proctor,  4  Burr.  2208 ;  Wood  v.  Day, 

judgment,    is    relied   upon    by   a  party,  7  Taunt.  646 ;  Fairtitle  r.  Gilbert,  2  T. 

and  the   record    is   offered   as   evidence.  K.    109;   Hill   v.   Manchester  &    S.  W. 

We  should  say  that  the  weight  of  Ameri-  Co.  2  B.  &  Ad.  .544  ;  Lainson  v.  Trcmere, 

can  authority  was  in  flivor  of  the  doctrine,  1  A.  &  E.  792  ;  Harding  v.  Ambler,  ."i  M. 

that  the  record  is  evidence,  but  not  con-  &  W.  279 ;  Doe  v.  Home,  3  Q.  B.  757  ; 

elusive  evidence.     See  Robinson  r.  Jones,  Stowe  v.  Wyse,  7  Conn.  214;  Washing- 

8  Mass.  53G ;  Maley  r.  Shattuck,  3  Cranch,  ton  Co.  Ins.  Co.  v.  Colton,  26  id.  42 ;  Jack- 

458 ;  Peters  v.  Warren  Ins.  Co.  3  Sumn.  son  v.  Parkhurst,  9  Wend.  209  ;  Decker 

389  ;  Gclston  v.  Hoyt,  3  Wheat.  246.     In  v.  Judson,  16  N.  Y.  439  ;  Carver  v.  Jack- 

Eng!a'id  it  is  perhaps  conclusive  evidence,  son,  4  Pet.  1,  83.  But  even  in  an  indenture 

Sec  Blad  i\  Bamticld,  3  Swanst.  604.  where  a  recital  is  intended  as  the  state- 

{j)   1  Rol.  _Abr.  872,  30,  50;  Jewell  i'.  ment  of  one  party  only,  it  is  binding  on 

,  1  RoUe,  il.  408  ;  Rainsford  v.  Smith,  him  alone.     Stroughill  r.  Buck,  14  Q.  B. 

2  Dyer,   196  a.     If  a  recital  is  a   state-  781.     If  the  condition  contain  a  general- 

ment  which  all  parties  have  agreed  up-  ity  to  be  done,  the  party  shall  not  be  cs- 

"  [  355  ] 


340  fZ 


THE   LAAV   OF   CONTRACTS. 


[part  ir. 


force  which  it  once  had ;  and  while  this  principle  is  of  great 
importance  as  a  rule  of  evidence,  or  rather  as  strengthening  the 
rule,  that  nothing  outside  of  a  written  contract  shall  be  permit- 
ted to  come  in  and  contradict  or  avoid  the  contract,  as  mere 
matter  of  estoppel  it  has  little  force,  unless  when  it  rests  upon 
the  equitable  grounds  to  be  mentioned  in  the  next  section. 

The  most  important  application  of  the  rule  of  estoppel  by 
deed,  is  this  :  if  a  grantor,  or  those  claiming  under  him,  come 
into  a  new  title,  subsequently  to  the  grant,  which  title  is  para- 
mount to  that  which  the  grantor  had,  or  the  grantee  has,  he  or 
they  may  enforce  this  title  and  oust  the  grantee  or  those  claim- 
ing under  him,  provided,  that  the  grant  was  without  warranty ; 
but  not  if  the  grant  were  with  warranty.  The  reason  usually 
assigned  being,  that  the  grantee,  if  evicted,  would  turn  round 
upon  the  evictors,  on  the  covenants  of  warranty,  [k)  The  rule 
itself  has  been  carried  so  far  as  to  hold  that  one  who,  without 
title,  but  in  possession  of  land,  mortgages  it  with  warranty,  and 


topped  to  say  there  was  not  any  such 
thing ;  but  in  all  cases  where  the  condition 
of  a  bond  has  reference  to  a  particuUir 
thing,  the  obligor  shall  be  estopped  to  say 
there  is  no  such  thing.  Rol.  Abr.  Estop- 
pel, P.  7 ;  Strowd  v.  Willis,  Cro.  Eliz.  362 ; 
Shelley  v.  Wright,  Willos,  9.  A  general 
recital  is  not  an  estoppel,  though  the  re- 
cital of  a  particular  fact  is.  Salter  v. 
Kidley,  1  Show.  58  ;  Rainsford  v.  Smith, 
supra.  In  Right  v.  Buckncll,  2  E.  &  Ad. 
278,  a  covenant  that  one  was  "  legally  or 
equitably  "  entitled,  did  not  estop  a  sul)se- 
quent  mortgage  on  the  legal  estate  which 
the  covciKiiitor  afterwards  acquired.  In 
most  American  courts  the  recital  in  a 
deed  of  the  payment  of  money  or  consid- 
eration clause  may  be  denied,  the  object  of 
the  deed  being  to  transfer  the  title,  and  not 
to  state  the  terms  of  tiie  ]iunhase.  The 
general  ojieration  of  the  deed  being  un- 
touched, evidence  varying  the  considera- 
tion mav  be  received.  M'Crea  v.  I'ur- 
niort,  16  Wend.  '160;  White  r.  Miller, 
22  Vt.  380  ;  Wilkinson  v.  Scott,  17  Mass. 
24!» ;  I'litcbard  r.  Erown,  4  N.  II.  ;)y7, 
siifnit,  vol.  1,  p.  3r)0  (//).  J5ut  there  is  no 
Chtopixl  wtiicli  shall  i)revent  a  party  from 
BJiying  that  a  deed  is  ino])erative  and  void. 
Doc  n.  HowcIIb,  2  H.  iSi.  Ad.  744  ;  Doe  ?;. 
Ford,  3  A.  &  10.  049  ;  Blake  v.  Tucker, 
12  Vt.  39  ;  Kinsman  v.  Loomis,  11  Ohio, 


475  ;  Winsted  Bank  v.  Spencer,  26  Conn. 
195  ;  Wallace  v.  Miner,  6  Ohio,  366  ;  Ker- 
cheval  v.  Triplett,  1  A.  K.  Marsh.  493. 

(k)  A  grant,  release,  or  bargain  and 
sale,  only  operate  as  a  conclusion  bStween 
parties  and  privies,  and  do  not  bind  or 
transfer  future  or  contingent  estates,  but 
act  only  on  that  estate  which  the  grantor 
actually  had.  Jackson  v.  Hubble,  1 
Cowen,  613;  Edwards  v.  Varick,  5  De- 
nio,  664;  Blancbard  i-.  Brooks,  12  Pick. 
47 ;  Doane  v.  Willcutt,  5  Gray,  328 ; 
Ham  V.  Ham,  14  Me.  351  ;  Kinsman  i'. 
Loomis,  11  Ohio,  475;  Bell  v.  Twilight, 
6  Foster,  401.  But  a  feoffment,  tine,  or 
common  recovery,  from  their  great  solem- 
nity, always  passed  an  estate  and  divested 
the  feoffor  of  all  his  estate,  present  or  after- 
wards acquired.  Co.  Litt.  9  a  ;  Helps  v. 
Hereford,  2  B.  &  Aid.  242 ;  Rawle  on  Cov. 
320,  321.  But  with  warranty  there  is  an 
estoppel,  to  prevent  circuity  of  action,  as 
has  been  said,  though  Mr.  Kawle  (piestions 
the  sufliciency  of  the  reason  to  sustain  all 
the  cases.  .lackson  v.  Winslow,  9  Cowen, 
13  ;  Kellogg  (.'.  AVood,4  Paige,  57S  ;  Dart 
r.  Dart,  7  Conn.  250  ;  I'ike  /'.  Calvin,  29 
Me.  is;i;  Kiml)all  r.  Blaisdell,  5  N.  II. 
53.3  ;  Blake  v.  Tucker,  Vi,  Vt.  39  ;  Wade 
?•.  Lindsay,  0  Met.  407  ;  Bush  v.  J\Iar- 
shall,  6  llow.  284,  291  ;  Thorndiko  r. 
Norris,  4  Foster,  454. 


CH.  v.]  ESTOPPELS.  340  6 

afterwards  acquires  title,  the  title  acquired  by  mortgagor  passes 
at  once  to  the  mortgagee  by  force  of  the  warranty.  {I)  And 
some  of  our  courts  have  even  held  that  the  warranty  in  the 
deed  of  a  married  woman  has  the  same  effect  in  transferring 
future  interests,  as  if  made  by  a.  feme  sole,  (m)  In  other  courts 
this  is  denied,  (n) 

The  authorities  for  the  general  rule  are  numerous  and  decisive; 
and  we  regard  not  the  rule  only,  but  the  reason  above  assigned 
for  the  rule,  as  a  part  of  our  American  common  law.  But  this 
reason  for  the  rule  has  been  questioned,  with  great  ability, 
although  not,  as  we  think,  overthrown,  in  the  notes  to  the  Ameri- 
can edition  of  Smith's  Leading  Cases,  (o)  The  learned  annota- 
tors  prefer  to  place  the  rule,  which,  in  itself,  can  hardly  be  ques- 
tioned, "  on  the  broader  basis  of  giving  effect  to  the  intention  of 
the  parties  as  expressed  in  the  deed."  (p)  We  should  admit 
that  the  rule  rests  on  this  foundation  also ;  and  that  a  grantor 
without  warranty  should  be  considered  as  intending  to  grant 
only  what  he  has ;  while  a  grantor  with  warranty  intends  to 
grant  what  he  has  or  may  subsequently  acquire  otherwise  than 
by  the  grantee's  act.  But  we  do  not  see  that  this  is  necessarily 
inconsistent  with  the  commonly  received  doctrine. 


SECTION    IV. 

OF  ESTOPPEL  IN  PAIS. 

An  estoppel  in  pais,  or   an    estoppel  in  fact,  is  one  which 
does  not  spring  from  a  record,  or  from  a  deed  ;  but  is  made  to 

(/)  White   V.   Patten,   24    Pick.   324;  Johns.  167  ;  Carpenter  t;.  Schermerhorn, 

Wark  V.  Willard,  13  N.  H.  389  ;  Baxter  2  Barb.  Ch.  3U ;  Wadleigh  v.  Elines,  6 

V.  Bradbury,  20  Me.  260  ;  Root  v.  Crock,  N.  H.  17  ;  Den  v.  Deniarest,  1  N.  J.  525, 

7  Barr,  378  ;  and  by  statute  in  Arkansas.  541,  and  by  statute  in  Virginia,  Illinois, 

In  England,  such  conduct  seems  to   be  Michigan,  and  Wisconsin, 

regarded   as   creating  a  personal   equity  (o)  2  Smith,  L.  Cas.  (Am.  ed.),  625- 

attaehing  to  the  conscience  of  the  party,  642.    Sec  also,  Rawle  on  Covenants,  c.  ix. 

and  not  descending  with  the  land.     Sug-  (p)  2    Smith's  L.   Cas.  (Am.  ed.),  p. 

den,  quoted  in  Rawle  on  Covenants,  345  ;  637,  citing  Jackson  v.  Bull,  1  Johns.  Cas. 

Morse  ii.  Faulkner,  1  Anstr.  11.  81  ;  Jackson  v.  Murray,  12  Johns.  201  ; 

(»i)  Hill  V.  West,  8  Ohio,  222  ;  Massie  Jackson  v.  Stevens,  16  "id.  110  ;  Brown  v. 

V.    Sebastian,   4   Bibb,   433;    Fowler  v.  McCormick,  6  Watts,  60;  Reederi;.  Craig, 

Shearer,  7  Mass.  14,  21.  3  McCord,  411. 

(n)    Jackson     v.     Vanderheyden,      17 

[357] 


340/  THE   LAW   OF   CONTRACTS.  [PART  II. 

appear  to  the  jury  (who  are  "the  country")  by  competent  evi- 
dence. While  the  former  modes  of  estoppel  have  declined  in 
importance,  and  have  been  restrained  within  narrower  limits 
than  of  old,  estoppel  in  pais  has  been  greatly  extended,  and  is 
found  to  be  usefully  applicable  to  a  great  variety  of  cases. 

Originally  it  was  applied,  almost  exclusively,  to  those  acts 
which  were  almost,  or  for  some  purposes  quite,  the  equivalent 
of  deed  or  record  ;  as  a  feoffment,  or  an  attornment  in  pais 
after  a  grant  by  deed  of  a  reversion.  It  was,  however,  at  an 
early  period  extended  beyond  those  limits ;  and  in  some  direc- 
tions quite  far.  And  now,  a  long  course  of  adjudication, 
founded  in  part  upon  what  may  be  called  commercial  princi- 
ples, and  in  part  upon  equitable  principles,  seems  to  have  estab- 
lished two  forms  of  estoppel  in  pais.  These,  so  far  from  being 
considered  as  subject  to  the  odium  which  once  attached  to  the 
whole  law  of  estoppel,  are  grounded  upon  principles  of  the  most 
obvious  and  certain  reasonableness  and  justice.  And  they  are 
freely  applied  in  recent  times,  both  in  England  and  in  this  coun- 
try, whenever  it  is  thought  that  they  would  aid  in  the  enforce- 
ment of  right  or  in  the  prevention  of  wrong. 

The  first  of  these  principles  is  that  which  relates  to,  and  is 
perhaps  confined  to,  negotiable  paper.  This,  the  law-merchant 
recognizes  (as  has  been  said  in  a  former  chapter)  as,  for  many 
purposes  and  in  many  respects,  the  equivalent  of  money ;  and 
seeks  to  make  it  an  adequate  equivalent.  The  rule,  that  the 
consideration  of  negotiable  paper  cannot  be  inquired  into  ex- 
cepting as  between  immediate  parties,  is  founded  upon  this 
principle  of  esto])pel ;  that  is,  upon  the  principle  that  a  party 
who  has  for  his  own  benefit,  and  in  his  own  business,  made  use 
of  negotiable  paper,  as  money,  is  estopped  from  taking  this 
character  away  from  it,  by  showing  the  absence  of  one  thing 
that  might  be  essential  to  the  validity  of  tiie  contract,  by  which 
the  paper  is  to  be  r('i)lacc'd  by  money.  Other  rules  in  relation 
to  this  subject  rest  u[)on  the  same  foundation;  as  Ihat  which 
))i-oliihits  Ww.  acce|)t()r,  or  iiulorser,  from  impeaching  by  proof  of 
forgery  or  other  inh(;rent  defect  tiie  paper  which,  bearing  his 
name  by  his  own  act,  has  passed  as  money  into  the  hands  of 
an  iiiiioeeiit  party  by  fair  negotiation.     We  only  mention  these 


cii.  v.] 


ESTOPPELS. 


3405- 


things  here,  and,  without  further  discussion,  refer  to  our  chapter 
on  Indorsement,  in  our  first  volume,  for  a  more  detailed  state- 
ment of  the  rules,  and  of  the  applications  of  them. 

The  other  class  of  estoppels  i)i  pais  is  of  a  different,  and  yet 
an  analogous  character.  In  them  the  rule  rests  upon  what  may 
seem  to  be  but  a  broader  assertion  of  the  same  principle.  It 
is,  that  no  man  shall  found  a  right  upon  his  own  wrong ;  or, 
in  other  words,  that  whatever  a  man  has  said,  or  implied, 
wrongfully,  for  his  own  advantage,  that  he  shall  be  bound  by, 
when  it  may  turn  to  his  disadvantage,  however  false  it  may  be, 
in  fact.  We  would  state  the  rule  thus.  When  a  man  has 
made  a  declaration  or  a  representation,  or  caused,  or,  in  some 
cases  not  prevented,  a  false  impression,  or  done  some  significant 
act,  with  intent  that  others  should  rely  and  act  thereon,  and 
upon  which  others  have  honestly  relied  and  acted,  he  shall  not 
be  permitted  to  prove  that  the  representation  was  false,  or  the 
act  unauthorized  or  ineffectual,  if  injury  would  occur  to  the 
innocent  party  who  had  acted  in  full  faith  in  its  truth  or  va- 
lidity, {fi)     For  that  which  would  otherwise  be  only  a  matter  of 


(q)  Greaves  v.  Key,  3  B.  &  Ad.  313  ; 
Heane  v.  Eogers,  9  B.  &  C.  577.  la 
Pickard  v.  Sears,  6  A.  &  E.  469,  per 
Denman,  C.  J. :  "  The  rule  of  law  is  clear, 
that,  where  one  by  his  words  or  conduct 
wilfully  causes  another  to  believe  the 
existence  of  a  certain  state  of  things  and 
induces  him  to  act  on  that  belief,  so  as  to 
alter  his  own  previous  position,  the  for- 
mer is  concluded  from  averring  against 
the  latter  a  different  state  of  things  as 
existing  at  the  same  time."  Gregg  v. 
Wells,  10  A.  &  E.  90 ;  Downs  v.  Cooper, 
2  Q.  B.  256.  Parle,  B.,  in  Freeman  v. 
Cooke,  2  Exch.  654,  G63,  declares  "  by  the 
term  '  wilfully,'  however,  iu  that  rule,  we 
must  understand,  if  not  tliat  the  party  rep- 
resents that  to  be  true  which  he  knows  to 
be  untrue,  at  least  that  he  means  his  rep- 
resentation to  be  acted  upon,  and  that  it  is 
acted  upon  accordingly ;  and  if,  whatever 
a  man's  real  intention  may  be,  he  so  con- 
ducts himself  that  a  reasonable  man  would 
take  the  representations  to  be  true,  and 
believe  that  it  was  meant  he  should  act 
upon  it,  and  did  act  upon  it  as  true,  the 
party  making  the  representation  would 
be  equally  precluded  from  contesting  its 
truth  ;  and  conduct,  by  negligence  or  omis- 


sion, where  there  is  a  duty  cast  upon  a 
person,  by  usage  of  trade  or  otherwise,  to 
disclose  the  truth,  may  often  have  the  same 
effect."  And  in  Hawes  v.  Marchant,  1 
Curtis,  136,  per  Curtis,  J.  :  "  To  consti- 
tute an  estoppel  in  jxiis,  a  party  must  have, 
designedly,  made  an  admission  inconsist- 
ent with  the  defence  or  claim  whicii  he 
proposes  to  setup,  and  with  his  knowledge 
and  consent  another  party  must  have  so 
acted  on  that  admission  that  he  will  bo 
injured  by  allowing  the  admission  to  be 
disproved ;  and  this  injury  must  be  co- 
extensive with  the  estoppel."  Smith  v. 
Schroeder,  U.  S.  C.  C.  Rhode  Island,  21 
Law  Rep.  739 ;  Dyer  v.  Cady,  20  Conn. 
563  ;  Cambridge  Savings  Bank  v.  Lit- 
tlefield,  6  Cush.  210.  Both  the  intention 
to  influence  and  the  actual  influence  must 
be  made  out.  Howard  v.  Hudson,  2  Ellis 
&  B.  1 ;  Patterson  v.  Lytic,  1  Penn. 
St.  53 ;  but  conduct  or  other  facts  may 
amount  to  an  admission.  Doe  v.  Groves, 
10  Q.  B.  486  ;  Wclland  Canal  v.  Hath- 
away, 8  Wend.  480;  Dczell  v.  Odell,  3 
Hill,  215,  and  sec  note  (r),  infra.  The 
party  introducing  matter  of  estoppel  must 
have  acted  on  tlic  faith  of  the  representa- 
tion or  conduct  complained  of.    Lawrence 

[359] 


340 /i 


THE   LAW   OF   CONTRACTS. 


[part  ir. 


evidence,  becomes,  in  such  a  case,  and  by  force  of  law,  matter 
of    estoppel,  and    a    bar    to   all   question..      A    very    extended 


V.  Brown,  1  Seld.  394  ;  Dczell  v.  Odell, 
Welland  Canal  v.  Hathaway,  and  How- 
ard V.  Hudson,  cited  above.  Truscott  v. 
Davis,  4  Barb.  495  ;  Wallis  v.  Truesdell, 
6  Pick.  455  ;  Dewev  v.  Field,  4  Met.  381  ; 
Watkins  v.  Peck,  "13  N.  H.  360 ;  Hicks 
V.  Cram,  17  Vt.  449.  Thus  in  Farrcll  v. 
Higley,  Hill  &  Denio,  87,  where  a  debtor 
informed  the  sheriff  that  goods  did  not  be- 
long to  him,  but  the  sheriff  seized  them, 
the  debtor  was  not  afterwards  estopped 
from  showing  they  were  his  own  ;  and  in 
Freeman  v.  Cooke,  2  Exch.  654,  it  was 
said  that  as  no  reasonable  man  could  have 
acted  on  the  representation,  taken  alto- 
gether, there  was  no  estoppel ;  so  where 
an  admission  is  made  to  third  persons 
without  intending  to  influence  the  party 
who  heard  and  acted  upon  it,  there  is  no 
estoppel.  Reynolds  v.  Lounsbury,  6  Hill, 
534 ;  Pierce  v.  Andrews,  6  Cush.  4 ; 
Barker  ;;.  Binninger,  14  N.  Y.  270.  "An 
estoppel  of  this  kind  is  an  equitable  aban- 
donment of  a  claim  ;  a  kind  of  perpetual 
disclaimer,  and  a  party  cannot  be  covertly 
led  into  it.  It  goes  upon  the  ground  of 
the  obligation  resting  on  one  owner  or 
part  owner  to  disclose  the  true  state  of  his 
title  to  another  who  is,  or  who  is  about  to 
become  interested  in  the  same  thing.  And 
the  party  to  be  affected  liy  the  estoppel 
should  be  made  fully  aware  of  the  interest 
of  the  party  making  the  inquiry,  or  that 
the  declaration  is  going  to  be  or  will  be 
likely  to  be  relied  upon  by  some  one." 
Wooley  V.  Chamberlin,  24  Vt.  270; 
Copeland  v.  Copeland,  28  Me.  525 ; 
Heane  v.  Kogers,  9  B.  &  C.  577  ;  Pcn- 
nell  I'.  Hinman,  7  Barb.  644  ;  Terry  ;;. 
BisscU,  26  Conn.  23  ;  but  tiic  case  must 
be  clearly  made  out.  Morris  v.  Moore, 
11  Humph.  433.  Though  the  act  of  the 
]iarty  alleging  matter  of  estopjicl  must  be 
based  on  the  statements  or  conduct  com- 
plained of,  it  need  not  be  immediate  and 
contemporaneous.  The  statements  or 
conduct  will  operate  I)y  way  of  relation  and 
hy  estoj)|)cl  for  a  rcasonal)le  time.  Kow- 
Icy  V.  Bigelow,  12  Pick.  307,  315  ;  and  in 
the  recent  citse  of  Smith  v.  Schroeder,  U. 
S.  C.  C.  Rhode  Island,  21  Law  Reporter, 
739,  during  a  treaty  for  the  sale  of  certain 
mills,  representations  Mere  made,  true  at 
the  time,  as  to  the  machinery  therein, 
which  was  removed  l)cfore  the  execution 
ofthede(;d.  Per  ('iiiiis,  J.:  "This  rep- 
resentation, not  luiving  been  withdrawn, 

[360] 


must  be  taken  to  be  a  continuing  repre- 
sentation, and  operative  at  the  very  time 
of  the  contract,  when  the  defendant  knew 
it  to  be  false,  and  must  have  designed  to 
mislead  the  plaintiff,  because  he  himself 
had  previously  removed  the  articles." 
Where  the  declarations  of  one  party  have 
been  acted  on  we  have  seen  they  are  con- 
clusive, but  if  by  the  declarations  one  ac- 
quired no  advantage,  nor  the  other  sus- 
tained injury,  there  is  no  estoppel.  Wallis 
V.  Truesdell,  6  Pick.  455.  This  was  a 
trespass  for  attaching  property,  but  on 
the  principle  above  stated,  the  plaintiff 
was  not  estopped  from  showing  title  by 
his  declarations  to  the  contrary  made  at 
the  time  of  the  attachment.  These  estop- 
pels arc  "  confined  to  their  legitimate  pur- 
pose of  preventing  one  man  from  being 
injured  by  the  wrongful  act  or  misrepresen- 
tation of  another.  But  where  no  injury 
results  from  a  misrepresentation,  its  dis- 
cussion belongs  to  the  forum  of  morals, 
and  not  to  the  judicial  tribunals."  Bitting 
&  Waterman's  Appeal,  17  Penn.  St.  211; 
Cole  V.  Bolard,  22  id.  431.  The  object 
of  the  estoppel  is  to  continue  the  parties 
in  the  same  relative  position  in  which  the 
representation  or  line  of  conduct  com- 
plained of,  placed  them.  Copeland  v. 
Copeland,  28  Me.  525.  Newton  v.  Lid- 
diard,  12  Q.  B.  925,  and  where  the  po- 
sition of  the  parties  is  unchanged  there  is 
no  estoppel.  Steele  v.  Putney,  1 5  Me.  327. 
Thus,  though  persons  have  held  them- 
selves out  as  partners,  one  of  them  may 
sue  alone  and  show  the  absence  of  a  part- 
ncrslii])  if  his  debtor  is  in  no  way  preju- 
diced thcreliy.  Kell  r.  Nainby,  10  B.  & 
C.  20;  Parsons  v.  Crosby,  5  Esp.  199. 
See  also,  Brockliank  v.  Anderson,  7  Man. 
&  G.  295  ;  Poole  v.  Palmer,  9  M.  &  W. 
71.  So,  in  Hawes  v.  Marchant,  1  Curtis, 
136,  Curtis,  J.,  says:  "He  was  silent 
when  he  should  have  spoken,  and  he  can- 
not now  si)eak."  And  in  Heane  v.  Rog- 
ers, 9  B.  &  C.  577,  Bdi/lei/,  J.,  declares  a 
party  is  at  liberty  to  prove  admissions 
were  mistaken  or  untrue,  and  is  not  estop- 
ped nor  concluded  by  them,  unless  an- 
other person  has  been  indiu'cd  by  them  to 
alter  his  condition.  Lewis  r.  Clifton,  14 
(/.  15.  245 ;  Newton  r.  Liddiard,  supra. 
And  where  the  admission  was  a  conven- 
ient assumption  between  tlie  jiarties,  and 
docs  not  alter  their  position  it  does  not 
estop.     Thus  where  one  procured  another 


en.  v.] 


ESTOPPELS. 


340  z 


application  is  now  made  of  this  rule,  and  a  great  variety  of 
subordinate  and  subsidiary  principles  may  be  drawn  from  the 
numerous  cases  in  which  this  application  is  made.  The  ne- 
cessity of  economizing  space  compels  us  to  refer,  for  them,  to 
the  notes,  in  which  we  present  some  of  the  many  illustrations  of 
this  rule,  which  modern  adjudication  supplies,  (r) 


to  admit  a  feet  to  answer  a  particular 
purpose  he  may  not  in  a  suit  against  that 
party,  insist  on  it  as  conchisive.  Davis  v. 
Sanders,  1 1  N.  H.  259  ;  Pecker  v.  Hoit, 
15  id.  143. 

(v)  An  admission  of  the  contents  of  a 
written  document  by  a  party  is  legal  evi- 
dence against  him,  not  to  supply  the  ab- 
sence of  the  instrument  but  superseding 
the  necessity  of  any  evidence.  Slatterie 
V.  Pooley,  6  M.  &  W.  664;  Picgina  v. 
Basinstoke,  14  Q.  B.  611.  As  we  have 
seen,  the  doctrine  of  equitable  estoppels 
has  been  introduced  into  our  system  of 
jurisprudence  for  the  purpose  of  protect- 
ing one  party  from  loss  arising  from  the 
fraud  or  negligent  conduct  of  another, 
and  there  is  hardly  a  limit  to  the  appli- 
cations of  the  principle.  Representations 
and  admissions,  or  a  course  of  conduct 
which  would  lead  a  reasonable  man  to 
infer  the  existence  of  certain  facts,  if  these 
have  formed  the  basis  of  any  action,  con- 
stitute a  ground  for  estoppel.  Passive 
acquiescence  in  the  conduct  of  anotlier, 
whether  in  deceiving  a  third  party,  or 
himself,  when  he  should  have  been  in- 
formed of  the  true  state  of  affairs,  estops 
equally  with  active  interference.  He  who 
is  silent,  it  is  said,  when  conscience  re- 
quii'es  him  to  speak  shall  be  debarred 
from  speaking  when  conscience  requires 
him  to  be  silent.  Niven  v.  Belknap,  2 
Johns.  573 ;  Cambridge  Savings  Inst.  v. 
Littlefield,  6  Cush.  210;  Queen  v.  L.  &  S. 
Railway,  10  A.  &  E.  3.  In  Freeman  v. 
Cooke,  2  Exch.  654,  Parke,  B.,  is  reported 
to  say:  "In  most  cases  to  wliich  the  doc- 
trine [of  equitable  estoppel]  is  to  be  applied 
the  representation  is  such  as  to  amount  to 
the  contract  or  license  of  the  party  making 
it."  Thus  George  v.  Clagett,  7  T.  11. 
359,  is  a  leading  case  for  the  doctrine,  that 
one  dealing  with  a  factor,  and  ignorant  of 
the  existence  of  a  principal  shall  be  al- 
lowed to  set  oft',  in  a  suit  by  the  principal, 
demands  against  the  factor  ;  and  this  has 
since  been  followed.  Coates  v.  Lewes, 
1  Camp.  444 ;  Taylor  v.  Kvmer,  3  B.  & 
Ad.  320 ;  Sims  v.  Bond,  5  "id.  389  ;  Pur- 

VOL.  II.  31 


chell  V.  Salter,  1  Q.  B.  197;  Stackwood 
V.  Dunn,  3  Q.  B.  822.  So  where  one  of 
the  plaintiffs  was  a  sleeping  partner.  Sta- 
cey  V.  Decy,  2  Esp.  469  (n),  7  T.  R.  361 
(c).  So  a  person  suffering  himself  to  be 
held  out  as  a  partner  in  a  firm  will  be 
liable  like  a  partner.  Hicks  v.  Cram,  17 
Vt.  449.  But  where  there  is  knowledge  of 
the  real  state  of  affairs,  the  reason  and  the 
rule  cease.  Maanss  v.  Henderson,  1  East, 
335.  So  where  notice  is  given,  before  the 
contract  is  complete.  Moore  v.  Clement- 
son,  2  Camp.  22.  Or  where,  from  the  na- 
ture of  the  business,  knowledge  may  be 
presumed.  Baring  v.  Corrie,  2  B.  &Ald. 
137.  Of  the  same  character  is  the  rule 
laid  down  in  Gregg  v.  Wells,  10  A.  &  E. 
90,  and  in  Thompson  v.  Blanchard,  4 
Comst.  303,  that  a  party  who  negligently 
or  culjjably  stands  by  and  allows  another 
to  contract  on  the  faith  and  understanding 
of  some  fact  which  he  can  contradict,  can- 
not dispute  that  fact  in  an  action  against 
the  person  whom  he  has  assisted  in  de- 
ceiving. Thus,  where  a  vendor  is  held 
out,  or  is  suffered  to  hold  himself  out,  as 
authorized,  the  owner  is  concluded.  Ste- 
phens V.  Baird,  9  Cowen,  274  ;  Pickering 
V.  Busk,  15  East,  38.  The  authority  may 
be  inferred  from  the  conduct  of  the  owner. 
Dyer  v.  Pearson,  3  B.  &  C.  38.  In  Da- 
vis V.  Bradley,  24  Vt.  55,  a  bill  of  sale 
and  order  for  the  delivery  of  goods  was 
held  conclusive  on  one  party,  a  consign- 
ment to  vendee  and  drafts  on  account 
conclusive  of  a  sale ;  and  a  receipt  by  one 
as  forwarding  merchant  concluded  him 
from  disputing  title.  See  also,  Brewster 
V.  Baker,  16  Barb.  613;  Whitaker  v. 
Williams,  20  Conn.  98 ;  Cox  v.  Buck,  3 
Strobh.  367.  Where  a  husband  had  re- 
ceived proceeds  of  wife's  choscs  in  action, 
a  future  title  in  him  inures  to  his  assignee. 
Commonwealth  v.  Shuman,  18  Penn.  St. 
343.  In  Stephens  v.  Baird,  the  plaintiff 
pointed  out  and  receipted  to  a  sheriff  as 
the  property  of  a  debtor,  property  in 
which  the  debtor  had  an  inchoate  right 
only ;  a  sale  followed,  and  by  these  ad- 
missions the  plaintiff'  was  estopped  from 

[301  J 


340; 


THE   LAW    OF   CONTRACTS. 


[part  II. 


It  may  also  be  laid  down  as  a  very  general  rule,  that  where 
proceedings   between  parties,  even  of  a  public  nature,  and  in 


showing  tliat  tlie  debtor's  interest  had 
never  ripened  into  title.  So  goods  attached 
as  property  of  another  were  receipted  for 
by  the  owner,  l)y  reason  of  which  no  other 
attachment  was  made  ;  and  the  owner  was 
estopped  from  showing  his  title  in  an  ac- 
tion on  the  receipt.  Dewey  v.  Field,  4  Met. 
3S1.  In  Dezell  v.  Odell,  3  Hill,  215,  a 
receipt  for  goods  attached  was  held  to 
be  an  estoppel  of  title,  but  if  given  through 
fraud  or  mistake  there  would  be  no  es- 
toppel. The  doctrine  has  been  extended  to 
real  estate.  Ilobbs  r.  Norton,  1  Vern.  Ch. 
136.  Wendell  v.  Van  Rensselaer,  1  Johns. 
Ch.  344,  declared  as  an  established  equi- 
table doctrine,  that  if  a  man  knowingly 
though  passively  suffers  another  to  pur- 
chase and  expend  money  on  land  under  an 
erroneous  opinion  of  title,  without  making 
known  his  claim,  he  shall  not  be  permitted 
afterwards  to  exercise  his  legal  right 
against  such  person,  qui  tacet,  consentire 
vklttur  ;  qui  potest  et  debet  vetare  jubet.  It 
is  an  act  of  fraud,  and  his  conscience  is 
bound  by  this  equitable  estoppel.  Storrs 
V.  Barker, 6. Johns. Ch.  166;  Dixon  f. Green, 
24  Missis.  612;  Nixon  u.Carco,  28  id.  414; 
Morford  v.  Bliss,  12B.  Mon.  255,  Sugden 
on  Vendors,  1022,  n. ;  Marshall  v.  Pierce, 
12N.  H.  127.  But  owner  must  be  charged 
with  knowledge  of  his  rights.  Watkins 
V.  Peck,  13  id.  360  ;  Casey  v.  Inloes,  1 
Gill,  430.  And  intentionally  or  negligently 
encourage  the  purchase.  Morris  v.  Moore, 
11  Humph.  433  ;  Muse  v.  Letterman,  13  S. 
&  R.  167,  171.  But  whatever  is  sufficient 
to  put  a  purchaser  on  inquiry  is  a  notice  to 
him  of  the  owner's  title.  K])ley  v.  Withe- 
row,  7  Watts,  163.  Nor  can  this  csto])pel 
arise  where  all  the  parties  arc  acquainted 
witii  the  true  state  of  the  title.  Wilton  v. 
Harwood,  23  Me.  131.  And  in  E.  I.  Co. 
V.  Vincent,  2  Atk.  83,  it  was  said  that  if  a 
man  suffers  another  to  build  on  his  ground 
without  setting  u[)  a  right  until  afterwards, 
the  court  will  oljlige  liim  to  permit  quiet 
enjoyment.  A  tenant  under  a  defective 
lease  is  ])rotectcd.  Stiles  v.  Cowper,  3 
Atk.  092,  Storv's  Equity  Jur.  §§  38H,  389  ; 
Hail  ,'.  Fisher.'tt  Barb.  17,31  ;  Hamilton  v. 
Hamilton,  4  Barr,  193;  Lord  Mditxji,!,!, 
(|iioti  d  in  Ilex  v.  Buttcrton,  6  'V .  W.  554. 
But  the  bad  faitli  of  the  owiht  must  be 
miidu  out.  Darm  v.  Spurrier,  7  Ves. 
231.  Nor  docs  the  doctrine  apply  to  en- 
croiicliineiits  on  land  where  the.  title  is 
known,     (jray  r.  Bartlett,  20  I'ick.  186. 

[302] 


But  these  remedies  are  to  be  sought  only 
in  equity,  except  in  jurisdictions  where 
no  chancery  courts  or  powers  obtain. 
Thus  in  Swick  v.  Sears,  1  Hill,  17,  a 
court  of  law  refused  to  apply  the  doctrine 
of  estoppel,  where  an  owner  not  only 
stood  by  but  encouraged  a  sale,  and  de- 
clared the  title  good.  And  it  is  always 
stated  that  the  legal  title  is  not  lost,  but  a 
court  of  equity  will  not  permit  the  owner 
to  prejudice  an  innocent  party  by  assert- 
ing it.  This  restraint  is  adapted  to  the 
nature  of  each  case,  and  the  extent  of  the 
fraud.  In  case  of  purchase  the  vendee 
may  be  secured  in  the  full  benefit  of  it. 
Niven  v.  Belknap,  2  Johns.  573 ;  and 
(since  the  amalgamation  of  law  and  equity 
in  New  York),  Hall  r.  Fisher,  9  Barb. 
17.  A  parol  agreement  to  purchase  and 
improvements  made  in  relation  thereon, 
may  entitle  to  specific  performance.  Park- 
hurst  V.  Van  Cortlandt,  14  Johns.  15; 
Carpenter  v.  Stilwell,  12  Barb.  128. 
Where  a  wall,  by  mistake  of  builder  and 
fraud  of  land-owner,  encroaches  beyond 
the  line,  it  will  be  protected  or  the  claim- 
ant be  saddled  with  the  expenses  of  its 
removal.  A  court  of  law  may  construe 
sucli  acquiescence  into  a  license,  but  no 
title  passes  thereby.  Miller  v.  Piatt,  5 
Duer,  272.  Where  one  knew  that  his 
land  would  be  flooded  by  a  dam  which  he 
assisted  in  building,  it  is  evidence  of  li- 
cense, but  not  conclusive  as  an  estoppel 
to  prevent  an  action  for  flowagc.  Batch- 
elder  V.  Sanborn,  4  Foster,  474.  But  see 
West  V.  Tilghman,  9  Ired.  163  ;  Danley 
I'.  Rector,  5  Eng.  211;  McPherson  v. 
Walters,  16  Ala.  714,  where  the  whole 
doctrine  of  estoppel  by  acquiescence  at  a 
sale  is  repudiated,  and  the  parties  turned 
over  to  equity  for  relief.  Where  the 
owners  of  adjoining  lots  of  land  settle 
and  establish  a  division  line  by  parol 
agreement,  and  that  agreement  is  exe- 
cuted, the  line  shall  not  be  disturbed, 
though  it  afterwards  appear  that  it  is  not 
the  true  line  according  to  the  j)aj)er  title, 
especially  after  long  acquiescence.  Rock- 
well ?'.  'Adams,  6  Wend.  467  ;  McCor- 
mick  r.  Barnum,  10  id.  104;  Dibble  v. 
Rogers,  13  id.  536  ;  Lindsay  v.  Si)ringer, 
4  llarring.  Del.  547  ;  Avery  v.  Baum, 
Wright,  576  ;  Chew  r.  Morton,  10  Watts, 
321  ;  Thompson  r.  McFariand,  6  Barr, 
478;  Kellogg  v.  Smith,  7  Cush.  375;  Gil- 
christ V.  McGee,  9  Ycrg.  455;  Missouri  v. 


CH.  v.] 


ESTOPPELS. 


SAOk 


which  the  State  is  interested,  have  been  allowed  to  mature,  the 
acquiescence    of   parties    estops    them   from    subsequent   inter- 


Iowa,  7  How.  660 ;  Whitehouse  v.  Bick- 
ford,  9  Foster,  471.  See  contra,  Crowcll 
r.  Bebce,  \0  Vt.  33;  Colhv  v.  Norton,  19 
Me.  412.  But  in  Kangely  u.  Spring,  28 
Me.  127,  and  Taylor  v.  Zepp,  14  Mo. 
482,  such  doctrine  is  declared  to  be  no 
departure  or  violation  of  statute  of  frauds, 
and  in  Boyd  v.  Graves,  4  Wheat.  .513, 
that  it  is  not  in  the  statute.  Prominent 
among  estoppels  is  tliat  which  precludes  a 
tenant  from  denying  the  title  of  the  land- 
lord under  whom  he  entered,  and  from 
setting  up  a  paramount  title  in  himself  or 
another.  Doe  v.  Smvthe,  4  M.  &  S.  347  ; 
Doe  V.  Wiggins,  4  Q.  B.  367  ;  Doe  v. 
Foster,  3  C^  B.  215;  Sharpe  v.  KcUey, 
5  Denio,  431  ;  Oakes  v.  Munroe,  8  Cush. 
282  ;  Henley  r.  Bank,  16  Ala.  552  ;  Pope 
V.  Harkins,  id.  321 ;  Mclntirc  v.  Patton, 
9  Humph.  447  ;  Cooper  v.  Smith,  8  Watts, 
536.  This  depends  upon  the  tenant's 
agreement,  express  or  implied,  that  he 
will  at  some  time  or  in  some  event 
surrender  the  possession.  Osterhout  v. 
Shoemaker,  3  Hill,  513.  Estoppel  applies 
wherever  one  party  is  let  into  possession 
by  another.  Doe  r.  Foster,  supra.  An 
unknown  landlord  is  protected  where  the 
premises  are  let  hy  an  agent.  Fleming  r. 
Gooding,  1 0  Bing.  549.  The  rule  applies 
to  all  in  privity  with  the  landlord.  Ren- 
nie  V.  Robinson,  1  Bing.  147  ;  Blantin  v. 
Whitaker,  11  Humph.  313.  And  the  ten- 
ant's assignees  are  equally  bound.  Jack- 
son V.  Davis,  5  Cowen,  123.  As  is  even 
an  adverse  party  let  in  by  the  tenant.  Doe 
V.  Mills,  1  Moody  &  R.  385.  And  in  Doe 
V.  Bay  tup,  3  A.  &  E.  188,  a  hostile  party, 
who,  obtaining  possession  by  license,  set 
up  his  adverse  claim,  was  estopped.  But 
a  tenant  may  show  the  landlord's  title 
expired,  wiiich  is  not  a  denial  of  title,  but 
an  avoidance  by  matter  ex  post  facto.  Hop- 
craft  V.  Keys,  9  Bing.  613  ;  Doe  r.  Bar- 
ton, 11  A.  &  E.  307.  And  estoppel  ex- 
pires with  the  term.     Bavley  v.  Bradley, 

5  C.  B.  396 ;  Ryerss  v.  Farwell,  9  Barb. 
615;  Horner  v.  Leeds,  1  Dixtchcr,  106; 
Ivnowles  v.  Maynard,  13  Met.  352 ; 
Pierce  v.  Brown,  24  Vt.  165.  So  where 
there  has  been  ouster.  Morse  v.  Goddard, 
13  Met.  177.  And  title  prior  to  tenancy 
may  be  disputed.     Doe  v.  Powell,  1  A. 

6  E.  531 .  And  where  the  landlord  insists 
that  the  lease  is  void,  the  tenant  may  set 
up  an  outstanding  term.  Egremont  v. 
Langdon,   12    Q.   B.    711.     Payment  of 


rent  is  an  acknowledgment  of  title  which 
will  estop.  Cooper  v.  Blandy,  1  Bing. 
N.  C.  45;  Gouldsworth  v.  Knights,  11 
M.  &  W.  337 .  Unless  it  was  made  through 
mistake  or  other  rebutting  circumstances. 
Rogers  v.  Pitcher,  6  Taunt.  202  ;  Fenner 
V.  Duplock,  2  Bing.  10;  Claridge  v.  Mac- 
kenzie, 4  Man.  &  G.  143  ;  Doe  v.  Barron, 

11  A.  &  E.  307.  And  acceptance  binds 
the    landlord.      Pennington   v.    Taniere, 

12  Q.  B.  998.  The  same  relation  exists 
between  a  trustee  and  a  ceslui  que  trust. 
Weddcrliurn  r.  Wedderburn,  4  Mylne  & 
C.  41  ;  Pinkston  v.  Brewster,  14  Ala. 
315;  Hovcnden  v.  Anneslcy,  2  Sch.  &  L. 
607.  Between  mortgasjorand  mortgatree. 
Doe  V.  Vickers,  4  A.  &  E.  782 ;  Hall  v. 
Surtees,  5  B.  &  Aid.  687.  Principal  and 
agent.  Osgood  v.  Nichols,  5  Grav,  420 ; 
Collins  I).  Tillou,  26  Conn.  368.  Vendor 
and  vendee.  Doe  v.  Edgar,  2  Bing.  N. 
C.  498  ;  Upshaw  v.  McBride,  10  B.  Mon. 
202.  Where  a  party  uses  an  invention 
by  permission  of  the  patentee,  he  is  estop- 
ped from  denying  the  validity  of  the  let- 
ters patent.  Laws  v.  Purser,  6  Ellis  &  B. 
930.  But  this  has  been  denied.  Blight 
r.  Rochester,  7  Wheat.  .535,  548  ;  Watkins 
V.  Holman,  16  Pet.  25 ;  Osterhout  v. 
Shoemaker,  3  Hill,  513;  Page  v.  Hill,  11 
Mo.  149.  Where  one  accepts  a  benefi- 
cial interest  under  a  will,  he  is  precluded 
from  setting  up  any  title  or  claim  in  him- 
self whereby  any  of  the  provisions  of  the 
will  maj^  be  defeated.  Benedict  v.  Mont- 
gomery, 7  Watts  &  S.  238 ;  Smith  v. 
Guild,'^  34  Me.  443  ;  Denn  v.  Cornell,  3 
Johns.  Cas.  174;  Hook  v.  Hook,  13  B. 
Mon.  526.  But  see  Fitts  v.  Cook,  5 
Cush.  596.  Where  a  tenant  accepts  a 
new  lease  or  other  conveyance  inconsist- 
ent with  his  prior  lease,  it  is  a  surrender 
of  the  latter  by  operation  of  law,  even 
though  the  new  lease  be  for  a  sliorter 
term.  Bac.  Abr.  Leases,  S.  2 ;  Roe  v. 
Archbishop,  6  East,  86  ;  Burnett  v.  Scrib- 
ner,  16  Barb.  621.  And  where  there  is  a 
parol  agreement  to  surrender  which  is 
within  the  statute  of  frauds,  if  it  is  acted 
upon  by  tlie  reentry  of  the  landlord,  the 
parties  will  be  estopped  from  denying  the 
surrender.  Grimman  ii.  Legge,  8  B.  & 
C.  324 ;  Dodd  v.  Acklora,  7  Scott,  N.  R. 
415.  But  there  must  be  a  change  of  pos- 
session. Johnstone  v.  Hudleston,  4  B. 
&  C.  922;  Doe  v.  Wood,  14  M.  &  W. 
682  ;  MoUett  v.  Brayne,   2    Camp.    103. 

[3G3] 


340/ 


THE  LAW   OF   CONTRACTS. 


[part  II. 


ference.  (s)  Still  more  is  this  the  case  where  the  proceedings 
are  between  private  persons  only,  and  there  was  sufficient  op- 
portunity to  arrest  them  ;  (t)  and  gross  negligence  is  equiva- 
lent in  its  conclusive  effect,  to  active  conduct  (w) 

It  must  be  obvious,  however,  that  the  doctrine  of  estoppel 
can  go  no  further,  than  to  preclude  a  party  from  denying  that 
he  has  done  that  which  he  had  power  to  do.  {v)     The  whole 


Such  agreement,  however,  may  be  a  de- 
fence in  an  action  for  rent.  Gore  v. 
Wright,  8  A.  &  E.  118.  And  if  the  new 
lease  f;iil  to  pass  an  interest  it  is  not  a 
surrender.  Doe  v.  Poole,  11  Q,  B.  713. 
In  Thomas  v.  Cook,  2  B.  &  AkI.  119,  a 
tenant  underlet  to  a  third  party,  wlio  was 
accepted  by  the  landlord,  with  the  assent 
of  the  tenant ;  this  was  held  a  valid  sur- 
render of  the  original  tenant  interest,  apd 
a  defence  against  the  landlord  chiiming 
rent.  This  case  was  controverted  in  Ly- 
on V.  Eeed,  13  M.  &  W.  285,  but  aflirmed 
in  Nlckells  v.  Atherstone,  10  Q.  B.  944. 
See  also,  Schieffelin  v.  Carpenter,  15 
AVend.  400,  ante,  vol.  1,  428  (d).  But 
the  intention  of  the  parties  must  be 
clearly  made  out.  Brewer  v.  Dyer,  7 
Cush.  337.  A  similar  practice  where 
leases  have  not  been  registered  obtains  in 
some  New  England  States.  4  Grecnl. 
Cruise,  8,  n.  (1). 

(s)  Thus,  citizens  omitting  to  make 
objection  to  a  petition  for  public  improve- 
ments when  there  was  opportunity  to  do 
60,  are  thereby  estopped  from  objecting  to 
the  action  taken  on  the  petition.  People 
V.  Rochester,  21  Barb.  656.  So  of  a  dedi- 
cation of  property  to  j)ublic  uses.  Cincin- 
nati V.  White,  6  Pet.  431. 

{t)  Thus  a  party  was  barred  by  say- 
ing Ills  name  was  John  when  interrogated 
before  a  process  issued  against  him  in  that 
name.  Price  v.  Ilarwood,  3  Camp.  108. 
In  an  action  for  reentry,  in  default  of  a 
distress,  the  defendant  was  concluded  by 
admitting  there  was  no  property  liable  to 
distress.  I'rerihyterian  Congr.  v.  Williams, 
9  Wend.  147.  An  execution  iiavirig  been 
levied  on  the  land  of  defendant's  reputed 
wife,  he  wa.s  cstop[)ed  from  showing  the 
marriage  to  bo  within  the  ))rohibited 
degrees.  DivoU  r.  Lcadbettcr,  4  Pick. 
220;  Waller  v.  Drakcford,  1  JOIiis  &  B. 
749.  So  judgment  credit(jr.s  liy  assenting 
to  a  couvcyatico  are  concluded  from 
a.sscrliiig  thi^ir  lien.  Doub  w.  Mason,  2 
M(l.  380.  It  is  well  settled  if  an  obligor 
induce  a  person  to  take  au  assignment  of 

[364] 


a  note  or  bond  by  admitting  the  justice  of 
the  debt  or  declaring  he  has  no  defence, 
he  cannot  afterwards  deny  it  to  the  preju- 
dice of  the  assignee.  But  unless  the 
assignee  would  be  prejudiced  by  having 
parted  with  value,  there  can  be  no  estoppel. 
Weaver  v.  Lynch,  25  Penn.  St.  449 ; 
Sloan  V.  R.  T.  &  M.  Co.  6  Blackf.  175; 
Crout  V.  De  Wolf,  1  R.  I.  393 ;  Truscott 
V.  Davis,  4  Barb.  495  ;  Piatt  i'.  Squire,  12 
Met.  494  ;  Davis  v.  Thomas,  5  Leigh,  1. 
A  corporation  which  has  entered  upon  its 
appropriate  functions  cannot  object  in  au 
action  against  it  that  legal  provisions  con- 
cerning it  have  not  been  complied  with. 
Commonwealth  v.  Worcester  T.  Co.  3 
Pick.  327  ;  nor  can  a  member  make  such 
objection.  Chester  Glass  Co.  v.  Dewey, 
16  Mass.  94.  Where  a  mortgage,  note  or 
other  instrument  is  given  to  a  corporation 
as  such,  the  party  giving  it  is  estopped 
from  denying  the  existence  of  the  corpora- 
tion. Angell  &  Ames  on  Corp.  §  635 ; 
Dutchess  Co.  v.  Davis,  14  Johns.  238; 
Searsburgh  T.  Co.  v.  Cutler,  6  Vt.  315. 
A  party  contracting  with  another  as  a  cor- 
poration is  estopped  to  deny  the  legal 
existence  of  such  corporation.  Worcester 
M.  I.  V.  Harding,  1 1  Cush.  285.  See  contra, 
Welland  Canal  v.  Hathaway,  8  Wend. 
480. 

(it)  "Any  culpable  conduct,  by  which 
the  relation  of  the  parties  to  the  property 
is  completely  altered,  will  have  the  same 
effect "  as  fraud.  Denmun,  C.  J.,  in  Coles 
V.  Bank  of  England,  10  A.  &  E.  437,  452. 
In  that  case  an  action  was  brought  for  a 
portion  of  stock  held  by  testatrix  which 
had  been  fraudulently  transferred ;  this  was 
successfully  resisted  on  the  ground  that 
though  there  was  no  knowledge  of  the 
fraud,  the  stockholder  had  the  means  of 
knowledge,  aTid  was  guilty  of  gross  negli- 
gence in  receiving  tiie  diminished  divi- 
dends without  objection. 

((;)  Thus,  a  corporation  may  show  its 
incajiacity  for  a  certain  contract  or  course 
of  action.  In  Lowell  r.  Daniels,  2  Gray, 
161,  the  (piestioii  was,  whether  a  married 


en.  v.] 


ESTOPPELS. 


340  w 


law  of  estoppel  may  seem  to  rest  only  on  the  ground,  that  the 
law  will  not  permit  a  party  to  profit  by  his  own  fraud  ;  and 
upon  fraud,  actual  or  constructive,  most  of  the  cases  do  certainly 
rest.  But  it  is  also  true,  that  if  one,  in  honest  error,  asserts  that 
which  is  not  true,  and  makes  the  assertion  for  the  purpose  of 
influencing  a  party,  who  acts  upon  and  trusts  to  the  assertion 
in  good  faith,  he  that  made  the  mistake,  shall  not  be  permitted 
to  correct  it  for  his  own  benefit,  and  to  the  injury  of  the  inno- 
cent party  who  was  deceived  by  his  assertion,  (iv)  However 
equally  innocent  the  assertor  may  have  been,  the  falsehood 
asserted  was  a  wrong  done  to  the  other  party.  It  is  possible  that 
the  estoppel  might  in  such  a  case,  be  overcome,  by  the  assertor 
showing  that  he  was  deceived  by  circumstances  which  entirely 
justified  his  belief,  and  that  his  own  negligence  in  no  way  co- 
operated to  produce  the  error.  It  is  in  reference  to  questions  of 
this  kind,  that  it  has  been  said,  that  he  who  asserts  what  he 
does  not  know  to  be  true,  stands  upon  the  same  footing,  with 


woman  may  he  barred  by  an  estoppel  in 
pat's.  Per  Thomas,  J. :  "  Tliis  doctrine 
of  estoppel  in  pais  would  seem  to  be  stated 
broadly  enough  when  it  is  said  that  such 
estoppel  is  as  effectual  as  the  deed  of  ihe 
party.  To  say  tliat  one  may  by  acts  in 
pais,  by  admission,  by  concealment,  or  by 
silence,  in  effect  do  what  could  not  be 
done  by  deed,  would  be  practically  to  dis- 
pense witli  all  the  limitations  the  law  has 
imposed  upon  tiie  capacity  of  infants  and 
married  women."  Brown  r.  McCune,  5 
Sandf.  224.  There  cannot  bo  an  estoppel 
to  show  a  violation  of  a  statute,  even  to 
the  prejudice  of  an  innocent  party.  Stead- 
man  V.  Uuhamel,  1  C.  B.  888. 

(iv)  See  note  {q),  supra.  In  Howard  w. 
Hudson,  2  Ellis  &  B.  1,  Campbell,  C.  J., 
states  the  rule  that  the  party  setting  up 
such  a  bar  to  the  reception  of  truth,  must 
show  both  that  there  was  a  wilful  intent 
to  make  him  act  on  the  faith  of  the  repre- 
sentation, and  that  he  did  so  act.  And  if 
the  party  induce  another  to  act  by  misrep- 
resentations innocently  made,  he  must  yet 
bear  the  injury.  Thus,  in  Waller  v. 
Drakeford,  1  Ellis  &  B.  749,  a  woman's 
goods  were  sold  to  an  innocent  party,  with 
her  concurrence,  by  a  man  to  whom  she 
supposed  she  was  married,  and  on  discov- 
ering her  mistake  she  was  precluded  from 
disputing  the  sale.     So  in  Wells  v.  Pierce, 

31* 


7  Foster,  503,  an  owner  was  concluded  by 
a  sale  whicli  he  had  induced  another  to 
make,  although  at  the  time  he  was  igno- 
rant of  his  own  interest.  See  also,  How- 
ard V.  Tucker,  1  B.  &  Ad.  712;  Doe  v. 
Lambly,  2  Esp.  635  ;  Carnes  v.  Field,  2 
Yeates,  241.  But  see  Steele  v.  Putney,  15 
Me.  327.  But  if  the  conduct  or  represen- 
tation be  not  intended  as  an  inducement 
to  another  to  act,  or  be  such  that  a  reason- 
able man  would  anticipate  no  action  from 
it,  there  is  such  an  absence  of  the  first  ele- 
ment of  estoppel,  that  none  is  raised, 
though  another  is  in  fact  induced  to  act 
upon  it.  Thus,  where  admissions  were 
made  to  third  persons,  Itegina  v.  Amber- 
gate,  &c.  K.  Co.  1  Ellis  &  B.  372 ;  Pen- 
nell  V.  Hinman,  7  Barb.  644,  and  notes  (7) 
and  ()•)  supra;  nor  where  the  admission 
sought  to  be  set  up  was  an  answer  to  an 
incidental  question.  Pierce  v.  Andrews, 
6  Cash.  4.  In  that  case  an  execution 
creditor,  without  disclosing  his  purpose, 
obtained  an  admission  that  a  horse  in 
plaintiff's  possession  was  the  property  of 
his  debtor,  and  a  seizure  was  thereupon 
made  ;  but  the  plaintiff  was  not  precluded 
from  showing  that  the  horse  was  his  own. 
So  members  of  a  corporation,  acting  in- 
nocently, are  not  personally  estopped  from 
asserting  their  private  rights.  Perry  v. 
Worcester,  6  Gray,  544. 

[3G5] 


340  n  THE  LAW  OF  CONTRACTS.  [PART  II. 

him  who  asserts  what  he  knows  to  be  false ;  a  principle  which 
we  cannot  admit,  as  we  elsewhere  state,  without  important 
qualification,  [x) 

The  difficulty  attending  this  class  of  estoppels,  may  be  stated 
thus.  Is  it  necessary  that  there  shall  be  some  default  of  duty, 
by  act  or  neglect,  as  a  ground  for  the  estoppel.  We  are  not  will- 
ing to  admit,  that  a  person  entirely  innocent,  in  a  moral  point 
of  view,  may  yet  be  bound  by  his  acts  or  sayings,  where,  if  he 
be  not  bound,  he  will  be  permitted  to  cast  an  injury  upon  some 
one  as  innocent  as  he  is,  but  who  has  been  misled  merely  by  a 
justifiable  confidence  in  what  was  said  or  done  to  him  with  the 
intent  that  he  should  rely  upon  it.  But  where  this  confidence 
and  dependence  were  not  expected,  and  still  more  where  they  do 
not  exist,  we  apprehend  that  an  estoppel  must  be  founded  upon 
fault.  The  whole  doctrine  of  estoppels  in  pais  originated  in 
courts  of  equity,  and  passed  from  them  into  courts  of  law ;  and 
the  doctrine  of  equity  is  often  asserted  in  respect  to  them, 
by  courts  of  law ;  {y)  and  where  there  is  no  violation  or  neglect 
of  duty,  of  any  kind,  we  apprehend  that  it  must  be  a  very 
strong  case  which  comes  within  the  law  of  estoppel,  {z) 

(?)  Lohclelly. Baker,  1  Met.  193;  Phila.  pnnciple  better  than  B.  &  W.  Railroad 

W.  &  B.  II.  R.  Co.  V.  Howard,  13  How.  Co.  v.  Sparhawk,  .5  Met.  469,  and  Brewer 

307,  336,  per  CV/-//S,  J.:  "When  a  party  as-  v.   B.   &  W.  Railroad   Co.   5  Met.  478. 

serts  what  he  knows  is  false,  or  docs  not  These  cases  are  in  substance  as  follows, 

know  to  be  true,  to  another's  loss  and  his  A  and  B  own  adjoining  land  ;  they  desire 

own  gain,  he  is  guilty  of  a  fraud  ;  a  fraud  to  establish  a  divisional  line  between  them, 

in  fact,  if  he  knows  it  to  bo  false  ;  fraud  and  by  parol  agree  on  such  a  line  ;  B  sells 

in  law,  if  lie  docs  not  know  it  to  be  true."  to  C  ;  before  the  sale,  A  informs  C,  orally, 

But  tiic  applications  of  the  rule  will  be  that  ho  claimed  only  to  that  agreed  line; 

found  to  bear  the  qualifications  in  vol.  1,  and  after  the  sale  C  made  expensive  ira- 

p.  5G.  jn-ovcmcnts  on  the  land,-«p  to  the  line, 

(y)  Thus  in  Welland  Canal  v.  Hatha-  with  the  knowledge  of  A,  who  expressed 

way,  8  Wend.  480,  Nelson,  J.,  limits  estop-  no  dissent  and  made  no  objection.     After 

pels  to  cases   where  a  party,  "in   good  all  this,  A  discovered  tliat  this  was  not 

conscience  and  honest  dealing,  ought  not  the  true  line,  and  tliat  B  had  been  in  pos- 

to  be  permitted  to  gainsay"  his  own  acts  session  of  land  really  belonging  to  A,  and 

or  admissions.  that  C,  as  grantee  of  A,  now  held  this 

(s)  We  apprehend  that  this  is  the  doc-  land.     A  i)rings  his  action  for  this  land, 

trine  of  Downs  v.  Cooper,  2  (^.  ]i.  2.")6,  and  was  permitted  to  recover  it,  not  being 

quoted   antf,   in    note   (y),   as    (|iialifying  est()])i)ed  I)y  what  he  had  said  or  done,  as 

I'ickard  c  Scar.^,  <j  A.  &  V..  469.     I'cr-  it  arose   from  a  mere   mistake,   without 

haps,    however,    no    cases   illustrate    tiiis  fraud  or  negligence. 

[3GG]   • 


en.  Vr.]  STATUTE   OF   LIMITATIONS.  341 


CHAPTER   VI. 

THE   STATUTE  OF  LIMITATIONS. 

Sect.  1. —  The  General  Purpose  of  the  Statute. 

Any  tribunal  which  inquires  into   the   validity  of  a   claim, 
must  admit  that  its  age  is  among  the  elements  which  deter- 
mine the  probability  of  its  having  a  legal  existence  and  obliga- 
tion.    The  natural  course  of  events  is  for  him  who  owes  a  debt, 
to  pay  it ;  and  for  him  to  whom  a  debt  is  due,  to  demand  it ; 
and  any  conduct  which   is   opposite   to   this,   is    exceptional. 
And  human  experience  tells  us,  that  it  is  very  rare,  in  point  of 
fact,  for  a  creditor  to  let  a  claim  which  is  enforceable  at  law, 
lie,  for  a  long  period,  not  only  unpaid,  but  uncalled  for.     This 
improbability   the    common    law   recognized ;    and    when    the 
claim   was    old    enough,    it   considered    the  improbability  too 
strong  to  be  overthrown  by  the  mere  fact  of  an  original  debt, 
and  no  evidence  of  payment;  in  other  words,  it  raised  a  pre-, 
sumption  of  payment  after  many  years  ;  this  period  is  generally, 
now  almost  universally,  twenty  years ;  and  it  still  applies  to  all 
personal  claims  which  are  not  limited  by  the  statute  of  limita- 
tions, {t)     But  tliis  was  not  an  absolute  presumption,  because 
it  could  be  rebutted    by    acts    or   words    on   the    part   of  the 
debtor,   which   were    incompatible    with    such    payment.      At 
length,  the  statute,  21  James  I.,  c.  16,  enacted,  among  other 
things,   that  all  actions  of  account,  and  upon  the  case,  other 
than  such  accounts  as  concern  the  trade  of  merchandise  be- 
tween merchant  and  merchant,  their  factors  or  servants,  all  ac- 
tions of  debt  grounded  upon  any  lending,  or  contract  without 
specialty,  and  all  actions  of  debt  for  arrearages  of  rent,  should 

(t)  Duffield  V.  Creed,  5  Esp.  52;  Cooper  f.  Turner,  2  Stark.  497;  Christophers  v. 
Sparke,  2  Jacob  &  W.  223. 

[367] 


342*  THE   LAW   OF    CONTRACTS.  [PART  II. 

be  commenced  and  sued  within  six  years  next  after  the  cause 
of  such  actions  or  suit,  and  not  after. 

*It  is  not  quite  certain,  from  the  selection  of  the  claims  to 
which  this  statute  applies,  whether  it  proceeded  upon  the  same 
ground  as  the  legal  presumption ;  that  is,  actual  probability  of 
payment;  for  while  these  claims  are  such  as  would  very  sel- 
dom be  suffered  to  be  long  unsettled,  and  the  excepted  claims, 
as  those  of  accounts  between  merchants,  and  those  grounded 
on  specialty,  are  often  permitted  to  go  on  without  liquidation 
for  a  considerable  period,  it  is  also  true  that  this  latter  class  of 
claims  might  become  old  without  becoming  stale,  and  should 
be  excepted  from  a  statute  of  limitations  which  went  on  the 
ground  that  the  actions  which  it  prohibited  ought  not  to  be 
brought  after  a  certain  time,  whether  the  debts  were  paid  or 
not,  because  they  ought  not  to  be  suffered  to  lie  unsettled  so 
long.  And  some  of  the  earlier  decisions  of  the  questions  which 
soon  arose  under  this  statute,  would  lead  to  the  supposition 
that  the  courts  then  regarded  it  as  a  statute  of  repose,  and  not 
one  of  presumption,  (w)  Soon,  however,  the  other  view  pre- 
vailed ;  and  a  long  course  of  decisions  occurred,  which  can  be 
justified  and  explained  only  on  the  supposition  that  the  statute 
is  to  be  construed  as  one  of  presumption,  and  of  rebuttable  pre- 
sumption, (v)  Gradually,  however,  this  view  gave  way  to  the 
first;  and  it  may  now  be  considered  as  the  established  rule 
that  the  statute  proceeds  upon  the  expediency  of  refusing  to 
enforce  a  stale  claim,  whether  paid  or  not,  and  not  merely  on 


{ii)  Bland   v.    Ilnsclrifr,  o   Vent.  151;  2  Camp.   9;  Lcaitcr  r.  Talton,  IG  East, 

Dickson  v.  Tlionipson,  2  SIiow.  12G;  La-  420;  Lowcth  v.  Fotliernill,  4  Camp.  185; 

con  r.  15ri<,rf;s,;.<  Atk.  105  ;  J}a.ss  y.  Smith,  Dowtliwaitc  r.    Tihlmt,  5    M.   &  S.   75; 

12  Vin.  AIn-.  229,  pi.  4;  Owen  v.  Wol-  Bcale  r.  Nintl,  4  IJ.  &  Aid.  5G8  ;  Clarke 

Icy,  15ull.  N.  ]'.  148;  Andrews  v.  Brown,  v.   Jloii;,'liam,  2  B.  &   C.   149;   Frost  v. 

Prcc.  in  Cli.  :w> ;  llyieinf^  v.  Ilnstinfrs,  Bonf^oti;;!!,     1    Bing.    2(50;    Collcdno    v. 

1  Ld.  Kjiym.389,4:il  ;  Sparling  r.  Smiili,  Horn,  a  Binj?.  119;  Trit^gs  v.  Ncwiiliam, 

id.  741.  1"  C.  &  r.  e:JI  ;  East  India  Co.  v.  Print'c, 

(r)   Yea  V.  Eoiirakor,    2    Burr.    1099  ;  llyan  &   M.   407  ;   Slnhy  r.  Cliamplin,  4 

Qiiantock    c.    I'lii'.'land,    5    15nrr.    2()28  ;  jdlnis.  4l'.l  ;  Do  Forest  V.  Hunt,  8  Conn. 

Kielninlson   v.  Fen,  i^oll'i,  80;    Eloyd  r.  179;  Aiken  r.  Benton,  2  ]>rev.  ."J.'iO  ;  Lee 

Muund,  2  T.  It.  7(j();  Catling  i;.  Skould-  v.   Berry,    3    MeCord,    552;    Glenn    v. 

inp,    G    id.    189;    Lawrence    c.   Worrall,  MeCnllmigli,     Harper,    484;    Burden    v. 

I'eakc,  N.I'.  9;{ ;  Clarke  7-.  Bradsliaw,  .'J  ISl'Ellienny,   2    Nolt  &  MeC.  CO;   Shcf't- 

EHp.   155;    Bryiui   r.   lIorHeinan,  5   Esp.  all  v.   ('lav,   U.  M.  Cliurlt.  7;  Bishop  u. 

81,    4    East,    599;   Uueker  r.  Jlannay,  4  SaiiCnrd,  15  Ga.  1. 
East,  G04,  n.  (a)  ;  Gainsfurd  r.  Gramnnir, 

[  ;3G8  ] 


CH.  VI.]  STATUTE   OF  LIMITATIONS.  *343-*344 

the  probability  that  a  stale  claim  has  been  paid ;  and  this  ex- 
pediency is  the  actual  basis  of  the  law  *of  limitations.  •  This 
change  we  deem  one  of  extreme  importance.  The  tendency  to 
it  caused  much  of  the  conflict  and  uncertainty  which  attended 
the  adjudication  upon  this  statute  in  England.  The  prevalence 
of  the  new  view  gave  rise  at  length  to  Lord  Tenterden^s  act  in 
England,  [m)  which  has  been  adopted  in  many  of  our  States, 
and  found  to  work  very  beneficially ;  and  in  the  construction 
of  this  statute,  or  in  the  consideration  of  questions  arising  un- 
der the  earlier  statutes  of  limitations  where  they  remain  in  force, 
we  consider  that  the  principle  which  will  hereafter  be  applied, 
will  be  that  which  regards  the  statute  of  limitations  as  a  statute, 
not  of  presumption,  but  of  repose. 

A  very  little  observation  will  show  that  these  two  views  lead 
to  results  which  are  not  only  distinctly  different,  but  antago- 
nistic. This  difference  may  be  stated  theoretically  thus :  If  the 
statute  of  limitation  be  a  statute  of  presumption,  then  it  is  taken 
away  by  whatever  will  rebut  the  presumption ;  and  this  is  any 
thing  which  implies  or  amounts  to  an  acknowledgment  that  the 
debt  still  exists.  But  if  it  be  a  statute  of  repose,  then  it  remains 
in  force,  unless  the  debtor  renounces  its  benefit  and  protection, 
and  voluntarily  makes  a  new  promise  to  pay  the  old  debt.  It 
is  true,  that  immediately  after  the  enactment  of  the  statute  of 
James,  if  the  statute  were  pleaded,  the  only  replication  was  "  a 
new  promise."  But  when  issue  was  joined  on  this  replication, 
the  plaintiff  made  out  his  case  by  showing  only  a  new  acknowl- 
edgment. And  it  was  a  gradual  progress  in  the  courts,  which 
finally  led  them  to  require  that  this  acknowledgment  should  be 
such,  in  fact,  as  amounted  to  a  promise.  Thus,  Lord  Mansfield 
said,  {x)  "  The  slightest  acknowledgment  has  been  held  sufl^i- 
cient,  as  saying,  '  Prove  your  debt,  and  I  will  pay  you  ; '  '  I  am 
ready  to  account,  but  nothing  is  due  to  you.'  And  much 
slighter  acknowledgments  than  these  will  take  a  case  out  of  the 
statute."  And  in  our  notes  will  be  seen  decisions  or  dicta  which 
are  not  less  extreme,  [y)     But  on  what  *principle  can  they  rest 

(tv)  9  Geo.  IV.  c.  14.  (ij)  Thus,  in  Kicliardson  v.  Fen,  Loflft, 

(x)  In  Trueman  v.   Fenton,    Cowpcr,     86,  it  appeared  that  the  defendant  met  a 

548.  man  in  a  fair,  and  said  he  went  to  the  fair 

[369] 


344- 


THE  LAW   OF   CONTRACTS. 


[part  II. 


for  a  moment,  except  that  which  looks  upon  limitation  as 
founded  on  actual  probability  of  payment?  And  connected 
with  these  decisions  grew  up  an  opinion  among  courts,  that  the 
plea  of  the  statute  was  dishonorable,  and  not  to  be  favored,  (z) 
So  late  as  in  1830,  Mr.  Justice  Story  (a)  spoke  very  strongly,  — 
in  a  passage  we  shall  presently  have  occasion  to  quote  at  length, 
—  of  his  own  recollection  of  an  extreme  and  inexcusable  en- 
deavor of  the  courts  to  take  from  the  operation  of  the  statute  of 
limitations,  all  cases  in  which  any  words  or  phrases  of  the  sup- 
posed debtor  could  be  strained  into  an  admission  of  the  debt. 
But  even  so  early  as  in  1702,  it  was  said  by  the  Court  of  King's 
Bench,  (b)  that  "  The  statute  of  limitations,  on  which  the  se- 
curity of  all  men  depends,  is  to  be  favored."  And  we  give  in  a 
note,  acknowledgments  which  have  been  held  insufficient  to 
take   the  case  out  of  the  statute,  although,  if  the  authorities 


to  avoid  the  plaintiff,  to  whom  he  was 
indebted.  This  was  held  to  be  a  sufficient 
acknowledgment  to  take  the  case  out  of 
the  statute,  there  lieing  no  other  debt 
between  tiiem.  And  in  Lloyd  v.  Maund, 
2  T.  R.  760,  it  was  held  that  a  letter 
written  by  the  defendant  to  the  plaintiff's 
attorney  on  being  served  with  a  writ, 
couched  in  amljiguous  terms,  neither  ex- 
pressly adntitting  nor  denying  the  debt, 
should  lie  left  to  the  jury  to  consider 
whether  it  amounted  to  an  acknowledg- 
ment of  the  del)t,  so  as  to  take  it  out  of 
the  statute.  And  Ashhnrsf,  J.,  said  :  "It  is 
certainly  true  that  any  acknowledgment 
will  take  the  case  out  of  the  statute  of 
limitations.  Now,  tliough  tliis  letter  is 
written  in  ambiguous  terms,  there  arc 
some  parts  of  it  from  which  tiie  jury  might 
perhaps  have  inferred  an  acknowledgment 
of  the  debt.  Tin-oughout  the  whole  of  it, 
tlic  defendant  does  not  deny  the  existence 
of  tlie  dcl)t."  So  in  l?ryan  ?'.  Horseman, 
4  EiLst,  .'iOO,  it  \v:is  held  that  an  acknowl- 
edgment of  a  debt,  tliougli  acc()mi)anicd 
witli  a  declaration  by  tUe  defendant  "  that 
he  did  not  consider  himself  as  owing  the 
plainlilf  a  fartliing,  it  being  more  than  six 
years  since  he  contracKid,"  was  sullicient 
to  take  the  case  out  of  tlie  statute.  So  in 
Lcftper  V.  Tatton,  UJ  Hast,  •121),  in  as- 
Hunipsit  against  tlie  dcfemiant,  as  acceptor 
of  a  bill  of  exchange,  and  upon  an  account 
stttteil,  evidence  that  the  defen(hint  ac- 
kuowiedged   bis  acceptance,  and  tiiat  lio 

[••570] 


had  been  liable,  but  said  that  he  was  not 
liable  then,  because  it  was  out  of  date,  and 
that  he  could  not  pay  it,  it  was  not  in  his 
power  to  pay  it,  was  held  sufficient  to  take 
the  case  out  of  the  statute,  upon  a  plea  of 
actio  nun  accrevit  infra  sex  annos.  And 
Lord  EUenborough  said  :  "  As  to  the  suf- 
ficiency of  the  evidence  of  the  promise,  it 
was  an  acknowledgment  by  the  defendant 
that  he  had  not  paid  the  bill,  and  that  he 
could  not  pay  it ;  and  as  the  limitation  of 
the  statute  is  only  a  presumption  of  pay- 
ment, if  his  own  acknowledgment  that  he 
has  not  paid  be  shown,  it  does  away  the 
statute."  And  again,  in  Clark  v.  Hough- 
am,  2  B.  &  C.  154,  Batjlpji,  J.,  said  :  "  The 
statute  of  limitations  is  a  bar,  on  the  sup- 
])Osition,  after  a  certain  time,  that  a  debt 
has  been  paid,  and  the  vouchers  lost. 
Wherever  it  appears,  by  the  acknowledg- 
ment of  the  party,  that  it  is  not  paid,  that 
takes  the  ease  out  of  the  statute.  Leaper 
V.  Tatton,  10  East,  420;  Dotliwaite  v. 
Tibbut,  .'■>  M.  &  S.  75.  And  according  to 
tiiosc  cases  it  makes  no  diflerence  whether 
the  acknowledgment  be  accompanied  by 
a  promise  or  refusal  to  pay.  Mount- 
stepiien  v.  Brooke,  3  15.  &  Aid.  141,  shows 
that  an  acknowledgment  to  a  third  persou 
is  sullicient." 

(z)   Willet  V.    Atterton,  1   W.  Bl.  35; 
Perkins  v.  Burbank,  2  Mass.  81. 

(ii)  In  Spring  v.  (Jray,  5  Mason,  523. 

(/;)    In  (;r(!cu  V.  Kivett,  2  Salk.  421. 


CH.  VI.] 


STATUTE   OF   LIMITATIONS. 


*345-*346 


stated  in  a  previous  note  had  been  *follo\ved,  most  of  these,  if 
not  all,  must  have  been  held  sufficient  to  constitute  a  new 
promise,  (c)    And  at  length,  through  *a  series  of  decisions,  going 


(c)  Thus,  in  A'Court  v.  Cross,  3  Bing. 
329,  defendant,  being  arrested  on  a  debt 
more  than  six  years  old,  said,  "  I  know 
that  I  owe  the  money,  but  the  bill  I  gave 
is  on  a  three  penny  receipt  stamp,  and  I 
will  never  pay  it ;  this  was  held  not  such 
an  acknowledgment  as  would  revive  the 
debt  against  a  plea  of  the  statute  of  limita- 
tions. And  per  Best,  C.  J.,  "  The  courts 
have  said,  acknowledgment  of  a  debt  is 
sufBcient,  without  any  promise  to  pay  it, 
to  take  a  case  out  of  the  statute.  I  cannot 
reconcile  this  doctrine,  either  with  the 
words  of  the  statute,  or  the  language  of 
the  pleadings.  The  replication  to  the 
plea  of  non-assumpsit  infra  sex  annos,  is 
that  the  defendant  did  undertake  and 
promise  within  six  years.  The  mere 
acknowledgment  of  a  debt  is  not  a  promise 
to  pay  it ;  a  man  may  acknowledge  a  debt 
which  he  knows  he  is  incapable  of  paying, 
and  it  is  contraiy  to  all  sound  reasoning 
to  presume  from  such  acknowledgment 
that  he  promises  to  pay  it ;  yet  without 
regarding  the  circumstance  under  which 
an  acknowledgment  was  made,  the  courts, 
on  proof  of  it,  have  presumed  a  promise. 
It  has  been  supposed  that  the  legislature 
only  meant  to  protect  persons  who  had 
paid  their  debts,  but  from  lapse  of  time 
liad  lost  or  destroyed  the  proof  of  payment. 
Prom  the  title  of  the  act  to  the  last  section, 
every  word  of  it  shows  that  it  was  not 
passed  on  this  narrow  ground.  It  is,  as  I 
have  often  heard  it  called  by  great  judges, 
an  act  of  peace.  Long  dormant  claims 
have  often  more  of  cruelty  than  of  justice 
in  them.  Christianity  forbids  us  to  at- 
tempt enforcing  the  payment  of  a  debt 
which  time  and  misfortune  have  rendered 
the  debtor  unable  to  discharge.  The 
legislature  thought  that  if  a  demand  was 
not  attempted  to  be  enforced  for  six  years, 
some  good  excuse  for  the  non-payment 
might  be  presumed,  and  took  away  the 
legal  power  of  recovering  it.  I  think,  if  I 
were  now  sitting  in  the  Exchequer  Cham- 
ber, I  should  say  that  an  acknowledg- 
ment of  a  debt,  however  distinct  and  un- 
qualified, would  not  take  from  the  party 
who  makes  it  the  protection  of  the  statute 
of  limitations.  But  I  should  not,  after 
the  cases  that  have  been  decided,  be  dis- 
posed to  go  so  far  in  this  court,  without 
consulting  the  judges  of  the  other  courts." 


So  in  Ay  ton  v.  Bolt,  4  Bing.  10.5,  where 
the  defendant  being  applied  to  to  pay  a 
debt  barred  by  the  statute  of  limitations, 
said  he  should  be  happy  to  pay  it  if  he 
could ;  it  was  held  that  the  plaintirt'  must 
show  the  defendant's  a])ility  to  pay,  the 
court  saying  that  the  case  fell  within  the 
rule  laid  down  in  A'Court  r.  Cross.  And 
in  Tanner  v.  Smart,  6  B.  &  C.  603,  in 
assumpsit,  brought  to  recover  a  sum  of 
money,  the  defendant  pleaded  tlie  statute 
of  limitations,  and  ujion  that  issue  was 
joined.  At  the  trial,  the  plaintiff  proved 
the  following  acknowledgment  by  the  de- 
fendant within  six  years  :  "  I  cannot  pay 
the  debt  at  present,  but  I  will  pay  it  as 
soon  as  I  can  ;  "  Held,  that  this  was  not 
sufficient  to  entitle  the  plaintiff  to  a  ver- 
dict, no  proof  being  given  of  the  defend- 
ant's ability  to  paj'.  And  Lord  Tenterden 
said,  "  There  are,  undoubtedly,  authorities 
that  the  statute  is  founded  on  the  presump- 
tion of  payment,  that  whatever  repels  that 
presumption  is  an  answer  to  the  statute, 
and  that  any  acknowledgment  which  re- 
pels that  presumption  is,  in  legal  effect,  a 
promise  to  pay  the  debt ;  and  that  though 
such. an  acknowledgment  is  accompanied 
with  only  a  conditional  promise,  or  even 
a  refusal  to  pay,  the  law  considers  the 
condition  or  I'cfusal  void,  and  considers 
the  acknowledgment  of  itself  an  uncondi- 
tional answer  to  the  statute ;  and  if  these 
authorities  be  unquestionable,  the  verdict 
which  has  been  given  for  the  plaintiff' 
ought  to  stand,  and  the  rule  for  a  new 
trial  ought  to  be  discharged.  But  if  there 
are  conflicting  authorities  upon  the  point, 
if  the  principles  upon  which  the  authorities 
I  Have  mentioned  are  founded,  appear  to 
be  doubtful,  and  the  opposite  authorities 
more  consonant  to  legal  rules,  we  ought, 
at  least,  to  grant  a  new  trial,  that  the  op- 
portunity may  be  offered  of  having  the 
decision  of  a  court  of  error  upon  the  point, 
and  that  for  the  future  we  may  have  a 
correct  standard  by  which  to  act.  .  .  . 
If  an  acknowledgment  had  the  effect  which 
the  cases  in  the  ]ilaintiff's  favor  attribute 
to  it,  one  should  have  expected  that  the 
replication  to  a  plea  of  the  statute  would 
have  pleaded  the  acknowledgment  in 
terms,  and  relied  upon  it  as  a  bar  to  the 
statute ;  whereas  the  constant  replication, 
ever  since  the  statute,  to  let  in  evidence  of 

[371] 


347' 


THE   LAW   OF   CONTKACTS. 


[part  II. 


to  show  that  the  statute  is  intended  for  the  relief  and  quiet  of 
defendants,  the  law  reached  the  conclusion  justly  and  forcibly 
expressed  by  Mr.  Justice  Story,  in  the  case  to  which  we  have 
before  referred,  {ca)  He  says  :  "  I  consider  the  statute  of  limita- 
tions a  highly  beneficial  statute,  and  entitled,  as  such,  to  receive, 
if  not  a  liberal,  at  least  a  reasonable  construction,  in  furtherance 
of  its  manifest  object.  It  is  a  statute  of  repose,  the  object  of 
which  is  to  suppress  fraudulent  and  stale  claims  from  springing 
up  at  great  distances  of  time,  and  surprising  the  parties,  or 
their  representatives,  when  all  the  proper  vouchers  and  evidence 
are  lost,  or  the  facts  have  become  obscure  from  the  lapse  of 
time,  or  the  defective  memory,  or  death,  or  removal  of  *  wit- 
nesses.     The    defence,   therefore,   which   it   puts   forth,   is   an 


an  acknowleclo:ment  is,  that  the  cause  of 
action  accrued  (or  the  defendant  made 
the  promise  in  the  declaration)  within  six 
years  ;  and  the  only  principle  upon  which 
it  can  be  held  to  be  an  answer  to  the 
statute  is  this,  that  an  acknowledgment  is 
evidence  of  a  new  promise,  and,  as  such, 
constitutes  a  new  cause  of  action,  and 
supports  and  establishes  the  promises 
which  the  declaration  states.  Upon  this 
principle,  whenever  tlie  acknowledgment 
supports  any  of  tlic  promises  in  the  decla- 
ration, the  plaintiff  succeeds ;  when  it  does 
not  support  them  (though  it  may  show 
clearly  IIlcU  the  debt  never  has  been  paid,  but 
is  still  a  subsisting  debt),  the  plaintiff 
fails."  His  lordship  then  proceeds  to  an 
elai)orate  review  of  the  authorities,  and 
continues  :  "  All  these  cases  proceed  upon 
the  principle  that  under  the  ordinary  issue 
on  the  statute  of  limitations,  an  acknowl- 
edgment is  only  evidence  of  a  i)roniise  to 
])ay  ;  and  unless  it  is  conformal)Ic  to,  and 
maintains  the  jjroinises  in  the  declaration, 
though  it  may  show  to  demonstration  tliat 
the  (ieiit  has  never  been  paid,  and  is  still 
subsisting,  it  has  no  effect."  And  sec 
Fcarn  v.  Lewis,  4  Moore  &  P.  1  ;  Brig- 
stocke  V.  Smith,  1  Cromp.  it  IM.  483  ; 
Ilay<lon  i\  Williams,  7  JJing.  lO;!;  Oory 
J).  IJretton,  4  C.  &  T.  AiVl  ;  Morrell  v. 
Frith,  .3  M.&  W.402;  ]{oiitledge  v.  Kiim- 
811V,  H  A.  &  H.  221  ;  Williams  v.  Griffith, 
3  iOxch.  33.1;  Cawiey  ?>.  Finiiell,  12  (.'.  15. 
291  ;  Smith  v.  Thorn,  18  Q.  H.  134,  U) 
Kng.  li.  !<•  Iv|.  3!)!  ;  Hurt  r.  rrciidcrgast, 
14M.&W.  7.|l.  In  this  hist  case, /'(//7,v, 
li.,  said  :  "  'I'licre  is  no  doubt  of  the  jirin- 

[372] 


ciple  of  law  applicable  to  these  cases,  since 
the  decision  in  Tanner  v.  Smart ;  namely, 
that  the  plaintiff  must  either  show  an  un- 
qualified acknowledgment  of  the  debt,  or, 
if  he  show  a  promise  to  pay,  coupled  with 
a  condition,  he  must  show  performance  of 
the  condition  ;  so  as  in  either  case  to  fit 
the  promise  laid  in  the  declaration,  which 
is  a  promise  to  pay  on  request.  The  case 
of  Tanner  v.  Smart  put  an  end  to  a  series 
of  decisions  which  were  a  disgrace  to  the 
law,  and  I  trust  we  shall  be  in  no  danger 
of  falling  into  the  same  course  again." 
For  recent  American  cases  to  the  same 
effect,  see  Gilkyson  v.  Larue,  6  Watts  & 
S.  213  ;  Morgan  v.  Walton,  4  Penn.  St. 
321  ;  Laforge  v.  Jayne,  9  id.  410 ;  Christy 
V.  Flemington,  10  id.  129  ;  Gillingham  v. 
Gillingham,  17  id.  303  ;  Kyle  v.  Wells,  id. 
286;  Bell  v.  Crawford,  8  Gratt.  110; 
lloss  V.  Ross,  20  Ala.  105  ;  Ten  Eyck  v. 
Wing,  1  Mann.  Mich.  40;  Butterficld  v. 
Jacobs,  15  N.  II.  140;  Ventris  v.  Shaw, 
14  id.  422;  Sherman  r.  Wakeman,  II 
Barb.  254;  Kllicott  v.  Nichols,  7  Gill,  85; 
Mitchell  V.  Sellman,  5  Md.  376  ;  Carruth 
V.  Paige,  22  Vt.  179  ;  Phelps  r.  William- 
son, 26  "Vt.  230;  Hayden  r.  Johnson,  id. 
768;  Cooper  v.  Parker,  25  id.  502;  Hill 
V.  ICendnll,  id.  528  ;  Hrainard  r.  Buck,  id. 
573;  Pritchard  ?.'.  Howell,  1  AVisc.  131  ; 
Deloaeh  r.  Turner,  6  Kich.  1 17,  7  id.  143  ; 
Butler  V.  Winters,  2  Swan,  91  ;  Brown  v. 
Kdes,  37  Me.  318  ;  Proddie  v.  Johnson,  1 
Sneed,  464.  And  see  the  leading  ease  of 
Bell  V.  Morrison,  1  I'et.  351. 
('•«)  See  ante,  p.  344,  n.  (a). 


CII.  VI.]  STATUTE    OF   LIMITATIONS.  *348 

honorable  defence,  which  does  not  seek  to  avoid  the  payment 
of  just  claims  or  demands,  admitted  now  to  be  due,  but  which 
encounters,  in  the  only  practicable  manner,  such  as  are  ancient 
and  unacknowledged ;  and,  whatever  may  have  been  their 
original  validity,  such  as  are  now  beyond  the  power  of  the  party 
to  meet,  with  all  the  proper  vouchers  and  evidence  to  repel 
them.  The  natural  presumption  certainly  is,  that  claims  which 
have  been  long  neglected  are  unfounded,  or  at  least  are  no 
longer  subsisting  demands.  And  this  presumption  the  statute 
has  erected  into  a  positive  bar.  There  is  wisdom  and  policy  in 
it,  as  it  quickens  the  diligence  of  creditors,  and  guards  innocent 
persons  from  being  betrayed  by  their  ignorance,  or  their  over- 
confidence  in  regard  to  transactions  which  have  become  dim  by 
age.  Yet  I  well  remember  the  time  when  courts  of  law  exer- 
cised what  I  cannot  but  deem  a  most  unseemly  anxiety  to 
suppress  the  defence ;  and  when,  to  the  reproach  of  the  law, 
almost  every  effort  of  ingenuity  was  exhausted  to  catch  up  loose 
and  inadvertent  phrases  from  the  careless  lips  of  the  supposed 
debtor,  to  construe  them  into  admissions  of  the  debt.  Happily, 
that  period  has  passed  away ;  and  judges  now  confine  them- 
selves to  the  more  appropriate  duty  of  construing  the  statute, 
rather  than  devising  means  to  evade  its  operation." 


SECTION    II. 

OF   A   NEW   PROMISE. 

The  law  may  not  be  yet  entirely  settled,  as  to  what  shall 
constitute  the  new  promise  which  removes  the  bar  of  the  stat- 
ute. But,  without  now  taking  into  consideration  Lord  Tenter- 
den's  act,  requiring  the  new  promise  to  be  in  writing,  we  think 
we  may  draw  from  the  multitudinous  decisions  on  the  subject, 
the  following  conclusions,  as  established  law. 

The  first  and  most  general  of  these  is,  that  there  must  be 
either  an  express  promise,  or  an  acknowledgment  expressed  in 
such  words,  and  attended  by  such  circumstances  as  give  *to  it 

VOL.  II.  32  [373] 


348 


THE   LAW    OP   CONTRACTS. 


[part  II. 


the  meaning,  and  therefore  the  force  and  effect  of  a  new  prom- 
ise. ((/)  Such,  we  think,  is  the  rule,  although  it  must  be  ad- 
mitted that  it  has  been  sometimes  applied,  even  of  late,  with 
great  laxity. 

Whether  an  acknowledgment  is  thus  equivalent  to  a  new 
promise,  or  is  sufficient  to  remove  the  bar  of  the  statute,  is  a 
question  which  must  be  determined  either  by  the  court  or  the 
jury;  and  it  does  not  seem  to  be  quite  settled  within  which 
province  it  lies.  We  should  say,  however,  in  general,  that 
where  this  question  is  one  of  intention,  and  is  to  be  gathered 
from  the  words  spoken,  and  from  the  circumstances  of  the  case 
to  be  considered  in  connection  with  the  words,  there  it  is  for  the 
jury,  under  the  instruction  of  the  court  as  to  the  principles  ap- 
plicable to  the  question,  to  determine  whether  the  acknowledg- 
ment be  sufficient  or  not.  But  where  the  question  is  one  of 
the  meaning  of  words  only,  and  especially  where  the  words 
relied  upon  are  written,  and  the  question  becomes,  in  effect,  one 
of  the  construction  of  a  written  document,  there  it  is  the  duty 
of  the  court  to  make,  and  of  the  jury  to  receive,  a  distinct  direc- 
tion, (e) 


(d)  Sec  upon  this  point  the  leading  case 
of  Tanner  v.  Smart,  6  B.  &  C.  603,  cited 
in  the  preccdinoj  note.  "According  to 
the  recent  cases,"  says  Parke,  B.,  in  Mor- 
rell  V.  Frith,  3  M.  &  W.  405,  "the  docu- 
ment, in  order  to  taivc  the  case  out  of  the 
statute,  must  either  contain  a  promise  to 
pay  tlic  debt  on  request,  or  an  acknowl- 
edgment from  wliieli  sucli  promise  is  lo  be 
inferred."  In  Hart  v.  I'rendergast,  14  M. 
&  W.  740,  /.'o//;-,  B.,  said  :  "  The  princii)le 
is  said  to  be,  tliat  the  document  nmst  con- 
tain either  a  ))romisc  to  pay  tlic  debt,  or 
an  acknowledgment  from  which  such  a 
promise  is  to  be  inferred.  Perhaps  it 
would  be  more  correct  to  say,  tliat  it  must, 
in  all  cases,  contain  a  promise  to  ))ay,  l)Ut 
that  from  a  simplo  acknowlcdj;-mciit  the 
law  imi)lies  a  promise  :  but  tliere  must, 
il4  nil  ciLscs,  1)0  n  jimnise,  in  order  to  suj)- 

£ort  tlie  declaration."  Again,  in  Bell  v. 
lorrison,  1  I'et.  302,  Mr.  Justice  ,SVor// 
says  :  "  If  the  bur  is  stjugiit  to  be  removed 
))y  the  ])roof  of  11  new  promise,  that  prom- 
ise, as  a  new  cause  (jf  action,  ou^^^bl  to  be 
proved,  in  a  clear  ami  explicit  inamicr, 
and  i)c  it)  its  teriris  une(|uivocaI  and  deter- 
minate;   an<l,  if  any  conditions  uru   au- 

[374] 


nexed,  they  ought  to  be  shown  to  be  per- 
formed. If  there  be  no  express  promise, 
but  a  promise  is  to  be  raised  by  impli- 
cation of  law  from  the  acknowledgment 
of  the  party,  such  acknowledgment  ought 
to  contain  an  unqualilied  and  direct  ad- 
mission of  a  previous,  subsisting  debt, 
which  the  party  is  liable  and  willing  to 
pay.  If  there  be  accompanying  circum- 
stances, which  repel  the  presum))tion  of  a 
promise  or  intention  to  pay  ;  if  the  ex- 
pressions be  equivocal,  vague,  and  inde- 
terminate, leading  to  no  certain  conclu- 
sion, but  at  best  to  probable  inferences, 
wliich  may  affect  different  minds  in  dif- 
ferent ways ;  we  think  tliC}'  ought  not  to 
go  to  a  jury  as  evidence  of  a  new  jirom- 
ise  to  revive  the  cause  of  action.  Any 
otlier  course  would  ojjcu  all  the  mischiefs 
against  which  the  statute  was  intended  to 
guard  imioccnt  ])crsons,  and  ex])ose  them 
to  the  dangers  of  iicing  entrapped  in  care- 
less conversations,  and  betrayed  by  per- 
juries." See  further  the  English  and 
Amciican  cases  cited  in  the  preceding 
note. 

{(■)  In  Lloyd  v.  l\Iatmd,  2  T.  B.  700,  the 
acknowledgment  was  contained  in  a  letter, 


en.  VI.] 


STATUTE    OF   LIMITATIONS. 


349 


It  is  not  necessary  that  the  acknowledgment  should  be  of 
any  precise  amount ;  (/)  but  if  there  be  an  admission  of  any 
debt,  and  of  legal  liability  to  pay  it,  evidence  may  be  connected 
with  this  admission  to  show  the  amount ;  (g-)  and  even  if  the 
parties  differ  as  to  the  amount,  an  admission  of  the  debt  may 
remove  the  bar  of  the  statute,  (h)  But  the  acknowledgment 
must  not  be  of  a  mere  general  indebtedness,  (i)  It  must  be,  on 
the  one  hand,  broad  enough  to  include  the  specific  debt  in  ques- 
tion, (J)  and  on  the  other,  sufficiently  precise  and  definite  in  its 
terms  to  show  that  this  debt  was  the  subject-matter  of  the  ac- 
knowledgment, (k)  So  a  general  direction  to  pay  debts,  or  a 
general  provision  for  their  payment,  does  not  operate  as  a  new 
promise  by  the  testator ;  (/)  and  an  acknowledgment,  to  revive 
a  debt,  should  in  fact  amount  to,  or  imply  a  promise  to  pay  it.  (la) 


and  yet  tlie  question  whether  the  acknowl- 
edgment was  sutficient  was  submitted  to 
the  jury.  T!ie  same  course  was  pursued 
in  Frost  v.  Bcngougii,  1  Bing.  266 ;  and 
in  Bird  v.  Gammon,  3  Bing.  N.  C.  883, 
Avhere  the  like  course  was  pursued,  and  a 
new  trial  was  moved  for,  on  that  among 
other  grounds,  Thukil,  C.  J.,  said:  "The 
first  objection  taken  for  the  defendant  is, 
that  it  was  left  to  the  jury  to  f^ay  what 
was  the  effect  of  the  letter.  But  by  a 
chain  of  cases,  from  Lloyd  v.  Maund  to 
Frost  V.  Bengough  and  others,  it  appears 
tiiat  such  has  l)ecn  the  constant  course." 
But  the  authority  of  these  cases  was  much 
sliaken,  if  not  entirely  overthrown,  by  the 
case  of  Morrell  v.  Frith,  3  M.  &  W.  402. 
See  cn^te,  p.  4  and  .5.  And  see  Clarke  v. 
Dutcher,  9  Cowen,  674  ;  Chapin  v.  War- 
den, 1.5  Vt.  560;  Martin  v.  Broach,  6  Ga. 
21  ;  Love  v.  Hackett,  id.  486  ;  Watkins  v. 
Stevens,  4  Barb.  168. 

(/)  Thus,  in  Dickinson  v.  Hatfield,  1 
Moody  &  II.  141,  Lord  Tenterdcn  ruled  that 
a  promise  to  pay  "  the  balance"  due,  is  suf- 
ficient to  take  a  case  out  of  the  statute  of 
limitations,  although  no  mention  is  made 
of  tlie  amount  of  the  balance.  And  see, 
to  the  same  effect,  Lechmcre  i\  Fletcher, 
1  Cromp.  &  M.  623;  Bird  v.  Gammon,  3 
Bing.  N.  C.  883;  Waller  ??.  Lacv,  1  Man. 
&  G.  54 ;  Gardner  r.  M'Mahon,  3  Q.  B. 
561  ;  Williams  v.  GriflSth,  3  Exch.  335; 
Hazlebaker  v.  Reeves,  12  Penn.  St.  264; 
Davis  r.  Steiner,  14  id.  275  ;  Dinsmore  v. 
Dinsmore,  21  Me.  433. 

(g)  Cheslyn  v.  Dalby,  4  Young  &  C. 


238  ;  Spong  v.  Wright,  9  M.  &  W.  629  ; 
Barnard  v.  Bartholomew,  22  Pick.  291. 
See  also  cases  cited  in  preceding  note. 
But  see  Kittredge  v.  Brown,  9  N.  H. 
377. 

(A)  Colledge  v.  Horn,  3  Bing.  119; 
Gardner  v.  M'Mahon,  3  Q.  B.  561.  See 
CoUis  V.  Stack,  1  H.  &  N.  605. 

(;)  Moore  r.  Hyman,  13  Ired.  272; 
Shaw  V.  Allen,  1  Busbee,  58  ;  McBride  v. 
Gray,  id.  420 ;  Bobbins  v.  Farley,  2 
Strobh.  348;  Harbold  v.  Kuntz,  16  Penn. 
St.  210;  Shitler  v.  Bremer,  23  id.  413; 
Zaeharias  v.  Zacharias,  id.  452 ;  Bucking- 
ham V.  Smith,  23  Conn.  453. 

(j)  Barnard  v.  Bartholomew,  22  Pick. 
291. 

[k)  Id. ;  Stafford  v.  Bryan,  3  Wend, 
532;  Arey  v.  Stephenson,  11  Ired.  86; 
Martin  v."  Broach,  6  Ga.  21  ;  Clarke  v. 
Dutcher,  9  Cowen,  674;  Suter !'.  Sheeler, 
22  Penn.  St.  308.  But  if  only  one  debt 
is  shown  to  exist,  the  acknowledgment 
will  be  presumed  to  i-efer  to  that.  Wood- 
bridge  V.  Allen,  12  Met.  470;  Guy  v. 
Tams,  6  Gill,  82. 

(/)  Bloodgood  V.  Bruen,  4  Sandf  427  ; 
Roosevelt  v.  Mark,  6  Johns.  Ch.  266; 
Carrington  v.  Manning,  13  Ala.  611; 
Braxton  v.  Wood,  4  Gratt.  25  ;  ilurray 
V.  Mechanics  Bank,  4  Edw.  Ch.  567 ; 
Walker  v.  Campbell,  1  Hawks,  304 ; 
Freake  v.  Cranefeldt,  3  Mylne  &  C.  499  ; 
Evans  v.  Tweedy,  1  Beav.  55. 

(hi)  Rackham  v.  Marriott,  1  H.  &  N. 
234  ;  Sldwell  v.  Mason,  2  H.  &  N.  306. 

[375] 


850* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


As  the  acknowledgment  must  be  such  as  to  be  equivalent  to 
a  promise,  if  it  be  in  other  resjDects  full  and  complete,  but  *is 
expressly  guarded  and  qualified  by  the  maker  so  that  it  nega- 
tives a  promise,  or  cannot  be  construed  into  a  promise,  it  is  not 
sufficient,  (m)  As  if  the  debtor  says,  "  I  know  that  T  owe  the 
money,  but  I  have  a  legal  defence,  and  will  not  pay  it,"  this  is 
not  enough  to  prevent  the  operation  of  the  statute ;  (n)  and 
therefore  we  say  that  the  acknowledgment  must  be  not  only  of 
the  debt,  but  of  a  legal  liability  to  pay  the  debt.  It  is  true  that 
the  naked  acknowledgment  of  the  debt  implies,  and,  as  it  were, 
contains,  an  acknowledgment  of  legal  liability ;  but  there  is  no 
room  for  this  implication,  where  this  liability  is  denied  and  ex- 
cluded;  because  the  statute  is  not  one  of  presumption,  but  of 
repose.  Therefore,  also,  the  acknowledgment  may  be  condi- 
tional, or  subject  to  whatever  qualification  the  debtor  thinks 
proper  to  make.  And  in  that  case,  the  acknowledgment  be- 
comes a  new  promise,  or,  in  other  words,  the  bar  of  the  statute 
is  removed,  only  when  the  creditor  can  show  that  the  condition 
has  been  performed;  or  that  the  event  has  happened,  or  the 
time  arrived,  by  a  reference  to  which  the  acknowledgment  was 
qualified,  (o)  But  it  does  not  seem  to  be  necessary,  even  in 
England   where  pleading  is  more  exact  than  here,  to  declare 


(m)  In  Tanner  v.  Smart,  6  B.  &  C. 
609,  Lord  Tcnii-rdm  said  :  "  U])on  a  gen- 
eral acknowledgment,  where  nothing  is 
said  to  prevent  it,  a  general  promise  to 
pay  may  and  oiiglit  to  lie  implied  ;  hut 
where  tiic  party  guards  his  aeknowledg- 
mcnt,  and  accompanies  it  with  an  express 
declaration  to  prevent  any  such  implica- 
tion, why  shall  not  the  rule  '  express  urn 
fnr.lt,  ccssiire  larifnrn  '  apply  ?  "  And  sec 
Mitciicil  V.  Srlhnan,  5  Md.  .'370,  and  the 
cases  cited  uiili'.,  345,  n.  {(■). 

(n)  A'Court  i\  Cross,  .'i  Hing.  .'$29.  In 
this  case  the  defendant  being  arrested  on 
a  debt  more  than  six  years  old,  said  :  "  [ 
know  that  I  owe  tlie  money,  hut  the  hill  I 
{^iivc  is  on  a  tiirec  ))cnny  receipt  stani]), 
nnd  I  will  never  pay  it;"  and  this  was 
fteld  not  such  an  acknowledgment  as 
would  revive  the  d<!l)t  against  a  jiica  of  the 
Statute  of  limitations.  And  llisl,  V,.  J., 
said  :  "  Then;  are  many  cases  from  which 
it  mny  be  collected,  that  if  there  he  any 

[.'57(;] 


thing  said  at  the  time  of  the  acknowledg- 
ment to  repel  the  inference  of  a  promise, 
the  acknowledgment  will  not  take  a  case 
out  of  the  statute  of  limitations."  So  in 
Danforth  r.  Culver,  11  Johns.  14G,  which 
was  an  action  on  a  promissory  note,  to 
which  the  statute  of  limitations  was  ])lead- 
ed,  it  appeared  that  within  a  year  of  the 
trial  and  after  the  commencement  of  the 
suit,  the  defendant,  oti  being  showti  the 
note,  admitted  tiiat  he  had  executed  it, 
but  said  it  was  outlawed,  and  that  he 
meant  to  avail  himself  of  the  statiitc  of 
limitations;  and  this  was  held  not  to  ho 
suflicient  (n'iilence  of  a  promise  to  pay 
within  six  years.  And  see  Douglass  v. 
J';ikius,  8  Foster,  20. 

{())  Tomi>kins  c.  Brown,  1  Dcnio,  247  ; 
Hill  r.  Kendall,  25  Vt.  528;  Ilumiihreys 
V.  Jones,  14  M.  &  \V.  1  ;  Butterliehrf?. 
Jacobs,  15  N.  II.  140;  Bullock  v.  Smith, 
15  (ia.  ."595.  And  see  cases  cited  ante,  p. 
345,  n.  (r). 


en.  VI.]  STATUTE   OF   LIMITATIONS.  *351-*352 

upon  the  promise  as  conditional,  (oa)  If  an  acknowledgment 
be  on  its  face,  or  in  its  direct  meaning,  full  and  unconditional, 
it  is  competent  to  show,  by  other  admissible  evidence,  as  of  the 
res  gestcCy  that  it  was  not  intended  as  an  acknowledgment,  but 
for  a  different  purpose.  (/?)  And  by  parity  of  reason,  it  w^ould 
*seem  to  be  competent  to  show  that  doubtful  expressions  were 
meant  and  understood  by  the  parties  to  operate  as  a  condition 
or  qualification.  So,  if  an  acknowledgment  be  made  and  at 
the  same  time  a  discharge  of  the  debt  be  given,  the  acknowl- 
edgment is  of  no  force,  although  the  discharge  be  void,  [pa) 

The  acknowledgment  must  be  voluntary ;  [q)  but  whether 
this  applies  to  admissions  made  under  process  of  law^,  as  by  a 
bankrupt  on  his  examination,  is  not  quite  certain;  but  the  pres- 
ent weight  of  authority  is,  perhaps,  in  favor  of  the  sufficiency 
of  this  acknowledgment,  (r)  We  should  doubt,  however, 
whether  this  bare  acknowledgment  ought  to  be  held  as  the 
equivalent  of  a  new  promise. 

It  is  uncertain  whether  every  new  item  and  credit  in  a  mu- 
tual and  running  account,  given  by  one  party  to  the  other,  is  an 
admission  and  acknowledgment  of  an  unsettled  account,  and 
evidence  of  a  promise  to  pay  the  balance,  whatever  that  ac- 
count and  balance  may  appear  to  be,  so  as  to  take  the  whole 
account  out  of  the  statute.  The  affirmative  of  this  question  is 
maintained  by  numerous  decisions  ;  {s)    but  we  *think   these 

(oa)  Irving  v.  Veitch,  3  M.  &  W.  90;  acknowledgment  of  a  debt,  to  prevent  the 
Edmunds  u.  Downes,  2  Cromp.  &  M.  459,  operation  of  the  statute  of  limitations, 
4  Tj-rw.  1 73 ;  Haydon  v.  Williams,  7  Bing.  must  at  least  be  consistent  with  a  promise 
168,  4  Moore  &  P.  811;  Gardner  v.  to  pay.  This  is  the  law  in  Pennsylvania. 
M'Mahon,  3  Q.  B.  561.  The  acknowledgment  in  defendant's  peti- 
(p)  Cripps  V.  Davis,  12  M.  &.  W.  159.  tion  for  the  benefit  of  the  insolvent  laws 
(}Ki)  Goate  V.  Goate,  1  H.  &  N.  29.  is  not  of  this  character,  for  the  very  basis 
(q)  Arnold  v.  Downing,  11  Barb.  554.  on  which  an  insolvent  asks  his  discharge 
(r)  In  Eicke  v.  Nokes,  1  Moody  &  R.  is  that  he  is  unable  to  pay  his  debts.  How 
359,  it  was  held  that  an  entry,  in  a  bank-  this  can  be  tortured  into  a  promise  to  pay, 
rupt's  examination,  of  a  certain  sura  being  or  as  being  consistent  with  such  a  prom- 
due  to  A,  is  a  sufficient  acknowledgment  ise,  we  are  at  a  loss  to  discover."  And 
to  take  the  case  out  of  the  statute  of  limi-  see,  to  the  same  effect,  Christie  v.  Flem- 
tations.  But  in  Brown  v.  Bridges,  2  ington,  10  Penn.  St.  129.  See  further. 
Miles,  424,  wliere  A  and  B,  being  indebt-  Kennett  v.  Milbank,  8  Bing.  38 ;  Well- 
ed to  C,  filed  their  petition  for  the  benefit  man  v.  Southard,  30  Me.  425  ;  Pott  v. 
of  the  insolvent  laws,  in  which  they  stated,  Clegg,  16  M.  &  W.  321. 
in  their  schedule  of  debts,  the  debt  due  to  (s)  A  leading  case  upon  this  point  is 
C;  it  was  held  that  this  was  not  a  suffi-  Catling  v.  Skoulding,  6  T.  R.  189.  It 
cient  acknowledgment  to  take  the  debt  out  was  there  held,  that  if  there  be  a  mutual 
of  the  statute.    And  the  court  said  :  "An  account  of  any  sort  between  the  plaintiff 

32*  [377] 


353* 


THE  -LAW   OF    CONTRACTS. 


[part  II. 


decisions  are  inconsistent  with  the  views  which  now  prevail  in 
regard  to  new  promises  and  *  acknowledgments  ;  and  we  doubt 


and  defendant,  for  any  item  of  which 
credit  has  been  j^iven  within  six  years, 
that  is  evidence  of  an  acknowledgment  of 
there  being  such  an  open  account  between 
the  parties,  and  of  a  promise  to  pay  the  bal- 
ance, so  as  to  take  the  case  out  of  the  stat- 
ute of  limitations.  And  Lord  Kewjon  said, 
"  It  is  not  doubted  but  that  a  promise  or 
acknowledgment  within  six  years  will  take 
the  case  out  of  the  statute  ;  and  the  only 
question  is,  whether  there  is  not  evidence 
of  an  acknowledgment  in  the  present  case. 
Here  are  mutual  items  of  account ;  and 
I  take  it  to  have  been  clearly  settled,  as 
long  as  I  have  any  memory  of  the  prac- 
tice of  the  courts,  that  every  new  item 
and  credit  in  an  account,  given  by  one 
party  to  the  other,  is  an  admission  of  there 
being  some  unsettled  account  between 
them,  the  amount  of  which  is  afterwards 
to  be  ascertained  ;  and  any  act  which  the 
jury  may  consider  as  an  acknowledgment 
of  its  being  an  open  account,  is  sutRcient 
to  take  the  case  out  of  the  statute.  Daily 
experience  teaches  us  that  if  this  rule  be 
now  overturned,  it  will  lead  to  infinite  in- 
justice." Perhaps  this  decision  is  consist- 
ent with  the  views  then  prevailing  in  re- 
spect to  new  promises  and  acknowledg- 
ments ;  but  it  is  submitted  that  it  cannot 
be  sustained  upon  principle,  since  the  de- 
cision in  Tanner  r.  Smart  in  England, 
and  Bell  ?'.  Morrison  in  this  country. 
And  this  is  the  view  adopted  by  the  Su- 
perior Court  of  New  Hampshire,  in  Blair 
V.  Drew,  6  N.  II.  235;  though  some  of 
the  reasoning  of  Par/ccr,  J.,  goes  even  fur- 
ther. In  delivering  the  judgment  of  the 
court,  he  says  :  "  Upon  what  principle  is 
it,  that  a  sale  of  an  article  upon  credit  is 
an  admission  of  any  thing  else  except  that 
the  subject-matter  of  that  transaction  had 
existence  ?  Upon  what  principle  docs  it 
admit  the  existence  of  an  unsettled  ac- 
count upon  the  other  side,  or  draw  after 
it  any  thing  else?  If,  in  the  nature  of 
things,  there  could  not  be  an  account  con- 
sisting of  a  single  item,  it  might  well  bo 
Hflid  that  the  charge  of  one  item  was  an 
admission  of  sometliing  more.  If,  in  the 
ordinary  transaction  of  business,  there 
could  not  lie  an  account  upon  one  side, 
without  an  account  upon  the  other  to  iial- 
ancc  it,  in  whole  or  in  ])art,  there  would 
ho  some  fi)undalion  for  such  a<lniission. 
But  every  day's  experience  negatives  all 
this;  accounts  exist  upon  one  side  only  ; 

[378] 


and  of  no  more  than  a  single  item.  The 
purchase  is  made  —  the  credit  is  given  — 
and  this  is  all  the  dealing  between  the 
parties.  Many  of  the  decisions  upon  the 
statute  of  limitations,  much  controverted, 
if  not  exploded,  were  founded  on  the  as- 
sumption, that  the  statute  was  based  upon 
a  presumption  of  payment,  and  of  conse- 
quence any  admission  that  the  del>t  was 
unpaid  rebutted  the  jjrcsumption  and  took 
the  case  out  of  the  statute.  Granting  the 
premises,  the  conclusion  followed  well 
enough.  But  even  upon  that  view  of  the 
statute,  the  position  is  wholly  untenable 
that  an  item  of  credit  constitutes  an  ad- 
mission of  another  preexisting  debt  upon 
the  other  side,  and  an  admission,  more- 
over, that  it  has  not  been  paid.  Aside 
from  the  statute  of  limitations,  such  doc- 
trine of  admission  would  receive  no  coun- 
tenance whatever.  No  jurist  would  ever 
argue,  that  because  he  had  proved  one 
item  of  account,  it  was  any  evidence  from 
which  a  jury  might  infer  and  find  other 
distinct  and  independent  items.  Still  less 
would  it  be  contended  that  an  account, 
proved  by  the  plaintiff,  was  an  admission 
which  furnished  evidence  in  favor  of 
another  account  of  independent  items, 
oflFcred  by  the  defendant,  or  that  it  was 
of  any  weight  to  prove  the  defendant's  ac- 
count, even  in  connection  with  other  evi- 
dence. And  if  it  furnishes  no  evidence  of 
admission,  in  such  case,  it  can  raise  no 
fair  admission  as  against  the  statute.  No 
admission,  then,  of  any  account  upon  the 
other  side,  can  be  fairly  inferred  from  the 
act  of  making  a  charge  on  account  against 
any  individual.  It  is  no  admission  of  an 
unsettled  account,  beyond  the  very  charge 
itself.  It  does  not  imply  that  the  party 
giving  tlie  credit  has  any  other  item  of 
claim  against  tlie  ])arty  charged.  Still 
less  docs  it  imply  that  the  i)arty  against 
whom  the  charge  is  made,  has  an  account 
to  balance  it,  in  whole  or  in  ])art.  It  is 
of  itself  a  distinct  and  independent  trans- 
action ;  and  it  might  with  just  as  much 
propriety  1)0  said  that  a  jiarty  making  a 
charge  of  an  item  of  account,  thereby  ad- 
mits that  it  is  paid,  in  whole  or  in  part, 
as  to  say  that  he  thereby  admits  the  ex- 
istence of  an  unsettled  account  against 
himself.  Nay,  it  would  be;  safer  for  the 
individual  to  hold  him  as  making  such  an 
admission,  which  could  extend  no  further 
thaii  in   discharge  of  the  demand  which 


CH.  VL] 


STATUTE    OF   LIMITATIONS. 


553 


whether  they  would  be  followed  in  any  jurisdiction  where  the 
question  is  still  open. 


SECTION   III. 

OF   PART   PAYMENT. 

A  part  payment  of  a  debt  has  always  been  held  to  take  it 
out  of  the  statute ;  (/)  the  six  years  being  counted  from   such 


constituted  the  acknowledgment ;  where- 
as, holding  the  admission  to  extend  to  an 
unsettled  account  against  himself,  may 
subject  him,  in  connection  with  fahricated 
evidence,  or  from  a  loss  of  vouchers  or 
testimony,  to  the  payment  of  pretended 
claims  upon  the  other  side,  of  an  amount 
vastly  beyond  the  small  item,  by  tlie 
charge  of  which  ho  has  drawn  down  such 
consequences  ujion  himself.  We  cannot 
deem  it  any  objection  to  our  reasoning 
upon  this  subject,  that  there  may  be  cases 
where  an  account  upon  one  side  may  be 
recovered,  while  one  upon  the  other  side 
of  older  date  is  barred.  If  it  be  so  it  will 
arise  from  the  ktchcs  of  the  party.  If  ar- 
ticles upon  one  side  are  delivered  in  pay- 
ment of  a  prior  existing  account  upon  the 
other,  the  delivery  raises  no  cause  of  ac- 
tion. If  not  delivered  in  payment,  each 
account  is  distinct  and  independent,  as 
much  so  as  promissory  notes  held  upon 
the  one  side  and  tiie  other ;  and  there  is 
as  much  reason  why  a  ])arty  should  not 
avail  himself  of  an  account,  which  is  liar- 
red  by  the  statute,  in  discharge  of  another 
account  due  from  him,  and  to  which  he 
has  no  other  defence,  as  there  is  that  he 
should  not  avail  himself  of  a  promissory 
note  whicii  is  barred,  in  the  same  way,  or 
that  he  should  not  recover  that,  or  any 
other  demand  which  is  barred,  in  an  inde- 
pendent suit  upon  the  demand  itself.  Wc 
have  endeavored  to  examine  this  subject 
with  all  the  care  and  attention  wliich  the 
importance  of  the  principle  involved,  and 
a  high  respect  for  the  learned  tribunals 
whose  decisions  have  been  adverse  to  the 
opinion  now  expressed,  demand  of  us. 
Consistently  with  the  principles  of  re- 
peated decisions  in  this  court,  that  in  or- 
der to  raise  a  new  promise  by  implication 
from  an   acknowledgment,  it  must   con- 


tain a  direct  and  unqualified  admission 
of  a  subsisting  debt,  which  the  party  is 
liable  and  willing  to  pay  ;  we  cannot  hold 
that  one  item  in  an  account  has  of  itself 
any  force  or  ctTect  to  take  other  items, 
which  would  otherwise  be  barred,  out  of 
tiie  statute."  See  also,  Livermore  v. 
Rand,  G  Foster,  85.  And  the  same  view 
is  adopted  in  Kentucky.  Lansdale  v.  Bra- 
shear,  3  T.  B.  Mon.  330;  Smith  v.  Daw- 
son, 10  B.  Mon.  112.  And  in  Tennessee. 
Craighead  v.  The  Bank,  7  Yerg.  399. 
But  it  must  be  admitted  that  the  main 
current  of  American  decisions  is  still  in 
accordance  with  Catlin  v.  Skoulding. 
See  Kimliall  v.  Brown,  7  Wend.  322; 
Chaml)erlin  v.  Cuyler,  9  id.  126  ;  Sickles 
V.  Mather,  20  id.  72;  Todd  v.  Todd,  15 
Ala.  743;  Wilson  v.  Calvert,  18  id.  274; 
Cogswell  V.  DoUiver,  2  Mass.  217  ;  Davis 
V.  Smith,  4  Greenl.  337  ;  Abbott  v.  Keith, 
11  Vt.  529;  Hodge  v.  Manly,  25  id.  210. 
But  see  the  opinions  of  the  learned  judges 
in  the  two  last  cases.  In  England  this 
question  was  set  at  rest  by  Lord  Tenter- 
den's  act,  very  soon  after  Tanner  v.  Smart 
was  decided.  See  Williams  v.  Griffiths, 
2  Cromp.,  M.  &  11.  45 ;  Mills  v.  Fowkes, 
7  Scott,  444  ;  Cottam  v.  Partridge,  4 
Scott,  N.  R.  819.  Care  must  be  taken 
not  to  confound  the  above  cases  with 
cases  concerning  "  merchants'  accounts," 
which  we  shall  consider  hereafter. 

(0  Whipple  V.  Stevens,  2  Foster,  219. 
In  tliis  case  the  court  say  :  "  It  is  well 
settled  that  a  partial  payment  of  a  debt 
amounts  to  an  acknowledgment  of  a  pres- 
ent subsisting  debt,  which  the  party  is  lia- 
ble and  willing  to  pay ;  from  which,  in 
the  absence  of  any  act  or  declaration  on 
the  part  of  the  i^arty  making  the  payment, 
inconsistent  with  tlic  idea  of  a  liability 
and  willingness  to  pay,  a  jury  may  and 

[  379  ] 


354* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


payment.  And  this  is  so,  though  the  payment  is  made  by 
goods  or  chattels,  which  it  is  agreed  shall  be  given  and  received 
as  payment,  (it)  And  even  where  the  debtor  gives  the  creditor 
his  negotiable  promissory  note  or  bill  of  exchange,  on  account 
of  a  larger  debt,  (v)  it  is  held  to  operate  *as  part  payment.     It 


onglit  to  infer  a  new  promise."  And  see 
Stump  V.  Henry,  6  Aid.  201,  and  cases 
cited  infra.  And  part  paj-mcnt  to  an  ad- 
ministrator has  the  same  effect  to  extend 
the  statute  as  if  made  to  the  debtor  In'm- 
self.  Baxter  v.  Penniman,  8  Mass.  1.34; 
Bodger  v.  Arch,  10  Exch.  333,  28  Eng. 
L.  &  Eq.  464. 

ill)  Hart  V.  Nash,  2  Cromp.,  M.  &  R. 
337  ;  Hooper  r.  Stephens,  4  A.  &  E.  71  ; 
Cottam  V.  Partridge,  4  Scott,  N.  R.  819. 

(r)  Tliis  was  decided  in  IMassachusetts, 
in  the  case  of  Ilsiey  v.  Jewett,  2  Met.  168. 
But  the  decision  was  put  upon  the  ground 
that  in  that  State  the  giving  of  such  note 
or  bill  is  prima,  facie  evidence  of  payment 
and  discharge  of  the  debt  for  which  it  is 
given.  A  simihir  decision,  however,  has 
been  made  in  tlie  recent  case  of  Turney  i'. 
Dodwell,  3  Ellis  &  B.  136,  24  Eng.  L.  & 
Eq.  92,  in  England,  where  no  such  rule 
prevails.  That  was  an  action  by  the 
plaintiff,  as  payee  of  a  promissory  note 
against  the  defendant,  as  maker.  The 
defendant  pleaded  the  statute  of  limita- 
tions. It  appeared  upon  the  trial  that 
the  defendant,  being  indebted  to  the  plain- 
tiff, on  the  ."jth  of  May,  1843,  gave  to 
him  the  note  sued  on,  "for  108/.  1.5s.  In 
February,  1848,  the  defendant,  having 
been  jjressed  to  pay  part  of  the  debt,  ac- 
cepted a  bill  of  excliangc,  drawn  upon 
liim  by  the  ])laintitr,  for  30/.,  in  part  pay- 
ment of  the  i)romissory  note.  And  this 
was  held  sufficient  to  take  the  note  out  of 
the  statute  of  limitations.  Lord  Camjibell, 
in  delivering  the  judgment  of  the  court, 
said ;  "  The  only  question  in  this  case 
was,  whether  a  jiart  ))ayment  by  a  bill  of 
exchange,  drawn  by  the  plaiiitiir  and  ac- 
cepted by  the  defendant,  was  sufficient  to 
take  the  case  out  of  the  statute  of  limita- 
tions. The  circumstances  under  which 
the  acceptance  was  ^ivcn,  were  such  as  to 
show  that  the  jiayinciit  was  made  as  a 
part  payment  of  the-  whole  amount  due, 
80  lis  lo  raise  the  implication  of  a  fresh 
promise,  and  tlierefore,  to  be  an  answer 
to  the  dcfenrc  of  the  statute  of  limita- 
tions, if  th(!  part  payment  by  bill  were  a 
part  payment  within  the  'J  Geo.  4,  c.  14. 

[  ;J80  ] 


It  was  said,  on  the  part  of  the  defendant, 
and  we  think  correctly,  that  we  ought  to 
assume  that  the  payment  in  question  was 
not  an  absolute  payment  in  satisfaction, 
so  as  to  be  a  discharge  if  the  bill  were 
dishonored.  If  the  payment  had  been 
one  of  absolute  satisfaction,  no  question 
could  have  arisen ;  and  we  have,  there- 
fore, to  consider  whether  the  pajmient 
in  the  usual  manner  in  which  bills  of  ex- 
change are  given  and  taken  in  payment 
is  a  payment  within  the  proviso  of  the  9 
Geo.  4,  c.  14,  by  which  the  effect  of  part 
payment  is  preserved.  The  counsel  for 
the  defendant  referred  us  to  the  case  of 
Gowan  v.  Forster,  3  B.  &  Ad.  507,  where 
a  doubt  was  expressed  as  to  wiiethcr  the 
drawing  of  a  bill  was  a  sufficient  acknowl- 
edgment, within  the  9  Geo.  4,  c.  14,  and 
to  the  case  of  Foster  v.  Dawber,  6  Exch. 
839,  where  the  Court  of  Exchequer 
thought  that  under  the  circumstances  no 
promise  to  pay  any  balance  could  be  im- 
plied in  the  particular  case ;  but  there  is 
nothing  to  show  that  they  thought  that 
a  pait  payment  by  bill,  might  not  be  an 
acknowledgment,  to  take  the  case  out  of 
the  statute  of  limitations,  as  to  the  re- 
mainder. On  the  other  hand,  in  the  case 
of  Irving  v.  Veitch,  3  M.  &  W.  90,  the 
expressions  used  l)y  the  learned  barons 
lead  us  to  suppose  that  they  thought  such 
part  payment  by  bill  sufficient.  In  both 
Gowan  v.  Forster,  and  Irving  v.  Veitch,  it 
was  unnecessary  to  determine  the  point 
now  in  question,  as  the  courts  most  prop- 
erly held  that  the  acknowledgment,  if  any, 
was  at  the  time  of  delivering  the  bills  in 
part  payment,  and  not  at  their  subsequent 
jiayment  by  the  ]iartics  on  whom  the  bills 
in  those  cases  were  drawn.  At  the  trial, 
in  the  jiresent  case,  the  Lord  Chief  Justice 
of  the  Common  Pleas  held,  that  the  part 
payment  was  sufficient  to  take  the  case 
out  of  the  statute  of  limitations,  and  we 
entirely  concur  in  that  ruling.  Before  the 
statute  9  Geo.  I V.  such  a  part  payment  was 
clearly  sufficient  to  take  the  case  out  of 
tiie  statute  of  limitations,  as  amounting  to 
an  acknowledgment  of  the  balance  being 
<luc ;   and   the   real  question  is,  whether 


en.  VI.] 


STATUTE    OF   LIMITATIONS. 


*3o5 


must,  however,  be  certain,  that  payment  is  made  only  as  a  part 
of  a  larger  debt ;  for  in  the  *absence  of  conclusive  testimony,  it 
will  not  be  deemed  an  admission  of  any  more  debt  than  it 
pays,  (w) 


such  paymont  by  bill,  though  not  received, 
in  absolute  satisfaction,  is  not  a  payment 
within  the  proviso  in  that  statute.  The 
eft'ect  of  giving  a  bill  of  exchange,  on  ac- 
count of  a  debt  is  laid  down  by  Maiile,  J., 
in  the  recent  case  of  Belshaw  v.  Bush,  1 1 
C.  B.  191,  ap]) roving  the  doctrine  of  the 
Court  of  Exchequer,  in  Griffiths  v.  Owen, 
13  M.  &  W.  58,  and  of  Aldcrson,  B.,  in 
James  v.  Williams,  13  51.  &  W.  833.  In 
all  those  authorities  such  a  delivery  of  a 
bill  is  laid  down  as  a  conditional  payment. 
Wc  do  not  sec  why  its  immediate  opera- 
tion, as  an  acknowledgment  of  the  balance 
of  the  demand  being  due,  is  at  all  affected 
by  its  operation  as  a  payment  being  liable 
to  be  defeated  at  a  future  time.  The  stat- 
utes intending  to  make  a  distinction  be- 
tween mere  acknowledgments,  by  word  of 
mouth,  and  acknowledgments  proved  by 
the  act  of  payment,  it  surely  cannot  be 
material  whether  such  payment  may  after- 
wards be  avoided  by  the  thing  paid 
turning  out  to  be  worthless.  The  inten- 
tion and  the  act  by  which  it  is  evinced  re- 
main the  same.  Wc  think  that  the  word 
'  payment'  must  be  taken  to  be  used  by 
the  legislature  in  a  popular  sense,  and  in  a 
sense  large  enough  to  include  the  sjiecies 
of  payment  in  question;  and  we  should 
think  the  acknowledgment  of  liability  as 
to  the  remainder  of  the  debt  not  at  all 
altered  by  the  fact  of  the  notes,  by  which 
it  was  paid,  turning  out  to  be  forged,  or 
of  the  coin  turning  out  to  be  counterfeit. 
In  all  these  eases,  the  force  of  the  ac- 
knowledgment is  the  same,  and  the  pay- 
ment is,  we  think,  a  sufficient  payment 
within  the  words  of  the  9  Geo.  IV.  In 
Maillard  v.  The  Duke  of  Argylc,  6  Man. 
&  G.  40,  the  Court  of  Common  Pleas  dis- 
tinctly held,  that  the  word  '  payment,'  as 
api)licable  to  a  transaction  of  this  kind, 
even  when  used  in  a  plea,  did  not  mean 
payment  in  satisfaction,  but  might  be 
treated  as  used  in  its  popular  sense;  and 
Maule,  J.,  in  that  case,  says,  '  that  "  pay- 
ment" is  not  a  technical  word;  it  has 
been  imported  into  law  proceedings  from 
the  exchange,  and  not  from  law  treatises.' 
When  you  speak  of  paying  by  cash,  that 
means  in  satisfaction,  but  when  by  bill, 
that  does   not  import  satisfaction  unless 


the  bill  is  ultimately  taken  up.  In  Bel- 
shaw V.  Bush,  the  Lord  Chief  Justice  .of 
the  Common  Pleas,  in  speaking  of  a  trans- 
action of  this  nature,  says  :  '  The  real  an- 
swer is,  that  upon  this  record  you  have 
been  paid  your  debt ; '  and  in  the  very 
report  now  before  us,  the  learned  Lord 
Ciiief  Justice  calls  the  present  transaction 
a  part  jiayment.  In  mercantile  transac- 
tions, nothing  is  more  usual  than  to  stipu- 
late for  a  payment  by  bills,  where  there  is 
no  intention  of  their  being  taken  in  abso- 
lute satisfaction.  We  are  satisfied  that  a 
transaction  of  this  nature  is  properly  de- 
scribed by  the  word  '  payment,'  and  that 
it  is  clearly  within  the  class  of  acknowl- 
edgments intended  to  be  unaffected  by  the 
statute ;  and  we  are  satisfied  that  there  is 
no  reason  whatever  to  restrict  the  expres- 
sion in  the  statute  to  tliat  species  of  pay- 
ment which  imports  a  final  satisfaction. 
The  defendant's  case,  which  rested  en- 
tirely on  the  proviso  in  the  9  Geo.  IV.  being 
so  restricted,  therefore  fails  in  its  founda- 
tion ;  and  we  think  that  where  a  bill  of 
exchange  has  been  so  delivered  in  pay- 
ment, on  account  of  tlie  debt,  as  to  raise 
an  implication  of  a  promise  to  pay  the 
balance,  the  statute  of  limitations  is  an- 
swered, as  from  the  time  of  such  delivery, 
whatever  afterwards  takes  place  as  to  the 
bill." 

[w)  Tippets  y.  Heane,!  Cromp.,M.  &R. 
252.  This  was  an  action  of  assumpsit,  for 
meat,  lodging,  &c.,  furnished  by  the  plain- 
tiff for  the  defendant's  son.  The  defend- 
ant pleaded  the  general  issue.  At  the 
trial,  before  Vnughan,  B.,  the  plaintiff,  to 
take  the  case  out  of  the  statute,  proved  by 
one  A  B  that  he  had  paid  10/.  to  the 
plaintiff,  by  tlie  direction  of  the  defendant, 
in  the  year  1829  ;  but  he  could  not  speak 
to  the  account  on  which  it  was  paid,  or 
give  any  evidence  beyond  the  mere  fiict  of 
having  paid  the  money  1)}'  the  defendant's 
direction.  The  learned  Baron  left  it  to 
the  jury  to  say,  whether  the  10/.  was  paid 
on  account  of  the  debt  in  question ;  and 
observed  to  them  that  no  other  account 
was  proved  to  have  existed  between  the 
parties.  The  jury  having  foi-ind  a  verdict 
for  the  plaintiff,  the  Court  of  Exchequer 
granted  a  new  trial,  on  the  ground  that 

[381] 


356 


THE  LAW   OF   CONTRACTS. 


[part  II. 


If,  therefore,  a  debtor  owes  his  creditor  several  debts,  some 
of  which  are  barred  by  the  statute  of  limitations,  and  some  are 
not,  and  pays  a  sum  without  appropriating  it  to  any  particular 
debt,  although  the  creditor  can  appropriate  the  sum  so  paid  to 
the  debts  that  are  barred,  he  cannot  thereby  take  them  out  of 
the  operation  of  the  statute,  (x)  And  it  seems,  that  if  there  are 
two  clear  and  undisputed  debts,  both  of  which  are  barred  by 
the  statute,  and  money  is  paid,  but  not  appropriated  to  either 
debt  by  the  debtor,  the  creditor  cannot  appropriate  the  payment, 
and  thereby  take  the  debt  to  which  he  applies  it  out  of  the 
statute,  (/j)  But  if  one  of  the  debts  is  admitted,  the  jury  may 
apply  the  payment  to  that  debt,  rather  than  to  those  which  are 
disputed,  (z)  If,  however,  money  be  paid,  and  there  is  with  it 
an  acknowledgment  of  further  debt,  and  the  debtor  owes  but 
one  debt  to  the  creditor,  the  payment  will  be  applied  to  that 
debt,  without  words  of  appropriation  by  the  debtor,  and  will 
have  the  effect  of  part  payment,  (a)  But  if  payment  be  made, 
and  with  it  words  of  denial  or  refusal  as  to  the  debt,  or  the  resi- 
due of  it,  arc  used,  this  does  not  take  the  debt  out  of  the  stat- 


therc  was  no  sufficient  evidence  of  part 
payment  to  go  to  the  jury.  And  Parke, 
B.,  said  :  "  In  order  to  talvC  a  case  out  of 
the  statute  of  limitations,  by  a  part  pay- 
ment, it  must  appear,  in  the  first  place, 
that  the  payment  was  made  on  account  of 
a  debt.  Tliat  was  left  in  ambij^uity  in  the 
present  case.  Secondly,  it  must  appear 
that  the  payment  was  made  on  account  of 
the  debt  for  which  tin;  action  is  brought. 
Here,  the  evidence  does  not  show  any 
particular  account,  to  which  the  payment 
was  applicable.  The  jury  seem  to  have 
considered  it  as  a  payment  of  part  of  the 
debt  in  (piestion  ;  and,  perhaps,  as  there 
was  no  other  account  found  to  have  been 
in  existence  ix'twciMi  ijie  parties,  they 
mi;^lit  lie  warrantiMl  in  so  doiti;;.  15ut  the 
(uise  must  j^o  further;  for  it  is  necessary, 
in  the  third  jdace,  to  show  that  the  pay- 
ment was  made  as  part  ])aymcnt  of  a 
greater  debt,  Itccausc  the  jtrinciple  upon 
which  a  part  payment  takes  a  case  out  of 
th(!  slaluli-  is,  that  it  admits  a  {.'rcatcr  di'iit 
to  be  due  at  iIk;  time  of  llie  part  |)aymcnt. 
UnlcHH  it  aitiount:^  to  an  admission  thai 
more  is  due,  it  cannot  operate  ns  an  ad- 
mission of  any  still  existin;;  dei)t.  Unless 
then,  in  the  present  case,  it  could  bo  col- 

[;582] 


lected  that  the  payment  was  in  part  of  a 
greater  debt,  the  statute  was  a  bar,  and 
there  being  no  evidence  from  which  a  jury 
were  warranted  in  coming  to  such  a  con- 
clusion, the  present  rule  must  be  made 
absolute."  And  sec  to  the  same  cfTect, 
Linsell  v.  Bonsor,  2  Bing.  N.  C.  241  ; 
Waters  v.  Tompkins,  2  Cromp.,  M.  &  R. 
726  ;  AVaugh  v.  Cope,  G  II.  &  W.  824  ; 
Wainman  r.  Kvnman,  1  Exch.  118; 
Davies  v.  Edwards,  7  id.  22  ;  Smith  v. 
Westmoreland,  12  Smedcs  &  M.  603; 
MeCullough  V.  Henderson,  24  Missis.  92; 
Alston  V.  State  Bank,  4  Eng.  45.') ;  State 
Bank  v.  Wooddy,  .5  id.  6.38;  Wood  v. 
Wylds,  6  id.  7.'J4;  Arnold  v.  Downing, 
11  Barb.  .5.54;  Hodge  v.  Manlev,  25  Vt. 
216. 

(:r)  Mills  V.  Fowkes,  5  Ring.  N.  C. 
455;  Nash  v.  Hodgson,  6  De  G.,  M.  & 
(;.474,  .'U  Eng.  L.  &  Eip  555.  But  sec 
Aver  V.  Hawkins,  1!)  Vt.  26.  And  see 
(lulc,  ]).  141,  n.  (//). 

(//)  I?uru  (•.  lioulton,  2  C.  15.476.  And 
sec  State  Hank  r.  AVooddv,  5  Eng.  638 ; 
Wood  r.  Wylds,  0  id.  754.  See  also, 
I'oiid  r.  Williams,  1  (Jray,  6.30. 

(c)  r.iiru  i\  Hoidton,  2  C.  B.  476. 

\(i)  Evans  v.  Havies,  4  A.  &  E.  840, 


CH.  VI.] 


STATUTE    OF    LIMITATIONS. 


%357 


utc.  (b)  If  the  debt  consists  of  principal  and  interest,  a  pay- 
ment on  account  of  either  will  take  the  whole  residue  of  both 
out  of  the  statute,  (c)  If  there  be  mutual  accounts,  and  a  bal- 
ance be  struck,  it  has  been  held  that  this  converts  the  items 
allowed  into  a  part  payment,  to  take  the  case  out  of  the  stat- 
ute, (d)  And  a  payment,  by  the  debtor  for  the  creditor,  *and 
at  his  request,  or  to  one  whom  the  creditor  owes  has  the  same 
eflect  as  a  payment  to  him.  (e) 

Lord  Tetiterdcii's  act  provides,  "  That  nothing  herein  con- 
tained shall  alter,  or  take  away,  or  lessen  the  effect  of  any  pay- 
ment of  any  principal  or  interest  made  by  any  person."  Hence, 
it  leaves  the  fact  of  part  payment  to  operate  as  before  ;  but  an 
interesting  question  has  arisen,  whether  the  preceding  clause  of 
the  act,  which  requires  that  the  new  promise  or  acknowledg- 
ment shall  be  in  writing,  requires,  by  construction  or  implica- 
tion, that  an  admission  or  acknowledgment  of  part  payment 
shall  be  proved  or  verified  by  writing.  The  tendency  of  the 
English  decisions,  for  some  time,  was  to  require  this ;  (/)  but 


(b)  Wainman  v.  Kynman,  1  Exch.  118. 

(c)  Parsonage  Fund  v.  Osgood,  21  Me. 
176;  Bealcy  v.  Greenslade,  2  Tyrw.  121, 
2  Cromp.  &  J.  61  ;  Sanford  v.  Hayes,  19 
Conn.  591 ;  Bradfield  v.  Tupper,  7  Exch. 
27,  7  Eng.  L.  &  Eq.  541. 

(d)  Thus,  in  Ashby  v.  James,  11  M.  & 
W.  542,  it  was  held  that,  where  A  has  an 
account  against  B,  some  of  the  items  of 
which  are  more  than  six  years  okl,  and  B 
has  a  cross  account  against  A,  and  they 
meet  and  go  through  both  accounts,  and 
a  balance  is  struck  in  A's  favor,  this 
amounts  to  an  agreement  to  set  off  B's 
claim  against  the  earlier  items  of  A's,  out 
of  which  arises  a  new  consideration  for 
the  payment  of  the  balance,  and  takes  the 
case  out  of  the  operation  of  the  statute  of 
limitations,  notwithstanding  the  provis- 
ions of  Lord  Tenterden's  act.  And  Lord 
Abinger  said  :  "  I  think  Lord  Tenterden's 
act  does  not  apply  at  all  to  the  fact  of  an 
account  stated,  where  there  are  items  on 
both  sides."  [His  Lordship  read  the 
act.]  "  This  is  not  an  acknowledgment 
or  promise  by  words  only  ;  it  is  a  transac- 
tion between  the  parties,  whereby  they 
agree  to  the  appropriation  of  items  on 
the  one  side,  item  by  item  to  the  satisfac- 
tion, pro  tanto,  of  the  account  on  the  other 
side.     The  act  never  intended  to  prevent 


parties  from  making  such  an  appropria- 
tion." And  Alderson,B.,  said :  "  The  courts 
have  never  laid  it  down  that  an  actual 
statement  of  a  mutual  account  will  not 
take  the  case  out  of  the  statute  of  limita- 
tions. They  have  indeed  determined  that 
a  mere  parol  statement  of,  and  promise  to 
pay,  an  existing  debt,  will  not  have  that 
effect ;  because  to  hold  otherwise  would 
be  to  repeal  the  statute.  The  truth  is, 
that  the  going  through  an  account,  with 
items  on  both  sides,  and  striking  a  bal- 
ance, converts  the  set-off  into  payments ; 
the  going  through  an  account  where  there 
are  items  on  one  side  only,  as  was  the  case 
in  Smith  v.  Forty,  4  C!  &  P.  126,  does 
not  alter  the  situation  of  the  parties  at  all, 
or  constitute  any  new  consideration.  Here 
the  striking  of  a  balance  between  the  par- 
ties is  evidence  of  an  agreement  that  the 
items  of  the  defendant's  account  shall  be 
set  oft",  against  the  earlier  items  of  the 
plaintiff's,  leaving  the  case  unaffected 
either  by  the  statute  of  limitations  or  the 
set-off."  And  see  Worthington  v.  Grims- 
ditch,  7  Q.  B.  479. 

(e)  Worthington  r.  Grimsditch,  7  Q.  B. 
479. 

(/)  See  Willis  i:  Newham,  3  Young  & 
J.  518  ;  Waters  v.  Tompkins,  2  Cromp., 
M.  &  K.  723  ;  Bayley  v.  Ashton,  12  A.  & 

[383] 


357- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


when  the  question  arose  in  this  country,  it  was  held  that  the 
statute  should  be  construed  as  leaving  the  matter  of  part  pay- 
ment where  it  was  before,  both  as  to  the  evidence  of  it,  and  as 
to  its  effect,  (g)  And  the  same  view  has  recently  been  adopted 
in  England,  in  the  Exchequer  Chamber,  (h)     It  has  been  held. 


E.  493  ;  Maghce  r.  O'Neil,  7  M.  &  W. 
531  ;  Eastwood  v.  Saville,  9  id.  615. 

((j)  See   William.s   v.  Gridlev,  9  Met. 
482  ;  Sibley  v.  Lumbert,  30  Me".  253. 

(h)  Cleave  v.  Jones,  6  Exch.  573.  This 
was  an  action  on  a  promissory  note,  for 
^350,  with  interest.  The "  defendant 
pleaded  the  statute  of  limitations.  At 
tlie  trial,  the  only  evidence  piven  by  tlie 
plaintiif  to  take  the  case  out  of  the  statute 
was  the  following  unsigned  entry  in  a  book 
of  the  defendant,  and  in  her  liandwriting  : 
"1843.  Cleave's  interest  on  £350,  £17 
IDs."  Held,  in  the  Exchequer  Chamber, 
reversing  the  judgment  of  the  court  below, 
tliat  this  was  sufficient  cviilcncc  of  pay- 
ment of  interest  to  the  plaintiff  to  take  the 
case  out  of  the  statute  of  limitations. 
And  Lord  Campbell,  in  delivering  the 
judgment  of  the  court,  said:  "The  time 
has  come  when  Willis  v.  Newham,  having 
been  brought  before  a  court  of  error,  must 
be  overruled.  The  question  on  this  rec- 
ord is,  whether  an  entry  in  an  account- 
book  of  the  defendant,  in  lier  liandwrit- 
ing, by  which  tliere  is  a  statement  that 
she  has  within  si.x  years  paid  interest  upon 
the  promissory  note  on  which  tlie  action  is 
brought,  is  evidence  for  the  jury  to  take 
the  case  out  of  the  statute  of  limitations. 
It  was  held  by  the  learned  Judge  who 
tried  this  case,  in  deference  to  that  decis- 
ion, that  it  was  not.  We  are  to  determine 
tliat  (lucstion.  If  Willis  r.  Newliam  was 
well  decided,  tlic  learned  Judge  was  fully 
justified  in  saying  that  the  entry  was  not 
evidence  logo  t(j  the  jury;  for  this  very  case 
is  ])Ut  in  Willis  c.  Xcwliam,  and  it  is  there 
a.ske(l,  wiiether  such  an  acknowledgment 
would  be  sunicieiit ;  and  the  learned  JJaron 
who  delivered  the  judgment  of  the  court, 
answers  'no;  because  the  act  says,  the 
defendant  shall  not  be  charged  except  l)y 
nn  acknr)wlc(lgment  in  writing,  signed  by 
liini.'  Does  the  act  say  so  or  not  ?  In 
our  opinion  the  act  says  no  such  tiling ; 
and  we  cainiot  extend  the  provisions  of  the 
statute  from  a  desire  to  prevent  misihief 
in  <:uiisiinlti  aiHii.  'llw.  preamble  of  the  '.) 
Geo.  4,  c.  14,  recites  that  '  cpieslioiis  have 
arisen  as  to  ihi;  proof  ami  ell'eet  of  ac- 
knowiedfjincnls   and  promises  offered  in 

[384] 


evidence  for  the  purpose   of  taking  the 
case  out  of  the  operation  of  the  statute  of 
limitations ; '  and  the  statute  then  goes  on 
to  legislate  so  as  to  guard  against   such 
questions  afterwards  arising.     Before  this 
statute  passed,  according  to  the  construc- 
tion of  the  21  Jac.  1,  c.  16,  three  modes 
were  in  practice  to  take  a  case  out  of  the 
operation   of  that   statute :    first,   an   ac- 
knowledgment by  words  only  ;  secondly, 
a  promise  by  words  only ;    and   thirdly, 
part    payment  of   principal   or   interest. 
Let  us  then  see  whether  the  9  Geo.  4,  c. 
14,  does  not  confine  itself  to  the  two  first, 
leaving    the    third    precisely   as    it   was 
before   that  statute  passed.      The  words 
arc,    'that  in   actions   of   debt,   &c.,   no 
acknowledgment   or  promise,   by   words 
only,  shall  be  deemed  sufficient  evidence 
of  a  new  or  continuing  contract,'  to  take 
the  case  out  of  the  statute,  '  unless  such 
acknowledgment  or  promise  shall  be  made 
or  contained  by  or  in  some   writing,   to 
l)e  signed  by  the  party  chargeable  thereby.' 
Does  that  lessen  the  effect  of  the  proof 
of  payment  of  principal  or  interest?     It 
docs  not ;  but  is  confined  to  acknowledg- 
ments  or   promises  bj^  words  only ;  and 
part   payment  of  principal  or  interest  is 
not  an  acknowledgment  by  words,  but  by 
conduct.    If  the  statute  had  stopped  there, 
it  would  not  have  met  the  case  of  part 
payment ;  but  to  guard  against  all  danger 
of  such  a  construction  being  put  upon  it, 
there  is  a  proviso  in  express  terms,  '  that 
nothing  liercin    contained  shall  alter,  or 
take  away,  or  lessen  the  effect,  of  any  pay- 
ment of  princiiial  or  interest,'  &c.     Does 
not  that  leave  the  effect  and  proof  of  pa}'- 
ment  exactly  as  it  was  before  the  statute 
passed?     With  deference  to  the  Court  of 
Exclicqucr,  I  think  it  does.     That   con- 
struction   of  the  statute  seems  so  plain, 
that  it  cannot  lie  strengthened  by  further 
ol)servation.     If  we  say,  as  we  feel  bound  to 
do,  that  Willis  r.  Newhain  was  improperly 
de(ide(l,  we  must  return  to  the  true  con- 
stnietioii  of  the  statute,  and  bold  that  the 
eviilence  rejected  ought  to  have  been  sub- 
milteil  to  the  jurv.      It  would   indeed  be 
strange  if  Lord  Ifiihrdin  had  inlrodueed, 
or  tho  legislature  had  passed,  an  act  to 


en.  VI.]  STATUTE    OF    LIMITATIONS.  *3''j8-*359 

in  England,  that  the  written  *acknowledgment  which  the  stat- 
ute requires,  must  have  the  actual  signature  of  the  party  him- 
self, that  of  his  agent  not  *being  sufficient.  (/)  We  are  not 
aware  that  this  question  has  arisen  in  this  country. 

It  is  clear  that  the  payment  cannot  revive  the  debt,  unless  it 
be  made  by  one  who  had  authority  to  bind  the  debtor ;  thus  a 
part  payment  by  a  wife,  without  specific  authority  from  the  hus- 
band, does  not  revive  the  debt  as  to  him.  (ia) 


SECTION  IV. 

OF   NEW   PROMISES   AND   PART   PAYMENTS   BY  ONE  OF  SEVERAL  JOINT 

DEBTORS. 

There  has  been  some  conflict,  and  some  change  in  the  law, 
as  to  the  effect  of  the  acknowledgment,  part  payment,  or  new 
promise,  of  one  of  two  or  more  joint  debtors.  And  it  is  obvi- 
ous that  this  must  depend  mainly  upon  the  question  whether 
the  statute  is  viewed  as  one  of  repose,  or  one  of  presumption. 
If  the  latter  is  the  true  construction  of  the  statute,  as  there  is 
no  reason  why  one  of  two  joint  debtors,  as  for  example,  one  of 
two  who  were  partners  in  a  firm  that  has  been  dissolved,  should 
not  know  perfectly  well  whether  the  debt  exists  or  not ;  and  as 
there  is  a  community  of  interest  between  him  and  the  other 
joint  debtors,  and  it  may  be  supposed  he  would  make  no  ac- 
knowledgment adverse  to  his  own  interest,  if  it  were  not  true,, 
it  would  follow  that  the  acknowledgment  of  one  that  it  does 
exist,  ought  to  bind  all.  But  if  the  statute  gives  its  protection 
on  the  ground  eithe)'  that  the  debt  is  paid,  or,  if  unpaid,  shall 

exclude  evidence  such  as  this,  so  litcely  to  wise  they  ^yould  have  provided  for   this 

occur  in  the  common  course  of  business,  case,  as  well  as  that  of  a  mere  promise  or 

and   which   is   not   open   to    fobrication,  acknowledgment   by   words    only.      For 

like  a  mere  promise  or  acknowledgment  these  reasons  we  arc  of  opinion  that  a  ve- 

by  words,  and,  being  Utera  scripta,  cannot  nire  (h  novo  ought  to  be  awarded."     And 

deceive.     It  is  said  that  the  effect  of  our  see  Nash  v.  Hodgson,  6  De  G.,  M.  &  G. 

decision  will  be  to  let  in  verbal  evidence  474,  31  Eng.  L.  &  Eq.  55.5. 
of  payment ;  but  the  legislature  must  have         (/)  Hyde  v.  Johnson,  3  Scott,  289. 
thought  tb:U  more  mischief  would    arise         [ia)  Neve  i-.  Hollands,  18  Q.  B.  262. 
from  excluding  than  admitting  it ;  other- 

VOL.  II.  33  [  385  ] 


360-361* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


not,  and  ought  not,  to  be  demanded,  it  is  obvious  that  the  ac- 
kno\yledgraent  by  one  debtor  of  the  non-payment  of  the  del^t  is 
not  enough.  He  may  bind  himself  by  his  acknowledgment  or 
promise,  if  he  choose  to  do  so,  but  cannot  bind  the  other  party, 
unless  he  has  authority  to  do  so.  And  this  we  take  to  be  the 
true  test  and  measure  of  the  effect  of  an  acknowledgment  by 
one  of  many  joint  debtors.  If  he  that  makes  the  acknowledg- 
ment had  full  authority  to  bind  the  others  by  an  original  prom- 
ise, growing  out  of  an  entirely  new  transaction,  as  one  partner 
in  an  existing  firm  has  to  bind  the  others,  then  the  acknowledg- 
ment, if  otherwise  sufficient,  may  bind  all,  as  the  new  promise 
of  all;  but  not  where  this  authority  is  wanting. 

*  We  cannot,  however,  assert  that  the  view  above  presented  is 
fully  sustained  by  authority,  although  we  think  it  not  only  de- 
ducible  from  the  reason  of  the  law,  but  sustained  by  modern 
adjudication,  so  far,  at  least,  as  to  show  that  the  tendency  of 
authority  is  in  this  direction.  (J)     Nevertheless,  *  our  notes  will 


( /)  It  was  decided  in  Wiiitcomb  v. 
Wiiiting,  2  Doug.  652,  that  an  aclinowl- 
edgment,  new  promise,  or  part  payment, 
by  one  of  several  joint  debtors,  would 
take  the  case  out  of  the  statute  of  limita- 
tions as  to  all.  That  was  an  action  on  a 
joint  and  several  promissory  note  executed 
by  the  defendant  and  three  others.  The 
plaintiff  having  proved  payment,  by  one 
of  tiie  other  tiiree,  of  interest  on  the  note 
and  part  of  the  ])rinci])al,  within  six 
years,  it  was  held  that  this  was  sufKeient  to 
take  the  case  out  of  the  statute  as  to  the 
defenilant.  And  Lord  Mdiisjie/d  said : 
"Payment  by  one  is  payment  for  all,  the 
one  acting  virtually  as  agent  for  the  rest; 
and  in  the  same  manner,  an  admission  liy 
one  is  an  admission  by  all ;  and  the  law 
raises  th(!  promise  to  pay,  when  the  debt 
is  admitted  to  be  (Inc."  Ami  W'i/les,  J., 
said :  "  The  defendant  has  had  the  ad- 
vniitagc  of  the  j)artial  payment,  and 
tlicrcfore,  must  l»e  liouiid  by  if."  It  would 
seem  that  tiie  court  procei'ded  i)artly  upon 
tJK!  then  prevah'iit  view  that  the  statutory 
bar  was  founded  on  a  |)rcsumption  of  ]iay- 
nv'iit,  and  partly  upon  the  ground  that  one 
joint  debtor,  in  nudging  a  m-w  |)romisc,  or 
ncknowicdgmcut,  or  part  jiaymciit,  acts  in 
hi'*  own  lii'lialf,  and  idso  as  agent  for  the 
rest.  The  first  ground,  as  we  bave  alrcaily 
seen,  no  longer  exists.      And  as  to  the 

[  .38G  ] 


second,  it  would  be  difficult  to  maintain 
upon  principle  that  any  such  agency  ex- 
ists. This  decision,  however,  though  at 
times  doubted  (see  Brandram  v.  Wharton, 
1  B.  &  Aid.  46.3;  Atkins  v.  Tredgold,  2 
B.  &  C.  23),  has  maintained  its  ground 
in  England,  and  is  no  v.-  regarded  there  as 
sound  law.  See  Perham  v.  Ravnal,  2 
Bing.  306 ;  Burleigh  v.  Stott,  8  13.  &  C. 
36;  Pease  v.  Hirst",  10  id.  122;  Wyatt  v. 
Hodson,  8  Bing.  309  ;  Manderston  v. 
Pobcrtson,  4  ISIan.  &  R.  440;  Channell  v. 
Ditchburn,  .'i  M.  &  W.  494.  In  this  last 
case  it  was  held  that  payment  of  interest, 
by  one  of  the  makers  of  a  joint  and  sev- 
eral promissory  note,  though  made  more 
than  six  years  after  it  became  due,  is  suf- 
ficient to  take  the  case  out  of  the  statute 
of  limitations,  as  against  the  other  maker. 
And  l'(tr/,-i',  B.,  said  :  "  The  ipiestion  in 
this  case  was,  whetiier  payment  of  interest 
by  one  of  two  makers  of  a  promissory 
note,  made  after  the  lapse  of  six  years 
from  the  time  when  the  note  became  due, 
took  the  (ase  out  of  the  statute  of  limita- 
tions with  regard  to  the  other  co-nu>ker. 
Ml'.  I'latt  idicd  upon  the  case  of  Atkins 
r.  'i'redgold,  and  Slater  r.  I^awson,  as 
making  si  distinction,  and  throwing  a 
(h)idit  upon  tlie  old  case  of  Wiiitcomb  v. 
\\'liiting,  wliieii  decided  that  one  of  two 
joint  makers  u^a  promissory  note  might, 


CH.  VI.] 


STATUTE    OF    LIMITATIONS. 


*362-*36{ 


show,  that  in  some  cases,  a  part  paymentJias  *  barred  the  statute, 
and  revived   a  remedy   against  others  who    *\vere   only  sure- 


by  acknowleflgmcnt  or  part  payment,  take 
the  case  out  of  the  statute,  as  against  the 
other.  After  those  two  cases,  undoubt- 
edly some  degree  of  doubt  might  fairly 
exist  as  to  the  propriety  of  the  decision  in 
Whitcoml)  V.  Whiting  ;  and  it  docs  seem 
a  strange  thing  to  say,  that  where  a  per- 
son has  entered  into  a  joint  and  several 
promissory  note  with  another  person,  he 
thereby  makes  that  other  his  agent,  with 
authority,  by  acknowledgment  or  payment 
of  interest,  to  enter  into  a  new  contract 
for  him.  But  since  the  decisions  in  At- 
kins V.  Tredgold  and  Slater  v.  Lawson, 
the  Court  of  King's  Bench  have  twice  de- 
cided that  payment  by  one  of  two  joint 
makers  of  a  promissory  note,  is  sufficient 
to  take  the  case  out  of  the  statute,  as 
against  the  other.  The  first  of  these  cases 
was  that  of  Burleigh  v.  Stott,  where  the 
defendant  was  sued  as  the  joint  and  sev- 
eral maker  of  a  promissory  note  ;  and 
tlicre  the  court  held  that  payment  of  inter- 
est by  the  other  joint  maker  was  enough 
to  take  the  case  out  of  the  statute,  as 
against  the  defendant ;  and  that  it  was  to 
be  considered  as  a  promise  by  both,  so  as 
to  make  both  liable.  And  since  the  de- 
cision in  that  case,  the  Court  of  King's 
Bench  have  come  to  the  same  conclusion, 
in  the  case  of  Manderston  v.  Robertson, 
which  was  argued  on  the  22d  of  JNIay, 
1829.  I  have  discovered  my  paper  book 
in  that  case,  which,  it  appears  was  argued 
by  Mr.  Piatt  himself;  and  the  court  de- 
cided there,  that  an  account  stated  by  one 
of  the  makers  of  a  joint  note,  and  part 
payment  of  the  account,  took  the  case  out 
of  the  statute  as  to  the  other ;  thus  con- 
firming the  authority  of  Burleigh  v.  Stott. 
Then  Mr.  Piatt  relies  upon  the  distinction 
in  this  case  that  the  payment  was  made 
after  the  statute  had  run,  and  which  was 
pointed  out  by  INIr.  Justice  Baijley  as  one 
of  the  grounds  on  which  he  distinguished 
the  case  of  Atkins  v.  Tredgold,  from 
Whitcomb  v.  Whiting ;  that  there  the 
statute  had  attached,  and  that  its  opera- 
tion could  not  be  afl'ected  by  any  act  of 
future  payment.  But  I  tind  that  in  ]Man- 
dcrston  r.  Robertson,  the  note  was  dated 
the  9th  of  July,  1817,  and  an  account  was 
furnished  by  one  of  the  joint  makers,  on 
the  1st  of  June,  182.5,  to  the  payee,  tak- 
ing credit  to  himself  for  payments  of  inter- 
est after  the  six  years  had  elapsed,  but  not 
before  ;  and  it  was  held  that  this  was  suf- 


ficient to  take  the  case  out  of  the  statute, 
as  against  the  other  maker.  There  liie 
payment  was  after  the  six  years  had 
elapsed,  and  yet  it  was  held  sufficient. 
The  result  is,  that  we  must  consider  the 
case  of  Whitcomb  v.  Whiting  as  good 
law."  Whitcomb  v.  Whiting  has  been 
followed  also  substantially  in  Massachu- 
setts. Hunt  V.  Bridgham,  2  Pick.  581  ; 
AVhite  V.  Hale,  3  id.  291 ;  Frye  v.  Barker, 
4  id.  382  ;  Sigourney  v.  Drury,  14  id.  387. 
And  in  Maine,  Getchell  v.  Heald,  7 
Grcenl.  26;  Greenleaf  v.  Quincv,  3  Fairf. 
11  ;  Pike  v.  Warren,  15  Me.  390  ;  Dins- 
more  V.  Dinsmorc,  21  id.  433  ;  Sliepley 
V.  Waterhouse,  22  id.  497.  But  see  hifva, 
n.  [q).  And  in  Vermont,  Joslyn  v.  Smith, 
13  Vt.  353  ;  Wheelock  v.  Doolittle,  18  id. 
440.  And  in  Connecticut,  Bound  v. 
Lathrop,  4  Conn.  336 ;  Coit  v.  Tracy, 
8  id.  268  ;  Austin  v.  Bostwick,  9  id. 
496;  Clark  v.  Sigournc}',  17  id.  511. 
And  perhaps  in  some  other  States.  See 
the  recent  case  of  Zent  v.  Heart,  8  Penn. 
St.  337.  This  case  was  overruled,  how- 
ever, in  Coleman  v.  Fobes,  22  Penn.  St. 
156.  Goudy  V.  Gillam,  6  Rich.  28; 
Bowdre  v.  Hampton,  id.  208 ;  Tilling- 
liast  V.  Nourse,  14  Ga.  641.  But  in  the 
Supreme  Court  of  the  United  States,  in 
the  case  of  Bell  v.  Morrison,  1  Pet.  351, 
the  authority  of  Whitcomb  v.  Whiting 
was  repudiated.  It  is  true  that  the  new 
promise  in  that  case  was  not  made  until 
the  debt  was  barred  by  the  statute  ;  but 
there  is  much  reason  to  believe  that  the 
decision  of  the  court  would  have  been  the 
same,  if  the  promise  had  been  made  before 
the  debt  was  barred.  Story,  J.,  in  delivering 
the  opinion  of  the  court,  after  quoting  the 
language  of  Lord  Mansfield,  that  "  pay- 
ment by  one  is  payment  for  all,  the  one 
acting  virtually  as  agent  for  the  I'cst ;  and 
in  the  same  manner  an  admission  by  one 
is  aa admission  by  all;  and  the  law  raises 
the  promise  to  pay,  when  the  debt  is  ad- 
mitted to  be  due ;  "  says  :  "  This  is  the 
whole  reasoning  reported  in  the  case,  and 
is  certainly  not  very  satisfactory.  It  as- 
sumes that  one  party  who  has  authority 
to  discharge,  has  necessarily,  also,  author- 
ity to  charge  the  others  ;  that  a  virtual 
agency  exists  in  each  joint  debtor  to  pay 
for  the  whole  ;  and  that  a  virtual  agency 
exists  by  analogy  to  charge  the  whole. 
Isow,  this  very  position  constitutes  the 
matter  in  controversy.     It  is  true,  that  a 

[387] 


363- 


THE   LAW    OF   CONTRACTS. 


[part  II. 


ties.  (A')     And  this  even  where  the  parties  were  bound  severally, 
as  well  as  jointly,  to  pay  the  debt,  and   the  action  is  brought 


payment  by  one  does  enure  for  the  benefit 
of  the  whole  ;  but  this  arises  not  so  much 
from  any  virtual  agency  for  the  wliolc,  as 
by  operation  of  law ;  for  the  payment  ex- 
tinguishes tlie  debt  ;  if  such  payment 
were  made  after  a  positive  refusal  or  pro- 
hibition of  the  other  joint  debtors,  it  would 
still  operate  as  an  extinguishment  of  the 
debt,  and  the  creditor  could  no  longer  sue 
them.  In  truth,  he  who  pays  a  joint  debt, 
pays  to  discharge  himself ;  and  so  far  from 
binding  the  others  conclusively  by  his  act, 
as  virtually  tlieirs  also,  he  cannot  recover 
over  against  them,  in  contribution,  with- 
out such  payment  has  been  rightfully 
made,  and  ought  to  charge  them.  When 
the  statute  has  run  against  a  joint  debt,  the 
reasonable  presumption  is  that  it  is  no 
longer  a  subsisting  debt ;  and,  therefore, 
there  is  no  ground  on  which  to  raise  a- vir- 
tual agency  to  pay  that  which  is  not  ad- 
mitted to  exist.  But,  if  tliis  were  not  so, 
still  there  is  a  great  difference  between 
creating  a  virtual  agency,  which  is  for  the 
benefit  of  all,  and  one  which  is  onerous 
and  prejudicial  to  all.  The  one  is  not  a 
natural  or  necessary  consequence  from  the 
other.  A  person  may  well  authorize  the 
payment  of  a  debt  for  wiiich  he  is  now 
liable ;  and  yet  refuse  to  autiiorize  a  charge, 
where  there  at  present  exists  no  legal  lia- 
bility to  pay.  Yet  if  the  principle  of 
Lord  Mdiisjield  be  correct,  the  acknowl- 
edgment of  one  joint  debtor  will  bind  all 
the  rest,  even  though  they  should  have 
utterly  denied  tlie  delit  at  the  time  wiien 
such  acknowledgment  was  made."  And 
the  Court  of  Appeals  in  New  York,  in 
two  recent  cases,  have  established  the  law 
in  that  State,  in  entire  accordance  with 
the  view  stated  in  the  text.  The  first  of 
these  cases  is  Van  Keuren  r.  rarmclee,  2 
Comst.  .52.'3.  It  was  there  held  that,  after 
tlic  dissolution  of  tlie  i)arlnersliip,  an  ac- 
knowledgment and  promise  to  pay,  made 
by  one  of  the  i)artners,  will  not  revive  a 
debt  against  the  firm  which  is  i)arred  by 
the  statute!  of  liuiitatioiis.  The  decision, 
therefore,  went  no  ftirtlier  than  that  in 
I'cll  V.  Morrison,  and  conse(|uently  did 
not  cover  the  case  of  u  new  pnunise  or  ac- 
knowledgment made  before  the;  debt  is 
burred,  nor  determine  whether  there  is 
any  distinction  in  this  resjieet   between  a 

(/■)  Iluileigh    r.    Stolt,   8   U.  &  C  I'A) 
ncy  V.  Drury,  14  Pick,  387. 

[  ^"h«  ] 


new  promise  or  acknowledgment  and  a 
part  payment.  After  this  case  was  decided, 
there  was  a  difference  of  opinion  in  the 
Supreme  Court,  upon  the  two  questions 
last  noticed.  See  Bogert  v.  Vermilya,  10 
Barb.  32  ;  Dunham  v.  Dodge,  id.  566  ; 
Reid  V.  McNaughton,  15  id.  168.  But 
they  were  both  set  at  rest  by  the  Court  of 
Appeals  in  Shoemakers.  Benedict,  1  Ker- 
nan,  176.  It  was  there  held  that  pay- 
ments made  by  one  of  the  joint  and  sev- 
eral makers  of  a  promissory  note,  before 
an  action  upon  it  is  barred  by  the  statute 
of  limitations,  and  within  six  years  before 
suit  brought,  do  not  affect  the  defence  of 
the  statute  as  to  the  other.  And  Allen,  J., 
after  examining  the  case  of  Van  Keuren 
I'.  Parmelce,  said:  "Do  the  points  in 
which  this  case  dilfers  from  that  decided 
in  the  Court  of  Appeals,  take  it  without 
the  principles  decided,  and  without  the 
statute  of  limitations  ?  I  think  not. 
First :  One  point  of  difference  is,  that  in 
this  ease  partial  payments,  and  not  a 
promise  or  naked  acknowledgment  of  the 
existence  of  the  debt,  are  relied  upon  to 
take  the  case  out  of  the  statute.  But  par- 
tial payments  are  only  available  as  facts 
from  which  an  admission  of  the  existence 
of  the  entire  debt  and  a  present  liability  to 
pay  may  be  inferred.  As  a  fact  by  itself, 
a  payment  only  proves  the  existence  of 
the  debt,  to  the  amount  paid,  but  from 
that  fact  courts  and  juries  have  inferred  a 
promise  to  ]iay  the  residue.  In  some 
cases  it  is  said  to  be  an  unequivocal  ad- 
mission of  the  existence  of  the  debt ;  and 
in  the  case  of  the  payment  of  money  as 
interest,  it  would  be  such  an  admission  in 
respect  to  the  principal  sum.  Again,  it  is 
said  to  be  a  more  reliable  circumstance 
than  a  naked  promise,  and  the  reason  as- 
signed is,  that  it  is  a  dclilierative  act,  less 
liable  to  misconstruction  and  misstatement 
than  a  verbal  acknowledgment.  So  be  it. 
It  is  nevertheless  only  reliable  as  evidence 
of  a  ])roiiiisc,  or  from  which  a  jiromisc 
may  be  implied.  Any  other  evidence 
which  establishes  such  jiromise  would  be 
equally  ellicacioiis,  and  most  assuredly  a 
deliberate  written  acknowledgment  of  the 
existence  of  the  debt  and  promi.sc  to  pay, 
is  of  a  high  character  as  evidence  of  a 
partial    ])ayineiit  to   defeat  the  statute  of 

Wy.xlt  r.    Ilodson,  8  Bing.  30'.» ;   Sigour- 


en.  yl] 


STATUTE   OF   LIMITATIONS. 


-363 


only  against  hlrn  who  did  not  make  the  payment.  (/)  Where 
there  was  a  dissolution  of  the  partnership,  and  a  subsequent 
part  payment  of  a  partnership  debt,  by  a  partner  to  a  creditor 
who  did  not  know  of  the  dissolution,  it  was  held  to  take  the 
case  out  of  the  statute,  (la)  Where  there  were  several  securities 
for  a  debt,  on  some  of  which  the  debtor  was  liable  alone,  and 
on  others  jointly,  a  payment  by  him  "  on  account,"   without 


limitations.  In  either  case  the  question 
is  as  to  the  weight  to  he  given  to  evidence, 
and  if  a  new  promise  is  satisfactorily- 
proved  in  either  method,  the  debt  is  re- 
newed. The  question  still  recurs,  who  is 
authorized  to  make  such  promise "?  If 
one  joint  debtor  could  bind  his  co-debtors 
to  a  new  contract,  by  implication,  as  by  a 
payment  of  a  part  of  a  debt  for  which 
they  were  jointly  liable,  he  could  do  it 
directly,  by  an  express  contract.  The  law 
will  hardly  be  cliarged  with  the  inconsis- 
tency of  authorizing  that  to  be  done  indi- 
rectly which  cannot  be  done  directly.  If 
one  debtor  could  bind  his  co-debtors  by  an 
unconditional  promise,  he  could  by  a  con- 
ditional promise,  and  a  man  might  find 
himself  a  party  to  a  contract  to  the  con- 
dition of  which  he  M'ould  be  a  stranger. 
Second  :  Another  fact  relied  upon  to  dis- 
tinguish this  case  from  Vcn  Keui-en  v. 
Parmelee  is,  that  the  payments  were  made 
before  the  statute  of  limitations  had  at- 
tached to  the  debt,  and  while  the  liability 
of  all  confessedly  existed.  In  some  cases 
in  Massachusetts,  this,  as  well  as  the  fact 
that  the  revival  or  continuance  of  the  debt 
was  effected  by  payment  from  which  a 
promise  was  implied  rather  than  by  ex- 
press promises,  were  commented  upon  by 
the  court  as  important  points.  But  I  do 
not  understand  that  the  cases  were  decided 
upon  the  ground  that  these  circumstances 
really  introduced  a  new  element  or  brought 
the  cases  within  a  different  principle.  The 
decisions,  in  truth,  were  based  upon  the 
authority  of  the  decisions  of  tlie  Englisli 
courts,  and  prior  decisions  in  the  courts  of 
that  State.  That  a  promise  made  while 
the  statute  of  limitations  is  running,  is  to 
be  construed  and  acted  upon  in  the  same 
manner  as  if  made  after  the  statute  has 
attached,  is  decided,  in  Dean  v.  Hewitt,  5 
Wend.  257,  and  Tompkins  v.  Brown,  1 
Denio,  247.  If  the  promise  is  conditional, 
the  condition  must  be  performed  before 
the  liability  attaches  so  as  to  authorize  an 
action.  It  does  not,  as  a  recognition  of 
the  existence  of  the  debt,  revive  it  abso- 

33* 


lutcly  from  the  time  of  the  conditional 
promise.  And  in  principle,  I  see  not  why 
a  promise  made  before  tlie  statute  has  at- 
tached to  a  debt,  should  be  obligatory 
when  made  by  one  of  several  joint  debt- 
ors, wiien  it  would  not  be  ol)ligatory  if 
made  after  the  action  was  barred.  The 
statute  operates  upon  the  remedy.  The 
debt  always  exists.  An  action  brought 
after  the  lapse  of  six  years  upon  a  simple 
contract,  must  be  upon  the  new  promise, 
whether  the  promise  was  before  or  after 
tlie  lapse  of  six  years,  express  or  implied, 
absolute  or  conditional.  The  same  author- 
ity is  required  to  make  the  promise  before 
as  after  the  six  years  had  elapsed.  Can  it 
be  said  that  one  of  several  debtors  can,  on 
the  last  day  of  the  sixth  year,  by  a  pay- 
ment, small  or  large,  or  by  a  new  promise, 
either  express  or  implied,  so  affect  the 
rights  of  his  co-debtors  as  to  continue 
their  liability  for  another  space  of  six 
years,  without  their  knowledge  or  assent, 
or  any  authority  from  them,  save  that  to 
be  implied  from  the  fact  that  they  are  at 
the  time  jointly  liable  upon  the  same  con- 
tract, and  yet  that,  on  the  very  next  day, 
without  any  act  of  the  parties,  such  author- 
ity ceases  to  exist  ?  If  so,  I  am  unable 
to  discover  upon  what  principle.  And 
may  the  debt  be  thus  revived,  from  six 
years  to  six  years,  tln-ougli  ail  time,  or  if 
not,  what  limit  is  put  to  the  authority? 
If  any  agency  is  created,  it  continues  until 
revoked.  The  decision  of  Van  Keuren  r. 
Parmelee,  is  upon  the  ground  that  no 
agency  ever  existed,  not  that  an  agency 
once  existing  has  been  revoked."  The 
law  is  the  same  in  New  Hampshire.  Ex- 
eter Bank  v.  Sullivan,  6  N.  H.  124;  Kel- 
ley  V.  Sanborn,  9  id.  46 ;  Whipple  v. 
Stevens,  2  Foster,  219.  And  in  Tennes- 
see. Belote  V.  Wynne,  7  Yerg.  534 ; 
Muse  V.  Donelson,  2  Humph.  166. 

(/)  Whitcomb  v.  Whiting,  2  Doug.  652  ; 
Burleigh  v.  Stott,  8  B.  &  C.  36  f  Chan- 
nell  V.  Ditchburn,  5  M.  &  W.  494. 

(la)  Tappan  v.  Kimball,  10  Foster,  136. 

[389] 


364* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


specification  or  appropriation,  was  lield  to  revive  them  all.  (m) 
And  sucli  payment,  by  a  joint  debtor,  has  been  held  to  revive 
the  debt  against  the  others,  although  the  debtor  made  it  in 
fraud  and  in  expectation  of  his  bankruptcy,  (^ii) 

*But  in  some  instances,  where  the  acknowledgment  of  one 
joint  debtor  is  held  to  be  admissible  evidence  of  the  promise  of 
the  others,  the  question  is  still  reserved,  whether  it  be  sufficient 
evidence.  As  where  one  made  an  acknowledgment  of  a  barred 
debt,  due  from  him  and  another,  under  circumstances  which 
showed  that  the  acknowledgment  was  made  for  the  sake  of  a 
personal  benefit  to  himself,  the  evidence  was  admitted,  but  the 
jury  were  told  that  it  was  insufficient,  (o)  As  to  partners  after 
dissolution,  there  is  in  this  country  much  conflict;  but,  as  we 
have  already  stated,  we  think  the  prevailing  authorities  are 
against  the  power  of  one,  to  bind  others  who  were  formerly 
partners  with  him,  by  his  acknowledgment  of  a  barred  partner- 
ship debt,  (p) 

This  whole  question,  so  far  as  regards  the  effect  of  a  new 
promise  or  acknowledgment,  by  one  of  several  joint  debtors,  has 
been  set  at  rest  in  England  by  Lord  Tenterdcn's  Act,  which 
declares,  in  substance,  that  no  joint  contractor  shall  lose   the 


{m)  Bowling  v.  Ford,  11  M.  &  W.  329. 
In  this  case,  one  Noilin  iiaving  npplied  to 
the  plaintiff  for  a  loan  of  .£.'300  on  mort- 
gaijje,  tiie  ])laintiff,  douhtintj  the  surticiency 
of  tlic  security,  refused  to  advance  it  with- 
out liaving,  in  addition,  a  joint  and  several 
])romissory  note  for  .£50,  from  Nodin  and 
the  defendant,  jjayahlc  on  demand.  The 
note  and  mortga^je  were  accordini^ly  jriven, 
the  latter  containinfi  a  covenant  iiy  Nodin 
to  pay  tlie  sum  of  .£•'!()()  and  interest  at  ,5 
per  cent.  Several  lialf  yearly  ])aynients 
of  ^.£7  10s.  each,  for  interest,  liavinj;  l)een 
made  by  Xodin  :  Ittld,  in  an  action  against 
the  defendant  upon  the  note,  that  such 
paymcMits  l)y  Nodin  kc))t  all  tlie  securities 
alive,  and  iireventeil  tlie  operation  of  the 
statute  of  limitations  as  to  tiie  note. 

(«)  (Joddard  v.  ln};ram,  3  Q.  15.  8;!'.». 
In  ihirt  case,  the  deht  wmh  orif^inally  con- 
tracted with  J.,  W.,  anil  S.  ;  and  S.  more 
than  «ix  years  afterwards,  and  witiiiu  six 
years  of  the  action  being  lirou^iht,  made  a 
payment  in  respect  of  it  to  the  jilaiiitiir. 
8.' became   l)anl<rupt  sii(jitiy   after;    and 

[  .'390  ] 


the  jury  found  that  he  made  the  payment 
in  fraud  of  J.  and  W.,  and  in  expectation 
of  immediate  bankruptcy.  Held,  never- 
theless, that  the  payment  barred  the  op- 
eration of  the  statute. 

(o)  Coit  V.  Tracy,  8  Conn.  268.  In 
this  case  tiiere  was  a  joint  indebtedness, 
by  tlie  defendant  and  one  Coit,  to  the 
])laintiff,  growing  out  of  an  agency  con- 
ducted l)y  tlie  defendant  and  Coit  jointly  ; 
and  more  tliaii  twenty  years  after  such 
agency  was  ended,  Coit  made  an  ac- 
knowledgment of  tiie  deitt,  and  then,  at 
his  own  ex|)ense,  and  witli  a  view  to  ob- 
tain an  advantage  to  himself,  by  a  recovery 
against  the  defendant,  i)rocuri'd  a  suit  to 
be  brought,  in  tlie  name  of  the  plaintilf, 
against  the  defendant  and  iiiniself;  and  it 
was  held,  lliat  tht;  acknowledgment  of 
Coit,  under  such  circumstances,  was  not 
siillicient  to  remove  the  bar  of  the  statute 
of  limitations,  set  u])  by  tlie  defendant. 

(/»)  Keli  r.  Morrison,  1  Pet.  .'5.51  ;  Van 
Keiiren  r.  I'armelee,  2  Comst.  .'")23.  And 
see  other  cases  cited  supra,  n.  («). 


en.  VI.]  STATUTE    OF   LIMITATION'S.  *365 

benefit  of  the  statute,  so  as  to  be  chargeable  by  reason  only  of 
any  written  acknowledgment  or  promise,  made  and  signed  by 
any  co-contractor,  (q)  But  in  order  to  preserve  unimpaired  the 
remedy  against  the  joint  debtor  who  makes  the  promise  or 
acknowledgment,  the  act  provides  that  in  actions  to  be  com- 
menced against  two  or  more  joint  contractors,  if  it  shall  appear 
that  the  plaintifl',  though  barred  by  the  statute  as  to  one  or  more 
of  such  joint  contractors,  is  entitled  to  recover  against  another, 
or  others  of  them,  by  virtue  of  a  new  acknowledgment  or  promise, 
"judgment  may  be  given,  and  costs  allowed,  for  the  plaintiff,  as 
to  such  *defendant  or  defendants  against  whom  he  shall  recover, 
and  for  the  other  defendant  or  defendants  against  the  plaintiff." 
Formerly,  the  acknowledgment  might  be  made  to  any  one, 
as  it  had  the  full  force  of  an  admission  of  a  fact,  (r)  Thus,  if 
A  said  to  B,  "  I  cannot  pay  you,  for  I  owe  C,  and  must  pay 
him  first,"  this,  in  an  action  brought  by  C  against  A,  to  which 
the  statute  was  pleaded,  supported  a  replication  that  the  cause 
of  action  accrued  within  six  years,  (s)  But  such  doctrine  would 
not  be  generally  maintained  now ;  (/)  and  it  has  been  supposed 
that  Lord  Tenterdeii's  Act,  by  implication,  required  that  the 
acknowledgment  should  be  to  the  creditor  himself.  {ii)  But  this 
cannot  be  the  legitimate  effect  of  the  statute,  if,  as  has  been 
said,  and  would  seem  to  be  deducible  from  the  words  of  the 
statute,  its  purpose  is  merely  to  substitute  "  the  certain  evidence 
of  a  writing,  signed  by  the  party  chargeable,  for  the  insecure 
and  precarious  testimony  to  be  derived  from  the  memory  of 


iq)  There   is   a   similar  statutory  pro-  (s)  Peters  i\  Brown,  4  Esp.  46. 

vision  ill  Massachusetts.     Sec  Mass.  Rev.  (t)  It  is  now  clearly  established  law,  in 

Stats,  c.  120,  §  18  ;  Pierce  v.  Tobey,  5  Met.  Pennsylvania,  that  a  new  promise  or  ac- 

168  ;   Balcom  v.  Richards,  6  Ciish.  360.  knowledgment,  to  take  a  case  out  of  the 

And  in  Maine.     See  Maine  Rev.  Stats,  c.  statute  of  limitations,  must  be  made  to  the 

146,  §  24  ;    Quimby  v.  Putnam,  28  Me.  creditor  or  his   autliorized   agent.      See 

419.     And  perhaps  in  some  other  States.  Farmers   &  Mechanics  Bank  i\  Wilson, 

(r)  Mountstephen  v.  Brooke,  3   B.    &  10    Watts,    261;    Morgan  r.  Walton,   4 

Aid.   141  ;  Peters  v.  Brown,  4  Esp.  46;  Penn.  St.  323;   Christv  i\  Flemiugton,  10 

Halliday  v.  Ward,  3   Camp.    32;    Clark  id.   129;  Kyle  i'.  Wells,  17  id.  286;  Gil- 

V.  liougham,  2  B.  &  C.  149;  Soulden  v.  lingham  v.  Gillingham,  id.  302.     But  see 

Van  Rensselaer,  9  Wend.  293 ;  Whitney  tlie  recent  New  York  cases,  cited  in  the 

v.  Bigelow,  4  Pick.  110;  St.  John  z-.  Gar-  preceding  note,  which  show  that  the  old 

row,  4  Port.  Ala.  223  ;  Oliver  v.  Gray,  1  rule  is  still  adhered  to  in  that  State. 

Harris  &  G.  204  ;  Watkins  v.  Stevens,  4  (u)  Grcnfell  v.  Girdlestonc,  2  Younge  & 

Barb.  168  ;   Carshore  r.  Huyck,  6  id.  583  ;  C.  662. 
Bloodgood  V.  Bruen,  4  Sandf.  427. 

[391] 


366*  THE   LAW    or   CONTRACTS.  [PART  II. 

witnesses."  (i^)  For  then,  a  writing  so  signed,  should  have  the 
whole  force  of  an  acknowledgment  proved  by  witnesses  before 
the  statute.  Perhaps  it  might  be  admitted,  from  the  peculiar 
nature  of  negotiable  paper,  that  an  acknowledgment  by  the 
maker  to  the  payee,  would  remove  the  bar  of  the  statute,  in 
favor  of  a  subsequent  party  to  the  note.  This,  however,  is  not 
quite  certain  on  the  authorities,  (w)  There  seems  to  be  no 
reason  why  a  part  payment  or  acknowledgment  to  an  agent, 
should  not  relieve  a  debt  from  the  statute  *as  to  his  principal ;  (x) 
or  that  one  to  an  administrator  should  not  defeat  the  statute  as 
to  his  claim  in  behalf  of  the  intestate's  estate.  (//) 


SECTION    V. 

OF   ACCOUNTS   BETWEEN   MERCHANTS. 

The  statute  of  James  applies  to  "  all  actions  of  account,  and 
upon  the  case,  other  than  such  accounts  as  concern  the  trade  of 
merchandise,  between  merchant  and  merchant,  their  factors  or 
servants."  And  similar  language,  or  a  similar  provision,  is  fre- 
quently found  in  the  statute  of  limitations  of  this  country. 

When  an  action  is  brought  to  which  the  statute  of  limitations 
is  pleaded  in  bar,  and  the  question  arises  whether  this  exception 
can  be  replied,  so  as  to  remove  the  bar,  it  is  necessary  to  inquire, 
1st,  whether  the  transaction  upon  which  the  action  is  founded, 
constitutes  an  "account"  within  the  meaning  of  the  exception; 
and,  2d,  whether  the  account  is  one  which  concerns  "  the  trade 
of  merchandise,  between  merchant  and  merchant,  their  factors 
or  servants,"  within  the  meaning  of  the  exception.  And  unless 
both  of  these  questions  can  be  answered  in  the  aflirmativc,  the 
statute  will  apply.  In  regard  to  the  first  of  these  questions,  it 
is  sell  led   ill   England,  by  recent  cases,  that  a  transaction  will 

(v)  Per  Timid,  C.  J.,    in    Ilaydun    v.  Pick.  488;  IIowc  v.  Tlioin|won,  2  Fairf. 

WilliuiiiH,  7  IJinj;.  100.                  "  \:rl. 

(w)  iSfc  Gale  V.  Caiturn,  1    A.    &   E.  (r)  Mi';.';,niison  v.  Harper,  2  Cronip.  & 

102  ;  Cripps  v.  Diivis.   12  M.  &  W.  15'^;  M.  .'122;   Hill  (-'.  Kendall,  25  Vt.  528. 

P.inl    V.    Adams,    7    (ia.    505;    Dean    v.  (//)  JJaxtcr  ?•.  Peiiniinan,  8  Mass.   133; 

llewit,  5  Wend.  257 ;  Little  v.  ^liiiit,  'J  Joiies  v.  Mooij;,  5  Binn.  573. 

[  :V.)2  ] 


CII.  YI.] 


STATUTE   OF   LIMITATIONS. 


-366 


not  constitute  an  "  account"  within  the  meaning  of  this  excep- 
tion, unless  it  is  such  that  it  would  sustain  an  action  of  account, 
or  an  action  on  the  case  for  not  accounting,  (c)     This  doctrine 


(2)  Inglis  V.  Ilaigh,  8  M.  &  W.  769. 
This  was  an  action  of  indebitatus  assump- 
sit, in  wliicli  tlic  j)laintiff  declared  for  work 
and  labor,  money  lent,  money  jiaid,  and 
for  interest.  The  defendant  pleaded  the 
statute  of  limitations.  The  plaintiff  re- 
plied that  he  and  the  defendant  were  both 
merchants,  and  that  the  cause  of  action 
stated  in  the  declaration  arose  in  a  course  of 
dealing, carried  on  between  the  plaintiff  and 
defendant,  as  merchant  and  merchant,  and 
consisted  of  items  in  an  open  and  unsettled 
account  between  them,  as  such  merchants  ; 
and  which  said  account  contained  various 
items  in  f;;vor  of  the  defendant,  and  the  bal- 
ance due  on  which  he,  the  plaintiff,  sought 
to  recover  in  the  present  action.  The 
question  was,  whether  this  replication  was 
a  sufficient  answer  to  the  plea.  And  the 
court  held  that  it  was  not.  Parle,  B.,  in 
delivering  the  judgment  of  the  court,  said  : 
"  The  ])lea  of  the  statute  of  limitations  is 
a  complete  bar,  unless  the  plaintiff,  by  his 
replication,  can  take  the  case  out  of  its 
operation.  He  attempts  to  do  so  by 
bringing  it  within  the  exception  in  the 
statute,  as  to  merchants'  accounts.  But 
wc  think  that  exce])tion  does  not  apply  to 
an  action  of  indebitatus  assumpsit,  for  the 
several  items  of  which  the  account  is  com- 
posed, or  for  the  general  balance ;  but 
only  to  a  proper  action  of  account,  or  per- 
haps also  an  action  on  the  case  for  not 
accounting.  Although  there  is  no  reported 
case  expressly  governing  the  present,  yet 
there  are  many  coming  very  near  it,  and 
in  which  the  dicta  of  very  eminent  judges 
fully  warrant  the  view  we  take  of  the  sub- 
ject." [His  Lordship  then  proceeded  to 
examine  the  cases.]  "  In  none  of  these 
did  the  facts  necessarily  call  for  a  decision 
whether  the  exception  did  or  did  not  at 
all  apply  to  actions  of  assumpsit.  Still 
tlie  dicta  of  the  judges  in  those  cases  are 
entitled  to  great  weight,  unopposed  as  they 
are  b}'  any  conflicting  authority  whatever. 
But  independently  of  authority,  we  are  of 
opinion  that  the  reasonable  construction  of 
the  statute  requires  such  a  restriction  as 
the  dicta  of  the  judges,  in  the  cases  we 
have  referred  to,  clearly  sanction.  The 
words  are,  '  all  actions  of  account,  and 
upon  the  case,  other  than  such  accounts  as 
concern  the  trade  of  merchandise,  between 
merchant  and  merchant,  their  factors  or 


servants.'  Now,  as  was  said  by  Scror/r/s,  J., 
in  the  case  of  Farrington  v.  Lee,  1  Mod. 
209,  2  id.  .311,  if  the  legislature  had  meant 
to  include  in  the  exception  other  actions 
tiian  actions  of  account,  the  language 
would  probably  have  been,  '  other  than 
such  actions  as  concern  the  trade  of  mer- 
chandise,' and  not  'other  than  such  ac- 
counts.' Indeed,  it  is  difficult  to  say  that 
an  action  of  indebitatus  assumpsit,  for 
goods  sold  and  delivered,  or  for  money 
had  and  received,  can,  under  any  circum- 
stances, be  described  as  an  action  having 
any  reference  to  accounts;  it  would  have 
been  still  more  difficult  to  say  so  at  the 
time  when  the  statute  of  limitations  was 
passed.  AVhere  a  merchant  plaintiff  brings 
an  action  for  goods  sold  and  delivered, 
money  paid,  or  any  of  the  other  items 
wiiicli  may  constitute  his  demand  against 
the  merchant  defendant,  with  whom  he 
has  had  mutual  dealings,  he  is  rather 
repudiating  than  enforcing  accounts.  In- 
deed, 1)}'  the  comparatively  modern  stat- 
utes of  set-off,  the  defendant  may  now 
have  the  benefit  of  his  counter  demands; 
but  that  was  not  the  case  at  tlie  date  of 
•the.  statute  of  limitations;  and  we  must 
construe  the  statute  now,  as  it  ought  to 
have  b^n  construed  immediately  after  it 
became  law.  At  that  time  there  was  no 
proceeding  at  law  by  which  mutual  de- 
mands could  be  set  against  each  other, 
except  by  action  of  account,  and  conse- 
quently there  was  no  other  action  in  any 
manner  connected  with  accounts,  properly 
so  called.  It  does  not  at  all  vary  the 
case,  that  the  plaintiff  only  seeks  to  re- 
cover what  he  calls  the  balance  due  on  the 
account.  If  that  balance  had  been  stated 
and  agreed  to,  then  all  the  authorities 
show  that  it  is  altogether  out  of  the  ex- 
ception. If  it  has  not  been  stated  and 
agreed  to,  then  it  is  only  what  the  plaintiff 
chooses  to  call  a  balance,  the  accuracy  of 
which  the  defendant  had,  at  the  time  of 
passing  the  statute  of  limitations,  no  means 
of  disputing,  in  an  action  of  assumpsit. 
Our  view  of  the  case  is  much  assisted  by 
considering  that  the  exception  clearly 
would  not  apply  to  an  action  of  debt, 
brought  for  the  very  same  demand  ;  and 
it  is  difficult  to  believe  that  the  legislature 
could  have  intended  to  preserve  the  right 
in  one  form  of   action,  but   to   bar  it  in 

[393] 


367*-368*-369* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


appears  to  *rest  upon  very  satisfactory  grounds,  and  we  think 
it  will  be  adopted  by  the  courts  in  this  country.  As  to  the 
second  *question,  there  seems  to  be  no  test  by  which  it  can  be 
determined,  other  than  tliat  furnished  by  the  language  of  the 
statute.  In  applying  this  language,  however,  to  the  facts  of 
particular  cases,  much  aid  may  be  derived  from  the  cases  already 
decided,  (a)     An  opinion  seems  formerly  to  have  *been  enter- 


anotlicr."  About  a  year  afterwards,  the 
case  of  Cottam  v.  Partridge,  4  Scott,  N. 
K.  819,  was  decided  in  the  Common 
Pleas.  That  was  an  action  of  assumpsit, 
for  goods  sold  and  delivered.  It  appeared 
that  the  plaintiffs  were  iron-founders,  and 
wholesale  and  retail  manufacturing  smiths, 
and  agricultural  implement  makci-s.  The 
defendant  carried  on  the  business  of  a  re- 
tail ironmonger.  The  action  was  brought 
to  recover  the  balance  of  an  account,  for 
goods  sold  and  delivered  b}-  the  plaintiffs 
to  the  defendant  between  the  month  of 
June,  1830,  and  June,  1834.  Held,  that 
the  case  was  not  within  the  exception  in 
the  statute  of  limitations,  as  to  merchants' 
accounts.  And  Tindal,  C.  J.,  said  :  "  In 
the  late  case  of  Inglis  v.  Ilaigh,  8  M.  & 
W.  7G9,  the  Court  of  Exchequer  seem  to 
have  decided  that  the  exception,  as  to 
merchants'  accounts,  in  the  statute  of 
limitations,  applies  only  to  an  action  of 
account,  or  perhaps  also  to  an  action  on  the 
case  for  not  accounting ,  but  not  to  ifti  action 
of  indebitatus  assum])sit.  Without  going 
quite  so  far  as  that  (though  I  by  no  means 
intend  to  impeach  the  propriety  of  that 
decision),  I  am  of  opinion  that  the  excep- 
tion will  not  apply,  except  where  an  action 
of  account  is  maintainable  ;  andtiie  ground 
upon  which  I  rest  the  determination  of  the 
present  case  is,  that  tiie  circumstances  arc 
not  such  for  which  an  action  of  account 
would  lie."  Tiie  earlier  cases  will  be 
found  fully  collected  in  a  learned  note  to 
Wclibcr  V.  Tivill,  2  Saund.  121,  by  Ser- 
geant U'illiains.  And  see  Sjjring  v.  Gray, 
5  Mason,  fjO,"),  6  I'et.  l.'Jl.  In  this  ease, 
Murs/i'ill,  ("..J.,  after  (pioting  the  language 
of  tlie  Htaliit(!,  says  :  "From  tlie  associa- 
tions of  actions  on  the  case,  a  remedy 
j^ivcn  by  the  law  for  almost  every  claim 
for  money,  anrl  for  tlie  redress  of  every 
breach  of  colli ract  not  under  seal,  with 
actions  ol  ni'coiint,  whii-h  lie  only  in  a  few 
Kjieeial  cases;  it  may  reasonably  bo  con- 
ceived that  the  legislature  ha<l  iti  contem- 
plation to  except  those  actions  only  for 
which  ne<'ount  would  lie.     lie  this  as  it 


may,  the  words  certainly  require  that  the 
action  should  be  founded  on  an  account." 
See  also,  Toland  v.  Sprague,  12  Pet.  300; 
Didier  v.  Davidson,  2  Barb.  Ch.  477. 

(a)  Where  the  joint  owners  of  planta- 
tions in  Java,  which  they  worked  in  co- 
partnership, kept  an  account  with  certain 
merchants  and  agents  at  Bombuij,  to  whom 
they  became  largely  indebted  in  respect  of 
moneys  advanced  and  paid  for  their  use; 
it  was  held,  that  the  account  was  not  a 
mercantile  account,  within  the  meaning  of 
the  exception  in  the  statute  of  limitations. 
Forbes  V.  Skelton,  8  Simons,  335.  And 
in  Spring  v.  Gray,  .5  Mason,  .505,  6  Pet. 
151,  it  was  lield,  that  a  special  contract  be- 
tween ship-owners  and  a  shipper  of  goods, 
to  receive  half  profits  in  lieu  of  freirjht  on 
the  shipment  for  a  foreign  voyage,  was  not 
a  ease  of  merchants'  accounts,  within  the 
exception  in  the  statute  of  limitations. 
And  Marshall,  C.  J.,  said  :  "  The  account 
must  be  one  '  which  concerns  the  trade  of 
merchandise.'  The  case  protected  by  the 
exception  is  not  every  transaction  between 
merchant  and  merchant,  not  every  account 
which  might  exist  between  them ;  hut  it 
must  concern  the  trade  of  merchandise. 
It  is  not  an  exemption  from  the  act,  at- 
tached to  the  merchant  merely  as  a  per- 
sonal privilege,  but  an  exemption  which 
is  conferred  on  the  business,  as  well  as  on 
the  persons  between  whom  that  business 
is  carried  on.  The  account  must  concern 
the  trade  of  merchandise  ;  and  this  trade 
must  be,  not  an  ordinary  traflic  lictwccn  a 
merchant  and  any  ordinary  custonu'rs,  but 
between  merchant  and  nierchant."  In 
Watson  i\  Lyle,  4  Leigh,  2o(;,  where  the 
plaintiff  replied  to  a  plea  of  the  statute  of 
limitations,  tiiat  the  cause  of  action  con- 
sisted of  accounts,  which  concerned  the 
trade  of  nierchimdise,  between  merchant 
and  merchant,  and  no  cvidi'nec  was  ad- 
duced to  |)r()ve  that  either  Jiarty  was  a 
merchant  during  the  time  of  the  dealings 
between  them,  nor  any  evidence  of  the 
character  of  those  dealings  but  that  fur- 
nished by  the  account  of  the  plaintiff,  in 


en.  yi.] 


STATUTE    OF    LIMITATIONS. 


-369 


tained  that  none  were  merchants,  within  the  meaning  of  this 
exception,  save  those  who  traded  beyond  sea.  (b)  But  that 
clearly  would  not  be  held  now.  So,  also,  an  opinion  has  pre- 
vailed, to  some  extent,  that  the  exception  does  not  extend  to 
accounts  between  merchants,  as  partners ;  (c)  but  we  doubt 
whether  there  is  good  reason  for  such  a  restriction,  (d)  Whether 
common  retail  tradesmen  come  within  the  exception,  as  being 
merchants,  is  more  uncertain,  (e) 

It  has  been  much  questioned  whether  this  exception  required 
that  even  where  the  account  was  between  merchants,  and  in 
relation  to  merchandise,  some  item  of  it  must  be  within  six 
years.  (/)  It  would  seem  that  this  construction  adds  to  the 
statute.  It  requires,  for  admission  within  the  exception,  a  new, 
distinct,  and  important  element,  which  the  statute  certainly  does 
not  express,  and,  perhaps,  does  not  indicate.     We  consider  this 


which  account  the  debits  to  the  alleged 
debtor  consisted  of  two  items  for  cash  paid 
him  on  account  of  bills  of  exchange,  one 
item  for  goods  sold  him,  and  the  other 
items  for  cash  advanced  to  or  for  him,  and 
there  was  a  single  credit  for  the  proceeds 
of  a  bill  of  exchange  bought  of  iiim ;  it 
was  held,  that  the  replication  was  not  sup- 
ported by  the  evidence,  and  the  demand 
therefore  was  barred  bythe  statute.  Again, 
in  Farmers  &  Mechanics  Bank  v.  Plan- 
ters Bank,  10  Gill  &  J.  422,  it  was  held, 
that  the  exception  did  not  apply  to  transac- 
tions between  banking  institutions.  And 
see  furtiicr,  Dutton  v.  Hutchinson,  1  Jur. 
772  ;  Coster  v.  Murray,  5  Johns.  Ch.  522, 
20  Johns.  576 ;  Landsdale  v.  Brashear,  3 
T.  B.  Mon.  330;  Patterson  v.  Brown, 
6  id.  10;  Smith  v.  Dawson,  10  B.  Mon. 
112;  Price  v.  Upshaw,  2  Humph.  142; 
Slocumb  V.  Holmes,  1  How.  Miss.  139  ; 
Pox  V.  Fisk,  6  id.  328 ;  Marseilles  v.  Ken- 
ton, 17  Penn.  St.  238 ;  McCulloch  v.  Judd, 
20  Ala.  703  ;  Blair  i'.  Drew,  6  N.  H.  235  ; 
Start  V.  Mellish,  2  Atk.  612;  Codman  v. 
Sogers,  10  Pick.  118  ;  Coalter  v.  Coalter, 
1  Rob.  Va.  79. 

(b)  Thus,  in  Sherman  i\  Withers,  1  Ch. 
Cas.  152,  which  was  a  bill  in  equity  for 
an  account  of  fourteen  years'  standing,  it 
appeared  that  the  plaintiff  was  an  inland 
merchant,  and  the  defendant  his  factor. 
The  defendant  pleaded  the  statute  of  limi- 
tations. And  "upon  debate  of  the  plea, 
the  Lord  Keeper  conceived  the  exception 


in  the  statute,  as  to  merchants'  accounts, 
did  not  extend  to  this  case,  but  only  to 
merchants  trading  beyond  sea."  And 
see  Thomson  v.  Hopper,  1  Watts  &  S. 
469. 

(c)  Bridges  v.  Mitchell,  Bunb.  217; 
Lansdale  v.  Brashear,  3  T.  B.  Mon.  330; 
Patterson  v.  Brown,  6  id.  10 ;  Coalter  v. 
Coalter,  1  Bob.  Va.  79. 

(d)  See  Ogden  v.  Astor,  4  Sandf.  327. 

(e)  In  Farrington  v.  Lee,  1  Mod.  268, 
^l/^^»s,  J.,  said  :  "I  think  the  makers  of 
this  statute  had  a  greater  regard  to  the 
persons  of  merchants,  than  the  causes  of 
action  between  them.  And  the  reason 
was,  because  they  ai'e  often  out  of  the 
realm,  and  cannot  always  prosecute  their 
actions  in  due  time.  I  think,  also,  that 
no  other  sort  of  tradesmen  but  merchants 
are  within  the  benefit  of  this  exce[)tion ; 
and  that  it  does  not  extend  to  shopkeep- 
ers, they  not  being  within  the  same  mis- 
chief." And  see  Cottam  v.  Partridge,  4 
Scott,  N.  R.  819,  where  this  question  was 
raised,  but  not  decided. 

( /)  For  cases  holding  the  affirmative  of 
this  question,  see  Welford  v.  Liddel,  2  Ves. 
Sen.  400  ;  Martin  v.  Heathcote,  2  Eden, 
169  ;  Barber  v.  Barber,  18  Ves.  286  ;  Fos- 
ter V.  Hodgson,  19  id.  ISO;  Auk  v.  Good- 
rich, 4  Russ.  430  ;  Coster  r.  Murray,  5 
Johns.  Ch.  522,  20  Johns.  576  ;  Didicr  v. 
Davison,  2  Barb.  Ch.  477  ;  Van  Rhyu  v. 
Vincent,  1  McCord,  Ch.  310.  And  see 
Penn  v.  Watson,  20  Mo.  13. 

[395] 


370* 


THE   LAW    OF   CONTRACTS. 


[part  II 


question  as  now  settled  in   England,  in  the  negative;  and  be- 
lieve that  it  will  be  so  held  in  this  country,  (g-) 


*SECTION  VI. 

WHEN    THE    PERIOD    OF    LIMITATION    BEGINS    TO    RUN. 

The  next  question  we  propose  to  consider  is,  from  what 
point  of  time  the  six  years  are  to  be  counted.  The  general  an- 
swer is,  from  the  period  when  the  creditor  could  have  com- 
menced his  action  ;  because  it  is  then  only  that  the  reason  of 
the  limitation  begins  to  operate,  whether  we  say  with  the  theory 
that  the  statute  is  one  of  presumption,  that  so  long  a  delay 
makes  it  probable  that  the  debt  is  paid,  or  suppose  the  statute 
to  be  one  of  repose,  and  say  that  after  so  long  a  neglect,  the 
creditor  ought  to  lose  his  action.  Thus,  if  a  credit  is  given,  the 
six  years  begin  when  the  credit  expires ;  (A)  and  if  the  money 
be  payable  on  the  happening  of  a  certain  event,  the  six  years 
begin  from  the  happening  of  the  event,  as  on  a  marriage ;  (i)  or 
if  a  bill  be  payable  at  sight,  the  six  years  begin  on  presentment 
and  demand,  (j)  And  this  credit  may  be  inferred,  or  length- 
ened  by  inference,  (k)      As  if  goods  are  sold  on  six  months 


{[/)  That  this  question  is  now  settlod  in 
the  ne;;iitive  in  Knuliind,  sec  Catiinii;  r. 
Siiouldin;:,  G  T.  K.  189;  Koljinson  /•. 
Alexand.-r,  8  ]'>li<:h,  352  ;  In,<;lis  r.  Ilai-li, 
8  M.  &  W.  71)9.  Sw,  however,  Tatam  r. 
Williams,  3  Hare,  347.  And  siieli  also  is 
the  wcif^ht  of  authority  in  tiiis  country. 
See  Miindeville  ?■.  Wilson,  5  Craneh,  15  ; 
Sprint;  r.  (irav,  (i  IVt.  151  ;  IJass  r.  J5ass, 
G  Tick.  30-2;"  Watson  r.  Lyle,  4  Lei-h, 
230  ;  (.'oaiter  v.  Coalter,  1  Hoi).  Vu.  79  ; 
Lansdale  v.  IJrasliear,  3  T.  IJ.  Mon.  330  ; 
l'atten<on  r.  I'rown,  C  id.  10;  Dyott  r. 
Letcher,  G  J.  J.  Marsii.  541  ;  Gnichard  v. 
Siiperveile,  1 1  Texas,  522  ;  rrid^ren  v. 
Hill,  12  id.  374  ;  ( );;dcn  r.  Astor,  4  Sandf. 
329.  And  see  Cliiunbers  v.  Snooks,  25 
I'enn.  St.  'J'M). 

(//)  'I'hus,  in  Wittersiieiin  v.  Lady  Car- 
lisle, 1  II.  I'd.  031,  it  was //rW  that'wherc 
a  bill  of  cxclian^je  is  drawn  j)ayal)lc  at  a 

[  39G  ] 


certain  future  period,  for  the  amount  of  a 
sum  of  money  lent  by  the  payee  to  tlie 
drawer,  at  the  time  of  drawinjj;  the  bill, 
tlie  ])ayee  may  recover  the  money  in  an 
action  for  money  lent,  altlioii_<;h  si.x  years 
have  elapsed  since  the  time  when  tiie  loan 
was  advanced  ;  the  statute  of  limitations 
beninninj;  to  o])eratc  only  from  the  time 
when  tiie  money  was  to  be  repaid,  namely, 
wiien  the  bill  became  due.  And  see 
Wheatley  )'.  Williams,  1  U.  &  W.  5.33  ; 
Irvinj,'  V.  Vcitch,  3  id.  90  ;  Fryer  v.  Iloc, 
12  C.  J5.  437,  22  En^c.  L.  &  Eq.  440; 
Tisdale  r.  Mitchell,  12  Texas,  G8. 

(0  Shutford  r.  r>orou-;h,  Godb.  437; 
Feuton  /•.  ICmblcrs,  1  W.  151.  353. 

( /)  Wolfe  r.  Whiteman,  4  Ilarrinp:. 
])|:1.  21('> ;  Jlolnu's  r.  Kerrison,  2  Taunt. 
323. 

{Ic)  See  JJrciit  i'.  Cook,  12  B.  Mon. 
267. 


CH.  VI.]  STATUTE    OF   LIMITATIONS.  *37i 

credit,  and  then  a  bill  is  to  be  given,  payable  at  three  months, 
whether  the  bill  is  given  or  not,  the  six  years  are  said  to  begin 
after  nine  months  ;  and  if  the  bill  may  be  at  two  or  four  months, 
at  the  purchaser's  option,  this,  it  seems,  would  be  construed  as 
a  credit  for  ten  months.  (/)  It  may,  however,  be  doubted 
whether  the  true  construction  of  such  a  contract  should  not  be 
a  credit  for  six  months ;  then  a  bill  for  two  or  four ;  and  if  the 
bill  is  given,  the  statute  will  begin  to  run  when  the  bill  is  due 
and  not  before ;  but  if  the  bill  is  *not  given,  this  is  a  breach  of 
the  contract  so  far,  and  the  credit  ends  with  the  six  months,  and 
the  statute  then  begins  to  run.  (m) 

Where  there  are  third  parties  in  the  transaction,  the  same 
rule  prevails.  As  if  one  sells  property  belonging  to  himself  and 
another,  and  this  other  sues  him  for  his  share,  the  action  is 
barred  by  the  statute,  only  if  six  years  have  run  from  the  time 
when  the  payment  was  made  by  the  buyer,  (n)  And  if  the 
seller  takes  a  promissory  note  for  the  goods,  the  six  years  do 
not  run  for  him  from  the  sale,  nor  yet  from  the  maturity  of  the 
note ;  but  only  from  t^e  actual  payment,  because  only  then 
could  the  other  owner  demand  his  share,  (o)  So  if  a  surety 
pays  for  his  principal,  the  statute  begins  to  run  from  his  first 
payment  for  his  principal,  as  to  that  payment ;  (p)  but  as  to  his 
claim  on  a  co-surety,  for  contribution,  it  does  not  begin  when 
he  begins  to  pay,  but  only  when  his  payments  first  amount  to 
more  than  his  share,  (q)  So  in  a  contract  of  indemnity ;  the 
six  years  begin  only  with  the  actual  damnification,  (r)  As  if 
one  lends  a  note,  on  a  promise  of  indemnity,  the  statute  begins 
to  run  only  from  the  time  when  he  has  to  pay  the  note  he 
lends,  (s)  If  a  demand  be  necessary  to  sustain  an  action,  only 
after  it  is  made  does  the  statute  begin,  (t)     But  a  note  payable 

(/)  Helps  V.  Wintcrbottom,  2  B.  &  Ad.  (r)  Iluntlev  v.  Sanderson,  1  Cromp.  & 

431.  M.  467  ;  Collinge  v.  Heywood,  9  A.  &  E. 

(?n)  Per  Pa?i-e,  J.,  in  Plelps  I'.  Winter-  633;    Ponder   v.   Carter,    12   Ired.   242; 

bottom,  supra.  Sims  r.  Gondclock,  6  Eicli.  100;  Gilles- 

(n)  Miller  v.  Miller,  7  Pick.  133.  pie  v.  Creswell,  12  Gill  &  J.  36  ;  Scott  v. 

(o)  Id.  Nichols,  27  Missis.  94. 

(/))  Davies  v.  Humphreys,  6  M.  &  W.  (s)  Rej-noldsr.  Doyle,  2  Scott,  N.  K.  45. 

153;   Ponder   v.    Carter,  "^12   Ired.   242;  (/)  For  the  cases  in  which  a  demand  is 

Gillespie  v.   Creswell,   12   Gill  &  J.  36;  necessary,    see   Topham   r.   Braddick,   1 

Bullock  V.  Campbell,  9  Gill,  182.  Taunt.  572  ;  Clark   r.  Moody,  17   Mass. 

((/)  Davies  i\  Humphreys,  s»j9ra.  145;    Coffin   v.    Coffin,    7    Grecnl.   298; 

VOL.  11.  34  [  397  J 


372*  THE   LAW   OF    CONTRACTS.  [PART  II. 

"  on  demand  "  is  due  always,  and  the  statute  begins  as  soon  as 
the  note  is  made.  (?y)  So  it  is  with  a  receipt  for  money  bor- 
rowed, whereby  the  borrower  agrees  to  jDay  "  whenever  called 
upon  to  do  so."  (v) 

*The  statute  begins  to  run  whenever  the  creditor  or  plaintiff 
could  bring  his  action,  and  not  when  he  knew  he  could ;  thus, 
it  is  said  that  if  one  promises  to  pay  when  able,  as  soon  as 
he  is  able  the  statute  runs,  although  the  creditor  did  not  know 
it.  (w)  And  if  the  action  rests  on  a  breach  of  contract,  it 
accrues  as  soon  as  the  contract  is  broken,  although  no  injury 
result  from  the  breach  until  afterwards,  [x)  As  if  one  delivers 
goods  which  are  not  what  he  undertakes  to  sell,  and  the  pur- 
chaser re-sells  under  his  mistake,  and  is  obliged  to  pay  damages, 
he  has  a  claim  against  the  first  seller,  but  must  bring  his  action 
to  enforce  it  within  six  years  from  the  first  sale.  (7/)  So  if  one 
is  guilty  of  gross  negligence,  whereby  injury  occurs,  six  years, 
running  from  the  time  of  his  neglect,  will  bar  the  action,  al- 
though the  injury  has  occurred  within  the  six.  (z) 

The  holder  of  a  foreign  bill  acquires  a  right  of  action,  as 
against  the  drawer,  immediately  on  non-acceptance,  protest, 
and  notice ;  and  the  statute  then  begins  to  run  against  him; 

Little  r.  Blunt,  9  Pick.  488  ;  Stafford  V.  (x)  Argall    u."  Bryant,    1    Sandf.    98; 

Richardson,    15    Wend.   302;    Lillic   v.  Smith  v.  Fox,  6  Hare,  386.     And   see 

Hoyt,  .5  Hill,  395  ;  Hickok  v.  Hickok,  13  cases  cited  in  preceding  note. 

Bar!).  032 ;  Lyle  v.  Murray,  4  Sandf.  590;  (y)  Thus  where  A,  under  a  contract  to 

Mitchell   V.   ^IcLemore,   9   Texas,    151  ;  deliver  spring-wheat,  had  delivered  to  B 

McDonnell  v.  Branch  Bank,  20  Ala.  313  ;  winter-wheat,  and  B,  having  again  sold  the 

Taylor  r.  Sjjcar,  3  Eng.  429 ;  Denton  v.  same  as  spring-wheat,  had  in  consec[uence 

Emluiry,  5  id.  228.  been  compelled,  alter  a  suit  in  /Scotland, 

(it)  Little  V.  Blunt,  9  Pick.  488;  Wen-  wliich  lasted  many  years,  to  pay  damages 

man  v.  The  Moiiawk  Ins.  Co.  13  Wend,  to  tiie  vendee,   and   afterwards   brought 

267;  Hill  ?•.  Henry,  17  (Jhio,  9;  Norton  an  action  of  assumpsit  against  A  for  his 

V.  Eiiaiii,  2  M.  &  W.  4G1.  lircach    of   contract,   alleging   as    special 

(r)  See  Waters  v.  The  Earl  of  Thanct,  damage,  tiic  damages  so  recovered,  it  was 

2  Q.  B.  757.  Iicld,  that  although  such  special  damage 
(iv)  Water.')  V.  The  Earl  of  Thanet,  2  had  occurred  within  six  years  before  tho 

Q.  B.  757.    And  sci;  Baitlcy  i\  Faulkner,  commencement  of  the  action  by  B  against 

3  B.  &  Aid.  288  ;  Short  v.  M'Carthy,  id.  A,  yet  that  the  breach  of  the  contract  hav- 
020  ;  Brown  r.  Howard,  2  Broil.  &  B.  ing  occurred  more  than  six  years  before 
73;  (Irangcr  v.  (Icorgc,  5  B.  vt  C.  149;  that  jiciiod,  A  might  properly  plead  arlio 
Argall  i\  Bryant,  1  San<lf.  98  ;  'J'rou])  v.  non  (nvra-il  inffn  scr  (uiikjs.  Battley  v. 
Smith,  20  JolmH.  33  ;  Howell  ?>.  Young,  Faulkner,  3  B'.  &  Aid.  289. 

5  B.  &  C.   259;  Wilcox   v.   Plummcr,  4         (-)  Sinclair  v.  The  Bank  of  So.  Car.  2 

I'et.  172;  Kerns  I).  Sclioonnuikcr,  4  Ohio,  Strobh.  344.     And  see  cases  cited  *»/^ra, 

.331;    Denton  v.    Embury,   5    Kng.   228;  n.  (»). 
The  Governor  n.  (jordon,  15  Ala.  72. 


CH.  VI.]  STATUTE   OF   LIMITATIONS.  *373 

and,  therefore,  if  he  afterwards  pays  the  bill  when  due,  he  has 
not  six  years  from  that  payment  in  which  he  may  bring  his 
action,  (a)  It  has  been  said,  obiter,  in  New  York,  that  a  sec- 
ond indorser  who  sues  a  prior  indorser  for  money  paid  on  a  note, 
but  who  has  not  paid  the  note  and  brought  his  action  upon  it, 
cannot  maintain  his  action,  if  the  statute  has  run  in  favor  of  the 
defendant,  and  against  the  holder  of  the  note,  (b) 

*  If  money  be  payable  by  instalments,  the  statute  begins  to 
run  as  to  each  instalment  from  the  time  when  it  becomes  due  ; 
but  if  there  be  an  agreement  that  upon  default  as  to  any  one, 
all  then  unpaid  shall  become  payable,  the  statute  begins  to  run 
as  to  all,  upon  any  default,  (c) 

If  the  demand  arise  from  the  imperfect  execution  of  a  con- 
tract to  do  certain  work,  in  a  certain  way,  and  within  a  certain 
time,  it  is  said  that  the  six  years  begin  to  run  from  the  time 
when  the  work  was  to  have  been  completed,  and  not  from  the 
time  when  the  plaintiff  had  received  actual  damage  from  the 
imperfect  execution  of  the  work,  (c/) 

It  would  seem,  both  from  English  and  American  authority, 
that  the  statute  does  not  begin  to  run  against  the  claim  of  an 
attorney,  for  professional  services,  until  he  no  longer  acts  in 
that  matter  as  attorney ;  [e]  but  he  may  terminate  his  profes- 
sional relation  at  his  own  pleasure  (if  he  thereby  does  no 
wrong  to  his  client),  and  demand  payment  of  his  bill;  and  the 
statute  then  begins  to  run.  (/)  So  it  would  undoubtedly  be,  if 
the  services  were  in  any  way  brought  to  an  end,  although  no 
demand  were  made  ;  because  (except  that,  in  England,  the  rule 
requiring  a  delivery  of  the  signed  bill  one  month  before  suit, 
might  prevent  it)  he  could  bring  an  action  for  his  services  at 
once. 

(a)  Whitehead  v.  Walker,  9  M.  &  W.  629  ;  NiclioUs  v.  Wilson,  1 1  M.  &  W.  106  ; 

506.  Whitehead  v.  Lord,  7  Exch.  691,  11  Eng. 

(6)  Wright  V.   Butler,    6   Wend.    284.  L.   &  Eq.  587  ;   Eothery  v.  Mannings,  I 

And  see  Barker  v.  Cassidy,  16  Barb.  177.  B.  &  Ad.  15  ;  Phillips  v.  Broadley,  9  Q. 

(c)  Hemp  V.  Garland,  4  Q.  B.  519.  B.  744;    Foster  v.  Jack,  1  Watts,  334; 

(d)  Rankin  v.  Woodworte,  3  Penn.  48.  Jones  v.  Lewis,  11  Texas,  359. 

(e)  Harris  v.  Osbourn,  2  Cromp.  &  M.         (/)  Vansaudau  v.  Browne,  9  Bing.  402. 

[399] 


374*  THE   LAW   OF   CONTRACTS.  [PART  II. 

SECTION    VII. 

OF   THE   STATUTE   EXCEPTIONS   AND   DISABILITIES. 

The  statute  of  James  provides,  that  if  the  plaintiff  at  the 
time-  when  the  cause  of  action  accrues,  is  within  the  age  of 
twenty-one  years,  feme  covert,  non  compos  mentis,  imprisoned,  or 
beyond  the  seas,  he  may  bring  his  action  at  any  time  within  six 
years  after  the  disability  ceases  or  is  removed. 

*  If,  therefore,  eilher  of  these  disabilities  exists,  when  the 
cause  of  action  arises,  then,  so  long  as  it  exists,  the  statute  does 
not  run;  but  as  soon  as  the  disability  is  removed,  the  statute 
begins  to  run.  [fa) 

In  general,  if  the  statute  begins  to  run,  its  operation  cannot 
afterwards  be  arrested,  [g)  Thus,  if  the  disability  should  not 
exist  when  the  cause  of  action  arose,  but  should  begin  one 
month  afterwards,  and  remain,  as  if  the  creditor  should  go 
abroad  and  not  return,  the  statute  runs  in  the  same  way  as  if 
the  disability  never  existed.  So  if  it  exists  when  the  cause  of 
action  begins,  and  is  afterwards  removed,  although  temporarily, 
the  statute  begins  to  run  as  soon  as  the  disability  is  removed, 
and  then  continues.  And  it  has  been  held,  not  only  that  if  the 
creditor  returns  to  his  home  for  a  short  time,  and  then  goes 
abroad  again,  and  remains  there,  the  statute  begins  to  operate; 
but  if  there  be  joint  creditors,  who  were  abroad  when  the  cause 
of  action  accrued,  and  one  of  them  returned  home,  the  six  years 
begin  as  to  all  from  such  return.  (A) 

If  several  disabilities  coexist  when  the  right  of  action  ac- 
crues, the  statute  does  not  begin  to  run  until  all  are  removed,  [i) 
But  if  there  exists  but  one  disal)ility  at  the  time  when  the  cause 

(fit)  All  acknowlcilt^inciit  hy  :iii  iiifaiit  I'ciidcitxriist  i'.  Foley,  8  Ga.   1  ;   Stewart 

of  u  ilcltt  iliKi  fur  iiL'c('ssiiric,s  is  cflcctivc,  v.  Spcdik'ii,  T)  Mil.  4.'i.'5. 
f'(jr  tlic  purpose  of  tiikin;;  llic  ilcht  out  of         (A)   J'l'rry    i\    J;ickson,    4    T.  R.  516; 

tlic  operation  of  the  stiitutc.     Williams/'.  IMarstellur    v.    M'Clean,    7  Cranch,  156; 

Sniitli,  4  Elli«  &  13.   180,  28  Kii^'.   L.  &  Henry  c  Menus,  2  Hill,  S.  C.  .'328;  Kiggs 

Iv|.  270.  '•.  Do'oley,  7  W.  Mon.  2;H)  ;  Wells  v.  Kag- 

('/)  Sinitli  »•.  Hill,  1  Wilson,  134  ;  Cray  laud,    1     Swan,    501.      But    sec    contra, 

V.   Mcuilez,   Stra.    556;    ]{uli'    v.   Hid  I,  7  ( ioiirdiiie  r.  (irahaui,  1  Hrcv.  329. 
Harris  &  J.  14  ;  Young  v.  Mackall,  4  Aid.         (/)  Deniarest  n.  Wynkoo]>,  3  Johns.  Ch. 

362;  Coventry  v.  Alherton, 'J  Ohio,  .■i4 ;  12'J;  Jackson?;.  Johnson,  5  Cowcn,  74; 

[  400  ] 


en.  VI.] 


STATUTE    OF   LIMITATIONS. 


*375 


of  action  accrues,  other  disabilities,  arising  afterwards,  cannot 
be  tacked  to  the  first,  so  as  to  extend  the  time  of  limitation,  (j) 
But  it  is  obvious  that  an  action  cannot  be  brought  if  the 
defendant  cannot  be  reached,  any  more  than  if  the  plaintiff  can- 
not act.  And,  therefore,  the  statute  of  the  fourth  of  Anne,  ch. 
16,  s.  19,  provides  that  if  any  person  against  whom  there  shall 
be  a  cause  of  action,  shall,  at  the  time  when  such  cause  *of 
action  accrues,  be  beyond  the  seas,  then  the  action  may  be 
brought  at  any  time  within  six  years  after  his  return.  This 
statute  also  has  been  substantially  reenacted  here.  In  England 
it  seems  to  have  been  held  that  if  the  debtor  returns  but  for  a 
few  days,  and  his  return  is  wholly  unknown  to  the  creditor,  the 
statute  begins  to  run  from  the  date  of  his  return,  (k)  But  it 
has  been  held  here,  that  if  the  debtor  come  back  within  the 
jurisdiction  and  remain  some  weeks,  but  hide  himself,  so  that 
the  creditor  has  not  actually  an  opportunity  of  suing  him,  this 
return  does  not  satisfy  the  purpose  of  the  statute,  and  the  six 
years  do  not  begin.  (Z)  It  has  further  been  held  here,  that  in 
order  to  put  the  statute  in  operation,  the  defendant  is  bound  to 


Butler  V.  Howe,  13  Me.  397 ;  Dugan  v. 
Gittings,  3  Gill,  138;  Scott  v.  Haddock, 
11  Ga.  258. 

{j )  Demarest  v.  Wynkoop,  3  Johns. 
Ch.  129;  Jackson  v.  AVheat,  18  Johns. 
40 ;  Eager  i".  The  Commonwealth,  4  Mass. 
182 ;  Dease  v.  Jones,  23  Missis.  133  ;  Doe 
d.  Caldwell  v.  Thorp,  8  Ala.  253  ;  Mercer 
V.  Selden,  1  How.  37 ;  Bradstreet  v. 
Clarke,  12  Wend.  602;  Scott  v.  Haddock, 
11  Ga.  258. 

(k)  See  Gregory  v.  Hurrill,  5  B.  &  C. 
341  ;  HoU  V.  Hadley,  2  A.  &  E.  758. 

(/)  White  V.  Bailey,  3  Mass.  271.  So 
the  Supreme  Court  of  New  York  in  Fow- 
ler V.  Hunt,  10  Johns.  464,  declared  that, 
"  The  coming  from  abroad  must  not  be 
clandestine,  and  with  an  intent  to  defraud 
the  creditor  by  setting  the  statute  in  opei'a- 
tion  and  then  departing.  It  must  be  so 
public,  and  under  such  circumstances,  as 
to  give  the  creditor  an  opportunity,  by  the 
use  of  ordinary  diligence  and  due  means, 
of  arresting  the  debtor."  So  in  Hysinger 
V.  Baltzells,  3  Gill  &  J.  158,  where  the 
cause  of  action  accrued  in  October,  1822, 
when  the  defendant  was  a  resident  of 
another  State,  and  it  appeared  that  the 
defendant  was  iu  Baltimore,  where  the 

34* 


plaintiff  resided,  in  April,  1823,  "pur- 
chased other  goods  from  the  plaintiff,  and 
remained  there  for  two  days,"  it  was  held, 
that  the  statute  did  not  begin  to  run,  be- 
cause it  did  not  appear  at  what  time 
during  those  two  days,  the  defendant 
made  his  purchase ;  nor  whether  the  plain- 
tiff had  an  opportunity  to  sue  out  a  writ 
against  him  with  effect.  And  Martin,  J., 
said  :  "  It  might  be  true  the  defendant 
was  in  Baltimore  for  two  days,  and  that 
he  purchased  goods  from  the  plaintiffs,  yet 
if  their  knowledge  of  his  being  there  arose 
solelt/  from  the  purchase  made,  and  that 
purchase  was  made  immediatelij  before  the 
defendant  left  the  city,  that  would  not 
afford  them  an  opportunity  to  sue  out  a 
writ  with  effect.  If  it  had  been  stated, 
that  the  defendant  was  in  Baltimore  for 
two  days,  and  that  the  plaintiffs  knew  he 
was  there  for  that  space  of  time,  laches 
might  be  imputed  to  them  ;  but  this  is  not 
stated,  and  the  court  could  not  infer  it." 
And  see  further.  State  Bank  v.  Scawell, 
18  Ala.  616;  Byrne  v.  Crowninshicld,  1 
Pick.  263  ;  Howell  v.  Burnet,  11  Ga.  303; 
Alexander  v.  Burnet,  5  Rich.  189  ;  Dorr 
V.  Swartwout,  1  Blatchf.  C.  C.  179;  Ean- 
dall  V.  Wilkins,  4  Denio,  577. 

[401] 


376* 


THE  LAW   OF   CONTRACTS. 


[part  ir. 


show,  either  that  the  plaintiff  linew  of  his  return,  so  as  to  have 
had  an  opportunity  to  arrest  him,  or  that  his  return  was  so  pub- 
lic as  to  amount  to  constructive  notice  or  knowledge,  and  to 
raise  the  presumption  that  if  the  plaintiff  had  used  ordinary 
diligence,  the  defendant  might  have  been  arrested,  (m) 

*A  question  has  been  made  whether  the  exception  in  the 
statute,  in  reference  to  absentees,  extends  to  foreigners,  or  those 
who  have  resided  altogether  out  of  the  State  or  country,  as  well 
as  to  citizens  who  may  be  absent  for  a  time.  And  it  has  been 
contended  that  the  word  "return"  required  that  the  exception 
should  be  confined  to  the  latter  class.  But  the  contrary  is  well 
settled  both  here  and  in  England,  (n)  And  it  seems  that  this 
exception  to  the  statute  of  limitations  applies  to  foreigners,  even 
where  they  have  an  agent  residing  in  the  State  where  the  suit 
is  brought,  (o)  Where  the  debtor  is  a  resident  of  the  State  or 
country  at  the  time  the  cause  of  action  accrues,  and  until  his 
death,  the  statute  of  limitations  commences  running  only 
from    the  time   of   granting  letters   of  administration  on   his 


(m)  Little  u.  Blunt,  16  Pick.  359.  In 
Mazozon  v.  Foot,  1  Aikens,  282,  Skinner, 
C.  J.,  said  :  "  It  cannot  be  supposed,  nor 
does  the  defendant  insist,  that  every  com- 
ing or  return  into  the  State,  would  set  the 
statute  in  operation.  He  admits  it  must 
be  such,  as  that  by  due  diligence  the  cred- 
itor might  cause  an  arrest.  If  the  debtor 
should  remove  or  return  to  the  State  pub- 
licly, and  with  a  view  to  dwell  and  per- 
manently reside  within  its  jurisdiction, 
altliough  iu  an  extreme  part  from  the 
place  of  his  former  residence,  or  tliat  of 
the  creditor,  this  would  undoubtedly  bring 
the  case,  by  a  correct  construction  of  the 
statute,  witiiin  its  operation,  tiiough  tiic 
creditor  sliould  liave  no  knowledge  of  ids 
return.  So,  too,  if  the  debtor,  luiving  no 
intention  to  reside  hero,  comes  or  returns 
into  tiie  State,  and  this  is  known  to  the 
creditor,  and  he  lias  an  opi)ortunity  to 
arrest  tlie  body,  tiic  case  is  brouglit 
within  the  statute.  In  tlic  latter  case,  it 
is  necessary  the  creditcjrslioidd  be  iijipriscd 
of  his  debtor's  being  williin  tlir  jurisdic- 
tion of  tlie  State."  And  see  Hill  r.  Ik'l- 
lows,  15  Vt.  727;  Didior  v.  Davison,  2 
Sandf.  Ch.  01.  IJut  see,  coutra,  Slate 
Bank  v.  Scawell,  18  Ala.  010. 

in)    Thus,    in    lluggles    v.    Kceler,   .3 
Johns.  201,  Kent,  C  J.,  said  :  "  Whether 

[4U2] 


the  defendant  be  a  resident  of  this  State, 
and  only  absent  for  a  time,  or  whether  he 
resides  altogether  out  of  the  State,  is  im- 
material. He  is  equall)'  within  the  pro- 
viso. If  the  cause  of  action  arose  out  of 
the  State,  it  is  sufficient  to  save  the  statute 
from  running  in  favor  of  the  party  to  be 
charged,  until  he  comes  within  our  juris- 
diction. This  has  been  the  uniform  con- 
struction of  the  English  statutes,  which 
also  speak  of  the  return  from  beyond  seas 
of  the  party  so  absent.  The  Avord  return 
has  never  been  construed  to  confine  the 
l^roviso  to  Englishmen,  who  went  abroad 
occasionally.  The  exception  has  been 
considered  as  general,  and  extending 
equally  to  foreigners  who  reside  always 
abroad."  And  see,  to  the  same  effect, 
Strithorst  v.  Graeme,  3  AVilson,  145,  2  W. 
151.  723  ;  Lafonde  r.  Ruddock,  1.3  C.  B. 
839,  24  Eng.  L.  &  Eq.  2.39  ;  King  v.  Lane, 
7  Mo.  241  ;  Tagart  r.  The  State  of  In- 
diana, 15  id.  209;  Alexander  v.  Burnet, 
5  Kich.  189;  Estis  r.  Rawlins,  5  How. 
I\Iiss.  258;  Hall  i\  Little,  14  IMass.  203  ; 
Dunning  v.  Chamberlin,  0  Vt.  127  ; 
(iravcs  ('.  Weeks,  19  id.  178;  Chom([ua 
r.  Mason,  1  Gallis.  342.  But  see,  contra, 
Snoddv  !'.  Cage,  5  Texas,  lOG  ;  Moore  v. 
llendrick,  8  id.  253. 

(")  Wilson  r.  Appleton,  17  Mass.  180. 


CH.  VI.]  STATUTE    OF   LIMITATIONS.  *377 

estate.  (;?)  It  has  recently  been  held  in  New  York,  by  the' 
Court  of  Appeals,  that  a  foreign  corporation  sued  in  that  State, 
cannot  avail  itself  of  the  statute  of  limitations.  It  is  like  a 
natural  person  within  the  exceptions  to  the  operation  of  the 
statute,  by  which  the  time  of  absence  from  the  State  is  not  to 
be  taken  as  any  part  of  the  time  limited  for  the  commencement 
of  an  action  against  it.  (pa) 

In  New  England,  where  attachment  by  mesne  process  pre- 
vailed, it  was  formerly  very  generally  provided  that  if  the 
defendant  had  left  property  within  the  State,  this  clause  did  not 
operate,  because  the  action  could  be  begun  and  kept  alive  by 
attachment.  And  under  this  provision  it  was  held  that  real 
estate  was  such  property,  and  prevented  the  operation  of  this 
section,  although  under  attachment  for  more  than  *its  value,  {q) 
Because  the  action  could  still  be  kept  alive,  and  perhaps  the 
first  attachment  might  be  defeated.  But  this  clause,  respecting 
property,  is  now,  in  some  cases,  omitted,  (r)  It  is,  however, 
sometimes  provided,  that  if,  after  the  action  accrues,  the  defend- 
ant shall  be  absent  from,  and  reside  out  of  the  State,  the  time 
of  his  absence  shall  not  be  taken  as  any  part  of  the  time  limited 
for  the  commencement  of  the  action.  Under  this  clause  the 
question  has  arisen  whether  successive  absences  can  be  accu- 
mulated, and  the  aggregate  deducted  from  the  time  elapsed 
after  the  accruing  of  the  cause  of  action  ;  or  whether  the  statute 
provides  only  for  a  single  departure  and  return,  after  which  it 
continues  to  run,  notwithstanding  any  subsequent  departure. 
And  this  question  has  been  decided  differently  in  different 
States,  (s)  The  question  has  also  arisen,  whether  this  clause 
contemplates  temporary  absences,  or  only  such  as  result  from  a 

(p)  Benjamin  v.  Do  Groot,  1  Denio,  the  action  was  barred  by  the  statute  and 

151 ;  Christophers   v.    Garr,  2  Seld.   61  ;  nonsuited  the  phxintifF.    The  general  term 

Davis  r.  Garr,  id.  124;  Douglas  v.  For-  of  the  Supreme  Court  affirmed  this  judg- 

rest,  4  Bing.  686.  mcnt.     But  upon  appeal  to  tlie  Court  of 

{pa)  Oleott  V.   The    Tioga    Railroad  Appeals,  the  judgment  of  the    Supreme 

Company.      The    case    of   Faulkner    v.  Court    was    reversed,   and    a,    new   trial 

Delaware  and  Hudson  Canal  Company,  ordered.     This  case  has  not  yet  been  rc- 

1  Denio,  141,  was  overruled.     The  action  ported. 

was  against  a  corporation  created  by  and  (7)  Byrne  v.    Crowninshield,    1    Pick, 

existing  under  tlie  laws  of  Pennsylvania  263. 

upon  a  bill  of  exchange  drawn  by  it  in  (r)  See  Mass.  Eev.  Stats,  c.  120,  §  9. 
payment  for    a    locomotive  engine,   and  (s)  In  New  York  it  has  been  held,  that 
protested  May  21,  1842.     The  statute  of  the  statute  provides  for  only  a  single  de- 
limitations was  pleaded,  and  the  referee  parturc  and  return.      Cole  v.  Jessup,  2 
to  whom  the  action  was  referred  held  that  Barb.  309 ;  Dorr  v.  Swartwout,  1  Blatchf. 

[403] 


378*  THE   LAW    OP   CONTRACTS.  [PART  U. 

permanent  change  of  residence.  And  upon  this  question  also 
learned  courts  have  differed,  [t) 

It  has  been  recently  held  in  England,  that  if  there  be  several 
defendants,  and  some  of  them  are  abroad,  and  some  at  home, 
the  statute  does  not  begin  to  run  in  regard  to  any  who  are  at 
home,  until  all  are  within  reach  of  suit,  (w)  For  although,  if 
one  of  several  co-plaintiffs  is  within  seas,  the  statute  runs,  be- 
cause one  plaintiff  can  use  the  names  of  the  others  in  his  action, 
it  is  otherwise  as  to  co-defendants.  The  plaintiff  can  sue  those 
only  who  are  within  reach  ;  and  if  compelled  to  sue  them,  he 
may  have  a  judgment  against  *insolvent  persons,  which  satisfies 
his  claim  and  destroys  his  remedy  against  solvent  debtors. 

The  expression  "  beyond  the  seas  "  in  the  English  statute,  is 
repeated  in  some  of  the  American  statutes  ;  and  in  others,  such 
phrases  as  "beyond  sea,"  "over  the  sea,"  "out  of  the  country," 
"  out  of  the  State,"  are  used  in  its  stead,  but  for  an  equivalent 
purpose.  These  phrases  are  generally  construed  to  mean,  out 
of  the  State  or  jurisdiction  where  the  case  is  tried ;  {v)  but  our 
notes  will  show  that  there  is  much  authority  for  construing  any 
such  phrase  as  meaning  beyond  the  limits  of  the  United 
States,  {lo) 

There  is  some  uncertainty  whether  it  is  a  good  defence  at 
law  against  the  operation  of  the  statute,  when  an  action  is 
grounded  upon  a  fraud  committed  more  than  six  years  before, 
that  it  was  not  discovered  until  within  six  years.     There  is  no 

C.   C.  179.     But  the  contrary  has  since  and  resided  out  of,  the   State.     Drew  v. 

been  decided  in  New  Hampshire.    Gihnan  Drew,  37  Me.  389  ;  Varney  v.  Grows,  id. 

V.  Cutts,  3  Foster,  376.     And  sec  Smith  306. 

V.  The  Heirs  of  Bond,  8  Ala.  386;  Ciicnot  («)  Fannin  v.  Anderson,  7  Q.  B.  811. 

V.  Lcfevre,  3  Oilman,  637.  And  see  Towncs  v.  Mead,  16  C.  B.  123, 

(t)  In  the  case  of  Oilman  v.  Cutts,  29  Eng.  L.  &  E(i.  271. 
sujiru,  the  Superior  Court  of  New  Hump-  (r)  Galusha  v.  Coblcinh,  13  N.  II.  79  ; 
shire  held,  that  every  absence  from  the  Field  v.  Dickinson,  3  Pike,  409  ;  Wake- 
State,  whether  tcm])orary  or  otherwise,  if  field  v.  Smart,  3  Eng.  488  ;  Eichardson 
it  he  sucii  tiiat  the  creditor  cannot,  during  v.  Ivichardson,  6  Ohio,  12.5  ;  Bancoast  v. 
the  time  of  its  continuance,  make  legal  Addison,  1  Harris  &  J.  350  ;  FoiH)es  v. 
service  upon  tlic.  drhtor,  must  he  reckoned.  Foot,  2  McCord,  331 ;  Murray  r.  Baker, 
And  see  Vaniandiii^jh.iMi  r.  Huston,  4  3  Wheat.  541  ;  Shcll)y  v.  Guy,  11  id. 
Oilman,  125.    J5ul  in  Wheeler  r.  Webster,  361. 

1  E.  D.  Smitii,  1,  the  Court  of  Common  (ir)   Thus,  in  Pennsylvania,  the  term 

Plcn.s  for  the   City  and  C!ounty  of  New  "  beyond  the  .seas  "  is  construed  to  mean 

York,  held  that,  in  order  to  interrupt  the  without  the  limits   of  the  United    States, 

running  of  tbe  statute,  it  is  not  sullicient  Thurston  r.  I'"lshcr,  9  S.  &  K.  288.     Also 

to  prove  that  the  debtor,  after  the  cause  of  in  North  Caroliiui.     Whitlocke  i\  Walton, 

action  uccnicii,  from  time  to  time  (k'partcd  2  Murphy,  23  ;  Earlo  v.  Dickson,  1   Dev. 

and  was  repeatedly  absent  from  the  Slat(';  16.     And  in  Missouri.     Marvin  i'.  Bates, 

he  must  he  shown  to  have  dejiarted  from,  13Mo.217;  Facklcr  ?;.  Fackler,  14  id.  431. 

[401] 


CH.  VI.]  STATUTE   OF  LIMITATIONS.  *379 

exception  against  fraud  in  the  English  statute  ;  nor  is  such  an 
exception  generally  made  in  this  country.  And  although  in 
equity,  this  would  remove  the  bar  of  the  statute,  almost  as  a 
matter  of  course,  (x)  there  is  some  difficulty  in  giving  effect  to 
it  at  law.  Nevertheless,  the  prevailing  rule  in  this  country  pre- 
vents the  six  years  from  beginning  to  run,  even  at  law,  until  the 
fraud  is  discovered  by  the  plaintifl';  (?/)  but  our  notes  will  show 
that  there  is  much  diversity  in  the  decisions  on  this  subject. 


*SECTION  VIII. 

THAT  THE  STATUTE  AFFECTS  THE  REMEDY  ONLY,  AND  NOT  THE  DEBT. 

The  statute  only  declares  that  "  no  action  shall  be  main- 
tained ;  "  but  not  that  the  cause  of  action  is  made  void.  Hence, 
although  the  remedy  by  action  is  lost,  a  lien  is  not  lost.  If  one 
holds  a  note  against  which  the  statute  has  run,  and  also  a  mort- 
gage or  pledge  of  real  or  personal  property  to  secure  it,  he  can- 
not sue  the  note,  but  he  can  take,  or  hold  possession  of  the 
property  and  sell  it,  if  it  be  personal,  with  proper  precautions, 
or  have  a  bill  in  equity,  to  foreclose  his  mortgage.  And  if  his 
lien,  whatever  it  be,  fails  to  pay  the  whole  amount  of  the  note, 
he  loses  the  remainder,  because  he  can  have  no  action  upon  it, 
although  he  may  have  proper  process  founded  upon  the  debt 
and  the  security,  to  establish  his  lien,  and  make  it  available  in 
payment  of  the  debt,  (c) 


(.r)  Mayne  v.  Griswold,  3  Sandf.  463 
Kane  v.  Bloodgood,  7  Jolins.  Ch.  90,  122 
Stocks  V.  Van  Leonard,  8  Ga.  511 
Charter  v.  Trevelyan,  11  Clark  &  F.  714 


Cravy,  6  Rich.  Eq.  140  ;  McLure  v.  Ash- 
by,  7  id.  430.  And  see  the  Lite  English 
case  of  Imperial  Gas  Light  &  Coke  Co. 
V.  London  Gas  Light  Co.  10  Exch.  39, 


Blair  v.  Bromley,  5  Hare,  542.  26  Eng.  L.  &  Eq.  425,  and  editor's  note. 

(y)  Such  is  the  doctrine  of  Sherwood         (z)  Spears  v.  Hartley,  3  Esp.  81  ;  Quan- 

V.    Sutton,   5    Mason,    143;    Conyers   v.  tock  y.  England,  5  Burr.  2628  ;  Williams 

Kenans,  4  Ga.  308  ;  Persons  v.  Jones,  12  v.  Jones,  13  East,  439;  Chappie  v.  Durs- 

id.  371 ;  The  First  Massachusetts  Turn-  ton,  1  Cromp.  &  J.  1 ;  Mavor  v.  Pvne,  2 

pike  Corp.  v.  Field,  3  Mass.  201  ;  Horner  C.  &  P.  91  ;  Higgins  v.  Scott,  2  B.  &  Ad. 

V.  Fish,  1   Pick.  435;  Pennock  r.  Free-  413;  Mayor,  &c.  of  N.  Y.  v.  Colgate,  2 

man,  1  Watts,  401  ;  Harrell  v.  Kelly,  2  Duer,  1,  2  Kern.  140.     The  early  cases  of 

McCord,  426.     But  see  contra,  Troup  v.  Drapery.  Glassop,  1  Ld.  Raym.  153,  and 

Smith,  20  Johns.  33 ;  Leonard  v.  Pitney,  Anonymous,    Salkeld,   278,   M'hich   were 

5  Wend.  30  ;  Allen  v.  Mille,  17  id.  202  ;  decided  upon  the  ground  that  the  statute 

Smith   V.   Bishop,  9  Vt.   110;  Lewis  v.  of  limitations  destroyed  the  debt  as  well 

Houston,  11  Texas,  642  ;  Parham  v.  Mc-  as  the  remedy,  have  now  no  authority. 

[405] 


380  THE  LAW  OP  CONTRACTS.  [PART  II. 


CHAPTER    VII. 

OF  INTEREST   AND   USURY. 

Sect.  1.  —  Of  interest,  and  ivhen  it  is  recoverable. 

Originally,  the  word  usury  meant  any  money  received  for 
the  use  of  other  money.  Whether  it  were  more  or  less,  such 
taking  was  thought  to  be  unlawful,  or,  at  least,  immoral.  In 
modern  times,  a  moderate  payment  for  the  use  of  money  has 
been  held  to  be  lawful;  and  to  this  the  name  of  interest  is 
given ;  or  rather  such  payment  of  money  for  the  use  of  money, 
whether  it  be  more  or  less,  is  now  called  interest,  while  the 
word  usury  is  now  confined  to  the  taking  of  more  than  the  law 
allows. 

Now,  and  for  some  generations,  the  law  of  England  and  of 
this  country  not  only  permits  parties  to  bargain  for  a  certain 
rate  of  interest,  and  enforces  that  bargain,  but  it  makes  it  for 
them,  in  many  cases ;  that  is,  where  it  is  certain  that  money 
ought  now  to  be  paid,  and  ought  to  have  been  paid  long  since, 
the  law,  in  general,  implies  conclusively  that  for  the  delay  in 
the  payment  of  the  money,  the  debtor  promised  to  pay  legal 
interest,  (a) 

This  interest  is  allowed  on  money  withheld,  if  not  on  the 
ground  of  some  promise  to  pay  it,  express  or  implied,  then  as 
damages  for  default  in  retaining  the  money  which  belongs  to 
another.  Tlic  contract  may  be  implied  from  the  usage  of  a 
place,  or  of  a  trade,  (i)  or  from  the  course  of  dealing  between 
the  j)firties,  {ha)  or  from  the  practice  of  one  party,  if  that  be 
known  to  tli(!  other  party,  (r) 

(a)  Scllec-k   v.   French,    1    Conn.   .'52  ;  Koons  v.  Miller,  .3  Watts  &  S.  271  ;  Watt 

Rcul  V.  liciisHchier  Glass  Factory,  ■'{  Cow-  r.  llocli,  25  I'enn.  St.  411. 
en,  39.'J,  ."J  id.  587;   Dod^c  r.  Perkins,  'J         (h<i)  Easterly  v.  Cole,  3  Corast.  502,  1 

Pick.  308.     And  hcc  Kennedy  r.   JJaru-  IJarl).  2.')5. 
well,  7  Kicli.  124.  (r)  M'Allister  r.  Real),  4  Wend.  483,  8 

(6)  Meedi    v.    SmitI),    7    Wetid.    .'315;  Wend.  lO'J  ;  Easterly  v.  Cohi,  supra. 

[  40C  ] 


CH.  VII.] 


INTEREST   AND   USURY. 


*381 


Among  the  cases  in  which  interest  has  been  allowed  for  the 
detention  of  a  debt,  the  following  may  be  considered  the  most 
important:  An  action  of  debt  on  a  judgment,  (d)  *or  on  an  ac- 
count liquidated,  (e)  For  goods  sold,  interest  accrues  after  the 
day  of  payment.  (/)  On  an  unsettled  claim,  after  a  demand 
of  payment,  (g-)  For  rent  to  be  paid  at  a  fixed  time,  interest  is 
payable  from  the  time  the  rent  becomes  due,  (h)  even  if  it  be 
payable  in  specific  articles,  (i)  For  money  paid  for  the  use  of 
another,  interest  is  due  from  the  time  of  payment,  (j)  So  it 
has  been  held  in  cases  of  money  lent,  (k)  If  the  money  is  due 
now,  but  not  payable  until  some  act  of  the  promisee,  as  if  pay- 
able on  demand,  then  that  act  must  take  place  before  any  claim 
for  interest  can  accrue,  (l) 

The  guarantor  of  a  note  is  liable  for  interest  from  the  time 
that  he  is  notified  of  the  default  of  the  principal,  (la)  and  per- 
haps from  the  date  of  the  default,  (lb) 

In  England,  the  weight  of  authority  would  seem  to  establish 
the  rule,  that  interest  should  not  be  added  in  the  amount  of 


(J)  Klock  V.  Eobinson,  22  Wend.  157  ; 
Prescott  V.  Parker,  4  Mass.  170;  Gwinn 
V.  Whitaker,  1  Harris  &  J.  754  ;  Hodg- 
don  V.  Hod^don,  2  N.  H.  169.  And  see 
Nelson  v.  Felder,  7  Rich.  Eq.  395. 

(e)  Blaney  v.  Hendrick,  3  Wilson,  205 ; 
Walden  r.  Sherburne,  15  Johns.  409, 
424 ;  Liotard  v.  Graves,  3  Gaines,  226, 
234  ;  Elliott  v.  Minott,  2  McCord,  125. 

(/)  Crawford  v.  Willing,  4  Dall.  286, 
289  ;  Bate  v.  Burr,  4  Harring.  Del.  130 ; 
Porter  v.  Hunger,  22  Vt.  191  ;  Easterly 
V.  Cole,  3  Comst.  502. 

((/)  Mcllvaine  v.  Wilkins,  12  N.  H. 
474  ;  Gammel  v.  Skinner,  2  Gallis.  45 ; 
Barnard  v.  Bartholomew,  22  Pick.  291. 
See  Goff  v.  Rchoboth,  2  Cush.  475  ;  Pur- 
dy  V.  Philips,  1  Kern.  406. 

(A)  Clark  v.  Barlow,  4  Johns.  183; 
Williams  v.  Sherman,  7  Wend.  109  ; 
Dennison  v.  Lee,  6  Gill  &  J.  383  ;  Elkin 
V.  Moore,  6  B.  Mon.  462  ;  Buck  v.  Fisher, 

4  Whart.  516. 

{{)  Lush  V.  Druse,  4  Wend.  313;  Van 
Rensselaer  i'.  Jewett,  5  Denio,  135,  2 
Comst.  135  ;  Van  Rensselaer  v.  Jones,  2 
Barb.  643.     But  see  Philips  v.  Williams, 

5  Gratt.  259 ;    Dana  v.  Fiedler,  2  Kern. 
40. 

(j)  Gibbs  V.  Bryant,  1  Pick.  118;  Sims 


V.  Willing,  8  S.  &  R.  103 ;  Goodloe  v. 
Clay,  6  B.  Mon.  236  ;  Rcid  v.  Rensselaer 
Glass  Factory,  2  Cowen,  393,  5  id.  587. 

(k)  Dilworth  v.  Sinderling,  1  Binney, 
488 ;  Liotard  v.  Graves,  3  Caifies,  226  ; 
Reid  r.  Rensselaer  Glass  Factory,  2  Cow- 
en,  393,  5  id.  587  ;  but  in  Hulibard  v. 
Charlestown  Branch  R.  R.  Co.  11  Met. 
124,  where  a  party  had  overdrawn  money 
at  a  bank  by  mistake,  it  was  held  that  in- 
terest could  not  be  recovered  until  after 
demand  made  or  some  default  in  payment. 
See  Simonds  v.  Walter,  1  McCord,  97  ; 
King  V.  Diehl,  9  S.  &  R.  409.  See  1  Amer- 
ican Leading  Cases,  341,  where  in  a  note 
nnder  Selleck  v.  French,  the  whole  sub- 
ject of  interest  is  thoroughly  considered. 

(/)  Jacobs  V.  Adams,  1  Dall.  52  ;  Hunt 
V.  Nevers,  15  Pick.  500;  Breyfogle  v. 
Beckley,  16  S.  &  R.  264  ;  Nelson  v.  Cart- 
mel,  6  Dana,  7  ;  Henderson  r.  Blanchard, 
4  La.  Ann.  23  ;  Livermore  v.  Rand,  6 
Foster,  85  ;  Hantz  v.  The  York  Bank, 
21  Penn.  St.  291.  And  see  Purdy  v. 
Philips,  1  Kern.  406. 

{la)  Washington  Bank  v.  ShurtlefF,  4 
Met.  30. 

(Ih)  Ackermann  v.  Ehrensperger,  16  M. 
&  W.  99. 

[  407  ] 


382*  THE   LAW   OF   COXTRACTS.  [PART  II. 

damages,  unless  there  be  a  distinct  contract  to  pay  interest ;  (m) 
but  tliere,  also,  this  contract  may  be  implied  *  from  the  usage  of 
trade,  or  from  other  circumstances,  (n)  In  this  country,  the 
rule  seems  to  be  well  established,  that  whoever  receives  money 
not  his  own  and  detains  it  from  the  owner  unlawfully,  must 
pay  interest  therefor.  Hence  a  public  officer  retaining  money 
wrongfully  is  chargeable  with  interest  during  the  time  of  such 
wrongful  detainer,  (o)  So  an  agent  unreasonably  neglecting  to 
inform  his  principal  of  the  receipt  of  money,  is  liable  for  the 
interest  from  the  time  when  he  should  have  communicated  such 
information,  (p)  But  an  agent  is  not  generally  liable  for  in- 
terest on  funds  in  his  hands,  unless  he  uses  them,  or  is  in 
default  in  accounting  for  them,  (q)  Interest  is  recoverable  on 
money  fraudulently  obtained  and  withheld,  (r) 

Generally,  where  unliquidated  damages  are  demanded,  in- 
terest is  not  payable  ;  nor  is  it  in  actions  grounded  on  tort. 
But  even  in  these  actions,  it  is  true  that  interest  is  excluded 
in  name  rather  than  fact.  That  is,  the  jury  may  make  use  of 
it  in  their  own  estimate  of  damages,  if  all  the  circumstances 
of  the  case  lead  to  the  inference  that  there  was  a  contract  or 
understanding  that  interest  should  be  paid,  or,  if  they  should 
be  satisfied   that   the  plaintiff  would    not  be   adequately  and 


(m)  Pc  Ecrnales  y-Fullci-,  2  Camp. 426  ;  from  which  a  contract  for  interest  was  to 

Attwood  i\  Taylor,  1  Man.  &  G.  279,  note,  bo  inferred,  has  interest  been  ever  given." 

In  l)c  IlaviUand  v.  I'owcrhank,  1  Camp.  («)  Eddowcs  v.  Hopkins,  1  Dong.  376  ; 

50,   Lord    Kllenhorowih    said    that   "  He  Moore  v.  Vonghton,  I  Stark.  487  ;  Blaney 

thought,  that  where  "money  of  the  plain-  r.    llendrick,   3  Wilson,  205,  2   W.   Bl. 

tiff  had  come  to  the  hands  of  the  defend-  701.     Where  the  principal  is  to  bo  paid 

ant,  to  estalilish  a  riglit  to  interest  npon  it,  at  a  specific  time,  an  agreement  to  pay 

there  should  citlicr  be  a  specific   agree-  interest  after  that  time  is  implied.     Kob- 

mcnt  to  that  effect,  or  something  should  inson  v.  Bland,  2  Burr.  1080;  Calton  v. 

appear  from  wliicli  a  promise  to  pay  in-  Bragg,   15  East,  220,   per  Lm-A  Ell enbor- 

tcrest  inigbt  be  inferred,  or  jiroof  should  ough  ;  Boddam   o.  l\iley,  2   Bro.    Ch.  2; 

be  given  (jf  the  money  being  used."     In  Mountford  v.  AVilles,  2  B.  &  1'.  337. 

Calton    r.    Bragg,    15    ICast,    223,    Lord  (o)  Commonwealth  v.  Crevor,  3  Bin- 

Ellc)il'orotii/h    said,    "Lord   Mdiisjirld  nut  ney,  123;  Crane  ?'.  Dygert,  4  Wend.  075  ; 

here  fur  u|)wnrds  of  thirty  years<  Lord  yv'of-  People  v.  Gaslierie,  9  Johns.  71  ;  Hudson 

ijon  for  aliovc  fliirtccii  years,  and  I  have  v.  Tcnney,  0  N,  H.  450. 

now  sat   Iktc  fur  more  than  nine  years;  {  y)   Dodge  v.  I'crkins,  9  I'ick.  .'i08. 

and  during  this   long   course  of  time,  no  (</)    lOUcrv  r.  ( 'umiingliam,  1  Met.  112; 

case  h;is  occ-urrcd   when',   upon  a  simple  Bedell   c.   .Jaiiney,  4  (iilman,   193;    Wil- 

contra't  of  lending,   without    an   agree-  liams  v.  Storrs,  0  Johns.  Ch.  353. 

mcnt  for  i)ayment  of  the  principal  at  a  (r)  Wood  v.  Kobbins,    11   Mass.   504. 

certain  tiuiit,  or  for  interest  to  run  imme-  See  .si(y)/v(,  note  (ti). 
diatcly,  or  luidcr  special    circuinslanccs 

[408] 


CII.  VII.] 


INTEREST   AND    USURY. 


-382 


justly  compensated    or  indemnified  without  the  allowance    of 
interest,  (s) 


(s)  Arnott  r.  Rcdfcrn,  3  Bing.  353; 
Dox  V.  IKj,  3  Wend.  356  ;  Hull  v.  Cald- 
well, 6  J.  J.  Marsh.  208;  Sargent  v. 
Franklin  Ins.  Co.  8  Pick.  90.  In  An- 
crum  V.  Slone,  2  Spcers,  594,  Frost,  J., 
in  delivering  the  opinion  of  the  court, 
said  :  "  The  first  [ground  of  appeal], 
presents  the  question  of  law,  whether,  in 
a  special  action  on  the  case,  in  assumpsit 
on  a  warranty  of  soundness,  interest  is 
recoverable  eo  nomine.  It  is  necessary  to 
the  allowance  and  estimate  of  interest,  to 
ascertain  the  sum  due,  and  the  time  when 
payable.  Accordingly,  all  engagements 
or  acknowledgments  in  writing,  express- 
ing the  suna  due  and  the  time  of  payment, 
have  been  recognized  as  liquidated  de- 
mands, and  on  them  it  has"  been  permitted 
to  recover  interest  by  way  of  damages. 
Interest  has  also  been  allowed  in  liabili- 
ties to  pay  money,  though  not  in  writing, 
if  the  sum  is  certain  or  capable  of  being 
reduced  to  certainty,  from  the  time  when 
either  by  the  agreement  of  the  parties  or 
the  construction  of  law,  the  payment  was 
demandable.  As  in  cases  of  money  had 
and  received,  ^aid  for  the  use  of  another; 
or  by  mistake,  or  on  an  account  stated; 
and  on  open  accounts  by  express  agree- 
ment ;  and  when,  by  the  course  of  dealing 
between  the  parties  or  the  usage  of  trade, 
such  agreements  may  be  inferred.  The 
time  of  payment  must  also  be  determined, 
either  by  tiie  agreement  of  the  parties,  the 
course  of  dealing  between  them,  by  known 
custom,  or  the  usage  of  trade.  Thus 
open  accounts  do  not  bear  interest,  though 
the  sum  is  certain  ;  because  by  custom 
the  credit  is  indefinite.  But  if  there  be 
an  agreement  expressed  or  implied,  it  is 
allowed  accordingly.  It  is  not  recover- 
able on  a  quantum  meruit,  for  work  and 
labor,  nor  quantum  valcbat,  for  goods  sold, 
nor  on  a  verbal  contract  to  pay  a  sum  cer- 
tain for  rendering  a  service,  1  Hill,  393 ; 
nor  on  a  due-bill,  payable  on  demand, 
though  expressed  to  be  for  a  loan  of 
money,  on  the  day  of  the  date,. except 
from  the  time  of  demand,  2  Bail.  276  ; 
nor  on  a  balance  of  a  factor's  account, 
due  to  his  employer,  except  from  the  time 
of  demand.  1  Hill,  400.  Other  cases 
might  be  adduced  to  show  that  the  gen- 
eral rule  is  to  allow  interest,  eo  nomine, 
only  on  money  demands  certain  or  eapa- 

VOL.  II.  35 


ble  of  being  reduced  to  certainty,  and 
payable  at  a  definite  time,  either  ex- 
pressly or  impliedly.  There  may  be 
some  exceptions  to  the  rule,  and  its  appli- 
cation has  been  extended  by  construction 
of  law.  Thus,  on  a  breach  of  warranty, 
if  the  contract  is  rescinded  by  a  tender  of 
the  property  to  the  seller,  indebitatus  as- 
sumpsit will  lie  for  the  price  paid,  as 
money  had  and  received  by  the  vendor  to 
the  use  of  the  vendee,  and  interest  may  be 
recovered.  And  in  covenant,  on  a  war- 
ranty of  title,  interest  may  be  found,  in 
addition  to  the  value,  for  a  total  or  partial 
eviction.  These  cases  proceed  on  the 
ground  of  a  rescission  of  contract  and  res- 
titution to  the  plaintiff  of  the  price  paid. 
But  a  special  assumpsit,  on  a  warranty 
of  soundness,  for  damages,  is  subject  to 
the  rule  governing  actions  sounding  in 
damages,  that  interest  is  not  recoverable 
eo  nomine."  In  Holmes  v.  Misroon,  1 
Const.  R.  21,  3  Brev.  209;  which  was 
a  special  assumpsit,  the  law  is  thus  af- 
firmed by  Nott,  J. :  "  This  was  a  special 
action  on  the  case,  sounding  altogether  in 
damages,  and  therefore  could  not  carry 
interest.  I  think  the  jury  might  have 
made  the  value  of  the  projjerty  and  inter- 
est.thereon  the  measure  of  damages,  and 
found  a  verdict  for  the  aggregate  amount; 
but  no  law  has  been  introduced  to  show 
that  they  could  give  interest  eo  nomine,  in 

an   action  of  this   sort To  the 

argument,  if  interest  may  be  allowed  in 
the  aggregate  damages  found  by  a  ver- 
dict, why  may  it  not,  be  allowed  eo  nomine  ? 
The  reply  is,  the  law  does  not  inquire  into 
the  particulars  of  a  verdict  for  damages, 
and  in  some  cases  interest  furnishes  a  just 
and  convenient  measure  for  the  jury.  But 
it  is  a  stated  compensation  for  the  use  of 
monej'^,  and  as  it  cannot  be  separated, 
even  in  idea,  from  debt,  seems  not  prop- 
erly incident  to  uncertain  and  contingent 
damages.  The  distinction  is  admitted  to 
be  one  of  form,  depending  upon  the  form 
and  cause  of  action."  In  the  same  way 
interest  may  be  taken  into  account  by  the 
jury,  in  assessing  damages  in  trespass  and 
trover ;  Hyde  r.  Stone,  7  Wend.  354  ; 
Beals  V.  Guernsey,  8  Johns.  446  ;  Ken- 
nedy V.  Whitwell,"4  Pick.  466.  And  in 
replevin;  Rowley  v.  Gibbs,  14  Johns. 
385  ;  Suydam  r.  Jenkins,  3  Sandf.  614. 

[409] 


383-384*  THE   LAW    OF   CONTRACTS.  [PART  II. 


SECTION    II. 

WHAT   CONSTITUTES   USURY. 

The  statutes  of  usury  in  this  country  have  been  copied,  in 
substance,  but  with  more  or  less  variation  of  form,  from  the  12 
Anne,  stat.  2,  ch.  16,  v\^hich  provides  that  no  person  shall  take, 
directly  or  indirectly,  upon  any  contract,  "  for  loan  of  any 
moneys,  wares,  merchandise,  or  other  commodities  *whatsoeveT, 
above  the  value  of  five  pounds  for  the  forbearance  of  one  hun- 
dred pounds  for  a  year,  and  so  after  that  rate  for  a  greater  or 
lesser  sum,  or  for  a  longer  or  shorter  time;"  and  that  "all 
bonds,  contracts,  and  assurances  whatsoever,  for  payment  of 
any  principal  or  money  to  be  lent,  or  covenanted  to  be  per- 
formed, upon  or  for  any  usury,  whereupon  or  whereby  there 
shall  be  reserved  or  taken  above  the  rate  of  five  pounds  in  the 
hundred,  as  aforesaid,  shall  be  utterly  void;"  and  further  pro- 
vides that  any  person  who  shall  take  more  than  five  pounds  per 
cent.,  contrary  to  the  provisions  of  the  statute  shall  forfeit  and 
lose  for  every  such  offence  the  treble  value  of  the  moneys,  wares, 
merchandises,  and  other  things  so  lent,  (t)  Our  statutes  differ 
greatly  as  to  the  amount  which  may  be  taken  or  received,  the 
legal  interest  in  ^ach  State  being  intended  to  represent  the  fair 
worth  of  money,  and  that  varying  greatly  in  different  parts  of 
this  country.  They  differ  also  very  much  in  the  penalties  with 
which  they  visit  the  offence  of  usury. 

Originally  the  principle  of  the  statute  of  Anne  was  adopted 
generally,    if   not   universally,    and    the    whole   debt  forfeited. 


[I)  By  the,  3  &  4  Will.  4,  c.  98,  s.  7,  tracts  !br  "the  loim  or  forbearance  of  any 
and  2  &  3  Vict.  c.  37,  enlarf,niif^  tiio  stat-  money  upon  security  of  any  lands,  tcnc- 
utc  of  William,  all  contracts  were  taken  ments,  or  liereditamcnts,  or  any  estate  or 
from  tlie  operation  of  the  statute  of  Anne,  interest  therein."  Any  usurious  contract 
cxccjit  those  contained  in  hills  of  cxchanf,'C  is  therefore  valid  in  En<;land,  with  the 
and  promissory  notes  havinj^  more  than  ahove  excepted  cases.  Thihault  v.  Gib- 
twelve  months  to  run,  those  for  the  loan  of  Kon,  12  M.  &  W.  88;  Sem])le  d.  Corne- 
nioncy  less  in  amount  than  the  sum  of  ten  wall,  10  Exeli.  GI7,  2\)  En{,^  L.  &  Eq.  436. 
pounds  Hlerlin;; ;  and  exee])tiny  also  con- 

[410] 


CH.  VII.]  INTEREST   AND   USURY.  *38o 

Afterwards,  there  was  a  considerable  relaxation  in  this  respect ; 
btit  with  some  fluctuation  and  a  return  to  severity ;  and  now 
usury  works,  generally,  a  forfeiture  of  the  usurious  interest  and 
some  part  of  the  principal,  or  the  lawful  interest  by  way  of  pen- 
alty. 

The  simplest  definition  of  usury  is,  the  taking  of  more  inter- 
est for  the  use  of  money  than  the  law  allows.  There  must 
therefore  be  the  use  of  money ;  which  may  be  by  a  loan,  or  by 
the  continuance  of  an  existing  debt.  That  is,  one  may  now 
lend  money  to  another,  and  so  give  him  the  use  of  it,  or  may 
agree  with  him  that  he  shall  not  now  repay  a  sum  which  has 
become  due,  and  so  permit  him  to  use  it.  (w)  *To  the  one  or 
the  other  of  these  classes  all  contracts  for  the  use  of  money 
may  be  referred.  And,  to  constitute  the  offence  of  usury,  there 
must  be  an  agreement  that  he  who  has  the  use  of  the  money 
shall  pay  to  the  owner  of  it  more  than  lawful  interest ;  that  is, 
more  than  the  law  permits  to  be  paid  for  the  use  of  money. 


SECTION    III. 

IMMATERIALITY   OF   THE   FORM    OlF   THE   CONTRACT. 

It  is  entirely  immaterial  in  what  manner  or  form  or  under 
what  pretence  this  is  done,  [v)     And  countless  are  the  devices 

(ii)  It  is  well  settled  that  if  there  be  a  Bro-s^n,  Holt,  N.  P.  295;  Marsh  v.  Mar- 
contract  for  the  payment  of  illegal  inter-  tindale,  3  B.  &  P.  154.  In  Floyer  r. 
est,  for  the  further  forbearance  of  a  debt  Edwards,  Cowp.  112,  Lord  Mansfield 
at  that  time  existing,  or  if  money  be  acta-  said  :  "  In  all  questions  in  whatever  re- 
ally paid  for  such  forbearance,  it  is  usury,  spect  repugnant  to  the  statute,  we  must 
Parker  v.  Ramsbottom,  5  Dowl.  &  R.  138,  get  at  tlie  nature  and  substance  of  the 
3  B.  &  C.  257,  post,  p.  388,  n.  b  ;  Evans  transaction  ;  the  view  of  the  parties  must 
V.  Negley,  13  S.  &  R.  218;  Hancocks,  be  ascertained,  to  satisfy  the  court  that 
Hodgson,  3  Scam.  333;  Carlis  v.  M'Laugh-  there  is  a  loan  and  borrowing;  and  that 
lin,  1  D.  Chip.  Ill  ;  Seneca  County  Bank  the  substance  was  to  borrow  on  the  one 
V.  Schermerhorn,  1  Denio,  135  ;  Gray  v.  part  and  to  lend  on  the  other,  and  where 
Belden,  3  Fla.  110;  Craig  v.  Hewitt,  7  the  i-oal  truth  is  a  loan  of  money,  the  wit 
B.  Mon.  475;  Young  v.  Miller,  7  B.  Mon.  of  man  cannot  find  a  shift  to  take  it  out 
540.  See  also,  Pollard  v.  Scholy,  Cro.  of  the  statute.  If  the  substance  is  a  loan 
Eliz.  20.  of  money  nothing  will  protect  the  taking 

(v)  Symonds   v.    Cockerill,   Noy,  151  ;  more  than  five  per  cent.,  and  though  the 

Burton's   case,    5    Co.    69;    Richards  v.  statute  mentions  only 'for  loan  of  moneys, 

Brown,    Cowp.    770 ;   Doe  d.  Metcalf  v.  wares,  merchandise,  or  other   commodi- 

[411] 


386" 


THE   LAW   OF   CONTRACTS. 


[part  II. 


by  which  usurers  endeavor  to  avoid  the  provisions  of  the  *stat- 
ute ;  as,  by  lending  a  thousand  dollars  on  a  note  for  a  year  At 
lawful  interest  and  immediately  receiving  half  of  it  back  again 
in  payment ;  or  by  selling  some  property,  at  the  time  of  the 
loan,  at  an  exorbitant  price,  (iv)     In  these  cases  a  nice  distinction 


ties,'  yet  any  other  contrivance,  if  tlie 
substance  of  it  be  a  loan,  will  come  under 
the  word  '  indirectly.' "  And  in  Scott  v. 
Lloyd,  9  Pet.  446,  in  which  the  bona 
Jide  purchase  of  an  annuity  is  admitted  to 
be  valid,  although  more  than  six  per  cent, 
profit  be  secured.  Marshall,  C.  J.,  said  : 
"  Yet  it  is  apparent  that  if  giving  this 
form  to  the  contract  will  afford  a  cover 
which  conceals  it  from  judicial  investiga- 
tion, the  statute  would  become  a  dead 
letter.  Courts,  therefore,  perceived  the 
necessity  of  disregarding  tlie  form  and  ex- 
amining into  the  real  nature  of  the  trans- 
action. If  that  be  in  fact  a  loan,  no  shift 
or  device  will  protect  it."  See  also,  Tate 
I'.  Wellings,  3  T.  R.  5.31  ;  Chesterfield  v. 
Janssen,  1  Atk.  340 ;  Lawley  v.  Hooper, 

3  Atk.  278 ;  Drew  v.  Power,  1  Sch.  &  L. 
182;  Hammett  v.  Yea,  1  B.  &  P.  151; 
Mansfield  v.  Ogle,  24  Law  J.  n.  s.  Ch. 
450,  31  Eng.  L.  &  Eq.  357  ;  Douglass  v. 
McChesney,  2  Rand.  112;  Andrews  v. 
Pond,  13  Pet.  65  ;  Tyson  v.  Rickard,  3 
Harris  &  J.  113;  Bank  of  the  U.  S.  v. 
Waggener,  9  Pet.  378 ;  Bank  of  U.  S.  v. 
Owens,  2  Pet.  536,  537  ;  Lloyd  v.  Scott, 

4  Pet.  226  ;  Siiober  v.  Hauser,  4  Dev.  & 
Bat.  91  ;  Delano  r.  Rood,  1  Oilman,  690; 
Spaulding  v.  Bank  of  Muskingum,  12 
Ohio,  544  ;  Pratt  v.  Adams,  7  Paige,  615  ; 
Dowdall  r.  Lenox,  2  Edw.  Ch.  267  ;  Sey- 
mour V.  Strong,  4  Hill,  255  ;  per  Cowen, 
J.,  4  Hill,  475  ;  Ely  v.  M'Clung,  4  Port. 
Ala.  128;  Clarkson  v.  Garland,  1 
Leigh,  147  ;  Steptoe  ?'.  Harvey,  7  Leigh, 
501  ;  Brown  t-.  Waters,  2  Md.  Ch.  Dec. 
201;  Wright  v.  McAlcxander,  11  Ala. 
236  ;  Williams  v.  Williams,  3  Oreen,  N. 
J.  255  ;  Ilcytlc  v.  Logan,  1  A.  K.  Marsh. 
529  ;  Brown  v.  Nevitt,  27  Missis.  801. 

(w)  See  Lowe  »;.  Waller,  Dong.  736. 
In  tlii.s  case  the  defendant  applied  several 
times  to  Harris  &  Stratton  to  obtain  the 
di.scoiint  of  a  bill  for  .€200,  who  had  rc- 

1)Iie(l  that  th<-y  cotild  not  advance  money, 
)Ht  only  gooils.  Siibse(|iiently  the  de- 
fundant  jigreed  to  take  ii  certain  (piantily 
of  gooiN,  which  were  delivered  to  him, 
and  the  bill  of  excluinge  delivered  to  Har- 
ris &  Stnilton,  tcjgetlier  with  <'ollateral 
Bccurity   for   its    jiaymcnt.      The    goods 

[412] 


were  disposed  of  by  the  defendant  to  an 
auctioneer  for  £120.  In  an  action  upon 
the  bill,  against  the  defendant,  to  which 
the  defence  of  usury  was  pleaded.  Lord 
Mansfield  directed  the  jury  that  they  were 
to  consider  whether  the  transaction  be- 
tween the  defendant  and  Harris  &  Strat- 
ton was  not,  in  truth,  a  loan  of  money, 
and  the  sale  of  goods  a  mere  contrivance 
and  evasion.  The  jury  having  found  the 
contract  usurious,  a  rule  for  a  new  trial 
was  granted,  and  subsec[uently  Lord 
Mansfield  delivered  the  opinion  of  the 
court  discharging  the  rule.  In  Barker  v. 
Vansommer,  1  Brown,  Ch.  149,  the  plain- 
tiff had  given  a  promissory  note  to  Van- 
sommer &  Co.  for  £2,225,  upon  receiving 
from  them  silks  valued  by  the  parties  at 
that  amount,  but  which  were  sold  by  the 
plaintiff  for  £799.  This  bill  was  brought 
by  the  plaintiff  to  have  the  note  given  up. 
Lord  Thurlow  said  that  the  court  was  to 
inquire  whether,  under  the  mask  of  trad- 
ing, this  was  not  a  method  of  lending 
money  at  an  extraordinary  rate  of  interest, 
and  that  there  was  not  a  doubt  that  the 
transaction  was  merely  for  the  purpose  of 
raising  money.  A  decree  for  relief  was 
made.  In  Doe  d.  Davidson  i\  Barnard, 
1  Esp.  11,  which  was  an  action  H])on  a 
mortgage,  the  defendant  proved  that  the 
mortgage  debt  was  the  deliver}'  of  stock 
to  the  defendant,  at  75  per  cent,  on  its 
value,  which  he  was  comi)ellcd  to  sell  at 
73  per  cent.,  the  market  ])rice  at  that  time. 
Lord  Kenijon  held  the  transaction  clearly 
usurious.  See  also,  Pratt  v.  Willey,  1 
Esp.  40. ,  The  pro|)osition  that  where 
upon  negotiations  for  a  loan  the  borrower 
receives  depreciated  bank-notes,  or  ]irop- 
crty  of  any  kind  of  a  less  value  than  the 
nominal  amount  of  the  loan,  such  trans- 
action is  usurious,  is  supported  by  the 
following  American  authorities:  Delano 
V.  Rood,  1  (jilinan,  690 ;  Morgan  v. 
Schermerliorn,  1  Paige,  544  ;  (irosvenor 
V.  Flax  &  Hemp  IManuf.  Co.  1  (irccn, 
Ch.  453;  Valley  15ank  ?'.  Stribling, 
7  Leigh,  26 ;  (irecnhow  ?'.  Harris, 
6  Munf.  472;  Archer  c.  Putnam,  12 
Smedes  &  M.  286  ;  Swanson  v.  White,  5 
Humph.    373 ;    Anonymous,   2    Desaus. 


en.  VII.] 


INTEREST   AND    USURY. 


^387 


has  been  made  as  to  the  onus  of  proving  value.  In  general, 
the  lender  or  nominal  seller  is  not  called  upon  to  prove  that  the 
value  of  the  goods  purporting  to  be  sold  and  delivered  instead 
of  the  whole  or  a  part  of  the  money  required,  *was  great 
enough  to  relieve  the  contract  from  usury ;  (x)  but,  if  it  is  shown 
that  the  borrower  was  compelled  to  receive  the  goods,  this  casts 
suspicion  on  the  transaction,  and  the  lender  is  now  obliged  to 
exculpate  himself  by  proof  of  their  value,  (y)  "Where,  however, 
as  in  the  case  just  supposed,  goods  are  delivered  and  received 
as  a  part  or  the  whole  of  the  money  advanced,  and  the  borrower 
sells  them,  he  cannot  keep  the  price  by  proving  the  contract  to 
be  usurious,  nor  is  he  answerable  for  them  in  their  value  at  the 
time  they  were  delivered ;  but  for  what  he  actually  receives  ;  as 
it  is  considered  that  they  were  given  him  to  be  sold.  Some  of 
the  devices  resorted  to  it  is  difficult  to  detect  or  to  prevent ;  but 
in  all  cases,  the  only  question  for  the  jury  is,  has  one  party  had 
the  use  of  the  money  of  the  other,  and  has  he  paid  him  for  it 


333 ;  Bank  of  U.  S.  v.  Owens,  2  Pet. 
527  ;  Rose  v.  Dickson,  7  Johns.  196 ; 
Dry  Dock  Bank  v.  Amer.  Life  Ins.  & 
Trust  Co.  3  Comst.  344 ;  Douglass  v. 
McChesnev,  2  Rand.  109  ;  Stribling  v. 
Bank  of  the  Valley,  5  Rand.  132 ;  Ehring- 
haus  I'.  Ford,  3  Ired.  522;  Eaglcson  v. 
Shotwell,  1  Johns.  Ch.  536;  Pratt  v. 
Adams,  7  Paige,  615;  Weatherhead  v. 
Boyers,  7  Yerg.  545  ;  Collins  v.  Secreh, 
7  T.  B.  Mon.  335  ;  Burnham  v.  Gentrys, 
id.  354  ;  Warfield  i'.  Boswell,  2  Dana, 
224  ;  Moore  v.  Vance,  3  Dana,  366,  367. 
But  where  the  transaction  is  a  sale,  and 
not  a  shift  to  cover  a  loan,  depreciated 
bank-notes  or  stock  may  be  disposed  of  at 
a  rate  above  their  current  market  value 
without  usury.  Bank  of  the  U.  S.  v. 
Waggener,  9'  Pet.  400 ;  Willoughby  v. 
Comstock,  3  Edw.  Ch.  424.  And  where 
the  discount  upon  uncurrent  money  is 
very  trifling,  and  the  same  will  pass  in  the 
market  in  the  way  of  trade,  it  seems  that 
its  reception  at  par  is  no  violation  of  the 
statute.  Slosson  v.  Duff,  1  Barb.  432. 
Or  if  the  borrower  has  the  option  of  re- 
turning the  depreciated  bank-notes  at  the 
same  rate  at  which  he  received  them,  this 
it  seems  prevents  the  transaction  from 
being  usurious.  Caton  v.  Shaw,  2  Harris 
&  G.  13. 

(.rj    Rich    V.   Topping,    1    Esp.    176; 
Coombe  v.  Miles,  2  Camp.  553;   Gros- 

35* 


venor  v.   Flax  &  Hemp  Manuf.   Co.   1 
Green,  Ch.  453. 

(?/)  Hargreaves  v.  Hutchinson,  2  A.  & 
E.  12;  Davis  v.  Hardacre,  2  Camp.  375. 
In  this  case  the  defendant  applied  to  the 
plaintiff  to  discount  a  bill  of  exchange  of 
£700  for  him.  The  plaintiff  refused  to 
do  so  unless  the  defendant  would  take  a 
check  for  £250,  a  promissory  note  for 
£286,  and  a  landscape  in  imitation  of 
Poussin,  to  be  valued  at  £150.  The  ac- 
tion was  brought  by  the  plaintiff  upon  the 
bill.  Lord  Ellenhoroiigh  said  :  "  Where  a 
party  is  compelled  to  take  goods,  in  dis- 
counting a  bill  of  exchange,  I  think  a  pre- 
sumption arises  that  the  transaction  is 
usurious.  To  rebut  this  presumption, 
evidence  should  be  given  of  the  value  of 
the  goods  by  the  person  who  owes  on  the 
bill.  In  the  present  case  I  must  require 
such  evidence  to  be  adduced;  and  I  wish 
it  may  be  understood  that  in  similar  cases, 
this  is  the  rule  by  which  I  shall  be  gov- 
erned for  the  future.  When  a  man  goes 
to  get  a  bill  discounted,  his  object  is  to 
procure  cash,  not  to  encumber  himself 
with  goods.  Therefore  if  goods  are 
forced  upon  him,  I  must  have  proof  that 
they  were  estimated  at  a  sum  for  which 
he  could  render  them  available  upon  a  re- 
sale, not  at  what  might  possibly  be  a  fair 
price  to  charge  to  a  purchaser  who  stood 
in  need  of  them." 

[413] 


388" 


THE   LAW   OP   CONTRACTS. 


[part  II. 


more  than  lawful  interest  in  any  way  or  manner.  And  in  this 
determination  the  contract  will  not  be  held  good,  merely  be- 
cause, upon  its  face,  and  by  its  words,  it  is  free  from  taint,  if  sub- 
stantially it  be  usurious  ;  nor,  if  it  be  in  words  and  form  usurious, 
will  it  be  held  so,  if  in  substance  and  fact  it  is  entirely  legal,  (z) 
And  these  questions  are  for  the  jury  only,  who  must  judge  of 
the  intention  of  the  parties,  which  lies  at  the  foundation  of 
the  inquiry,  from  all  the  evidence  and  circumstances,  [a)  And 
the  questions  which  are  presented  *thus  are  sometimes  ex- 
tremely nice.  Thus  a  contract  to  borrow  stock,  valued  at  more 
than  the  market  price,  and  to  pay  lawful  interest  on  this  valua- 
tion, would,  in  our  opinion,  be  usurious,  although  the  interest 
reserved  might  be  no  more  than  the  stock  earns ;  (b)  but  if  the 
stock  be  sold,  and  the  money  arising  be  loaned,  with  an  agree- 
ment to  replace  the  stock  on  a  certain  day,  and  to  pay  such 
interest  as  the  stock  would  have  earned  in  the  mean  time,  it  is 
not  usurious,  (c) 


{z)  Per  Lord  Tenterden,  C.  J.,  Beete  v. 
Bidgood,  7  B.  &  C.  458;  Andrews  v. 
Pond,  13  Pet.  76. 

(a)  Doe  d.  Metcalfe  v.  Brown,  1  Holt, 
N.  P.  295 ;  Mastcrmann  v.  Cowrie,  3 
Camp.  488;  Carstairs  v.  Stein,  4  M.  & 
S.  192  ;  Smith  v.  Brush,  8  Johns.  84 ; 
Thomas  v.  Catheral,  5  Gill  &  J.  23  ;  Ty- 
son V.  Kickard,  3  Harris  &  J.  109  ;  Ste- 
vens V.  Davis,  3  Met.  211  ;  Andrews  v. 
Pond,  13  Pet.  76,  77. 

(I>)  In  Parker  v.  llamsbottom,  5  Dowl. 
&  K.  138,  3  B.  &  C.  257,  B  &  C  being 
indebted  to  the  plaintiff  for  £15,000  in 
stock  previonsiy  advanced,  it  was  agreed 
between  the  parties  that  B  &  C  should  bo 
released  from  replacing  the  stock,  and  that 
instead  tliereof  tiiey  should  account  for  it 
in  money,  at  tiic  value  of  .£10,000,  paying 
5  per  cent,  interest  tliereon  until  the  prin- 
cipal and  all  interest  should  be  repaid. 
At  tlie  date  of  tiiis  agreement  the  market 
value  of  the  stock  was  only  .£8,400.  The 
plaintitf  claimed,  upon  tlio  issue  in  tiiis 
case,  to  jirove,  under  n  commission  of 
bankruptcy  against  B  &  C,  the  amount  of 
his  claim  uruler  this  agreement.  Ahhati, 
C.  J.,  said :  "  It  aj)pcars  to  mc  that  the 
agreement  is  clearly  void  for  usury,  be- 
cau>ic  it  Mciircs  to  the  ))lniiitill"  the  sum  of 
XI 0,000  as  till'  vahie  of  the  stoik  then  re- 
maining to  be  replaced,  though  the  real 
value  of  tliat  stock  was  then  only  X8,400." 

[■IM] 


Bayhy,  J.,  said  :  "  I  entertain  no  doubt 
that  tlic  agreement  was  usurious,  and  con- 
sequently void.  The  statute  evidently 
applies  to  loans  of  goods,  or  any  thing  that 
can  be  called  money's  worth,  as  well  as 
loans  of  money  itself.  In  this  case  the 
original  bargain  was  for  the  return  of  a 
loan  of  stock,  which  was  a  perfectly  legal 
bargain  ;  that  stock,  when  first  sold  out, 
produced  .£10,000,  but  when  the  second 
bargain  was  made  it  was  worth  only 
.£8,400 ;  tbercfore  at  that  time  the  plaintiff 
was  lending  a  stock  worth  £8,400  only, 
and  stipulating  to  be  repaid  by  ,£10,000, 
with  legal  interest  on  that  larger  sum. 
That  was  certainly  usurious."  In  Astor 
V.  Price,  19  Mart.  La.  408,  wliich  was  an 
action  on  certain  bills  of  exchange,  the 
defence  was  usury.  The  consideration  for 
tlie  bills  was  a  loan,  purjiorting  to  bo 
$64,000,  for  which  the  plaintiff  charged 
iutf  rest ;  but  he  disbursed  only  $8,8,50  in 
cash,  and  the  remainder  of  the  loan  was 
United  States  Bank  stock,  at  the  rate  of 
$105^  per  share,  when  the  market  value 
at  that  time  was  only  $104^  or  there- 
abouts. The  court  lie/d  the  transaction 
usurious  ami  the  bills  void. 

(«■)  Tate  r.  Wellings,  3  T.  U.  531. 
Here  the  defendant  applied  to  the  plain- 
tiff's testator  to  borrow  money,  the  tes- 
tator agreed  to  let  him  have  it,  but  told 
him  that  lie  should  exjjcct  the  same  inter- 


CH.  VII.] 


INTEREST  AND   USURY. 


389 


So  one  may  lend  stock  to  be  replaced  ;  (d)  or,  he  may  lend 
the  price  which  it  is  sold  for;  or  he  may  give  tiie  borrower  the 
option,  either  to  replace  the  stock  or  repay  the  money,  with  in- 
terest ;  but  if  he  reserves  this  option  to  himself  it  is  held  to  be 
usurious,  (e)      The  lender  may  lend  stock,  and  reserve  by  way 


est  which  he  received  in  the  short  annu- 
ities, namely,  8^  per  cent.,  and  which, 
being  assented  to,  it  was  agreed  that  the 
money  shoukl  be  raised  by  a  sale  of  short 
annuities,  to  the  amount  of  £900,  which 
the  defendant  was  to  replace,  in  the  same 
stock,  by  the  1st  of  September,  1785;  but 
if  it  were  not  replaced  by  that  time,  ho 
was  then  to  repay  that  sura  on  the  1st  of 
January,  1786,  and  in  the  mean  time  to 
pay  such  interest  as  the  stock  would  hfive 
produced.  The  jury  having  found  that 
the  transaction  was  an  honest  loan  of 
stock,  the  court  refused  to  disturb  the 
verdict.  Ashhurst,  J.,  said  :  "  The  ques- 
tion is,  whether  this  transaction  was  mere- 
ly colorable,  and  intended  as  a  loan  of 
money,  upon  which  usurious  interest  was 
to  be  taken,  or  a  loan  of  stock.  It  ap- 
peared from  the  evidence  that  in  substance 
this  was  a  loan  of  stock.  The  agreement 
was,  that  the  defendant  should  have  the 
use  of  the  money,  which  was  the  produce 
of  the  stock,  paying  the  same  interest 
which  the  stock  would  have  produced, 
with  liberty  to  replace  the  stock  on  a  cer- 
tain day,  till  which  time  the  lender  was  to 
run  the  risk  of  the  fall  of  the  stocks  ;  but 
he  stipulated  that,  if  it  were  not  replaced 
by  that  time,  he  would  not  run  that  risk 
any  longer,  but  would  be  repaid  the  sum 
advanced  at  all  events.  And  from  this 
contract  he  derived  no  advantage,  for  he 
was  only  to  receive  in  the  mean  time  the 
same  interest  which  the  stock  would  have 
produced.  Now  though  this  might  have 
been  used  as  a  color  for  usury,  it  was  a 
question  for  the  consideration  of  the  jury, 
and  they  have  negatived  it." 

{(l)  Forrest  v.  Elwes,  4  Ves.  492.  In 
this  case  £8,000  old  South  Sea  annuities 
were  loaned,  the  value  at  the  time  being 
£7,1 70,  and  a  bond  given  by  the  borrower 
to  replace  the  stock  in  six  months,  and  in 
the  mean  time  to  pay  lawful  interest  on 
£7,170.  It  was  contended  that  the  bond 
was,  upon  the  face  of  it,  a  usurious  con- 
tract ;  but  the  point  was  afterwards  given 
up,  and  the  Master  of  the  Rolls  decreed 
the  bond  good. 

(e)  Barnard  v.  Young,  17  Vcs.  44.  In 
this  case  £8,500  East  India  stock  was  trans- 


ferred as  security  for  the  performance  of  an 
agreement  that  £16,096  of  the  three  per 
cents,  which  was  the  amount  of  three  per 
cents  that  £10,000  would  have  purchased 
at  the  date  when  a  debt  for  £10,000  had 
become  due  from  the  plaintiffs  to  the  de- 
fendant, should  be  transferred  to  the  de- 
fendant on  the  30ih  of  the  next  September, 
or  that  the  debt  of  £10,000  should  be  paid, 
at  the  defendant's  option,  and  that  in 
either  case  five  per  cent,  interest  upon  the 
£10,000  should  be  paid  to  the  defendant. 
Upon  a  bill  filed  to  have  the  assignment 
of  the  East  India  stock  produced.  Sir  Wil- 
liam Grant,  M.  R.,  said  that  the  contract 
was  usurious,  as  it  reserved  the  capital, 
with  legal  interest  upon  it,  and  likewise  a 
contingent  advantage,  without  putting 
either  capital  or  interest  in  any  kind  of  risk. 
The  lender  was  to  have,  at  his  election, 
his  principal  and  interest,  or  to  have  a 
given  quantity  of  stock  transferred  to  him. 
This  principal  never  was  at  any  hazard, 
as  he  was  at  all  events  sure  of  having 
that  with  legal  interest,  and  had  the 
chance  of  an  advantage  if  the  stock  rose. 
It  was  usurious  to  stipulate  for  that 
chance,  and  the  contract  was  therefore,  in 
fact,  a  usurious  contract.  In  White  v. 
Wright,  3  B.  &  C.  273,  White  sold  out 
£400  stock,  in  the  three  per  cent,  consoli- 
dated bank  annuities,  for  £223,  which  he 
loaned  to  the  defendant,  who  executed  an 
agreement  that  after  one  year  she  would, 
if  requested,  transfer  to  White  £400  like 
stock,  and  would  in  the  mean  time  pay 
all  dividends  which  the  stock  would  pro- 
duce. The  defendant  also  executed  a  bond 
to  White,  conditioned  for  the  payment  of 
£223  and  interest,  to  him,  on  a  certain 
date.  The  pi'csent  action  was  brought 
upon  the  agreement  to  transfer  the  stock. 
Abbott,  C.  J.,  said  :,"Here  if  the  lender, 
after  receiving  five  per  cent,  interest  on 
his  money,  had  afterwards,  on  a  rise  in 
the  stocks,  compelled  the  defendant  to  re- 
place the  stock  sold,  he  would  have  had 
principal,  interest,  and  a  premium  besides. 
That  is  an  advantage  which  by  law  he 
was  not  entitled  to  contract  for.  The  con- 
tract was  therefore  usurious."  Bayley,  J., 
said  :  "  A  party  may  lawfully  lend  stock 

[415] 


390* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


of  interest,  the  dividends  which  would  be  paid  on  it,  whatever 
they  may  be,  provided  he  agrees  at  the  *time  of  the  loan  to 
take  them  ;  (/)  for  they  may  be  more  or  less  than  the  interest ; 
but  he  cannot  contract  that  he  shall  have  them,  if  more  than 
the  interest,  and  if  less,  so  much  more  as  shall  make  the  whole 
amount  received  equal  to  legal  interest. 

If  a  contract  be  in  part  for  usurious  interest,  and  it  is  made 
by  two  instruments,  one  promising  to  pay  the  principal,  with  or 
without  lawful  interest,  and  the  other  promising  to  pay  the 
usurious  interest  as  a  principal,  with  or  without  interest,  it 
would  seem  that  it  is  not  this  last  promise  alone  which  is  void, 
but  both,  because  both  together  form  one  contract,  which  is 
tainted  with  usury,  (g)     So,  if  there  be  a  note,  and  a  separate 


as  stock  to  be  replaced,  or  he  may  lend 
the  produce  of  it  as  money,  or  he  may 
give  the  borrower  the  option  to  repay  it, 
either  in  the  one  way  or  the  other.  But 
he  cannot  legally  reserve  to  himself  a  right 
to  determine,  in  future,  which  it  shall  be. 
It  is  not  illegal  to  reserve  the  dividends, 
by  way  of  interest  for  stock  lent,  although 
they  may  amount  to  more  than  £5  per 
cent,  on  the  produce  of  it ;  for  the  price 
of  stock  may  fall,  and  then  the  borrower 
"would  Ije  a  gainer;  but  the  option  must 
be  made  at  the  time  of  the  loan.  The 
instruments  set  out  in  this  case  show  that 
an  option  to  be  exercised  in  future  was 
reserved."  And  the  court  ordered  a  non- 
suit. In  Ciiippindale  v.  Thurston,  1 
Moody  &  M.  411,  .C.'iOO  was  loaned,  and 
the  borrower  agreed  to  repay  it  in  three 
per  cent,  consols,  at  a  price  not  exceeding 
68;}-  per  cent,  or  to  repay  it  in  Bank  of 
England  notes  upon  six  months'  notice. 
Tlie  court  ordered  a  nonsuit,  on  the 
ground  tliat  tlic  option  was  with  the  lend- 
er, and  the  (■f)ntract  therefore  dearly  usuri- 
ous, as  he  could  not  have  less  tlian  five  ]ier 
cent,  iiiton'st,  and  might  iiavc  more  than 
the  .£500  lent,  if  tiie  funds  rose  aI)ove  08,1. 

i  f)  liinjlqi,  J.,  White  r.  Wrigiit,  ;J  li. 
&  U.  278,  in  note  (c)  sujird.  See  also, 
I'ottcr  )•.  Yah;  College,  8  Conn.  .'J2. 

if/)  In  Kobcrts  r.  Trenayne,  Cro.  Jac. 
507,  Mary  Aiidington  loaned  Cory  .CI. 50, 
and  for  sccuriiy  of  its  rcpa3'mciit  Cory 
leased  to  Mary  Addington  a  dose  f(jr 
sixty  years,  coiiditioiierl  to  become  void  if 
he  paid  the  .€150  within  two  years.  It 
WttH  tlicn  fiirthi'r  aj^'rccd  that  Cory  should 
give  to  Mary  Adilington  annual  interest 

[IIG] 


of  twenty-two  pounds  ten  shillings,-  by 
means  of  a  grant,  by  fine,  of  a  rent  charge, 
which  was  done.  Cory  afterwards  granted 
the  inheritance  to  the  plaintiff,  who  brought 
this  action  of  trespass  against  the  defend- 
ant, husband  of  Mary  Addington.  "  It 
was  moved,  whether  this  lease,  being  taken 
for  the  payment  of  the  principal  money, 
and  not  for  the  payment  of  any  part  of  the 
usury,  be  within  the  statute,  to  make  the 
bargain  void  ?  —  It  was  resolved,  that  it  is : 
because  it  is  for  the  security  of  money  lent 
upon  interest,  and  for  the  securing  of  that 
which  the  statute  intends  he  should  lose  ; 
for  otherwise  it  would  be  an  evasion  out 
of  the  statute,  that  he  would  provide  for 
the  securing  of  the  payment  of  the  prin- 
cipal, whatsoever  usurious  bargain  was 
made,  which  the  law  will  not  permit." 
In  Wliite  r.  Wright,  3  B.  &  C.  273,  ante, 
p.  389,  n.  [e).  White  loaned  the  defend- 
ant .£400  stock,  and  received  an  agree- 
ment to  retransfer  X400  like  stock,  and  in 
tlic  mean  time  pay  the  dividends  the  stock 
would  earn.  By  another  agreement  the 
defendant  agreed  absolutely  to  pay  £223 
and  interest,  to  the  plaintifi",  on  a  certain 
day.  This  action  was  brought  upon  the 
first  agreement  to  retransfer  the  stock. 
The  first  agreement,  although  lawful  in 
itself  was  held,  upon  tlic  aiitliority  of 
Roberts  v.  Trenayne,  to  be  vitiated  by  the 
other  bond  for  the  payment  of  illegal  in- 
terest. To  the  same  eH'cct,  are  Motte  v. 
l^ornll,  1  McCord,  350;  Clark  r.  Badg- 
\c\,  3  Jlalst.  23.3  ;  rostlcthwait  v.  Ciarrett, 
3T.  B.  Mon.  345;  Fitch  v.  Hamlin,  1 
lioot,  110;  Swartwout  v.  Payne,  19 
Johns.  294;  Gray  v.  Brown,  22  Ala.  273. 


CH.  VII.]  INTEREST   AND   USURY.  *391 

oral  promise  to  pay  usurious  interest,  the  note  is  void.  (A)  The 
authorities  ditler  on  this  point,  but  the  prevailing  rule  is,  that  if 
the  design  of  the  whole  transaction,  and  the  inducement  to  it, 
are  to  lend  money  on  usurious  interest,  the  taint  of  usury  affects 
the  whole  and  every  part  of  the  contract,  and  no  one  portion 
thereof,  although  in  form  an  independent  contract,  is  made 
valid  by  the  fact  that  taken  by  itself  it  is  free  from  objection. 
The  very  fraud  consists  *in  disguising  usury,  by  separating  the 
contract  into  these  parts,  (i)  The  common  way  in  which,  in 
our  mercantile  cities,  the  usury  laws  are  now  evaded,  we  sup- 
pose to  be  this ;  a  valid  bargain  is  made  for  the  payment  of 
money  with  interest.  The  additional  bonus  or  premium  is  left 
entirely  at  the  pleasure  of  the  borrower,  with  the  understanding 
that  the  worth  of  money  at  that  time  is  a  certain  per  cent. 
Then  there  is  no  contract  which  is  not  legal ;  if  when  the  money 
is  due,  nothing  but  simple  interest  is  paid,  nothing  more  can  be 
demanded  by  any  contract,  and  the  lender  trusts  to  the  fact  that 
a  borrower,  who  thus  executes  only  his  contract,  would  not  be 
able  to  borrow  again.  But  if  this  understanding  assumes  dis- 
tinctness enough  to  become  a  coritract  for  the  repayment  of 
additional  interest,  we  are  satisfied  that  the  penalties  of  the 
usury  law  would  attach  to  it.  The  difficulty  of  distinguishing 
between  a  mere  understanding  and  a  promise  might  often  be 
great.  If  money  was  actually  paid  for  the  use  of  the  sura 
loaned,  over  and  above  the  lawful  interest,  a  similar  question 
would  arise,  whether  it  was  paid  in  pursuance  of  a  contract  to 
pa^j,  so  that  the  penalty  would  be  incurred  ;  or  whether  it  was 
a  mere  gratuity.  The  rule  of  law  must  be,  that  if  A  lends  to  B 
a  sum  for  a  given  time,  on  simple  interest,  and  B,  on  paying 
this  money,  manifests  his  gratitude  for  the  accommodation  by  a 
free  gift  to  A,  either  of  money  or  a  chattel,  there  is  no  usury  in 
this ;  but  if  the  money  is  paid,  or  a  chattel  given,  in  perform- 
ance of  a  previous  promise  to  pay,  then  the  penalty  of  usury 
must  attach ;  and  in  each  case  it  must  be  a  question  of  fact 

(h)   Merrills   v.   Law,   9    Cowen,    65  ;  v.   Whittlesey,  2  Root,  37 ;  contra,  But- 

Macomber  v.   Dunham,    8   Wend.  550;  terfielcl  w.  Kidder,  8  Pick.  512. 

Hammond  v.  Hopping,  13  Wend.  505;  (/)  Ibid. ;  Warren  i'.  Crabtree,  1  Greenl. 

Willard  v.  Eeeder,  2  McCord,  3G9  ;  Lear  171. 


V.  Yarnel,  3  A.  K.  Marsh.  419;  Atwood 


[417  1 


392*  THE  LAW   OF   CONTRACTS.  [PART  II. 

whether  the  payment  is  in  the  nature  of  a  gift,  or  of  the  execu- 
tion of  a  promise. 

It  should  be  remarked,  that  if  a  foreign  contract  provides  for 
interest  which  is  lawful  where  the  contract  is  made,  it  will  not 
be  declared  void  for  usury  in  a  State  in  which  only  a  less  inter- 
est is  allowed  by  law.  [j)  But  if  a  usurious  *contract  is  made 
in  a  State  in  which  it  is  wholly  void,  because  of  such  usury,  it 
cannot  be  recognized  in  another  State  in  which  the  penalty  is  a 
forfeiture  of  a  part  only,  and  enforced  there  for  all  but  this 
part,  {k) 

It  would  seem  that  there  must  be  an  intent  to  take  usury,  to 
constitute  the  offence.  Hence  the  usual  discount  of  a  bank, 
although  it  takes  in  fact  something  more  than  lawful  interest, 
is  not  usury,  {ka) 


SECTION    IV. 


THE   CONTRACT  ITSELF   MUST   BE   TAINTED    WITH   THE   USURY. 

In  order  that  a  contract  or  debt  should  be  avoided  as  usuri- 
ous, it  is  necessary  that  it  should  itself  be  tainted  with  this 
offence ;  for  if  any  subsequent  contract  in  payment  of  the  first 
be  usurious,  this  second  contract  will  be  void,  and  will  therefore 
leave  the  original  contract  or  debt  wholly  unpaid,  and  it  may 
be  enforced  as  if  the  second  had  not  been  made.  (/)     Thus,  if 

{j)   llarvcy  v.   Archbold,  3  B.  &   C.  upon  oyer  the  condition  was  to  pay  by  a 

626 ;    Thompson   v.    Powlcs,   2   Simons,  certain  day.     The  defendant  pleaded  the 

211;  l)e   Wolf  v.   Johnson,    10  Wheat,  statute,  12  Car.  2,  and  said  that  the  con- 

.307  ;  Chapman  v.  Robertson,  6  Paige,  627;  tract  was  usurious,  but  per  curiam,  being 

Pratt  V.  Adams,  7  Paige,  615.     See  on  made  after  the  liond  forfeited  to  receive 

this  subject,  ante,  p.  97,  n.  (e).     Nichols  v.  interest,  according  to  the  penalty,  which 

Cosset,  1   Koot,  294  ;  M'Queen  v.  Burns,  was  double  the  ])rincipal,  it  doth  not  void 

1  Hawks, 476;  M'Uuirc  r.  Warder,  1  Wash,  the  ol)ligation  that  was  good  at  first,  but 

Va.  .368;  Iiol)b  v.  Ilalsey,  11   Smedes  &  only  subjects  tiio  taker  to  other  penalties, 

M.   140.     Sec   also,    (ialo  ;;.  ]<^astman,  7  and    judgment    for    the    ]ilainti(f."      In 

Met.  14;  Jacks  v.  Nichols,  1    Sold.    178;  Anonymous,  1   Bulst.  17,  T.  N.  executed 

Davis  V.  Garr,  2  id.  134;  Turpin  v.  Po-  to  J.  P.  a  bond  for  .€G6,  Cnl.   principal, 

vail,  H  Lcigii,  93.  and    £(>    legal    interest,    ]iayablc    in    one 

(/.;)  Houghton  v.  Pngc,  2  N.  H.  42.  year.     Witldn  the  year  tiie  oliligor  paid 

(leu)  Qiiiiisigamond  Bank  r.  IIobl)s,  S.  tlic  .£.(>  interest,  and  afterwards  an  action 

J.  C.  Mass.  IS.'JH,  21  Law  Beportcr,  .')64.  being  l)roiight  for  the  non-payment  of  the 

{/)  lladlcv  I'.  Manning,  3  Keiiie,   142,  principal  tiu;  obligor  plcatlcd  the  statute 

pi.    13.     "In    debt   ujjon   an  obligation,  of  usury,  because  the  obligee  took  the  use 

[418] 


en.  VII.] 


INTEREST   AND   USURY. 


*393 


one  who,  as  joint  surety,  has  paid  the  *  whole  of  a  debt,  and  so 
acquired  a  claim  for  contribution  for  one  half,  settles  this  claim 
by  receiving  a  note  with  usurious  interest,  this  note  cannot  be 
collected,  but  the  original  claim  for  contribution  revives  and 
may  be  enforced,  (di)  So  an  agreement  to  pay  more  than  in- 
terest, by  way  of  penalty  for  not  paying  the  debt,  is  not  usuri- 
ous, because  the  debtor  may  relieve  himself  by  paying  the 
debt  with  lawful  interest,  and  even  if  he  incurs  the  penalty, 
this  may  be  reduced  to  the  actual  debt,  (w)     And  if  money  be 


money  within  the  year.  "  It  was  re- 
solved by  the  whole  court,  that  his  taking 
of  the  use  money  within  the  year  shall  not 
avoid  the  obligation,  and  that  this  taking 
is  no  usury  within  the  statute."  Williams, 
Justice  :  "  Where  the  first  contract  is  not 
usurious,  this  shall  never  be  made  usury, 
within  the  statute,  by  matter  ex  post  facto  ; 
as  if  one  contract  with  another  to  borrow 
£100  for  a  year,  and  to  give  him  £10  for 
interest,  at  the  end  of  the  year,  if  he  pays 
the  interest  within  the  year,  this  is  not 
usury  within  tlie  statute  to  avoid  the  obli- 
gation, or  to  give  a  forfeiture  of  the  money 
within  the  statute,  because  that  this  con- 
tract was  not  usurious  at  the  beginning  ; 
which  was  agreed  by  the  whole  court,  and 
judgment  given  for  the  plaintiff."  In 
Pollard  V.  Scholy,  Cro.  Eliz.  20,  Pollard 
sold  defendant  two  oxen,  for  six  pounds 
six  shillings  and  eight  pence,  to  be  paid 
at  All-Saints  next,  and  on  the  same  day 
the  defendant  required  longer  day  of  pay- 
ment, upon  which  Pollard  gave  him  till 
the  first  of  May  next,  receiving  therefor 
three  quarters  of  wheat,  which  was  above 
the  value  of  ten  pounds  per  cent,  upon 
the  debt.  In  debt  for  the  price  of  the 
oxen,  usury  was  set  np  as  a  defence. 
The  opinion  of  the  justices  was  that  the 
last  contract  was  void,  but  the  first  good, 
being  made  bond  fide.  Ferrall  v.  Shaen, 
1  Saund.  294,  was  debt  upon  a  bond,  for 
payment  of  £300  to  which  the  defendant 
pleaded  that  the  plaintiff  had  received 
£30  for  delaying  the  day  of  payment  of 
the  bond  one  year,  which  was  usurious. 
The  court  adjudged  the  plea  not  good, 
for  here  the  bond  was  good  when  it  was 
made,  and  then  a  usurious  contract  after- 
wards cannot  make  it  void,  although  the 
penalty  for  usury  was  incurred.  In 
Nichols  V.  Lee,  3  Anstr.  940,  where  to 
debt  upon  a  bond,  the  plea  was,  that  after 
the  execution  of  the  bond  the  plaintiff 


received  from  the  defendant  more  than 
lawful  interest,  Macdonald,  C.  B.,  said : 
"  There  is  nothing  more  settled  than  this 
point ;  to  avoid  a  security  as  usurious, 
you  must  show  that  the  agreement  was 
illegal  from  its  origin."  The  same  prin- 
ciple is  established  in  the  following  cases  : 
Ballard  v.  Oddey,  2  Mod.  307 ;  Parr  ;;. 
Eliason,  1  East,"  92  ;  Ilex  v.  Allen,  T. 
Eaym.  196  ;  Parker  v.  Eamsbottom,  3 
B.  &  C.  257;  Supra,  n.  (h)  ;  Phillips  v. 
Cockayne,  3  Camp.  119;  Gray  r.  Fowler, 
1  H.  Bl.  462  ;  Daniel  v.  Cartony,  1  Esp. 
274 ;  Bidler,  J.,  Tate  v.  Wellings,  3  T. 
R.  531  ;  Bush  v.  Livingston,  2  Caines, 
Cas.  66;  Nichols  v.  Pearson,  7  Pet.  107; 
Pollard  V.  Bavlors,  6  Munf.  433  ;  Roane, 
J.,  Pollard  r.'Baylor,  4  Hen.  &  M.  232 ; 
Merrills  v.  Law,  9  Cowen,  65  ;  Hughes 
V.  AVheeler,  8  Cowen,  77  ;  Rice  v.  Wel- 
ling, 5  Wend.  597  ;  Swartwout  v.  Payne, 
19  Johns.  294  ;  Craine  v.  Hubbcl,  7 
Paige,  417;  Brown  v.  Dewey,  1  Sandf. 
Ch.  56 ;  Johnson,  J.,  in  Gaither  v.  Farm- 
ers and  Mechanics  Bank,  1  Pet.  43  ; 
Gardner  v.  Flagg,  8  Mass.  101  ;  Parker, 
C.  J.,  Frye  v.  Barker,  1  Pick.  267  ; 
EdgcU  V.  Stanford,  6  Vt.  551  ;  Ham- 
mond V.  Smith,  17  Vt.  231  ;  Sloan  v. 
Sommers,  2  Green,  N.  J.  509  ;  liujfin, 
J.,  Collier  v.  Nevill,  3  Dev.  32 ;  Indian- 
apolis Ins.  Co.  V.  Brown,  6  Blackf.  378 ; 
Varick  v.  Crane,  3  Green,  Ch.  128  ; 
Brown  v.  Toell,  5  Rand.  543.  See  also 
Abrahams  v.  Bunn,  4  Burr.  2253. 

(/«)  Johnson  v.  Johnson,  11  Mass.  359. 

(?i)  Burton's  case,  5  Co.  69  ;  Vin.  Abr. 
Usury,  C. :  "If  a  man  obliges  himself  in 
nine  marks  to  pay  at  a  certain  day,  and 
that  if  he  does  not  pay  at  the  day,  he 
obliges  himself  by  the  same  deed  to  pay 
to  him  seventeen  marks;  this  is  not  usury, 
but  it  is  only  a  pain.  26  E.  3,  71."  In 
Roberts  v.  Trenayne,  Cro.  Jac.  507,  Dode- 
ridi/e,  J.,  took  this  difference  in  cases  of 

[419] 


394* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


due,  and  the  creditor,  at  the  *request  of  the  debtor,  agrees  to 
give  him  time,  on  condition  that  the  debtor  shall  continue  to 
pay  legal  interest,  and  also  such  further  interest  as  the  creditor 
may  be  obliged  to  pay  for  money  to  be  raised  by  him  to  take 
the  place  of  the  money  due  from  the  debtor,  such  agreement  is 
not  usurious  ;  and  if  the  debtor  pay  such  extra  interest,  he  can- 
not recover  it  back  as  a  usurious  payment,  (o)  Nor  will  the 
taking  of  usurious  interest  imply  conclusively  a  prior  agreement 
to  take  ;  as  if  a  bond  be  given  for  principal  and  lawful  interest, 
if  usurious  interest  be  taken  afterwards,  this  does  not  prove 
conclusively  that  such  was  the  secret  original  agreement ;  (/*) 
although  it  is  prima  facie  evidence,  [q)  But  by  some  authori- 
ties the  presumption  is  only  of  an  intentional  new  usurious 
contract  at  the  time  of  payment,  (r) 


casual  usury :  "  If  I  secure  both  interest 
and  principal,  if  it  be  at  the  will  of  the 
party  who  is  to  pay  it,  it  is  no  usury  ;  as 
if  I  lend  to  one  a  hundred  pounds  for 
two  years,  to  pay  for  the  loan  thereof  thirty 
pounds,  and  if  lie  pay  the  principal  at  the 
year's  end,  he  shall  pay  nothing  for  in- 
terest, this  is  not  usury,  for  the  party  hath 
his  election  ;  and  may  pay  it  at  the  first 
year's  end,  and  so  discharge  himself." 
In  Garrett  v.  Foote,  Comb.  13.3,  Holt  said  : 
"  If  I  covenant  to  pay  £100  a  year  hence, 
and  if  I  do  not  pay  it  to  pay.£^0,  it  is  not 
usury,  but  only  in  the  nature  of  a  nomine 
prf-mr."  In  Groves  v.  Graves,  1  Wash.  Va. 
1,  there  was  an  agreement  for  the  payment 
of  a  debt,  by  tlie  delivery  of  certificates  of 
"  Pierce's  final  settlements,"  at  the  rate 
of  twenty  shillings  for  every  twenty-six 
pence  of  the  money  advanced,  and  if  the 
debt  was  not  paid  at  a  certain  time,  tliat 
the  certificates  should  be  paid  at  the  rate 
of  twenty  shillings  for  every  thirteen 
pence.  The  President  held  that  the 
agreement  to  pay  ccrtilicatcs  at  half  their 
value,  was  ii  penalty  only,  and  the  con- 
tract thcrcf(n'c  not  usmious.  In  Winslow 
V.  Dawson,  1  Wash.  Va.  118,  a  debt  for 
£200  being  due,  two  bonds  were  executed, 
one  for  £100,  the  other  for  .Cl.'iO,  at  a 
certain  time,  to  which  latter  bond  a  mem- 
orandum was  aflixcil  that  it  might  be  dis- 
clnngcd  by  the  payment  of  CIOO,  if  paid 
nl  an  carliiT  date  than  the  time  mentioned 
in  the  condition.  The  contract  was  held 
not  usurious.  The /Vc.s/V/(;i<  said  :  " 'J'he 
rase  of  (irovcs  v.  Graves,  in  this  court, 
lia.s  decided  lliis  princii)lc,  viz.  :  that  such 

[420] 


a  contract,  to  pay  a  larger  sum  at  a  future 
day,  is  not  usurious  ;  but  that  the  in- 
creased sum  shall  be  considered  as  a  pen- 
alty against  which  a  court  of  equity  ought 
to  relieve,  upon  compensation  being 
made."  See  also,  Cutler  v.  How,  8  Mass. 
257 ;  Pollard  v.  Baylors,  6  Munf.  433  ; 
Eoane,  J.,  Pollard  v.  Baylor,  4  Hen.  & 
M.  232  ;  Brock  v.  Thompson,  1  Bailey, 
322;  Campbell  v.  Shields,  6  Leigh,  517; 
Flemincj,  J.,  Call  v.  Scott,  4  Call,  409  ; 
Moore  v.  Hvlton,  1  Dev.  Eq.  429 ; 
Brockway  v.  "Clark,  6  Ham.  45  ;  Wight 
i\  Shuck,  1  ]\Iorris,  425  ;  Shuck  i'. 
Wight,  1  Greene,  Iowa,  128;  Gambril 
V.  Hose,  8  Blackf.  140;  Lawrence  v. 
Cowles,-  13  111.  577  ;  Thompson  v.  Jones, 

1  Stewart,  564  ;  Long  i'.  Storie,  9  Hare, 
142,  10  Eng.  L.  &  Eq.  182;  Floyer  r. 
Edwards,  Cowp.  112. 

(o)  Kimball  v.  Proprietors  of  Boston 
Athenauim,  3  Gray,  225.  The  main 
ground  of  the  decision  was,  that  the  gist 
of  all  the  usury  laws,  from  1641  to  1846, 
is  the  taking  of  unlawful  juxifits ;  whereas 
here  there  is  no  taking  of  any  profit,  by 
the  creditor,  who  is,  in  fact,  the  agent  of 
the  debtor  for  raising  the  money. 

{/))  Enssil  V.  Brookes,  2  Car.  &  P. 
318;  Hammond  ;■.  Smith,  17  Vt.  231, 

(7)  Eerrall  ;-.  Shacn,  1  Saund.  295, 
note ;  New  York  Firemen  Ins.  Co.  v. 
ICIv,  2  Cowcn,  705;  Cummins  r.  Wise, 

2  ilalstcd's  Ch.  73;  Varick  v.  Crane,  3 
Green,  Ch.  128;  Ciuarlcs  v.  Brannon, 
5  Strobh.  151. 

(/•)  Hammond  r.  Smith,  17  Vt.  231. 


CH.  VII.] 


INTEREST  AND   USURY. 


*395 


SECTION    V. 


SUBSTITUTED   SECURITIES   ARE   VOID. 


If  the  statute  of  usury  provides  that  a  usurious  contract  is 
void,  then  no  subsequent  circumstance  can  make  the  original 
contract  good  ;  and  consequently  a  promissory  negotiable  note, 
void  at  its  inception  for  usury,  is  equally  void  in  the  hands  of 
innocent  indorsees,  (s) 

*Whether  a  note,  valid  in  its  inception,  but  usuriously  trans- 
ferred by  the  payee  or  indorsee,  is  valid  against  the  maker,  has 
been  variously  decided,  (t)  And  the  authorities  differ  on  the 
question  whether  such  a  note  is  valid  as  against  the  maker  in 
the  hands  of  the  usurious  indorsee  himself;  the  objection  being, 
that  no  rights  can  grow  out  of  an  illegal,  and  therefore,  invalid 
transaction,  (u)  There  are,  however,  cases  of  high  authority 
which  hold  that  the  maker  is  liable  to  the  indorsee,  even  if  the 
indorser  be  not  so  liable,  on  the  ground  that  the  indorsement 
operates  as  an  executed  transfer  of  the  property  in  the  note, 


(s)  Lowe  V.  Waller,  Doug.  736,  supra, 
386,  n.  {w);  Ackland  v.  Pearce,  2  Camp. 
599;  Young  v.  Wright,  1  Camp.  139; 
Wilkie  V.  Koosevelt,  3  Johns.  Cas.  66  ; 
Hackley  v.  Sprague,  10  Wend.  113; 
Lloyd  V.  Scott,  4  Pet.  228;  Chadbourn 
V.  Watts,  10  Mass.  121 ;  Bridge  v.  Hub- 
bard, 1.5  Mass.  96;  Sauerwein  w.  Brun- 
ner,  1  Harris  &  G.  477 ;  Paris  v.  King,  1 
Stewart,  255  ;  Sewall,  J.,  Chadbourn  v. 
Watts,  10  Mass.  121  ;  Payne  v.  Treze- 
vant,  2  Bay,  23  ;  Gaillard  v.  Le  Seigneur, 
1  McMullan,  225 ;  Solomons  v.  Jones, 
3  Brev.  54 ;  Townsend  v.  Bush,  1  Conn. 
260.  See  also,  Shober  v.  Hauser,  4  Dev. 
&  B.  97.  It  is  otherwise  where  the  stat- 
ute of  usury  does  not  declare  the  contract 
void.  Story,  J.,  Pleckner  v.  U.  S.  Bank, 
8  Wheat.  354  ;  Young  v.  Berkley,  2  N. 
H.  410 ;  Creed  v.  Stevens,  4  Whart.  223  ; 
Conkling  v.  Underbill,  3  Scam.  388 ; 
Wells  V.  Porter,  5  B.  Mon.  424  ;  McGill 
V.  Ware,  4  Scam.  21 ;  Tucker  v.  Wila- 
mouicz,  3  Eng.  157.     See  also,  Turner  v. 

VOL.  II.  36 


Calvert,  12  S.  &  R.  46 ;  Fenno  v.  Sayre, 
3  Ala.  458. 

(t)  Lord  Kenyan  originally  held  that 
such  holder  would  be  entitled  to  recover. 
Daniel  v.  Cartony,  1  Esp.  274 ;  Parr  v. 
Eliason,  1  East,  92.  In  Lowes  v.  Maz- 
zaredo,  1  Stark.  385,  however,  the  court 
decided  that  usury  on  the  part  of  the 
payee  of  a  note  was  a  bar  to  an  action  by 
a  bona  fide  holdei",  because  he  could  not 
bring  himself  in  connection  with  the 
maker,  except  through  the  medium  of 
usurious  indorsement ;  and  this  case  was 
approved  in  Chapman  v.  Black,  2  B.  & 
Aid.  589.  But  Bush  v.  Livingston,  2 
Caines,  Cas.  66 ;  Foltz  v.  Mey,  1  Bay, 
486  ;  Campbell  v.  Kead,  Martin  &  Y. 
392,  decided  that  a  note  thus  usuriously 
indorsed  is  valid  against  the  maker,  in 
the  hands  of  a  holder  in  good  faith. 

(u)  See  Lloyd  v.  Keach,  2  Conn.  175; 
Gaither  v.  Farmers  &  Mechanics  Bank, 
1  Pet.  44 ;  Nichols  v.  Pearson,  7  Pet.  107, 
and  Freeman  v.  Brittin,  2  Harrison,  191. 

[421] 


396*  THE   LAW    OF   COJsTRACTS.  [PART  II. 

and  does  not  remain  executory,  like  the  indorser's  general  lia- 
bility to  pay  the  note,  on  the  maker's  default,  (y)  In  the  sec- 
tion on  the  sale  of  notes,  we  shall  consider  this  question,  and 
give  our  reasons  for  holding  that  where  such  a  transaction  is  a 
bona  fide  sale  of  the  note,  both  maker  and  indorser  are  held  for 
the  whole  face  of  the  paper. 

To  remedy  the  hardship  imposed  upon  innocent  holders  of 
negotiable  paper,  under  the  English  construction  of  the  rule 
that  usurious  instruments  are  absolutely  void,  the  statute  of 
58  Geo.  3,  c.  93,  was  passed,  declaring  that  no  bill  or  note 
should  be  invalidated  in  the  hands  of  a  holder  for  value  with- 
out notice.  And  exceptions  to  the  same  effect  may  be  found 
in  some  of  the  statutes  of  usury  in  this  country,  {iv)  *But 
where  the  statute  contains  such  a  provision,  and  also  provides 
as  the  penalty  for  usury,  the  deduction  in  an  action  against  the 
debtor,  of  the  excessive  interest  secured,  and  the  indorsee  takes 
it  after  it  becomes  due,  the  deduction,  it  is  said,  may  be  made 
against  him.  {x) 

But  if  such  note,  or  any  securities  for  an  usurious  debt  be 
given  up  and  cancelled,  on  the  promise  of  the  debtor  to  pay  the 
original  debt,  with  lawful  interest,  this  promise  is  valid,  being 
founded  on  a  good  consideration,  {y)  8o  also,  it  is  true  in 
general,  that  any  security  given  in  payment  or  discharge  of  a 

(v)  Munn  v.  Commission  Co.  15  Johns,  time  to  time,  paid  on  this  account.     The 

44  ;  Collier  v.  Nevill,  3  Dcv.  30 ;  Knights  sugars  were  not  purchased  or  procured  by 

V.  Putnam,  3  Tick.  184.     See  also,  Lit-  Webb,   but    by   llarrie   &    Suthmicr,   in 

tell  V.  llord,  Hardin,  81.  their  own  names.     Upon  the  parties  be- 

{w)  Sec  Chapman  r.  Black,  2  B.  &  Aid.  ing    informed,    and    realizing    that    this 

589,  and  Ilackley  v.  Spraguc,  10  Wend,  transaction  was  usurious,  and  that  Webb 

113.  was  in  danger  of  losing  the  whole  of  his 

(x)  Wing  V.  Dunn,  24  Me.  128.  money,    Webb,   in   accordance    with    an 

()/)  Barnes  v.   Ileadley,  2  Taunt.  184.  arrangement  then  made,  drew   up  fresh 

In  this  case  an  agreement  was  made  be-  accounts,  deducting  all  charges  for  com- 

twecn  Webb  and  JIarrie  &  Suthmicr,  by  mission,  and  charging   five  per  cent,  in- 

wbicb  Webb  was  to  advance  them  money  terest  only,  on   the   money   actually  ad- 

to  ])iinhase    sugars    with,    from    time    to  vanced.     This  account  was  acknowledged 

time,    for  which    he    was    to  receive    five  by   the    debtors    to    be    correct,  and  they 

j)cr  cent,  interest,  and  also  a  commission  promised     to     pay     it,    whereupon    the 

of  five  percent,  upon  all  sugars  purchased,  original    securities   were   given    up,  and 

To  secure  the  repayment  of  the  priiici|)al,  the   origimd     agreement    cancelled     and 

interest,   and  commissions,  certain   dccils  burned.     Tiiis    action  was    brought  \\\ion 

nn<l    securities  were    c.xccutid   t(i   AVcbb.  the  last  account  against  tlie  assignees  of 

Under  this  agrecm(;nt  Webb  made  out  four  llarrie  &  Suthmicr;  and  the  court  held 

successive  lialf-yi-arly  accounts,   cliargiiig  that  it  was  maintainable.     Sec  Wicks  v. 

according  to  the  agreement  for  the  money  (jogcrley,  I  Jiyan  &  M.  123. 
flUvunced  ;  and  various  sums  were,  from 

['122] 


en.  VII.] 


INTEREST   AND   USURY. 


*397 


usurious  security,  is  equally  void  with  that,  (z)  *But  when  a 
new  and  innocent  party  is  introduced  into  the  substituted  secu- 
rity, the  weight  of  authority  would  lead  to  the  conclusion  that 
such   security  is  valid  as  to  him.  {a)       And  if  the  borrower 


(z)  Preston  v.  Jackson,  2  Stark.  237, 
was  an  action  oil  a  promissory  note,  by 
an  indorsee  against  the  maker.  The 
payee  was  called,  and  testified  that  he 
had  lent  the  defendant  100/.,  for  which 
he  was  to  receive  50/.,  by  way  of  interest, 
and  took  his  bond  for  150/.  That  he 
afterwards  lent  100/.  more  upon  the  same 
terms,  and  that  in  August,  1814,  the 
former  securities  were  given  up,  and  the 
note  sued  upon,  given  for  the  interest. 
Holroyd,  J.,  held  the  note  void.  In 
Pickering  v.  Banks,  Forrest,  72,  the  de- 
fendant had  given  the  plaintiff  bills  for 
a  usurious  consideration,  some  of  which 
he  had  paid ;  the  remainder  not  being 
discharged  when  they  became  due,  the 
defendant  gave  a  warrant  of  attorney  for 
the  balance  on  which  the  plaintiflf  had 
entered  up  judgment.  Mncdoiuild,  C.  B., 
ordered  the  judgment  to  be  set  aside  and 
the  warrant  of  attorney  to  be  delivered 
up.  In  Chapman  v.  Black,  2  B.  &  Aid. 
589,  a  bill  of  exchange  was  in  the  hands 
of  the  plaintiff,  which  had  been  usuriously 
indorsed  by  a  prior  party.  Upon  being 
informed  of  this,  the  plaintiff  procured  a 
new  bill  to  be  accepted  by  the  defendant, 
in  which  the  usurious  indorscr  was  omit- 
ted. The  present  action  was  brought 
upon  the  last  bill,  and  Abbott,  C.  J.,  de- 
livered the  opinion  of  the  court,  that  the 
bill  was  void.  In  Bridge  v.  Hubbard,  15 
Mass.  96,  Blanchard  &  Ford,  the  makers 
of  a  note  void  for  usury,  being  called  on 
for  payment,  asked  for  a  longer  credit, 
which  was  given  on  condition  that  other 
security  should  be  obtained.  The  note 
sued  on  was  then  procured,  signed  by  the 
defendant,  who  was  liable  as  indorser  on 
the  first  note ;  it  was  made  payable  to  T. 
W.  Sumner,  who  indorsed  it  in  blank, 
under  which  indorsement  the  plaintiffs 
claimed.  The  court  held  the  note  sued 
upon  to  be  a  mere  substituted  contract  for 
the  former  usurious  one,  and  void  in  the 
plaintiff's  hands.  See  also,  to  the  same 
effect.  Marsh  v.  Martindale,  .3  B.  &  P.  154, 
and  the  following  American  decisions : 
Walker  v.  Bank  of  Washington,  3  How. 
62 ;  Powell  v.  Waters,  8  Cowen,  685  ; 
Eeed  v.  Smith,  9  Cowen,  647  ;  Tut- 
hill  I'.  Davis,  20  Johns.  285 ;  Jackson  v. 


Packard,  6  Wend.  415;  Steele  r.  Whip- 
ple, 21  Wend.  103;  Gibson  v.  Stearns, 
3  N.  H.  185;  Morcure  v.  Dermott,  13 
Pet.  345  ;  Collins  i\  Kobcrts,  Brayt.  235  ; 
Swift,  C.  J.,  Scott  V.  Lewis,  2  Conn. 
13,5;  Botsford  v.  Sanford,  id.  276;  Wales 
V.  Webb,  5  Conn.  154;  Warren  v.  Crab- 
tree,  1  Greenl.  167;  Lowell  v.  Johnson, 
14  Me.  240;  Edwards  v.  Skirving,  1 
Brev.  548  ;  Dunning  v.  Merrill,  1  Clarke, 
Ch.  252  ;  Torrey  v.  Grant,  10  Smedes  & 
M.  89;  Jackson  v.  Jones,  13  Ala.  121; 
Hazard  v.  Smith,  21  Vt.  123  ;  Simpson 
V.  FuUenwider,  1 2  Ired.  338. 

(a)  Ellis  I'.  Warnes,  Cro.  Jac.  33, 
Yelv.  47  ;  Powell  v.  Waters,  8  Cowen, 
669  ;  Brown  r.  Waters,  2  Md.  Ch.  201  ; 
Aldrich  v.  Reynolds,  1  Barb.  Ch.  43; 
Wales  V.  Webb,  5  Conn.  154.  In  Cuth- 
bert  V.  Haley,  8  T.  R.  390,  Haley  pro- 
cured Plank  to  discount  certain  notes 
of  his  at  a  usurious  rate.  The  plaintiffs 
received  the  notes  from  Plank  bona  fide, 
and  the  defendant  being  applied  to  by 
them  for  payment,  executed  to  them  a 
bond  for  the  amount  of  the  notes,  upon 
which  bond  this  action  was  brought.  It 
was  held  that  it  could  be  maintained. 
Lord  Kmyon,  C.  J.,  said  :  "  The  construc- 
tion that  has  already  been  put  on  the 
statutes,  has  been,  in  a  variety  of  instances, 
abundantly  hard.  The  courts  have  said, 
and  rightly  so,  that  the  innocent  holders 
of  securities  given  on  usurious  considera- 
tions must  suffer  for  the  wickedness,  or 
rather  unlawfulness,  for  it  has  been  said 
that  usury  is  only  malum  prohibitum,  and 
not  malum  in  se,  of  the  original  parties  to 
the  transaction.  But  this  is  an  attempt 
to  carry  that  doctrine  much  further  than 
any  prior  case,  and  further  than  policy  or 
the  words  of  the  act  of  parliament  re- 
quire; and  if  it  were  to  succeed,  it  might 
affect  most  of  the  securities  in  the  king- 
dom ;  for  if  in  tracing  a  mortgage  for  a 
century  past,  it  could  be  discovered  that 
usury  had  been  committed  in  part  of  the 
transaction,  though  between  other  par- 
ties, the  consequence  would  be  that  the 
whole  would  be  void.  It  would  he  a 
most  alarming  proposition  to  the  holders 
of  all  securities.  I  admit  that  the  securi- 
ties themselves  that  are  tainted  with  usury 

[423] 


398* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


allows  the  usurious  claim  to  become  merged  in  a  judgment,  it 
is  then  too  late  to  take  advantage  of  the  defence  of  usury,  (b) 
But  it  is  also  true,  that  if,  in  the  bargain  respecting  the  new 
security,  there  is  an  agreement  to  expunge  or  exclude,  or  an 
actual  exclusion  of  the  unlawful  interest,  the  new  security  is 
valid,  (c) 

*Some  difficulty  may  arise  in  determining  when  the  usurious 
character  of  the  original  security  shall  attach  itself  to  the  sub- 
stituted security.  If  A  gives  B  a  usurious  note,  he  may  waive 
the  defence  and  pay  the  note ;  and  if  he  pays  it  in  bank-bills, 
these  of  course  are  good  in  the  hands  of  any  honest  holder  to 
whom  B  transfers  them.  If  A  happens  to  have  a  good  note  of 
C,  and  transfers  it  to  B  in  payment,  is  not  this  equally  good  in 
the  hands  of  B's  indorsee  ?  Or  if  A  procures  for  this  purpose  the 
note  of  C,  whose  note  B  has  expressed  himself  willing  to  accept. 


cannot  be  enforced  in  a  court  of  justice, 
even  though  they  be  in  the  hands  of  in- 
nocent purchasers  for  a  valuable  con- 
sideration, without   notice And 

therefore  the  plaintiffs  in  this  case  could 
not  have  maintained  any  action  on  the 
notes  given  by  the  defendant  to  Plank. 
But  the  notes  were  destroyed  after  they 
got  into  the  hands  of  the  plaintiffs,  and 
the  bond  in  question  was  given  to  them, 
they  not  knowing  of  the  usury  between 
Plank  and  the  defendant.  I  admit  that  if 
one  security  be  substituted  for  another,  by 
the  parties,  in  order  to  get  rid  of  the  stat- 
ute against  usury,  the  substituted,  as  well 
as  the  original,  security  will  be  void  ;  but 
it  is  not  pretended  that  that  was  the  case 
here."  Ju-nt,  C.  J.,  holds  similar  lan- 
guage, in  Jackson  v.  Ilcnry,  10  Johns.  19.5. 

(b)  Thatcher  v.  Gammon,  12  Mass. 
268  ;  Tliompson  v.  Berry,  3  Johns.  Ch. 
395,  17  Johns.  436.  See  also,  Jackson  v. 
Henry,  10  Johns.  196  ;  Jackson  y.  Bowen, 
7  Cowcn,  20;  Day  v.  Cummings,  19  Vt. 
496. 

(c)  Wright  V.  Wheeler,  1  Camp.  16."), 
note.  This  was  an  action  on  a  bond  to 
wliich  usury  was  pleaded.  A  bond  hail 
been  given  for  the  loan  of  money  with 
lawful  interest,  but  the  defendant  also 
agreed  to  give  plaiiitilf  a  salary  of  .50/. 
per  year  as  a  clerk  in  bis  brewery.  It 
was  not  ititi-ndcil  that  tin;  ])lainti(V  should 
renrler  any  service,  but  the  salary  was  a 
men!  Hliifi  to  give  the  plaintiff  more  than 
5/.  per  cent,  for  his  money.     After  one 

[424] 


year's  salary  had  been  paid  under  the 
agreement,  the  parties  agreed  that  it 
should  be  deducted  from  the  principal, 
the  original  deed  cancelled,  and  a  fresh 
bond  taken  for  the  remaining  principal 
and  legal  interest.  This  was  done,  and 
on  the  second  bond  the  action  was 
brought ;  Lawrence,  J.,  said  :  "  The  act 
of  parliament  only  makes  void  contracts 
whereby  more  than  five  per  cent,  is  se- 
cured. The  original  contract  between 
these  parties  was  certainly  usurious,  and 
no  action  could  have  been  maintained  on 
the  first  bond  ;  but  there  was  nothing  ille- 
gal in  the  last  bond ;  it  was  not  made  to 
assure  the  performance  of  the  first  con- 
tract, nor  does  it  secure  more  than  five 
per  cent,  interest  to  the  plaintiff.  The 
parties  saw  they  had  before  done  wrong, 
they  rectified  the  error  they  had  commit- 
ted, and  substituted  for  an  illegal  contract 
one  that  was  perfectly  fair  and  legal.  I 
see  no  objection  to  their  doing  that,  and 
am  therefore  of  opinion  that  the  present 
action  is  maintainable."  The  principle 
of  the  above  decision  is  abundantly  sus- 
tained in  the  following  American  cases : 
DeWolf  r.  Johnson,  10  Wheat.  367; 
Chadbourn  r.  Watts,  10  Mass.  121  ;  Mc- 
Clure  V.  Williams,  7  Vt.  210;  Ham- 
mond I".  Ilopjiing,  13  Wend.  .505;  Miller 
V.  Hull,  4  Denio,  104;  Bank  of  Mcmroc 
V.  Strong,  1  Clarke,  Cii.  7() ;  Fowler  v. 
Garret,  .3  J.  J.  Marsh.  681  ;  Postlethwait 
t;.  (Jarrett,  3  T.  B.  Mon.  345;  Cummins 
V.  Wire,  2  Halst.  Ch.  73. 


CH. 


VII.] 


INTEREST  AND   USURY. 


*399 


this  note  being  not  usurious  in  itself,  and  C  not  knowing  the 
original  usury,  would  not  this  note  be  good  in  the  hands  of  B's 
indorsee,  or  assignee  ?  We  should  say  that  it  would  be ;  because, 
we  think,  on  principle,  that  no  contract  should  be  held  void  for 
usury,  unless  the  borrower,  for  usury,  was  a  party  to  it ;  or 
unless  it  is  given  as  collateral  security  for  a  present  subsisting 
usurious  contract,  {d)  It  has  been  said,  very  forcibly,  if  one 
chooses  *not  to  avail  himself  of  the  defence  of  usury,  but  to  pay 
a  usurious  debt,  and  pay  it  by  delegating  a  debtor  to  himself  to 
pay  this  debt,  it  ought  to  be  in  the  power  of  this  delegated 
debtor  to  insist  upon  the  original  defence,  and  avail  himself  of 
a  usury  by  which  he  was  not  affected,  (e)  So,  at  least,  it 
seems  to  be  held  in  the  case  of  a  usurious  mortgagee,  where 
the  land,  subject  to  such  a  mortgage,  is  conveyed  to  a  third 
party ;  for  the  grantee  cannot  hold  his  land  clear  of  the  first 
mortgage  debt,  by  denying  the  right  of  the  mortgagee,  on  the 
ground  of  usury.  (/)     Indeed  it  would    seem    that   none   but 


{d)  In  Turner  ?'.  Hulnie,  the  plaintiff 
arrested  the  maker  of  a  note  to  him,  which 
was  clearly  void  on  the  ground  of  usury. 
The  defendant  in  this  action  represented 
to  the  plaintiff  that  he  could  not  recover 
on  the  note  the  consideration  being  usuri- 
ous, but  tlie  plaintiff  refused  to  liberate  the 
maker  of  the  note  unless  the  defendant 
would  join  in  a  note  to  the  amount  of  the 
maker's  debt,  which  the  defendant  did, 
and  upon  that  note  this  action  was  brought. 
It  was  contended  that  the  second  note  was 
tainted  by  the  original  usury.  "  But  Lord 
Kemjon,  on  this  being  re-opened,  intimated 
his  clear  opinion  to  the  contrary  ;  he  said 
that  Banks,  when  the  first  note  had  been 
put  in  writ,  by  Turner,  against  him, 
should  have  resisted  and  defended  himself 
on  the  ground  of  usury ;  but  that  the  con- 
sideration of  that  note  could  not  be  ques- 
tioned in  the  present  action,  unless  it 
could  be  shown  that  this  was  a  colorable 
shift  to  evade  the  statute  against  usury, 
devised  when  the  money  was  originally 
lent,  and  the  first  note  granted."  In  Mar- 
chant  V.  Uodgin,  2  Moore  &  S.  6.32,  an 
action  was  brought  against  the  defendants, 
acceptors  of  a  bill  of  exchange,  drawn  by 
Taylor,  by  him  indorsed  to  Daniel,  and 
by  Daniel  to  plaintiff.  Taylor  testified 
that  certain  other  bills  had  been  accepted 
by  defendant,  for  his  accommodation,  and 

36* 


usuriously  discounted  by  the  plaintiff. 
One  of  these  bills  being  due,  the  bill  sued 
upon  was  accepted  by  the  defendants,  in 
order  to  enable  Taylor,  by  its  discount,  to 
meet  the  former  bill,  which  he  did,  and  no 
usury  was  proved  as  to  this  bill.  A  rule 
for  setting  aside  a  verdict  for  the  plaintiff, 
being  moved  for,  Imdal,  C.  J.,  said : 
"  The  bill  upon  which  the  action  was 
brought  was  not  a  continued  bill,  given  in 
substitution  of  the  former  acceptance  of 
the  defendants,  but  was  given  merely  for 
the  purpose  of  raising  money  to  meet  the 
second  bill."  Bosanquet,  J.,  said  :  "  It  does 
not  appear  from  the  evidence  that  the  third 
bill  was  given  in  substitution  of  the  second, 
so  as  to  be  affected  by  what  passed  on  the 
discount  of  it."  The  rule  was  refused. 
In  Stanley  v.  Kempton,  30  Me.  118, 
Butler  held  three  notes  against  Bangs, 
which  were  usurious.  Bangs  being  called 
upon  to  pay,  procured  the  defendant  to 
give  the  note  in  suit,  in  payment  of  the 
three  original  notes,  which  were  given  up. 
The  court  held  the  last  note  to  be  a  pay- 
ment, and  not  a  substitute  for  the  other 
notes,  and  therefore  valid. 

(e)  Jackson,  J.,  Bridge  v.  Hubbard,  15 
Mass.  103 ;  Bearce  v.  Barstow,  9  Mass. 
45. 

(/)  Green  v.  Kemp,  13  Mass.  515; 
Mechanics  Bank  v.  Edwards,  1  Barb.  271 ; 
[425] 


400M01* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


parties  or  privies  can  take  any  advantage  of  this  defence,  or  this 
defect  in  a  contract.  For  while  a  subsequent  mortgagee  cannot 
relieve  himself  from  the  former  mortgage,  by  showing  its  usuri- 
ous nature,  a  guarantor  of  a  debt  is  so  far  connected  with  the 
contract  that  he  may  avail  himself  of  the  defence  of  usury,  {g) 


*SECTION    VI. 

DISTINCTION  BETWEEN   INVALIDITY   OF  THE   CONTRACT,  AND   THE 
PENALTY  IMPOSED. 

The  law  affects  a  usurious  contract  with  two  consequences, 
which  should  be  discriminated.  One  is,  the  avoidance  of  the 
contract;  the  other  is,  the  penalty  for  the  breach  of  the  law. 
Now  the  penalty  is  not  incurred  until  usurious  interest  be  in 
some  way  paid  or  received ;  although  the  contract  may  be 
avoided  for  this  cause,  at  any  time  ;  and  it  is  sometimes  a  very 
difficult  question,  at  what  time,  or  by  what  act,  the  usury  is 
completed.  (/<)     Although  an  original  *  contract  for  the  use  of 


Sands  v.  Church,  2  Seld.  347.  See  also, 
Stoney  v.  Amer.  Life  Ins.  Co.  11  Paige, 
635. 

ig)  Huntress  v.  Patten,  20  Me.  28 ;  Har- 
rison V.  Ilamel,  5  Taunt.  784 ;  Gray  v. 
Brown,  22  Ala.  273. 

(/i)  Claric  V.  Badffley,  3  Halst.  233; 
Thomes  v.  Cleaves,  7  Mass.  361  ;  Oyster 
V.  Longneckcr,  10  Pcnn.  St.  274;  Liviii};- 
ston  V.  Indianapolis  Ins.  Co.  6  Blackf. 
133  ;  Upson  v.  Austin,  4  Ala.  124  ;  Kirk- 
patrick  v.  Houston,  4  Watts  &  S.  ll.'i; 
Bank  of  U.  S.  v.  Owens,  2  Pet.  527; 
HodRCs  V.  Lovat,  Lofft,  50.  Fisher  v. 
Bea«ley,  Dou}:^.  235,  was  an  action  of  deht, 
to  recover  tlic  jjciiah y  f'"'"  taking,'  usurious 
interest.  One  (jriiidail  liad  iiorrowed 
£100  of  tlic  defendant,  for  wliiih  he  had 
given  a  hond,  for  tiie  payment  of  the  prin- 
cipal and  iiUerest,  at  the  rate  of  .C5  ]wr 
cent,  at  the  end  of  Ki.x  inontlis.  He  also 
paid  two  f;uiiien«  to  the  defendant,  iis  a 
premium,  at  liui  lime  wiieu  the  money  was 
advanced.  At  liie  en<l  of  the  six  montiis, 
the  XlOO  waH  rej)aid,  and  X2  1  On.  for  in- 
terest.    Tiiis  action  waa  hrougiit  witiiin  a 

[  426  ] 


year  after  the  payment  of  the  capital  and 
interest,  hut  more  than  a  year  after  the 
two  guineas  were  paid  and  the  money 
advanced,  and  the  question  was,  whether 
the  action  was  barred  by  not  being  brought 
within  a  year  after  tiic  oft'ence  of  usury 
was  committed.  The  cases  of  Lloyd  v. 
Williams,  2  W.  Bl.  792,  and  Mallory  v. 
Bird,  cited  in  Cro.  Eliz.  20,  were  referred 
to  for  the  defendant,  in  which  latter  case, 
it  is  said :  "  If  one  contracts  to  liave  twenty 
pounds  for  tiie  loan  of  an  hundred  pounds, 
if  lie  taketii  nothing  of  the  twenty  pounds 
he  is  not  punisiiable  by  the  statute,  but  if 
ho  taketh  any  thing,  if  but  one  sliilling, 
tiiis  is  an  aflirmancc  of  the  contract,  and 
lie  sliall  render  for  tlie  whole  contract." 
But  Jiullcr,  J.,  said,  tiiat  the  answer  given 
by  Astor,  J.,  to  that  case,  when  it  had 
been  cited  on  some  former  occasion  was, 
that  it  meant  one  shilling  above  the  legal 
interest.  Lord  Miinajiild  said  :  "  It  be- 
came material  in  this  case  to  determine 
when  tiie  usury  was  com])lcte.  One  side 
contended,  tiiat  it  was  so  upon  the  pay- 
ment of  tiie  premium,  and  1  long  inclined 


en.  VII.] 


INTEREST  AND   USURY. 


*402 


money  be  free  from  the  taint  of  usury,  and  consequently  can  be 
enforced,  yet  if  usurious  interest  be  *  actually  paid  upon  it  after- 


to  that  opinion,  because  it  was  paid  eo 
nomine  as  above  legal  interest.  But  I  am 
now  satisfied,  as  we  all  are,  that  the 
offence  was  not  complete  till  tiie  half 
year's  interest  was  received.  There  are 
two  branches  of  the  statute.  Under  the 
first,  every  agreement,  contract,  and  se- 
curity, for  more  than  legal  interest,  is 
void.  Therefore  the  bond  given  to  the 
defendant  in  this  case  was  void.  But 
under  the  second,  the  penalty  is  incurred 
only  by  taking,  accepting,  and  receiving, 
more  than  legal  interest.  All  the  author- 
ities lean  this  way,  both  ancient  and  mod- 
ern. In  Lloyd  v.  Williams,  more  than 
legal  interest  had  been  paid  at  first." 
Maddock  qui  tarn  v.  Hammett,  7  T.  R. 
184,  was  an  action  on  the  statute,  the 
usury  alleged  being  the  discount  of  a  note 
for  £1,000.  But  the  point  on  which  the 
case  turned  was,  that,  on  the  day  when 
the  note  became  due,  the  maker  discharged 
it  by  giving  another  note,  which  included 
the  amount  due  upon  the  first  note,  and  a 
further  sum  advanced  by  the  defendants, 
which  last  note  was  outstanding  and  un- 
satisfied at  the  trial  of  this  case.  Buller, 
J.,  at  nisi  prius,  was  of  the  opinion  that 
usury  had  not  been  committed,  no  money 
having  been  received  by  the  defendant, 
and  Lord  Kenyon,  C.  J.,  delivering  the 
opinion  of  the  court,  upon  a  motion  to  set 
aside  the  nonsuit,  said:  "The  objection 
here  is,  that  nothing  has  been  received  by 
the  defendants,  either  for  interest  or  prin- 
cipal, except  a  paper  security,  which,  till 
it  has  been  paid,  is  no  payment  whatever, 
and  may  ultimately  turn  out  to  be  worth 
nothing.  The  plaintiif  says  that  it  was 
given  for  the  first  note,  which  was  given 
on  a  usurious  contract;  if  so,  the  second 
note  is  also  bad.  But  the  plaintiff  cannot 
be  permitted  to  contend  both  ways  ;  that 
it  is  good,  because  given  in  payment  of  the 
first  note;  and  bad,  because  that  first  note 
for  which  it  was  given  in  discharge  was 
bad.  It  is  true  that  a  payment,  either  in 
money  or  money's  worth,  would  be  suf- 
ficient ;  and  it  shall  not  be  permitted  to  a 
party  who  has  knowingly  received  any 
thing,  as  interest,  to  apply  it  afterwards  to 
another  account,  as  he  finds  it  convenient. 
But  here  the  defendants  have  not  received 
any  thing ;  and  therefore  I  am  of  opinion 
that  the  direction  of  the  learned  judge  at 
the  trial  was  right."  In  Pearson  v. 
M'Gowran,  3  B.  &  C.  700,  5  Dowl.  &  R. 


616,  the  venue,  in  an  action  of  debt  for 
penalties,  was  laid  in  Middlesex,  and  the 
offence  was  alleged  to  be  tliat  usurious 
interest  was  secured  to  the  defendant,  by 
a  bill  of  exchange  accepted  and  afterwards 
paid  by  a  person  named  Bottrill.  On  the 
trial  it  appeared,  that  the  contract  was 
made  and  the  acceptance  given  in  Middle- 
sex, but  that  the  bill  (vas  paid  in  London, 
to  the  holders,  to  whom  the  defendant 
had  indorsed  it.  Abbott,  C.  J.,  delivering 
the  opinion  of  the  court,  referred  to  the 
statute  providing  that  any  person  taking, 
accepting,  or  receiving  above  £5  per  cent, 
interest,  should  forfeit  the  treble  value  of 
the  moneys  lent,  and  providing  that  the 
forfeiture  should  be  sued  for  in  the  county 
where  the  offence  was  committed,  and 
said  (5  D.  &  R.  619),  "Then  the  only 
question  is,  what  is  the  offence  1  We 
think  it  consists  in  taking,  accepting,  and 
receiving  usurious  interest.  The  corrupt 
contract  precedes  and  forms  no  part  of  the 
taking,  therefore  the  offence  here  was  not 
committed  partly  in  Middlesex  and  partly 
in  London,  and  the  only  materiality  of  the 
contract  is  to  show  the  real  nature  and 
consequent  illegality  of  the  taking.  .  .  . 
We  are  of  opinion  that  the  venue  in  this 
case  ought  to  have  been  laid  in  London, 
and  not  in  Middlesex."  And  in  Simpson 
(/(«'  tarn  V.  Warren,  15  Mass.  460,  where 
the  defendant  had  discounted  a  note  for 
$400,  at  the  rate  of  two  per  cent,  per 
month,  which  was  unpaid  at  the  time  this 
action  for  the  penalties  was  brought,  it 
was  held  that  no  usury  had  been  com- 
mitted. Parker,  C.  J.,  said  :  "  The  whole 
sum  loaned  was  not  paid  over,  but  the 
balance,  after  deducting  the  discount,  so 
that  in  fact  four  hundred  dollars  were  never 
lent,  as  stated  in  the  declaration,  but  a  less 
sum,  for  which  the  borrower  promised  to 
pay  four  hundred  dollars,  which  was  the 
principal  lent  and  the  excessive  interest. 
The  defendant  has  then  received  nothing, 
either  principal  or  interest,  and  therefore 
he  cannot  be  liable  for  the  penalty." 
Wright  V.  Laing,  3  B.  &  C.  165;  Ste- 
vens V.  Lincoln,  7  Met.  525,  are  to  the 
same  eff'ect.  See  also.  Scurry  v.  Free- 
man, 2  B.  &  P.  381.  But  if  a  sum  more 
than  equal  to  the  legal  interest  upon 
the  sum  substantially  loaned  or  forborne, 
be  received,  the  ofl^ence  of  usury  is  com- 
plete, whether  the  principal  be  repaid  or 
not.     In  Wade  cpii  tarn  v.  Wilson,  1  East, 

[427] 


403* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


wards,  the  penalty  is  incurred,  (i)     *And  if  the  usurious  interest 
is  payable  at  intervals,  the  penalty  is  incurred  by  the  first  pay- 


195,  £600  being  due  from  G.  to  the  de- 
fendant, 10  guineas  were  paid  by  G.  to  the 
defendant,  by  wa}'  of  premium,  for  the 
defendant's  forbearance  for  one  year,  and 
G.  executed  his  note  to  the  defendant  for 
£600  at  £5  per  cent.  A  half  year's  interest 
of  £15  was  afterwards  received  by  the 
defendant,  upon  the  note,  and  it  was  held 
that  upon  tliis  payment  usury  was  com- 
mitted. Lord  Kentjon  said  :  "  Here  the 
party  having  ten  guineas  premium  in  hand, 
and  interest  accruing  from  day  to  day, 
actually  received  interest  qua  interest  for 
half  a  year,  which  made  what  he  received 
upon  the  whole,  amount  to  more  than 
lawful  interest  for  that  time,  upon  the  sum 
lent."  Lawrence,  J.,  said  :  "  Here,  then, 
is  a  premium  paid  of  ten  guineas,  at  first, 
which  was  to  run  through  the  whole  year, 
and  interest  accruing  daily  on  the  prin- 
cijjal  sum,  the  defendant  actually  received 
interest  for  the  first  half  year,  which, 
together  with  what  he  had  before  received 
by  way  of  premium,  amounts  to  more  than 
legal  interest.  That  immediately  consti- 
tuted usury."  Le  Blanc,  J.,  said  :  "  I  am 
of  opinion  that  at  least  one  moiety  of  the 
premium  is  to  be  apportioned  to  the  half 
year's  interest  which  was  received,  and 
that  the  true  spirit  of  the  agreement  was, 
that  the  premium  was  to  run  through  tiie 
•whole  year,  in  proiiortion  as  the  interest 
accrued,  and  therefore,  upon  the  whole,  I 
think  the  contract  proved  sustains  the 
count,  and  that  the  usury  was  complete 
when  the  first  half  year's  interest  was 
paid."  In  Llovd  (/ni^ tani  v.  Williams,  2 
W.  P.l.  792,  Iliiuhliirc  borrowed  £100  for 
three  months,  of  the  defendant,  which  he 
received,  and  paid  the  defendant  thereout 
£6  5.S.  by  way  of  interest,  in  advance,  and 
gave  the  defendant  his  note  for  £100  ])ay- 
aliic  in  three  months.  iJc  Urcij,  C.  J.,  and 
Bluckslom,  J.,  a  majority  of  the  court,  held 

(/)  Gardner  r.  I'lagg,  8  Mass.  101; 
Tliotnj)Son  v.  Woo(ll)ri<igc,  id.  250  ;  JSfw- 
all,  J.,  Chadbourn  r.  Watts,  10  Mass.  124. 
In  Sir  \Volhiston  Dixie's  case,  1  Leon.  95, 
6V;;/,  IJ.,  said  :  "  If  I  leiul  one  a  huiiilrecl 
pounds  without  any  contract  for  interest, 
and  afterwards,  at  the  end  of  a  year,  he 
gives  iiK-  £20  for  the  loan  thereof,  the 
Bume  is  within  tlic  statute,  for  my  accept- 
ance makes  the  oflencc  without  any  bar- 
tain  or  contract."  In  Floy<T  v.  Tvlwards, 
Cowp.    114,  Lord   Mamjidd  said:    "In 

[428] 


that  the  offence  of  usury  was  consummated 
and  completely  committed  on  making  the 
corrupt  agreement,  and  receiving  the  in- 
terest in  advance.  In  Commonwealth  v. 
Frost,  5  Mass.  53,  the  defendant  had 
loaned  money  to  Ebenezer  Clough,  on  a 
note  for  $200,  in  ninety  days,  paying  him 
$187,  having  retained  $13  for  the  ninety 
days'  interest.  At  the  expiration  of  the 
term,  another  note  for  the  same  amount 
was  given,  Clough  paying  fourteen  dollars 
in  cash,  for  the  extension  of  the  time 
ninety  days  longer.  This  note  was  also 
renewed  for  ninety  days,  and  sixteen  dol- 
lars paid  by  Clough  on  its  renewal,  for 
the  reception  of  which  last  interest,  the 
defendant  was  indicted.  The  court  said  it 
was  clear  "  that  the  taking  of  the  sixteen, 
dollars,  as  the  compensation  for  the  loan, 
that  sum  exceeding  lawful  interest,  com- 
pleted the  offence  of  usury,  Avhether  the 
principal  sum  was  ever  paid  or  not." 
There  has,  however,  been  a  tendency  to 
consider,  in  contracts  of  this  last  nature, 
the  money  actually  received  by  the  bor- 
rower as  the  amount  of  the  loan ;  and 
although  the  securities  given  are  for  an 
amount  sufficiently  more  than  the  sum 
received,  to  make  the  contract  usurious, 
if  the  legal  per  cent,  of  interest  is  paid 
thereon,  not  to  consider  the  offence  of 
usury  complete  until  a  payment  of  such 
interest  is  made.  This  was  the  view 
Gould,  J.,  was  inclined  to  take,  in  Lloyd 
V.  Williams,  supra ;  and  in  Scurry  v. 
Freeman,  2  B.  &  P.  381,  in  which  the 
defendant  lent  Robert  Ilooley  .£500  upon 
security  given  for  that  amount,  mIio,  a 
previous  agreement  having  been  made 
that  sometliing  more  than  legal  interest 
should  be  paid,  but  no  particular  sum 
having  been  agreed  u])Ou,  offered  the  de- 
fendant back  .£50  which  he  direi'ted  to  be 
given  to  his  son,  the  court  (consisting  of 

case  the  agreement  originally  for  the  pay- 
ment of  principal  be  legal,  and  the  interest 
does  iu)t  exceed  tlie  legal  rate,  but  after- 
wards, upon  payment  being  forborne, 
illegal  interest  is  demanded,  there  the 
agreement  liy  retrospi'ct,  is  not  void,  but 
the  parties  arc  lialiie  to  tlie  ])enalty  of 
treljle  value."  See  also,  lladley  r.  Man- 
ning, :»  Keble,  142,  ))1.  1:);  Lord  Mans- 
Julil,  in  Abrahams  v.  Bunn,  4  Burr.  2253, 
and  previous  iKJte. 


en.  VII.] 


INTEREST   AND   USURY. 


-403 


ment  and  receipt;  (J)  but  it  would  seem  that  no  more  than  one 
penalty  can  be  incurred  upon  the  same  loan,  although  further 
instalments  continue  to  be  paid,  (k) 


Heath,  EooJce,  and  Chamhre,  judges)  were 
very  clearly  of  opinion  that  the  receipt 
afterwards  of  £25,  as  one  year's  interest 
upon  the  debt,  was  usurious,  so  that  an 
action  under  the  statute  witiiin  one  year 
after  its  reception  would  lie,  inasmuch  as 
the  loan  could  only  be  deemed  a  loan  of 
£450  since  the  defendant  had  taken  back 
£50  out  of  the  £500.  So  also,  Gibson, 
C.  J.,  in  Oyster  v.  Longnecker,  16  Penn. 
St.  274,  says,  there  is  a  distinction  be- 
tween interest  and  a  bonus;  and  that  a 
return  of  part  of  the  sum  on  which  interest 
is  reserved,  reduces  the  contract  essentially 
to  a  loan  of  the  residue,  and  that  there- 
fore the  offence  of  usury  is  not  committed 
until  interest  has  actually  been  paid  upon 
the  sum  reserved  as  the  debt.  But  the 
better  opinion  would  seem  to  be  that  such 
agreements  are  tisurious  whenever  more 
than  the  legal  interest  on  what  is  under- 
stood by  the  parties  as  the  principal  debt, 
is  paid,  since  the  statute  of  Anne  declares 
it  shall  be  usury  to  receive  more  than  five 
pounds  per  cent,  for  forbearing  or  (jiving 
daij  of  payment ;  so  that,  as  Mr.  Justice 
Blackstone  remarked  in  Lloyd  r.  Wil- 
liams, "  interest  may  as  lawfully  be  re- 
ceived beforehand  {or  forbearing,  as  after 
the  term  is  expired,  for  having  forborne;" 
and  if  in  either  case  more  than  five  per 
cent,  is  taken,  usury  is  committed.  See 
remarks  of  Bayley,  J.,  in  W^ood  v.  Grim- 
wood,  10  B.  &  C.  699. 

(/)  Wade  V.  Wilson,  1  East,  195; 
Wood  V.  Grimwood,  10  B.  &  C.  689, 

(k)  In  Wood  V.  Grimwood,  10  B.  &  C. 
696,  in  which  a  bonus  had  been  paid,  and 
afterwards  a  half  year's  interest,  which 
together  with  the  bonus  paid,  constituted 
more  than  the  lawful  interest,  and  subse- 
quently legal  interest  was  paid  half  yearly, 
on  the  original  debt,  it  was  decided  that 
the  offence  of  usury  was  complete  when 
the  first  half  yearly  payment  was  made  ; 
that  the  bonus  was  not  to  be  apportioned 
throughout  the  whole  time  of  the  loan. 
So  that  an  action  brought  for  penalties,  at 
any  time  within  one  year  after  the  pay- 
ment of  any  half  year's  interest,  could  be 
maintained,  as  being  in  time.  And  it  was 
doubted  whether,  even  if  such  bonus  was 
apportionable,  the  only  offence  for  which 
the  lender  could  be  prosecuted  had  not 
been  committed  upon  the  reception  of  the 


first  half  year's  interest.  Parke,  J.,  said  : 
"  I  am  of  opinion  that  the  moment  one 
penalty  was  incurred,  upon  one  bargain  or 
loan,  no  other  offence  could  be  committed 
in  respect  of  the  same  bargain  or  loan,  by 
reason  of  the  lender  having  received  a 
further  sum,  by  way  of  usurious  interest. 
The  statute  of  1 2  Anne,  st.  2,  c.  1 6,  enacts  : 
'  That  all  persons  who  shall,  upon  any 
contract,  take,  accept,  and  receive,  by  way 
or  means  of  any  corrupt  bargain,  loan, 
&c.,  for  the  forbearing  or  giving  day  of 
payment  for  one  whole  year,  of  or  for 
their  money,  above  the  sum  of  £5  for  the 
forbearing  of  £100  a  year,  and  so  after 
that  rate,  shall  forfeit  and  lose,  for  every 
such  offence,  the  treble  value  of  the 
moneys  lent,'  &c.  The  statute  therefore 
requires  two  things  to  constitute  the  of- 
fence ;  a  corrupt  bargain,  and  an  actual 
taking  of  a  higher  rate  of  interest  than  5 
per  cent,  for  forbearing  or  giving  day  of 
payment  for  one  whole  year.  As  soon  as 
these  two  things  concur,  the  offence  con- 
templated by  the  statute  is  completed. 
The  party  who  has  received  the  usurious 
interest  in  respect  of  the  corrupt  bargain, 
then  incurs  the  penalty,  and  I  think  the 
only  penalty,  attached  by  the  statute  to 
that  corrupt  bargain,  and  the  receipt  of 
usurious  interest  thereon,  by  forfeiting 
treble  the  value  of  the  moneys  lent  or 
forborne.  If  it  were  otherwise,  and  each 
subsequent  payment  of  the  legal  interest 
should  constitute  a  distinct  offence  of 
usury,  where  a  premium  has  been  given, 
the  consequence  would  be,  that  if  a  party 
took  legal  interest  for  such  a  loan,  at  in- 
tervals, he  would  be  liable  to  forfeit  treble 
the  amount  of  the  moneys  lent,  not  merely 
once,  but  each  time  he  received  the  in- 
terest ;  and  if  those  intervals  were  short, 
penalties  to  the  amount  of  m'any  thousands 
might  be  incurred  by  a  loan  of  a  single 
£100.  This  never  could  have  been  the 
intention  of  the  legislature.  I  think  it 
must  have  meant  that  no  more  than  three 
times  the  amount  of  the  money  lent  could 
ever  be  forfeited  by  the  offender."  But  in 
Lamb  v.  Lindscy,  4  Watts  &  S.  449, 
this  question  was  directly  decided  in  an 
opposite  waj'.  Money  was  loaned  at 
usurious  interest,  the  device  of  the  sale  of 
property  and  a  lease  back,  being  adopted, 
to   disguise   the   transaction.     The  rent, 

[429] 


404* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


Where  the  statute  makes  a  usurious  contract  void,  or  forfeits 
a  part  of  the  principal  or  legal  interest,  by  way  of  penalty,  *the 
creditor  of  course  must  lose  this,  for  the  debtor  may  interpose 
this  defence,  however  inequitable  it  may  be.  But  if  the  debtor 
make  himself  a  plaintiff,  and  seek  relief  against  a  contract  for 
its  usury,  it  is  held,  in  equity,  that  he  must  pay  or  tender  the 
whole  amount  of  principal  and  legal  interest.  (Z)  It  was  once 
an  established  rule  that  there  is  no  way  in  which  the  debtor 
can  ask  relief  at  law,  except  collaterally.  He  must  wait  until 
he  is  sued,  before  he  can  raise  directly  the  question  of  his  right 
to  this  defence,  and  then  this  defence  is  given  and  measured  by 
the  statute.  But  if  he,  for  example,  brings  trover  for  goods 
pledged,  to  secure  a  debt  for  which  a  note  with  usurious  inter- 
est was  given,  and  seeks  to  get  the  value  of  his  goods  without 
deducting  his  debt,  on  the  ground  that  the  note  is  void,  it  might 
be  said  to  him,  on  high  authority,  that  the  note  may  be  void, 


amounting  to  1 5  per  cent,  upon  the  money 
loaned  was  regularly  paid,  and  the  present 
qui  tarn  action  was  brought,  more  than  a 
year  from  the  first  payment,  and  within  a 
year  from  the  last.  A  majority  of  the 
court  held  the  action  maintainable,  decid- 
ing that  the  penalty  of  a  forfeiture  of  "  tiio 
money  and  other  things  lent,"  was  incurred 
at  each  time  when  the  lender  received 
more  tiian  the  legal  interest.  JNIr.  Justice 
Ktnmdtj,  however,  delivered  a  dissenting 
opinion,  in  which  he  vindicates  his  own 
opposite  ruling  at  nhi  ]irius,  and  adopts 
tiie  same  view  taken  by  Mr.  Justice  Parke, 
supra,  although  the  case  of  Wood  v.  Grim- 
wood  was  not  cited  in  tiie  case. 

(/)  Scott  V.  Nesbit,  2  Brown,  Ch.  641, 
2  Cox,  18.3;  Ex  parte  Skip,  2  Ves.  Sen. 
489  ;  Benfieid  v.  Solomons,  9  Ves.  84  ; 
llogers  V.  liathljun,  1  Johns.  Ch.  367 ; 
Tupjier  V.  Powell,  id.  4.']9 ;  Fanning 
r.  Dunham,  5  Johns.  Cli.  l-2'2;  Fultou 
liank  /•.  Bcacii,  1  Paige,  42!) ;  Moryjaii  v. 
Schemmerhorn,  id.  .'J44 ;  McDanieis  v. 
Barnum,  .'i  Vt.  262;  .fordan  r.  Truiubo, 
6  fJili  &  J.  lo:i;  Tiiomas  v.  Mason, 
8  (iill,  I  ;  Anonymous,  2  Desaus.  :i:y.i ; 
Stone  ;•,  Ware,  6  Munf.  .')41  ;  Sh<'hoii  r. 
(lill,  11  Ohio,  417;  Day  r.  Ciiininings, 
19  Vt.  4'.)(i  ;  Ballingcr'  r.  Kdwards,  4 
Ircd.  I''.'(.  449;  Phelps  r.  Pier.xon,  1  Iowa, 
121  ;  Wihou  /•.  Ilardesly,  1  Md.  Ch. 
Dec.  66.  Ill  Iliiidl(^  /•.  O'Brien,  I  'I'aiint. 
41.'J,  the  def.ri<lant  had  given  llie  plaintitl', 


for  various  sums  borrowed  of  him,  bills 
and  notes  with  usurious  premiums.  The 
parties  at  length  stated  an  usurious  ac- 
count, and  the  defendant  gave  new  bills, 
and  a  warrant  of  attorney  to  confess  judg- 
ment, and  the  old  bills  and  notes  were 
given  up.  Upon  the  defendant's  failure 
to  pay  an  instalment  of  the  new  bills,  the 
plaintitf  entered  up  judgment  on  the  war- 
rant of  attorney  and  sued  out  execution. 
Upon  an  application  to  set  aside  the  judg- 
ment, the  court  did  so  only  upon  the 
terms  that  the  defendant  should  repay  the 
principal  and  legal  interest  due,  wliich 
was  ordered  to  be  ascertained  by  a  protho- 
notary.  Pnit  in  Roberts  r.  Goff,  4  B.  & 
Aid.  92,  upon  an  application  to  set  aside 
a  judgment  obtained  under  a  warrant  of 
attorney,  and  to  have  the  warrant  of  at- 
torney delivered  up,  on  the  ground  of 
usury,  the  court  refused  to  inipo'^c  the 
terms  tliat  the  party  siiould  pay  tlie  money 
actually  advanced,  with  legal  interest. 
ii(ii/l('i/,  J.,  said  :  "  Wc  cannot  impose 
sucii  terms.  The  instrument  is  void.  It 
is  not  good  at  law."  Under  the  construc- 
tion ]Hit  ui)on  the  Virginia  statute  of 
usury,  it  seems  fliat  the  deblor  need  only 
])ay  the  principal  del)t,  wiliioiit  any  inter- 
est. Voiing  V.  Seolt,  4  Hand.  415; 
Chirkson  r.  (Jarland,  1  licigh,  147;  Tur- 
pin  V.  Povall,  8  Lei^h,9;);  Marks?'.  Mor- 
ris, 4  Ilcn.  &  M.  46.'{.  Sec  also,  Boone  v, 
Poiiidexter,  12  Smedcs  &  M.  640. 


CH.  VII.]  INTEREST   AND    USURY.  *405 

but  that  is  not  now  the  question;  for  he  owes  money,  and  has 
pledged  goods,  and  must  pay  his    debt    to  redeem    them,  (la) 
But  this  doctrine  has  been  attacked,  and  perhaps  overthrown  in 
England,  and  may  be  doubted  here,  (m)      So,  if  he  has  paid 
money  on  a  usurious  *contract,  and  sues    for    its    repayment, 
it  seems  that  he  will  recover  so  much  as  he  has  paid    usuri- 
ously,  {7)ia)  but  no  more  ;  that  is,  he  will  not  recover  the  legal  in- 
terest, which  he  has  paid  on  a  usurious  contract.     Courts  were 
at  first  inclined  to  deny  the  right  of  a  party  paying  usurious  in- 
terest, to  recover  back  any  portion  of  the  money  so  paid,  on  the 
ground  that  both  parties  to  such  a  transaction  were  in  pari  de- 
licto, and  the  party  paying  the  money  parted  with  it  freely,  so 
that  the  maxim  volenti  non  Jit  injuria  would  apply,  (n)      But 
this  is  not  so  now,  the  rule  being  that  above  stated  ;  and  the 
distinction  has  been  taken  between  statutes  enacted  on  general 
grounds  of  policy  and  public  expediency,  in  which  each  party 
violating  the  law  is  in  pari  delicto,  and  entitled  to  no  assistance 
from  a  court  of  justice,  and  those  laws  enacted  to  protect  weak 
or  necessitous  men  from  being  overreached,  defrauded,  or  op- 
pressed, in  which  event  the  injured  party  may  have  relief  ex- 
tended to  him,  and  the  whole  purport  and  reason,  both  of  the 
law  of  usury,  and  of  the  great  mass  of  decisions  under  it,  indi- 
cate that  the  lender  on  usury  is  regarded  as  the  oppressor  and 
the  criminal,  and  the  borrower  as  the  oppressed  and  injured,  (o) 


SECTION    VII. 

OF   CONTRACTS   ACCIDENTALLY   USURIOUS. 

If  a  contract  is  accidentally  usurious,  that  is,  made   so  by 
some  mistake  in  calculation,  or  other  error  in  fact,  against  the 

(la)  Fitzroy  v.  Gwillim,  1  T.  R.  153.  (n)  Tomkins  i'.  Bernet,  1  Salk.  22. 

(;«)  Tregoningy.  Attenborough,  7  Bing.  (o)  Clarke  v.  Slice,  Cowp.  197;  Brown- 

97,  4  Moore  &  P.    722;    Hargrcaves    v,  ing  i\  Morris,  Cowp.  790;  Bosanquett  v. 

Hutchinson,  2  A.  &  E.  12  ;  Ramsdell  v.  Dashwood,    Cases     to;?/).     Talbot,     38; 

Morgan,  16  Wend.  574.  Wheaton   r.    Hibbard,  '20    Johns.    292; 

(ma)  Bosanquett  v.  Dashwood,  Cases  Beanlsle^,  C.  J.,  Schroeppel  v.  Corning, 

tevip.  Talbot,    38,    per    Lord    Mansfield;  5  Deuio,  240. 


Browning  i\  Morris,  Cowp.  793. 


[431] 


406* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


intention  of  the  parties,  the  mistake  may  be  corrected,  and  the 
contract  saved,  (p)  But  if,  in  fact,  a  greater  rate  of  *interest  is 
taken  than  the  law  allows,  by  reason  of  an  erroneous  opinion 
of  the  lender  that  he  had  a  right  to  this  interest,  this  is  a  mis- 
take of  law,  and  agreeably  to  the  general  rule,  will  not  excuse 
the  lender,  and  the  whole  effect  of  usury  will  attach  to  the  con- 
tract, (q) 


(p)  Anonymous,  1  Freem.  253,  pi.  268. 
It  was  said,  by  North,  C.  J.,  that  "if  a 
scrivener,  in  making  a  mortgage,  &c., 
do,  tiirough  mistake,  make  the  money 
payable  sooner  than  it  ought  to  be,  or  re- 
serve more  interest  than  ought  to  be,  this 
will  not  make  it  void  within  the  statute, 
because  here  was  no  corrupt  agreement." 
See  also,  Nevison  i'.  Whitley,  Cro.  Car. 
.501,  W.  Jones,  396;  and 'Buckley  r. 
Guildbank,  Cro.  Jac.  678.  Glasfnrd  v. 
Laing,  1  Camp.  149,  was  an  action  on  a 
bill  of  exchange  for  £3,1 80,  the  defendants 
resisted  the  action,  on  the  ground  of  usury, 
and  showed  that  the  parties  for  whom  the 
defendants  accepted,  being  indebted  to  the 
plaintiff  in  St.  Ivitts,  for  £6,000,  with  six 
per  cent,  legal  interest  there,  agreed  with 
the  plaintiff  in  England,  that  the  principal 
should  be  paid  by  two  bills  of  exchange, 
one  in  twelve  months  and  the  other  in  two 
years  ;  and  accordingly  the  present  bill 
for  3,180/.,  and  another  for  3,360/.  were 
drawn,  but  tliat,  according  to  the  legal 
rate  of  5  per  cent,  interest  in  England, 
the  l)ills  should  have  been  for  only  3,150/. 
and  3,300/.  The  plaintiff's  agent,  how- 
ever, swore  that  the  increased  amount 
arose  from  an  oversight  of  his  ;  that  hav- 
ing been  called  upon  to  calculate  the  sum 
due  on  the  debt,  for  which  tiie  bills  were 
to  1)0  drawn,  after  calculating  the  amount 
due  on  the  original  debt  at  6/.  per  cent., 
as  permitted  in  the  West  Indies,  he  inad- 
vertently calculated  the  interest  to  grow 
due  in  Kngland,  at  the  same  rate.  Sir 
Jfimis  Minisjiild,  C.  J.,  held  that  the  action 
might  dearly  be  maintained  for  the  sum 
bfiiKi  /ill''  due,  as  the  excess  in  the  amount 
of  the  bill  had  arisen  from  a  mere  mis- 
take, and  tifc  intention  to  take  usury  could, 
nt  any  rate,  be  imputed  to  the  jjlaiiititf. 
Sec  also  fjjbson  v.  Stearns,  3  N.  J  I.  185  ; 
Livingston  r.  Jiird,  1  Root,  .'to;)  ;  Mrl.nin, 
J.,  Llovd  r.  Scott,  4  JVt.  224  ;  McElfat- 
rick  I'.'Hirks,  21  I'cnn.  St.  402;  Marviiio 
V.  Ilymcrs,  2  Keni.  223. 

(7)  Miirsh  V.  Martindalc,  3  B.  &  V. 
154 ;  Maine  IJank  v.  Butts,  9  Mass.  49. 

[432] 


This  was  an  action  bi'ought  by  the  bank, 
to  recover  possession  of  certain  premises 
mortgaged  to  them  by  the  defendant,  to 
secure  several  notes  given  by  him  to  the 
bank.  The  defendant  alleged  that  on  the 
date  of  mortgage  deed,  the  plaintiff  loaned 
him  $10,000,  and  that  it  was  agreed  be- 
tween them  that  more  than  6  per  cent,  in- 
terest should  be  paid  upon  the  loan,  and 
that  the  notes  secured  by  the  mortgage 
were  given  to  secure  such  principal  and 
illegal  interest,  and  therefore  he  pleaded 
the  statute  of  usury.  It  appeared  upon 
the  trial  that  there  had  been  a  forbear- 
ance of  10,000  dollars  by  the  bank,  and 
that  the  interest  secured  in  the  mort- 
gage was  more  than  6  per  cent,  upon  the 
10,000  dollars  ;  but  it  was  proved  that  the 
excess  had  arisen,  not  from  a  direct  re- 
ception by  the  bank  of  more  than  6  per 
cent,  upon  any  notes,  but  by  reason  of 
the  defendant's  having,  in  order  to  meet 
notes  for  63  days,  at  the  times  they  be- 
came due,  procured  new  loans,  a  week 
previous  to  the  expiration  of  the  time  of 
credit  given  for  the  former  loans,  giving 
new  notes  therefor  ;  and  it  was  contended 
that  although  the  money  thus  received 
amoimted  to  more  than  6  percent,  upon  the 
original  debt,  for  the  reason  that  the  bank 
retained  the  amount  of  the  new  notes  until 
the  old  notes  became  due,  for  the  purpose 
of  meeting  them,  yet  that  as  no  more  than 
the  usual  profits  upon  loans  made  on 
banking  principles  were  received,  such 
agreements  were  not  usurious.  But  the 
court  decided  that  no  banking  company, 
any  more  than  an  individual,  had  author- 
ity to  m;ike  a  discount  or  loan,  at  a  greater 
profit  than  6  per  cent,  interest,  nor  was 
exempt  from  the  restrictions  of  the  statute 
against  usury.  And  Sewall,  J.,  said  :  "It 
is  proliablc  that  in  this  case  there  was  no 
intentional  deviations  on  the  part  of  the 
bank  ;  but  a  mistake  of  their  rights.  This, 
however,  is  a  consideration,  which  must 
not  inllucnce  our  decision.  The  mistake 
was  not  involuntary,  as  a  miscalculation 
might  bo  considered,  where  an  iuteutiou 


CH.  VII.] 


INTEREST  AND   USURY. 


*407 


The  question  has  been  very  much  discussed,  whether  banks, 
or  other  money-lenders,  or  bill  or  note  discounters,  have  a  legal 
right  to  adopt,  as  a  principle  of  calculation,  the  rule  *that  gives 
rather  more  than  legal  interest  upon  notes  discounted,  or  to 
which  the  interest  is  added,  in  case  of  fractional  portions  of 
years  and  months.  Rowlett's  Tables,  which  are  calculated 
mainly  on  the  supposition  that  a  year  consists  of  360  days,  gives 
this  advantage  to  the  lender.  The  use  of  these  tables,  or  of  a 
similar  principle  of  calculation,  is  very  general,  not  to  say  uni- 
versal. And  although  this  practice  is,  strictly  speaking,  usu- 
rious, and  there  is  much  conflict  in  the  authorities,  we  have  no 
doubt  that  the  prevailing  rule  of  law  sanctions  this  practice, 
where  it  is  adopted,  merely  as  a  convenience,  and  in  conformity 
to  usage,  (r) 


of  conforming  to  the  legal  rule  of  interest 
was  proved  ;  but  a  voluntary  departure 
from  the  rate.  An  excess  of  interest  was 
intentionally  taken,  upon  a  mistaken  sup- 
position that  banks  were  privileged  in  this 
respect,  to  a  certain  extent.  This  was 
therefore,  in  the  sense  of  the  law,  a  cor- 
rupt agreement ;  for  ignorance  of  the  law 
will  not  excuse."  See  also  Childers  v. 
Deane,  4  Rand.  406. 

(r)  In  New  York  Firemen  Ins.  Co.  v. 
Ely,  2  Cowen,  678,  a  note  for  90  days,  in- 
dorsed by  the  defendants,  was  the  cause 
of  action ;  it  was  given  for  two  others, 
which  in  turn  were  a  renewal  of  others. 
Some  of  the  previous  notes  had  been  pay- 
able at  90  days,  and  all  the  notes  had  been 
discounted  l)y  the  plaintiffs,  at  7  per  cent., 
and  the  discount  deducted  in  advance. 
The  secretary  of  the  company  testified 
that  his  practice  had  been  to  cast  interest, 
considering  30  days  the  twelfth  of  a  year, 
60  days  the  sixth,  and  90  days  the  fourth 
of  a  year,  and  to  cast  interest  at  7  per 
cent,  (tlie  lawful  rate)  accordingly.  The 
three  days  of  grace  he  called  one  tenth  of 
a  month.  The  question  was  whether  the 
note  sued  upon  was  usurious,  and  it  was 
decided  to  be  so.  The  court  say :  "  It 
must  be  conceded  that  more  than  seven 
per  cent,  per  annum  was  received  upon 
the  discoiint  of  the  note,  in  this  case. 
How  is  the  presumption  of  law,  that  it  was 
received  in  pursuance  of  a  corrupt  agree- 
ment, sought  to  be  repelled  ?  Not  by 
showing  that  the  sum  paid  for  interest  was 
greater  than  the  parties  intended   should 

VOL.  II.  37 


be  paid  ;  that  there  was  a  mistake  in  tell- 
ing the  money  ;  or  that  the  clerk  who  cast 
the  interest,  had  fallen  into  an  arithmetical 
error;  but  by  sliowing  that  the  excess 
arose  from  the  adoption  of  a  principle  of 
calculation,  which  the  parties  knew  would 
give  more  than  seven  per  cent.,  though 
they  believed  it  was  not  a  violation  of  the 
statute.  In  other  words,  the  plaintiffs 
received  more  than  seven  per  cent.,  because 
they  believed  that  tliey  had  a  legal  right 
to  receive  more.  If  they  judged  errone- 
ously, it  was  a  mistake  in  point  of  law, 
and  not  in  point  of  fact ;  and  unless  there 
be  something  in  the  case  of  usury  to  dis- 
tinguish it  from  all  other  cases,  tlieir  ig- 
norance or  mistake  in  relation  to  the  law, 
can  afford  them  no  protection."  And  after 
examining  the  cases  upon  the  subject  the 
court  concluded  that  the  mistake  of  the 
parties  did  not  prevent  the  contract  from 
being  usurious,  as  matter  of  law,  and  its 
consequences  from  resulting.  The  same 
view  is  taken  in  Utica  Insurance  Co.  v. 
Tillman,  1  Wend.  555  ;  Bank  of  Utica  v. 
Wagar,  8  Cowen,  398;  State  Bank  v. 
Cowan,  8  Leigh,  253.  On  the  other  liand, 
see  Lyon  v.  State  Bank,  1  Stewart,  442  ; 
Planters  Bank  v.  Snodgrass,  4  How. 
Miss.  573  ;  Duval  v.  Farmers  Bank,  7 
Gill  &  J.  44 ;  Duncan  v.  Maryland  Sav- 
ings Institution,  10  Gill  &  J.  299;  Bank 
of  St.  Albans  v.  Scott,  1  Vt.  426  ;  Agri- 
cultural Bank  v.  Bissell,  12  I'ick.  586. 
In  this  last  case  the  cashier  of  the  bank 
took  $21  as  the  interest  of  $2,000  for 
sixty-three    days.      Shaiv,    C.   J.,    said : 

[433] 


408 


THE   LAW   OF   CONTRACTS. 


[part  II. 


SECTION    VIII. 

OF  DISCOUNT   OF   NOTES   AND   BILLS. 

The  practice  of  discounting  bills  or  notes  by  deducting  from 
their  face  the  interest  for  the  whole  time  they  had  to  run,  be- 
gan with  our  banks,  and  was  soon  so  firmly  established,  that  it 
was  sanctioned  by  the  courts,  almost  of  necessity.  But  this 
practice  is,  in  itself,  certainly  usurious,  for  the  borrower  has  the 
use  of  the  amount  of  the  note,  minus  the  interest,  and  pays 
interest  for  the  whole  amount.  Having  been  sanctioned  in 
respect  to  corporations  whose  business  it  was  to  lend  money, 
a  distinction  could  not  be  made  asrainst  individuals  who  lent 


"  That  this  sum  a  little  exceeds  6  per  cent, 
for  one  year,  as  fixed  by  statute,  is  very 
obvious.  If  this  were  done  with  design, 
and  with  the  intent  of  taking  more  tlian 
the  lawful  interest,  or  if  done  in  pursu- 
ance of  the  adoption  of  a  principle  of  com- 
putation, which  would  give  more  than  tlie 
legal  rate,  we  are  not  prepared  to  say  that 
it  would  not  be  usurious,  however  small 
the  excess  over  the  legal  rate.  But,  as 
the  statute  prescribes  the  rate  of  interest 
for  one  year,  and  so  at  the  same  rate,  for  a 
longer  or  shorter  time,  it  is  obvious,  tliat 
when  the  interest  is  to  be  computed  in 
days  or  months,  it  is  impossililc  to  follow 
the  iircscribed  rule  precisely,  without  tak- 
ing the  fraction  of  a  day  ;  and  that  this  is 
not  required,  is  now  settled  by  tlie  wliole 
current  of  authorities.  From  tlic  impos- 
sibility of  executing  the  statute  with  lit- 
eral exactness,  lias  resulted  the  necessity 
of  resorting  to  an  (♦xccution  rij  pres,  in 
many  cases  wiierc  it  is  intended  to  conform 
to  the  intent  and  si)irit  of  the  statute. 
So  it  has  been  the  practice  to  consider  a 
contract  for  money  f)iiyabl('  in  moiuhs, 
to  be  payable  in  calcndiir  months,  and  to 
consider  a  calendar  month  as  the  twclftli 
part  of  a  year,  and  coiMiiute  interest  ac- 
cordingly, tliongh  they  arc  of  (lilferent 
lengths.  A  note  given  in  Feiiniary,  at 
two  months,  will  have  .')7  days  to  run,  and 
pay  one  p(T  cent,  interest,  as  for  the  sixlli 
part  of  a  year;  but  a  note  given  in  J>e- 

[43i] 


cember,  at  two  months,  will  have  62  days 
to  run,  and  pay  the  same  rate  of  interest. 
The  same  difficulty  arises,  in  computing 
interest  for  a  small  number  of  days  ;  and 
therefore  some  approximation,  which  can 
be  made  by  an  easy  and  ])racticable  mode 
of  computation,  if  made  in  good  faitli  and 
without  being  intended  as  a  cover  for 
usury,  has  been  considered  allowable, 
without  drawing  after  it  the  penalty 
of  the  statute.  Such  being  the  universal 
practice,  of  other  persons  as  well  as  banks, 
we  think  a  jury  would  not  be  warranted, 
from  the  mere  foct  that  the  interest  thus 
computed  slightly  exceeds  the  legal  rate, 
to  infer  a  corrupt  and  usurious  agreement. 
Aiul  we  tliiidc  the  present  case  comes 
witliin  tliis  rule.  The  intent  was  to  com- 
])ute  and  receive  the  interest  for  60  days 
and  grace.  The  grace  is  a  regular  por- 
tion of  the  time  the  note  has  to  run,  and 
the  bank  had  a  right  to  compute  and  re- 
ceive interest  for  it.  The  ]ieri()d  of  sixty 
days  is  one  sixth  of  a  year,  as  nearly  as 
can  l)c  computed  without  a  fraction  ;  and 
tiiree  days  is  tiie  nearest  apjiroximation  to 
the  loth  part  of  a  month,  or  tlie  120th 
jiart  of  a  year,  without  fractions  of  a  day. 
I 'poll  tills  \'h'\\'  of  the  case,  we  are  of 
opinion,  that  it  is  not  shown  that  usurious 
interest  was  taken,  contnu-y  to  the  pro- 
visions of  tiic  statute,  and  that  the  defence 
is  iu>t  sustained." 


CH.  VII.]  INTEKEST   AND   USURY.  *409 

money  ;  and  it  may  now  be  considered  as  settled,  rather  for  the 
sake  of  convenience  than  upon  principle,  that  it  is  not  nsurious 
to  take  the  interest  in  advance,  by  way  of  discount,  although  it 
is  obvious,  that  by  carrying  this  principle  far  enough,  any 
amount  of  excessive  interest  may  be  taken.  Thus,  if  the  legal 
interest  were  six  per  cent.,  and  a  note  for  a  thousand  dollars 
had  ten  years  to  run,  the  borrower  would  receive  four  hundred 
dollars,  and  at  the  end  of  ten  *  years,  pay  six  hundred  for  the 
use  of  it,  or  sixty  dollars  a  year  for  the  use  of  four  hundred, 
which  is  obviously  much  more  than  even  compound  interest. 
There  seems,  however,  to  be  a  strong  disposition  to  limit  this 
practice  to  short  paper,  or  at  least  not  to  apply  it  to  long  loans 
or  discounts,  although  nothing  like  a  fixed  rule  or  standard  can 
be  found,  either  in  the  authorities  or  in  the  usage,  and  it  must 
often  be  difficult  to  apply  such  a  distinction,  (s)  It  seems 
originally  to  have  been  doubted  whether  the  receipt  of  interest 
quarterly  or  semiannually  was  not  usurious,  on  the  ground  that 
the  lender  received  thereby  more  than  the  legal  rate  by  the  year. 
And  for  a  considerable  time  these  contracts  were  considered 
usurious,  upon  which  the  legal  interest  was  deducted  from  the 
sum  loaned,  or  paid  in  advance,  [t)  But  the  practice  is  now 
universal,  both  in  England  and  in  this  country.  The  authori- 
ties, however,  which  sustain  this  departure  from  the  accurate 
enforcement  of  the  usury  laws,  seem  mainly  to  rest  upon  the 
principle  that  the  additional  sum  received  by  the  lender  may  be 
considered  in  the  nature  of  a  compensation  for  his  services  and 
trouble.  And  all  the  decisions  show  that  such  anticipated  re- 
ception of  interest  must  be  confined  to  cases  where  a  bill  or 
note  is  given  by  the  borrower,  and  does  not  extend  to  any  ordi- 
nary private  agreement  of  loan.  (?<) 

(s)  See  Barnes  v.  Warlich,   Cro.  Jac.  days  Ijefore  it  is  due,  that  does  not  make 

25,  Yelv.  31,  and  Grysill  v.  Whichcott,  the   obligation  void,  because  it  was   not 

Cro.  Car.  283  ;  Caliot  v.  Walker,  2  Anst.  corrupt.     But  if  upon  making  the  obliga- 

496;    Eaton   v.  Bell,   5   B.   &  Aid.  40;  tion  it  had   been    agreed   that    the   £10 

Mowry  v.  Bishop,  .5  Paige,  98  ;  Marvinc  should  have  been  paid  within  the  time, 

r.  Hymers,  2  Kern.  223.  that  should  have  been  usury,  because  he 

{{)  In   Anonymous,   Noy,    171,   usury  had   not   the   .£100  for   the'  whole  A-ear, 

was  pleaded  to  an  action  upon  a  bond,  when  the  £10  was  to  be  paid  within  the 

Popham,  J.,  said  :  "  If  a  man  lend  £100  year."     And  verdict  was   given   accord- 

for  a  year,  and  to  have  £10  for  the  use  of  ingly. 

it,  if  the  obligor  pays   the   £10   twenty  \u)  In  N.  Y.  Firemen  Ins.  Co.  v.  Elv, 

[435] 


410 


THE  LAW   OF   CONTRACTS. 


[part  il 


SECTION    IX. 

OF   A   CHARGE   FOR   COMPENSATION   FOR   SERVICE. 

It  is  quite  certain,  that  the  lender,  whether  banker  or  bro- 
ker, may  charge,  in   addition   to   the   discount,   a   reasonable 


2  Cowen,  703,  the  principle  extracted  from 
the  cases,  by  Sutherland,  J.,  in  which  the 
whole  court  seem  to  have  concurred,  was 
this  :  "  The  taking  of  interest  in  advance, 
is  allowed  for  the  benefit  of  trade,  al- 
though, by  allowing  it,  more  than  the 
legal  rate  of  interest  is,  in  fact,  taken ; 
that  being  for  the  benefit  of  trade,  the 
instrument  discounted,  or  upon  which 
the  interest  is  taken  in  advance,  must  be 
such  as  ifill,  and  usually  does,  circulate 
or  pass  in  the  course  of  tra  'e.  It  must, 
therefore,  be  a  negotiable  instrument,  and 
payable  at  no  very  distant  day  ;  for  with- 
out these  qualities  it  will  not  circulate  in 
the  course  of  trade.  Under  tliese  limita- 
tions the  taking  of  interest  in  advance, 
either  by  a  bank,  or  incorporated  com- 
pany without  banking  powers,  or  an  in- 
dividual, is  not  usurious."  In  Marsh  v. 
Martindalc,  3  B.  &  P.  154,  the  defend- 
ants were  acceptors  of  a  bill  of  ex- 
change for  £5,000,  drawn  by  Robert 
Wood,  payable  in  tin-ee  years,  to  the 
plaintiff.  It  appeared  that  Robert  Wood, 
having  granted  an  annuity  to  the  ])laintifl', 
whicli  lie  desired  to  redeem,  and  which, 
togetlier  with  charges  u])on  it,  was  worth 
£4,134,  l)rought  to  the  pbiintilf  the  bill  in 
question  which  the  jilaintitf  agreed  to 
discount,  and  the  £5,(){)0  was  made  up  of 
the  price  of  tlie  annuity,  £4,134,  £116 
paid  to  tiie  defendant  in  cash,  and  £750 
three  years'  discount  on  the  note.  The 
present  action  was  on  a  bcmd  given  as  a 
substitute  for  the  note,  and  tlie  defence  of 
usury  was  set  up,  wliicii  it  was  attempted 
to  answer  Iiy  considering  the  transaction 
a.s  a  discount  in  advance  of  llie  interest 
due  on  the  .£5,000  note,  wliich  would  not 
be  usurious.  The  court  determined  that 
a.s  the  bill  was  for  so  long  a  time,  coupled 
with  its  being  a  redemption  of  tin;  annuity, 
it  v/na  evident  that  the  transaction  was 
not  a  discount  in  the  way  of  trmlc,  but  a 
loan   of   money,  a  jnetiiod   ol'   oljlaining 

[4;5G] 


more  than  legal  interest,  which  was  cor- 
rupt in  law,  whatever  the  intention  of  the 
parties  might  have  been.  Lord  Alvanley, 
C.  J.,  said  :  "  It  is  also  contended  that  at 
all  events  the  negotiation  of  the  bill  of  ex- 
change was  a  transaction  in  the  usual 
mode,  in  which  all  persons  possessed  of 
bills  of  exchange  have  been  permitted  to 
discount  them  ;  in  which  cases  the  inter- 
est is  always  deducted  from  the  money 
advanced.  It  certainly  has  been  deter- 
mined that  such  a  transaction  on  a  bill  of 
exchange,  in  the  way  of  trade,  for  the 
accommodation  of  the  party  desirous  of 
raising  money,  is  not  usurious  though 
more  than  five  per  cent,  be  taken  upon  the 
money  actually  advanced.  In  such  cases 
the  additional  sum  seems  to  have  been 
considered  in  the  nature  of  a  compensa- 
tion for  tlie  trouble  to  which  the  lender  is 
exposed  ;  and  unless  that  indulgence  were 
allowed,  it  might  not  be  worth  while  for 
any  mercliant  to  discount  a  bill.  If, 
therefore,  nothing  more  has  been  done  in 
this  case  than  what  always  has  been  done 
by  way  of  accommodation  among  mer- 
chants, the  transaction  was  not  usurious  ; 
but  the  rule  must  be  confined  strictly  to 
that  sort  of  transaction  ;  for  if  discount 
be  taken  upon  an  advance  of  money  with- 
out the  negotiation  of  a  bill  of  exciiange, 
it  will  amount  to  usury,  as  appears  clearly 
from  the  cases  which  were  cited  in  the 
argument.  We  must,  therefore,  consider 
what  was  the  real  transaction  between  the 
parties."  In  Lloyd  (jni  tarn  v.  Williams, 
2  W.  Bl.  7'.)2,  where  Ilinchlilfe  borrowed 
.ClOO  of  the  defendant,  and  ininiediately 
]iaid  bini  thereout  L'ti  5,s'.  iidvanccd  inter- 
est, and  gave  his  note  for  £100  jiayable  in 
three  months,  l)e  dnti,  C.  ,1.,  ancl  Black- 
stone,  J.,  "  inclined  to  think  that  the  ofi'ence 
was  consunimiited  and  comi)letcly  com- 
mitted on  making  the  c()rru|>t  agreement, 
and  receiving  tlie  interest  by  advance; 
and  that  it  was  not  to  bo  considered  as 


CH.  VII.] 


INTEREST   AND   USURY. 


411 


sum  for  his  trotible  or  services.  (?')      And  this  principle  is  not 
confined  to  bankers  and  brokers,  but  is  extended  to  all  cases  in 


merely  a  loan  of  .£93  15s.     The  statute 
12  Anne  is  express,  that  it  is  usury  to 
take  above  five  per  cent,  for  the  forbearing 
or  giving  day  of  payment,  which  plainly 
has  respect  to  a  taking  of  the  interest,  or 
forbearance,  before  the  principal  sum  is 
due.      And    Blackstone    conceived,    that 
interest  may  as  lawfully  be  received  be- 
forehand,  for    forbearing,    as,   after    the 
term  is  expired  for  having  forborne:    And 
it  shall  not  be  reckoned  as  merely  a  loan 
of  the  balance.     For,  if  upon  discounting 
a  £100  note  at  five  per  cent,  he  should  be 
construed  to  lend  only  £95  then,  at  the 
end  of  the  time,  he  would  receive  £5  in- 
terest for  the  loan  of  £95  principal,  which 
is  above  the   legal  rate."     In   Floyer  v. 
Edwards,    Cowp.    116,    Lord    Mansfield 
said,  in  reference  to  the  general  practice 
of  trade  to  stipulate  for  a  certain  per  cent, 
upon  a  neglect  to  pay  the  price  of  goods 
bought ;  "  It  is  true  the  use  of  this  prac- 
tice will  avail   nothing,  if  meant  as  an 
evasion  of  the  statute  ;  for  usage  certainly 
will   not   protect   usury.     But  it  goes  a 
great  way  to  explain  a  transaction  ;  and 
in  this  case  is  strong  evidence  to   show 
that  there  was  no  intention  to  cover  a  loan 
of  money.     Upon  a  nice   calculation   it 
will   be   found   that   the   practice   of  tlio 
banks,  in  discounting   bills,  exceeds   the 
rate  of  five  per  cent. ;  for  they  take  inter- 
est upon  the  whole   sum  for  the  whole 
time  the  bills  run,  but  pay  only  part  of 
the  money,  namely,  by  deducting  the  inter- 
est first ;  yet  this  is  not  usury."     In  Maine 
Bank  v.  'Butts,   9  Mass.  54,  referred  to 
above,  in  which  it  was  decided  that  banks 
had  no  more  right  than  individuals  to  re- 
ceive more  than  six  per  cent,  legal  inter- 
est, and  that  the   "  banking  privileges," 
given  by  the  legislature  did  not  confer 
such  a  power,  the  court  said  :  "  That  ex- 


pression, if  it  has  any  peculiar  meaning, 
is  an  authority  to  deduct  the  interest  at 
the  commencement  of  loans  or  to  make 
loans  upon  discounts,  instead  of  the  ordi- 
nary forms   of  security  for  an  accruing 
interest.      But    individuals   have   a  like 
authority,  although  in  both  cases  the  con- 
struction is  a  relaxation  of  the  prohibitions 
of  the  statute  against  usury,  and  allows  a 
rate  of  interest,  which  may  be  estimated 
at  a  small  extent  beyond  six  per  cent,  per 
annum.     Banks,  in  their  discounts,  never 
venture  to  exceed  that  rate,  in  the  deduc- 
tions, which  they  make  from  their  loans, 
although  this  anticipation  of  interest,  in 
effect,   gives   more    than   the   fixed   rate 
upon  the   sum    actually  paid    out."     In 
rieckner  v.  U.  S.  Bank,  8  Wheat.  354, 
the  court  say  upon  this  question  :  "  The 
next  point  arising  on  the  record  is,  whether 
the  discount  taken  in  this  case  was  usuri- 
ous.    It   is   not  pretended,  that   interest 
was  deducted  for  a  greater  length  of  time 
than  the  note  had  to  run,  or  for  more 
than  at  the  rate  of  six  per  cent,  per  an- 
num on  the  sum  due  by  the  note.     The 
sole  objection  is,  the  deduction  of  the  in- 
terest from  the  amount  of  the  note  at  the 
time  it  was  discounted  ;  and  this,  it  is 
said,  gives  the  bank  at  the  rate  of  more 
than  six  per  cent,  upon  the  sum  actually 
carried  to  the  credit  of  the  Planters'  Bank. 
If  a  transaction   of    this    sort  is   to   be 
deemed  usurious,  the  same  principle  must 
apply  with  equal  force  to  bank  discounts 
generally,  for  the  practice  is  believed  to 
be   universal ;    and  probably  few  if  any 
charters  contain  an  express  provision,  au- 
thorizing, in  terms,  the  deduction  of  the 
interest  in  advance,  upon  making  loans  or 
discounts.     It  has  always  been  supposed 
that  an  authority  to  discount,  or  to  make 
discounts,  did,  from  the  very  force  of  the 


{v)  Auriol  V.  Thomas,  2  T.  R.  52. 
Winch  V.  Fenn,  cited  2  T.  R.  52  ;  Caliot 
V.  Walker,  2  Anst.  496  ;  Rooke,  J.,  Ham- 
mett  V.  Yea,  1  B.  &  P.  156  ;  Masterman 
V.  Cowrie,  3  Camp.  488  ;  Ex  parte  Jones, 
17  Ves.  332;  Ex  parte  Henson,  1  Mad- 
dock,  115  ;  Ex  parte  Gwyn,  2  Dea.  &  Ch. 
12;  Gibson  v.  Livesey,  cited  4  M.  &  S. 
196  ;  Fussell  v.  Daniel,  10  Exch.  581,  29 
Eng.  L.  &  Eq.  369 ;  Kent  v.  Phelps,  2 
Day,  483  ;  Hutchinson  v.  Hosmer,  2  Conn. 
341 ;    Hall  v.  Daggett,  6  Cowen,   657  ; 

37* 


Nourse  v.  Prime,  7  Johns.  Ch.  69 ;  Trot- 
ter i'.  Curtis,  19  Johns.  160;  Suydam  t?. 
Westfall,  4  Hill,  211  ;  Suydam  v.  Bartle, 
10  Paige,  94  ;  Bullock  v.  Boyd,  1  Hoffm. 
Ch.  294;  Holford  v.  Blatchford,  2 
Sandf.  Ch.  149;  Seymour  v.  Marvin,  11 
Barb.  80  ;  M'Kesson  v.  M'Dowell,  4  Dev. 
&  B.  120 ;  Rowland  v.  Bull,  5  B.  Mon. 
146;  Brown  v.  Harrison,  17  Ala.  774. 
See  also.  Ex  parte  Patrick,  1  Mont.  &  A. 
385 ;  Harris  v.  Boston,  2  Camp.  348. 

[437] 


412* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


which  there  may  be  such  services  as  are  fairly  entitled  to  com- 
*pensation,  although  the  lender  be  neither  banker  nor  broker, 
nor  engaged  in  trade,  and  lends  his  own  money,  (iv)  But  it 
seems  that  the  sum  paid  as  a  compensation  or  commission  for 
service  or  trouble  in  any  case,  must  not  exceed  the  amount 
usually  taken  in  the  course  of  trade  in  that  business ;  and  if  it 
do,  such  excess  will  make  the  contract  usurious,  (x)     If  there 


terms,  necessarily  include  an  authority  to 
take  the  interest  in  advance.  And  this  is 
not  only  the  settled  opinion  among  pro- 
fessional and  commercial  men,  but  stands 
approved  by  the  soundest  principles  of 
legal  construction.  Indeed,  we  do  not 
know  in  what  other  sense  the  word  dis- 
count is  to  be  interpreted.  Even  in  Eng- 
land, where  no  statute  authorizes  bankers 
to  make  discounts,  it  has  been  solemnly 
adjudged  that  the  taking  of  interest  in 
advance,  by  bankers,  upon  loans,  in  the 
ordinary  course  of  business,  is  not  usuri- 
ous." See  also,  to  the  same  effect  as  the 
foregoing  cases  :  Manhattan  Co.  v.  Os- 
good, 15  Johns.  1G2  ;  Bank  of  Utica  v. 
Phillips,  3  Wend.  408  ;  Utica  Ins.  Co.  v. 
Bloodgood,  4  Wend.  652  ;  Bank  of  Utica 
V.  Wager,  2  Cowen,  712  ;  Stribling  v. 
Bank  of  the  Valley,  5  Rand.  132  ;  Thorn- 
ton V.  Bank  of  Washington,  3  Pet.  36  ; 
State  Bank  v.  Hunter,  1  Dev.  100;  Cole 
V.  Lockhart,  2  Cart.  Ind.  631  ;  McGill  v. 
Ware,  4  Scam.  21  ;  Ticonic  Bank  v. 
Johnson,  31  Me.  414;  Sessions  v.  Rich- 
mond, 1  II.  I.  305  ;  Haas  v.  Flint,  8 
Blackf.  67  ;  Duncan  v.  Maryland  Sav- 
ings Institution,  10  Gill  &  J.  311.  See 
also,  Iloyt  V.  Bridgewatcr  Co.  2  Halst. 
Ch.  253,  625. 

{iv)  Ex  parte  Gwyn,  2  Dea.  &  Ch. 
12.  And  in  Palmer  v.  Baker,  1  M. 
&  S.  56,  where  a  right  to  purchase  cer- 
tain timber  then  standing  on  the  land  of 
the  vendor,  was  assigned  by  the  vendee, 
to  scfurc  a  debt  due  from  him,  under 
which  iigrccmcnt  the  assignees  were  to 
take  upon  themselves  the  getting  out  and 
working  of  the  timlier,  and  after  paying 
themselves  the  amount  duo  them,  with 
interest  thereon,  and  after  tledueting  "the 
further  sum  (if  .£200,  as  and  for  a  reason- 
able profit  and  eo!n[)eiisation  for  the  trouliic 
they  would  be  at  in  thi;  business,  and  also 
nil  eosts,  elinrges,  damages,  and  expenses, 
wliieh  they  hhould  or  might  expend,  be 
put  to,  or  be  liable  for,  on  aecount  of  the 
premises,  or  in  anywise  relating  tliereto," 
were  to  repay  llic  same  to  their  ussigiujr; 

[438] 


the  court  refused  to  nonsuit  the  plaintiff 
in  the  present  suit,  brought  by  the  as- 
signees, against  the  sheriff,  who  had 
seized  a  portion  of  the  timber  as  the  prop- 
erty of  the  assignor,  and  decided  that,  as 
the  jury  had  not  found  that  the  compen- 
sation was  colorable,  or  excessive,  the 
court  could  not  say  that  the  contract  was 
usurious,  since  the  compensation  must 
therefore  be  taken  to  be  a  reasonable  one, 
for  the  services  performed  and  the  trouble 
incurred.  In  Baynes  v.  Fry,  15  Ves.  120, 
a  claim  was  made  upon  certain  property, 
for  commission  money.  The  party  claim- 
ing the  commission,  having  advanced 
money  at  five  per  cent,  interest,  took  bills 
upon  Hamburg,  which  bills  he  sent  there 
for  the  purpose  of  obtaining  their  amount, 
and  upon  this  transaction  the  commission 
was  claimed,  which  claim  was  objected  to 
because  it  was  usurious.  Lord  Chancel- 
lor E/don  said  :  "  The  first  case  upon  this 
point  was  tlutt  upon  the  circuit,  in  1780, 
Benson  r.  Parry,  where  Lord  Chief  Jus- 
tice, then  Baron  Eyre,  held  that  a  coun- 
try banker,  discounting  bills  payable  la 
London,  could  not  take  a  commission,  but 
that  was  set  right  upon  an  application  to 
the  court.  I  take  the  facts  of  this  case,  as 
far  as  I  can  understand  tliem  from  the 
accounts  that  have  been  handed  up,  to 
stand  thus  :  Hanson  advanced  money  to 
these  parties,  u]ion  the  terms  of  receiving 
interest ;  desiring  them,  if  they  had  bills 
upon  ILimhKn/,  to  put  them  into  his  hands, 
for  the  ])urp()se  of  sending  tliem  there,  to 
proeuH!  acceptance  and  ]iaymcnt;  in  or- 
der to  bring  iiimsclf  home,  taking  a  rea- 
sonable commission  for  his  troulile  in  do- 
ing so.  That,  according  to  modem  doc- 
trine, is  not  usurious." 

(.<■)  In  Harris  v.  Boston,  2  Camp.  348, 
the  plaintill's  were  seed  factors,  and  bought 
large  (|uanlilies  of  raj)e  seed  for  the  do- 
fendant,  advancing  money  tlicreiipon,  for 
which  they  charged  the  legal  interest ;  and 
it  was  also  agreed  that  they  should  have  a 
commission  of  2^  ])(n-  cent,  upon  all  the 
seed    purchased.      Upon    an    action    to 


CH.  VII.] 


INTEREST  AND    USURY. 


*413 


be  such  charge  it  will  be  a  question  for  the  jury,  whether  it  is 
in  fact  a  reasonable  compensation  for  services  rendered,  or  a 
mere  pretence  for  obtaining  usurious  interest ;  (y)  in  *which  case 
of  course,  it  will  not  be  allowed.  The  party  drawing  a  bill 
may  also  charge  a  sum,  in  addition  to  legal  interest,  as  the  rate 


recover  an  amount  due  under  this  contract, 
to  which  usury  was  pleaded,  many  wit- 
nesses swore  that  the  highest  commission 
they  had  ever  known  taken  upon  such 
purchases,  was  one  shilling  a  quarter, 
which,  at  the  current  price  of  rape  seed, 
amounted  to  exactly  one  per  cent.  Lord 
EUenborough  said  :  "  If  the  plaintiffs  would 
have  duly  made  the  purchases  for  one  per 
cent.,  but  charge  2^,  besides  legal  interest, 
where  they  advance  the  money,  this  com- 
mission must  be  considered  an  expedient 
for  enhancing  the  rate  of  interest  beyond 
five  per  cent.,  and  is  a  mere  color  for 
usury." 

(y)  Kent  v.  Phelps,  2  Day,  483 ;  Hutch- 
inson r.  Ilosmer,  2  Conn.  341  ;  De  Forest 
V.  Strong,  8  Conn.  519  ;  M'Kesson  v. 
M'Dowell,  4  Dev.  &  B.  120;  Bartlett  v. 
Williams,  1  Pick.  294 ;  Stevens  v.  Davis, 
3  Met.  211;  Brown  v.  Harrison,  17  Ala. 
774.  In  Carstairs  v.  Stein,  4  M.  &  S. 
192,  the  defendants  allowed  Kensington 
&  Co.  to  draw  upon  them,  for  an  amount 
not  exceeding  £20,000  at  any  one  time, 
and  were  to  receive  a  commission  of  one 
half  per  cent,  upon  the  amount  of  the 
bills  drawn.  In  this  action,  brought  by 
the  assignees  of  Kensington  &  Co.,  for 
balances  alleged  to  be  due,  the  defence  of 
usury  was  alleged,  and  evidence  was  of- 
fered to  show  that  the  commission  of  one 
half  per  cent,  was  unreasonable,  and 
more  than  the  accustomed  rate.  Lord 
EUenborough  directed  the  jury,  that  if  the 
commission  could  be  fairly  set  to  the  ac- 
count of  trouble  and  inconvenience,  it 
was  not  usurious ;  otherwise  if  the  com- 
mission overstep i>ed  the  bona  fide  trouble, 
and  was  mixed  with  an  advance  of  money, 
in  order  to  effect  an  inducement  for  such 
advance,  from  time  to  time,  and  his  lord- 
ship inclined  to  consider  the  transaction, 
under  the  circumstances,  usurious,  but 
left  it  to  the  jury,  who  found  otherwise 
for  the  plaintiff.  Upon  a  motion  for  a 
new  trial  the  court  refused  to  disturb  the 
verdict.  Lord  Ellenborourjh,  C.  J.,  said: 
"  The  principal  cpiestion  has  been,  whether 
the  one  half  per  cent,  agreed  to  be  charged 
for  commission,  in  this  case,  is  clearly  re- 
ferable to  an  usurious  contract  between 


the  parties,  for  the  payment  of  interest 
above  five  per  cent,  upon  a  loan  of  money, 
or  whether  it  may  not  be  referred  to  an 
agreed  case  of  remuneration,  justly  de- 
niandable  for  trouble  and  expense  incur- 
red, in  the  accepting  and  negotiating  bills 
remitted  to  and  drawn  upon  them,  and  in 
the  doing  such  other  business  as  is  stated 
to  have  been  done  by  the  Kensingtons, 
for  the  houses  or  rather  for  the  house  of 
the  defendants,  under  its  dif!erent  names 

and  descriptions All  commission, 

where  a  loan  of  money  exists,  must  be 
ascribed  to  and  considered  as  an  excess, 
beyond  legal  interest,  unless  as  far  as  it  is 
ascribable  to  trouble  and  expense  bona  fide 
incurred,  in  the  course  of  the  business 
transacted  by  the  person  to  whom  such 
commission  is  paid ;  but  whether  any 
thing  and  how  much  is  justly  ascribable  to 
this  latter  account,  namely,  that  of  trouble 
and  expense,  is  always  a  question  for  the 
jury,  who  must,  upon  a  view  of  all  the 
facts,  exercise  a  sound  judgment  there- 
upon." His  lordship  recapitulated  here 
the  suspicious  circumstances  in  the  case, 
and  then  said  :  "  These  circumstances 
certainly  laid  a  foundation  for  suspecting 
that  the  high  rate  of  commission  contract- 
ed for  was  a  color  for  usury,  upon  loans 
which  were  stipulated  not  to  be  required, 
but  which  were  in  fact  required  and  made, 
from  the  beginning  to  the  end  of  this 
business.  But  this  question,  that  is, 
whether  color  or  not,  was  a  question  for 
the  consideration  of  the  jury,  and  to  their 
consideration  it  was  fully  left,  with  a 
strong  intimation  of  opinion,  on  the  part 
of  the  judge,  that  the  transaction  was 
colorable  and  the  commission  of  course 
usurious.  The  jury  have  drawn  a  differ- 
ent conclusion,  and  which  conclusion, 
upon  the  view  they  might  entertain  of  the 
facts  they  were  at  liberty  to  draw  ;  and 
they  having  done  so,  for  the  reasons  al- 
ready stated,  we  do  not  feel  ourselves,  as 
a  court  of  law,  and  acting  according  to 
the  rules  by  which  courts  of  law  are  usual- 
ly governed  in  similar  cases,  at  liberty  to 
set  aside  that  verdict  and  grant  a  new 
trial." 

[439] 


414*  THE   LAW   OF   CONTRACTS.  [PART  II. 

of  exchange  between  the  place  where  the  loan  is  actually  ad- 
vanced and  the  place  where  it  is  to  be  repaid;  provided  such 
charge  is  the  customary  rate,  and  therefore  not  a  device  to 
cover  usury,  (z)  So  if  the  acceptor  of  a  bill  pays  it  before  it  is 
due,  it  is  held  that  he  may  deduct  *a  larger  sum  than  legal  in- 
terest on  the  amount,  until  the  day  of  the  maturity  of  the  bill, 
without  the  transaction  being  usurious,  (a)  because,  in  fact,  it  is 
no  loan,  but  a  voluntary  anticipation  of  a  payment. 


SECTION    X. 

OF   A   CHARGE   FOR   COMPENSATION   FOR  RISK   INCURRED. 

As  the  lender  may  take  a  compensation  for  his  trouble  and 
services,  so  he  may  for  the  risk  that  he  runs.  By  this,  however, 
is  not  meant  the  personal  risk  of  the  debtor's  ability  to  pay ; 
for  nothing  of  this  kind  is  any  justification  whatever  of  more 
than  legal  interest.  But  where,  by  the  nature  of  the  terms  of 
the  contract,  the  repayment  of  money  loaned  is  made  to  de- 
pend upon  the  happening  of  contingent  events,  there  the  lender 
may  take,  beside  his  interest  for  the  sum  loaned,  enough  more 
to  insure  him  against  the  casualty  which  might  destroy  his 
claim;  that  is,  so  much  more  as  this  risk  of  loss  is  worth.     Nor 

(z)  Andrews  v.  Pond,  13  Pet.  65  ;  Buck-  of  &d.  in  the  pound  ;  and  the  defendant 

ingham  v.  McLean,  13  IIow.  151  ;  Mcrritt  accordingly  paid  £29  5s.  to  Cutler,  who 

i\  Benson,   10  Wend.   116;  Williams  v.  thereupon  gave  him  tlie  hill.     Tlie  plain- 

Ilance,  7  Paige,   581  ;  Ontario  Bank  r.  tiff  having  hecn  nonsuited,  at  the  trial, 

Schermerhorn,   10  Paige,    109;    Cayuga  heforc  Lord  ^//cH^JoroKr/Zi,  the  court  refused 

County  Bank  v.  Hunt,  2  Hill,  635;  IIol-  to  grant  a  rule  to  set  the  nonsuit  aside, 

ford  V.  Blutchford,   2    Sandf.    Ch.    149;  Lord  EUenhorough,  C.  J.,  said,  "that  to 

Cuylcr  t'.  Sanford,  13  Barh.  339;  Com-  constitute  usury  there  must  ho   either  a 

mercial   Bank  r.  Nolan,  7   How.    Miss,  direct  loan  and  a  taking  of  more   than 

508.     Sec  also,  Lcavitt  v.  ])e  Launy,  4  legal  interest  for  the  forhearance  of  repay- 

Comst.  304  ;  Marvine  v.  Hymers,  2  Kern,  meiit,  or  there  must  he  some  device  con- 

223.  trived  for  the  purjjose  of  concealing  or 

(n)  Barclay  v.  Walmsley,  4  East,  55.  evading  the  ap])carance  of  a  loan  and  for- 

A  hill  for  X-'U)  was  drawn  on  the  defend-  hearance,  when  in  truth  it  was  such.     But 

ant,   datcil  .July  14,   1801,  and  came   l)y  here  was   no   loan  or  An-hcaraiice,  only  a 

indorsement    to    Cutler.       The    hill    was  mere  aiitici])alion   of   the   ])aymcnt  of  a 

payahlc  thirty  days  after  date,   and  was  dcht,  hy  the  l)arty,  hcfore  the  time  when 

presented     l»y    Cutler   to    the    defendant,  hy  law  he  coitid    ho  called    upon  for  it. 

for  acceptance,  on  the  2()th  Aui;ust,  when  That  the   defcTidant  had    hccn   guilty  of 

it  was  agreed  that  the  defendant  should  very  improjjcr  practice,  hut  not  of  usury." 
pay  the  hill,  the?i  receiving  an  allowance 

[410] 


en.  VII.] 


INTEREST   AND   USURY. 


*415 


is  there  any  definite  standard  for  this,  like  that  which  the  stat- 
utes give  for  legal  interest ;  and  any  contract  for  loan  of  money 
upon  extra  interest,  if  the  principal  sum  were  actually  at  risk, 
would  probably  be  sanctioned  by  the  courts,  unless  it  amounted 
by  its  excess  or  its  circumstances,  to  fraud  and  oppression. 
Upon  this  foundation  rests  a  large  class  of  mercantile  contracts 
of  universal  use  and  great  importance,  known  by  the  names  of 
loans  on  bottomry  and  respondentia.  By  these  contracts,  money 
is  *  loaned  either  on  a  pledge  of  the  ship,  or  on  that  of  the  goods 
on  board  a  ship,  with  condition  that  if  the  ship  or  goods  be  lost 
nothing  of  the  principal  or  interest  shall  be  repaid,  but  if 
they  arrive  safe,  the  principal  shall  be  repaid  with  more  than 
lawful  interest,  {b)      And   a   bottomry   bond    may   be    made 


(6)  Soome  v.  Gleen,  Sid.  27,  was  debt, 
upon  an  obligation,  the  condition  of  which 
was,  that  if  a  certain  ship  should  go  to 
Surat,  in  the  East  Indies,  and  return 
safe  to  London,  or  if  the  owner  or  his 
goods  should  return  safe,  then  the  de- 
fendant should  pay  the  plaintiff  the  prin- 
cipal money  loaned,  and  £40  for  every 
£100;  but  if  the  ship,  &c.,  should  perish 
by  unavoidable  casualty  of  sea,  fire,  or 
enemies,  the  plaintiff  should  have  nothing. 
The  question  whether  the  contract  was 
usurious,  was  argued  by  Earle  for  defend- 
ant, who  agreed  that  if  the  condition  had 
been  solely  that  if  the  ship  should  return 
safe,  this  would  have  been  a  good  bot- 
tomry contract,  and  an  apparent  hazard 
of  the  principal,  but  contended  that  since 
here  the  contingency  was  so  remote,  that 
if  the  owner  of  the  ship  or  his  goods  re- 
turned it  would  not  happen,  the  contract 
was  within  the  statute,  for  otherwise  the 
statute  of  usury  would  be  of  no  effect. 
But  it  was  replied  by  tlie  counsel  for  the 
plaintiffs  and  resolved  by  the  court,  that 
this  was  not  usury,  within  the  statute,  but 
a  good  bottomry  contract.  And  Chief 
Justice  Bridgman  took  a  diversity  between 
a  bargain  and  a  loan,  for  where  there  is  a 
plain  and  square  bargain  (as  here),  and 
the  principal  hazarded,  this  cannot  be 
within  the  statute  of  usury.  But  other- 
wise is  it  of  a  loan  which  is  intended 
where  the  principal  is  not  hazarded.  And 
there  are  apparent  dangers  of  the  sea,  fire, 
and  enemies,  between  this  and  the  East 
Indies,  which  endanger  the  loss  of  the 
principal.    And  they  said  that  such  con- 


tracts, called  bottomry,  tend  to  the  in- 
crease of  trade,  and  that  on  which  many 
orphans  and  widows  live  in  the  port 
towns  of  this  realm.  Judgment  by  the 
whole  court  was  for  the  plaintiff,  that  this 
contract  is  not  usurious.  Sharpley  v. 
Hurrel,  Cro.  Jac.  208,  was  debt  u])on  an 
obligation.  "  The  defendant  pleaded  the 
statute  of  usury  ;  and  showeth  that  a  ship 
went  to  fish  in  Newfoundland,  which 
voyage  might  be  performed  in  eight 
months,  and  that  the  plaintiff  delivered 
fifty  pounds  to  the  defendant,  to  pay  sixty 
pounds  upon  return  of  the  ship,  off  Dart- 
mouth ;  and  if  the  said  ship,  by  occasion  of 
leakage  or  tempest,  should  not  return 
from  Newfoundland  to  Dartmouth,  then 
the  defendant  sliould  pay  the  principal 
money,  namely,  fifty  pounds  only ;  and  if 
the  ship  never  returned,  he  should  pay 
nothing.  And  it  was  held  by  all  the 
court,  not  to  be  usury,  within  the  statute ; 
for  if  the  ship  had  staid  at  Newfoundland 
two  or  three  years,  he  should  have  paid  at 
the  return  of  the  ship  but  sixty  pounds ; 
and  if  the  ship  never  returned,  then  noth- 
ing ;  so  that  the  plaintiff  ran  a  hazard  of 
having  less  than  the  interest,  which  the 
law  allows,  and  possibly  neither  principal 
nor  interest."  See  also,  to  this  effect, 
Earl  of  Chesterfield  v.  Janssen,  1  Wilson, 
286,  1  Atk.  342,  348,  2  Vcs.  Sr.  143,  148, 
per  Burnett,  J.,  and  Sir  John  Strange,  M. 
R. ;  Rucher  v.  Conyngham,  2  Pet.  Adm. 
295;  The  Sloop  Mary,  1  Paine,  C  C. 
67.5 ;  Doderidge,  J.,  in  Roberts  v.  Tre- 
nayne,  Cro.  Jac.  508;  Garret  v.  Eoot, 
Comb.  133. 

[441] 


416 


THE   LAW   OP   CONTRACTS. 


[part  II. 


on  time,  as  well  as  on  a  specific  voyage,  (c)  This  is  often  — 
or  certainly  may  be — used  as  a  means  of  lending  money  on 
usurious  interest.  If,  for  example,  the  loan  is  for  one  year,  at 
twelve  per  cent,  six  per  cent,  being  legal,  and  the  lender  insures 
the  ship  (which  he  may  lawfully  do)  (d)  for  three  per  cent,  he 
gets  nine  per  cent  for  the  use  of  his  money.  Still  these  con- 
tracts are  sanctioned  by  the  law  and  usage  of  every  mercantile 
country,  and  are  protected  by  courts,  provided  the  principal  and 
interest  are  both  put  at  hazard,  by  the  very  contract  itself.  For 
this  is  the  one  condition  of  their  validity,  [da) 

This  same  principle  is  applied  to  some  land  contracts ;  as  if 


(c)  Thorndike  v.  Stone,  11  Pick.  183, 
infra. 

(d)  Id. 

(da)  In  Thorndike  v.  Stone,  11  Pick. 
1S3,  the  plaintiff"  brought  an  action  upon 
a  penal  bond,  the  condition  of  which  re- 
cited a  loan  of  $18,000,  by  the  plaintifi", 
to  the  defendant,  which  sum  was  to  run  at 
bottomry,  upon  the  ship  Israel,  at  and 
from  Boston,  to  and  in  any  ports  and 
places,  during  the  term  of  three  years 
from  the  date  of  tlie  bond,  at  the  interest 
and  premium  of  12  per  cent,  per  annum  ; 
and  declared  that  the  defendant  should 
also  pay  to  the  plaintitf,  during  the  three 
years,  one  half  of  the  gross  earnings  of  the 
ship,  which  should  go  in  discharge  of  the 
principal  sum  and  the  premium  due  upon 
it ;  that  the  defendant  miglit  make  any 
further  payments  within  the  three  j'cars  ; 
that  upon  all  such  payments  the  plaintiff 
shouhi  thereafter  bear  the  risk  only  of  the 
amount  actually  due  on  the  bond,  being 
entitled  to  retain  all  jjayments  made  to 
him,  whether  the  ship  were  lost  or  not, 
and  the  ship  being  pledged  to  the  plaintiff 
to  se(!ure  tiie  balance  due  at  any  time  ; 
and  the  bond  was  to  be  void  upon  the 
defendant's  performance  of  the  agree- 
ment and  the  payment  of  any  sum  which 
might  l)e  due  under  it,  at  tiie  expiration  of 
the  three  years.  It  a[)peared  also  that  the 
defendant  mortgaged  certain  real  estate  to 
the  plaiutitr,  to  secure  the  performance  of 
the  coiulition  of  the  bond  ;  that  the  plain- 
tiir  jirocured  810,000  insurance  on  th(r  ves- 
si.'l  for  one  year,  at  fi\(!  ami  a  half  per 
cent.,  and  that  the  defendant  also  insured 
the  vessel  for  a  certain  voyage.  It  was 
contcnd(!d,  for  the  def(!ndant,  that  this  was 
not  a  bottomry  bond,  but  a  <'ontract  at 
common  law,  and  usurious.     I'ldnani,  ,]., 

[442] 


delivered  the  opinion  of  the  court :  "  We 
are  all  clearly  of  opinion,  that  the  objec- 
tions which  the  defendant's  counsel  have 
made  to  the  plaintiff's  recovery,  cannot 
prevail.  It  is  said  that  this  is  not  a  bot- 
tomry bond,  but  a  usurious  contract ;  and 
the  court  are  to  determine  whether  it  be 
one  or  the  other,  upon  the  facts  which  are 
agreed  by  the  parties.  It  is  argued  that 
payment  of  the  money  borrowed,  is  se- 
cured in  such  a  manner  as  to  make  it  a 
certainty  that  the  plaintiff  would  receive 
his  money,  with  twelve  per  cent. ;  that  it 
is  secured  by  a  mortgage  of  real  estate,  as 
well  as  by  a  mortgage  of  the  ship,  and  an 
assignment  of  half  the  freight  and  earn- 
ings for  the  term  of  the  loan  ;  and  it  is 
further  objected,  that  the  loan  is  upon 
time,  and  not  for  a  voyage,  as  it  is  usually 
made.  But  the  answer  to  these  objections 
is,  that  if  the  ship  should  be  lost  within 
the  time  of  three  years,  for  which  the 
money  was  lent,  the  plaintiff'  was  to  lose 
all  the  money  which  should  be  then  due 
njjon  the  bond.  It  is  the  essence  of  the 
contract  of  bottomry  and  res])ondentia,* 
that  the  lender  runs  the  marine  risk,  to  be 
entitled  to  the  marine  interest.  The  rate 
of  interest,  and  the  manner  of  securing 
the  payment  of  what  may  become  due 
upon  sucii  contract,  arc  to  be  regulated 
by  the  parties.  Those  considerations  arc 
not  to  be  regarded  Iiy  the  coiu't,  excc])ting 
only  to  ascertain  whether  they  were  color- 
ai)Iy  put  forth  to  evade  the  statute  against 
usury.  Wc  do  not  iicrceive  any  thing 
in  the  facts  wliicii  would  warrant  tiiat  con- 
clusion. If  tlieshi|i  h:i(l  been  hjst  imme- 
diately after  she  sailed,  it  is  perfectly  clear 
that  the  i)laintiff'  would  have  lost  all  his 
money." 


CH.  VII.] 


INTEREST    AND    USURY. 


*417 


one  buys  an  annuity,  or  rent  charge,  even  on  exorbitant  terms, 
it  is  still  no  usury.  From  the  authorities  on  this  subject  it  may 
be  inferred,  that  the  grant  of  an  annuity,  at  any  price,  for  an 
uncertain  period,  either  upon  a  purchase  or  a  loan,  is  not  usuri- 
ous, because  the  lender  or  purchaser  incurs  the  risk  that  he  may 
never  be  entitled  to  receive  the  amount  loaned  or  paid.  If  the 
transaction  be,  in  fact  and  in  good  faith,  a  purchase,  any  actual 
contingency,  although  slight,  *\vill  prevent  the  contract  from 
being  usurious ;  and  even  if  the  annuity  granted  by  the  seller 
be  so  large  that  a  court  of  equity  will  set  it  aside  as  unconscion- 
able, yet  it  is  not  thereby  usurious.  But  if  it  appears  that  a 
loan  was  in  fact  intended  between  the  parties,  and  the  form  of 
an  annuity  was  resorted  to  merely  as  the  shape  or  method  of 
the  loan,  the  contingency  must  now  be  real  and  substantial,  and 
of  sufficient  magnitude ;  for  if  it  appears  to  be  so  slight  as  to  be 
merely  colorable,  or  such  that  the  probability  of  its  occurrence 
could  not  have  been  for  any  material  purpose  within  the  con- 
templation of  the  parties,  this  shape  of  an  annuity  will  not  pro- 
tect the  transaction  from  the  penalties  of  usury,  (e) 


(e)  Roberts  v.  Tremoille,  2  Rolle,  47  ; 
Fountain  v.  Giymes,  Cro.  Jac.  252, 
1  Bulst.  36 ;  Floyer  v.  Sherard,  Ambler, 
18  ;  Lloyd  v.  Scott,  4  Pet.  205  ;  Scott  v. 
Lloyd,  9  Pet.  418.  In  Richards  v.  Brown, 
Cowp.  770,  Lord  Mansfield  treats  an  an- 
nuity upon  the  borrower's  life,  with  a 
right,  on  his  part,  to  redeem  at  the  end 
of  three  months,  as  involving  only  the 
contingency  of  the  borrower's  dying  within 
that  three  months ;  and  after  showing 
that  the  transaction  between  the  parties 
was  essentially  a  loan,  says  :  "  It  is  true, 
there  was  a  contingency  during  the  three 
months.  It  was  that  which  occasioned 
the  doubt,  whether  a  contingency  for 
three  months  is  sufficient  to  take  it  out 
of  the  statute.  As  to  that,  the  cases  have 
been  looked  into,  and  from  them  it  ap- 
pears, that  if  the  contingency  is  so  slight, 
as  to  be  merely  an  evasion,  it  is  deemed 
colorable  only,  and  consequently  not  suffi- 
cient to  take  it  out  of  the  statute.  Here 
the  borrower  was  a  hale  young  man,  and 
therefore  we  are  of  opinion  that  there  was 
no  substantial  risk,  so  as  to  take  this  case 
out  of  the  statute."  But  it  seems  that 
where  the  right  to  redeem  is  optional  with 
the  seller,  the  purchase  is  not  usurious,  be- 


cause the  purchaser  or  lender  cannot  com- 
pel a  repayment  of  his  principal,  and  it  is 
therefore  a  risk.  King  v.  Drury,  2  Lev. 
7;  Murray  v.  Harding,  2  W.  Bl.  859. 
See  also,  'Baijley,  J.,  White  v.  Wright,  3 
B.  &  C.  273  ;  Chippindale  v.  Thurston,  1 
Moody  &  M.  411  ;  Earl  of  Mansfield  v. 
Ogle,  24  Law  J.  n.  s.  Ch.  450,  31  Eng.  L. 
«&  Eq.  357.  Since  the  introduction  of  life 
insurance,  the  purchase  of  an  annuity  may 
be  made  the  means  of  eifecting  a  loan  at 
more  than  legal  interest,  and  tliat  certainly 
secured,  as  the  purchaser  may  guard 
against  the  contingency  of  the  grantor's 
death,  by  effecting  insurance  on  his  life. 
Hardwicke,  L.  C,  Lawley  v.  Hooper,  3 
Atk.  278  ;  Blackstone,  J.,  Murray  v.  Hard- 
ing, 2  W.  Bl.  865.  And  where  an  an- 
nuity was  granted  for  four  lives,  with  a 
covenant  that  the  grantor,  within  thirty 
days  after  the  expiration  of  the  third  life, 
should  insure  the  principal  sum  upon  the 
life  of  the  survivor,  the  covenant  was  held 
not  to  make  the  transaction  usurious.  In 
re  Naish,  7  Bing.  150.  See  also,  Morris  v. 
Jones,  2  B.  &  C.  232;  Holland  v.  Pelham,  1 
Cromp.  &J.  575,1  Tyrw.  438.  It  was  an- 
ciently decided  that  annuities  for  terms  of 
years,  by  which  it  was  evident  that  erentu- 

[443] 


418 


THE   LAW   OP   CONTRACTS. 


[part  II. 


It  has  been  held  that  loans,  of  which  the  repayment  is  made 
to  depend  on  the  life  of  the  parties,  come  within  the  same  prin- 
ciple. (/)  So  also  with  regard  to  loans  to  be  repaid  on  the 
death  of  a  party,  or  post-obit  contracts,  which,  even  if  excessive 
and  oppressive,  and  on  that  ground  avoided  in  equity,  are, 
nevertheless,  not  usurious,  (g-) 


ally  more  than  the  principal  sum  and  legal 
interest  would  be  paid,  were  not  usurious, 
being  merely  purchases.  Fuller's  case,  4 
Leon.  208  ;  Symonds  v.  Cockerill,  Noy, 
151;  Cotterel  v.  Hamngton,  Brownl. 
&  G.  180;  King  v.  Drnry,  2  Lev.  7; 
Twisden,  J.,  in  Rowe  v.  Bellasevs,  1  Sid. 
182.  But  in  Doe  v.  Gooch,  3  13.  &  Aid. 
666,  upon  Sir  James  Scarlett's  saying, 
that  if  a  person  have  an  annuity  secured 
on  a  freehold  estate,  with  a  power  of  re- 
demption, such  power  will  not  make  the 
bargain  usurious,  Bat/lei/,  J.,  remarked : 
"In  that  case  the  principal  is  in  hazard, 
from  the  uncertain  duration  of  life.  Here 
it  is  in  the  nature  of  an  annuity  for  years, 
and  there  is  no  case  in  which  such  an  an- 
nuity has  been  held  not  to  be  usurious, 
where,  on  calculation,  it  appeared  that 
more  than  the  principal,  together  with 
legal  interest,  is  to  be  received."  And, 
where  an  annuity  was  granted  for  1 1  ^  years, 
payable  half  yearly,  the  seller  giving 
twenty-three  promissory  notes  for  the  half- 
yearly  payments  ;  and  it  appeared  in  evi- 
dence, that  these  payments  would  pay  the 
purchase-money  of  tiie  annuity,  and  inter- 
est, at  nearly  12/.  per  cent,  per  annum; 
the  jMaster  of  the  Rolls  said  :  "  With  re- 
spect to  this  fpiestion  of  usury,  I  shall  not 
refer  to  the  old  cases  which  have  been 
cited.  This,  in  effect,  is  an  agreement  to 
repay  the  principal  sum  of  4,000/.,  with 
interest,  by  twenty-three  instalments,  and 
as  it  appears  that  the  interest  thus  paid 
will  exceed  legal  interest,  the  transaction 
is  plainly  usurious." 

(/)  In  Burton's  case,  .5  Coke,  69,  Pop- 
ham,  C.  J.,  said  :  "  If  A  comes  to  B  to 
borrow  £100,  B  lends  it  him  if  he  will 
give  him  for  tli(!  loan  of  it  for  a  year  C2(), 
if  the  son  of  A  bo  then  alive.  'J'his  is 
usury  witiiin  the  statute! ;  for  if  it  should 
be  out  of  the  statute,  for  the  uncertainty 
of  the  iile  of  A,  the  statute  would  bo  of 
little  elfect  ;  ancl  by  tlio  sumo  reason  that 
lie  may  add  one  life,  he  may  a<ld  many, 
and  so  like  a  matlK'uiatical  liiu;  whicli  is 
divi.iihilis  ill  sim/Krdirisiltiliii."  In  accord- 
ance with  this  |)rinciple,  (Mayion's  case, 
5  Coke,   70,    in    which   Rcighnolds   lent 

[111] 


Clayton  £30  for  six  months,  to  be  paid  at 
that  time  £33  if  Reighnold's  son  should 
be  then  alive,  if  not,  to  be  paid  £27,  was 
decided  to  be  usurious.  Button  v.  Down- 
ham,  Cro.  Eliz.  643,  was  similarly  decided ; 
but  in  Bedingfield  v.  Ashley,  Cro.  Eliz. 
741,  in  which  Ashley,  for  £100,  cove- 
nanted with  Gower  to  pay  to  every  one  of 
Gower's  five  daughters,  who  should  be 
alive  in  ten  years,  £80,  this  transaction 
was  resolved  by  all  the  judges  not  to  be 
usury;  "for  it  is  a  mere  casual  bargain, 
and  a  great  hazard,  but  that  in  ten  years, 
all  the  daughters,  or  some  of  them  will  be 
dead  ;  and  if  any  of  them  be  not  alive,  he 
shall  save  thereby  £80.  But  if  it  were  that 
he  should  pay  £400  at  the  end  of  ten 
years,  if  any  of  them  were  alive,  it  were  a 
greater  doubt.  Or  if  it  had  been  that  he 
should  pay,  at  the  end  of  one  or  twoyears, 
£300,  if  any  of  the  said  children  were 
alive,  that  hud  been  usury ;  for  in  proba- 
bility one  of  them  would  continue  alive 
for  so  short  a  time,  but  in  ten  years  are 
many  alterations."  And  in  Long  & 
Wharton's  case,  3  Keble,  304,  which  was 
"  Error  of  judgment,  in  debt,  on  obliga- 
tion to  pay  £100,  on  marriage  of  the 
daughter,  and  if  either  plaintiff  or  defend- 
ant "die  before,  nothing.  The  defendant 
pleads  the  statute  of  usury,  and  that  this 
was  for  the  loan  of  £30  before  delivered, 
to  which  the  plaintiff  demurred,  and  per 
curiiiiii,  tliis  is  plain  bottomry,  and  judg- 
ment affirmed." 

((/)  The  great  case  on  the  validity  of 
post-obit  bonds,  is  that  of  Chesterfield  v. 
Janssen,  1  Atk.  301,  2  Ves.  Sr.  12.'J,  1 
Wilson,  286.  The  defendant  paid  Mr. 
Spencer,  testator  of  the  itlaiutiffs,  £.'5,000, 
an<l  took  from  him  a  bond  for  £20,000, 
conditioned  for  the  ])ayment  of  £10,000, 
to  the  defendant,  at  or  within  some  short 
time  after  the  death  of  flie  Duchess  of 
Marlborough,  in  case  Mr.  S])enccr  sur- 
vived her,  but  not  otherwise.  In  six  years 
the  Dutciicss  (lied,  and  shortly  after  her 
death  Mr.  Spencer  lencwed  the  boiul  of 
£20,000,  to  the  defendant,  with  a  condi- 
tion for  the  payment  of  the  £10,000  on 
the  next  April,  —  gave  the  defendant  a 


CII.  VII.] 


INTEREST   AND    USURY. 


419 


SECTION    XI. 

CONTRACTS  IN  WHICH  A  LENDER  BECOMES  PARTNER. 

It  is  often  attempted  to  apply  the  same  principle  to  the  law 
of  partnership,  and  to  protect  contracts  in  which  money  has  been 


warrant  of  attorney  to  confess  judgment 
against  him,  and  about  a  year  after  this 
paid  £2,000  on  the  new  bond.  Two 
years  after  the  Duciicss  of  Mai-lborough's 
death,  Mr.  Spencer  died,  and  his  execu- 
tors brought  this  bill  to  be  relieved  against 
tiie  bond  to  the  defendant,  as  unreason- 
able and  usurious,  being  independent  of 
any  other  contingency  than  that  of  a 
grandson  of  thirty  years  of  age  surviving 
a  grandmother  of  eighty,  so  that  by  reason 
of  tlie  great  age  and  infirmity  of  the 
Duchess,  and  her  consequent  approaching 
death,  the  requiring  £10,000  for  the  for- 
bearance of  £5,000,  was  more  than  legal 
interest.  The  cases  upon  the  subject  of 
loans,  upon  contingencies,  post-obits,  &c., 
down  to  the  time  of  this  case,  were  col- 
lected and  cited  by  tiie  able  counsel  em- 
ployed ;  and  Lord  Chancellor  Ilai-dwicke, 
Sir  Joh7i  Strange,  M.  R.,  and  Mr.  Justice 
Burnett,  decided  that  the  loan  to  Mr. 
Spencer  being  upon  a  contingency,  where- 
by tiie  pi-incipal  was  bond  Jide  hazarded, 
was  not  usurious ;  and  although  tlicy 
would  have  relieved  against  the  bargain 
as  unconscionable,  had  it  not  been  con- 
firmed, they  lield  that  the  execution  of 
the  new  bond,  by  Mr.  Spencer,  and  apart 
payment  upon  it,  confirmed  and  ratified 
tlie  agreement,  so  tliat  they  could  not  re- 
lieve. It  will  be  noticed  that  in  this  case 
there  was  a  possibility,  in  case  Mr.  Spen- 
cer should  die  before  the  Duchess,  that  no 
})art  of  the  money  lent  would  be  repaid  ; 
and  therefore  this  case  docs  not  go  to  the 
extent  of  deciding  that  where  there  is  a 
contract  to  pay  money,  at  all  events,  upon 
the  death  of  a  party,  such  contract  is  good 
by  reason  of  the  uncertainty  of  the  amount 
that  will  eventuallv  be  received.  But  in 
Batty  V.  Lloyd,  "l  Vera.  141,  the  de- 
fendant bad  agreed  with  the  plaintiff,  who 
had  an  estate  fall  to  her,  after  the  death  of 
two  old  women,  to  give  her  .£359,  in  con- 

VOL.  II.  38 


sideration  of  receiving  .£700  at  the  death 
of  the  two  women,  which  money  the  plain- 
tiff was  to  secure  by  a  mortgage  of  her 
reversionary  estate.  Both  the  women  died 
within  two  years  afterwards ;  and  the 
plaintiff  being  sorry  for  her  bargain, 
brought  this  bill  to  be  relieved.  Lord 
Keeper  North  said :  "  I  do  not  see  any 
thing  ill  in  this  bargain.  I  think  the  price 
was  of  full  value,  though  it  happened  to 
prove  well.  Suppose  these  women  had 
lived  twenty  years  aftei-wards,  could  Lloyd 
have  been  relieved  by  any  bill  here  ?  I 
do  not  ])elieve  you  can  show  me  any  such 
precedent.  What  is  mentioned  of  the 
plaintiff's  necessities,  is,  as  in  all  other 
cases  -^  one  that  is  necessitous  must  sell 
cheaper  than  those  who  arc  not.  If  I  liad 
a  mind  to  buy  of  a  rich  man  a  piece  of 
ground  tliat  lay  near  mine,  for  my  con- 
venience, he  would  ask  me  almost  twice 
the  value ;  so  where  people  are  constrained 
to  sell,  they  must  look  not  to  have  the 
fullest  price ;  as  in  some  eases  that  I  have 
known,  when  a  young  lady  that  has  liad 
.£10,000  portion,  payable  after  the  death 
of  an  old  man,  or  the  like,  and  she  in  the 
mean  time  becomes  marriageable,  this  por- 
tion has  been  sold  for  £6,000,  present 
money,  and  thought  a  good  bargain  too. 
It  is  the  common  case;  pay  me  double 
interest  during  my  life,  and  j-ou  shall 
have  the  principal  after  my  decease."  In 
Lamego  v.  Gould,  2  Burr.  715,  defendant 
gave  plaintiff  this  writing,  receiving  there- 
for two  guineas;  "Memorandum.  In 
consideration  of  two  guineas,  received  of 
Aaron  Lamego,  Esq.,  &c.,  I  promise  to 
pay  him  twenty  guineas,  upon  the  I'ecjase 
of  my  present  wife,  Anne  Gould."  The 
question  was  whether  it  was  usurious,  the 
woman  being  at  the  time  seventy  years  of 
age.  Tlic  court  held  it  no  usurious  loan, 
but  only  a  wager.  Matthews  v.  Lewis,  I 
Anstr.  7,  was  a  case  in  which  Lewis  upon 

[445] 


420*  THE   LAW   OF   CONTRACTS.  [PART  H. 

loaned  from  the  imputation  of  usury,  by  the  defence  that  the 
person  advancing  the  money  becomes  a  partner  with  the  person 
receiving  it,  and  liable  as  such  for  the  debts  of  the  partnership, 
and  that,  therefore,  there  is  a  substantial  risk,  which  protects 
the  transaction  from  being  *usurious,  although,  by  the  terms  of 
the  agreement,  the  party  is  to  receive  more  than  legal  interest 
for  his  money. 

In  reference  to  this  question  it  seems  in  general  clear,  that 
where  a  contract  of  partnership  is  expressly  entered  into  by  the 
parties,  or  where  money  is  advanced  and  the  party  advancing 
it  reserves,  instead  of  interest,  a  certain  proportion  of  the  profits 
of  a  certain  business,  so  that  in  the  construction  of  law  a  part- 
nership may  fairly  be  presumed  to  be  intended,  and  the  contract 
is  in  neither  case  intended  as  a  device  to  cover  a  usurious  loan, 
then  the  contract  lacks  that  essential  element  of  the  crime  of 
usury,  —  a  loan  of  money, —  and  therefore  no  usury  is  com- 
mitted ;  although  the  partner  advancing  the  money  may  and 
probably  will  receive  more  than  would  amount  to  legal  interest 
upon  it.  (//) 

And  if  it  be  clear  that  a  partnership  was  bond  fide  intended, 
and  that  there  was  no  contrivance  to  cover  a  loan,  there  is  no 
usury,  although  one  of  the  partners  covenants  that  he  will  bear 
all  the  losses  and  pay  the  other,  as  his  share  of  the  profits, 
a  certain  sum,  which  amounts  to  more  than  legal  interest 
on  that  other  share  in  the  capital  ;  for  here  is  still  no  loan  of 
money.  (/) 

But  wliere  the  contract  is  for  a  loan  of  money,  in  the  form  or 
under  the  disguise  of  a  partnership,  and  for  its  use  the  borrower 
contracts  to  pay  legal  interest,  and  also  a  certain  proportion  of 
the  profits  of  a  trade  or  business,  this  is  usurious,  although  the 
lender  may  be  made  lial)lo,  as  a  ])artner,  for  the  debts  incurr(>d  by 
the  borrower  in  the  course  of  tlie  trade  or  business ;  because  if  ho 

a    loan    of    .£1,000    {^iivc    pusl-ohils    for  lmr;::iiii,  iiu  cxtorliuniiij;  ;)o.s7-o/;/<,  but  no 

i;3,200    j)ayiil)le    on    tlic  dcaili    of  I'itlicr  usniv." 

Lewis's    mother    or    fjnindinotlnr,    from  (//)  I'V^rcdiiy  /•.  Ilonlcrn,  1  .Tacob,   144; 

whom  lie  was  cntitlerl    to   lar;:('  pnjpcrty,  Morrissct  r.  Kiuix,  '2  Burr.  891. 

and    his  (^raiidmoilier  iicin;^  <i;,dity-scv(ii         (/)  lOndirby  /•.  (iiljiin,  5  J.  B.  Moore, 

years  of  a(;e.     'J'lic  court  said:  "This  is  572,  1   Duwl.  iS  K.  570,  5   15.  &  Aid.  954; 

nothing    like    usury.     It    in   a    ealehiuf^  Fercday  r.  llordurn,  1  Jacob.  144. 

[440] 


CH.  VII.]  INTEREST   AND    USURY.  *421 

is  SO  compelled  to  pay,  he  still  has  his  remedy  over  against  the 
borrower,  and  therefore  runs  no  ultimate  risk,  except  that  of 
the  borrower's  insolvency,  which,  as  we  have  seen,  is  not 
enough.  (7) 


*  SECTION    XII. 

OF   SALES    OF   NOTES   AND    OTHER   CHOSES   IN   ACTION. 

It  is  quite  settled  that  negotiable  paper  may  be  sold  for  less 
than  its  face,  and  the  purchaser  can  recover  its  whole  amount 
from  the  maker  when  it  falls  due,  although  he  thereby  gets 
much  more  than  legal  interest  for  the  use  of  his  money ;  and 
this  principle  is  extended  to  bonds  and  other  securities  for 
money  loaned. 

The  reason  on  which  the  rule  rests  is  obvious.  For  such 
paper  is  property ;  and  there  is  no  more  reason  why  one  may 
not  sell  notes  which  he  holds,  at  a  price  made  low  either  by 
doubts  of  the  solvency  of  the  maker,  or  by  a  stringency  in  the 
money  market,  than  why  he  should  not  be  able  to  sell  his  house 
or  his  horse  at  a  less  than  the  average  price.  But  the  purchase 
must  be  actual  and  made  in  good  faith,  and  not  merely  color- 
able, and  intended  to  give  efficacy  to  a  usurious  contract.  For 
if  the  mere  form  of  a  sale  was  sufficient,  it  is  obvious  that  the 
usury  laws  would  lose  all  their  force ;  for  the  lender  need  only 
refuse  to  lend  at  all,  and  propose  instead,  to  buy  the  note  of  the 
borrower.  It  is,  therefore,  important  to  discriminate  between 
these  two  cases ;  that  is,  between  a  loan,  in  the  form  of  a  sale, 
and  an  actual  sale  and  purchase.  And  this  discrimination  is 
very  difficult ;  nor  is  it  quite  certain  from  authority  what  rules 
govern  this  question.  We  may  say  that  if  the  payer  lends,  and 
the  borrower  gives  his  note  for  legal  interest,  the  lender,  having 
thus  acquired  the  note,  may  afterwards  sell  it  for  the  most  he 
can  get,  and  it  is  obvious  that  the  lender  takes  nothing  usurious  ; 
and  if  he  loses  by  the  second  transaction,  and  the  purchaser 

ij)  Morse  v.  Wilson.  4  T.  R.  353 ;  Huston  v.  Moorhead,  7  Barr,  45. 

[447] 


422*  THE   LAW    OF   CONTRACTS.  [PART  II. 

gains,  it  is  a  loss  and  gain  on  a  purchase,  and  not  on  a  loan. 
And  both  on  authority  and  on  general  principles,  it  would  seem 
that  the  first  owner  of  the  note  must  pay  for  its  full  amount,  or 
else,  though  he  may  say  he  purchases  it  of  the  maker,  in  fact 
he  only  lends  on  his  security,  and  that  usuriously.  (k)  Again, 
if  this  be  *true  where  the  parties  deal  directly  together,  it  should 
be  equally  true  where  they  deal  through  an  agent.  And  then 
it  would  follow,  that  if  the  maker,  whom  we  may  suppose  to 
be  one  of  our  railroad  corporations,  issues  its  notes  or  bonds, 
and  gives  them  to  a  broker,  to  raise  money  on  them,  for  the  use 
of  the  corporation,  and  the  broker  sells  them  to  his  customers 
for  less  than  the  face,  or  par  value,  such  a  transaction  would  be 
a  loan,  and  a  usurious  loan,  from  those  customers  to  the  cor- 
poration. And  if  the  paper  was  indorsed  or  assigned  to  any 
person,  without  consideration,  and  without  giving  any  owner- 
ship of  the  paper  to  him,  and  only  for  the  purpose  of  facilitating 
the  raising  of  money,  or  concealing  the  real  character  of  the 
transaction,  it  would  still  fall  within  the  same  principles,  and 
be  only  a  loan.  It  is  in  this  way  we  should  speak  of  this  ques- 
tion, on  principle ;  but  in  practice  it  becomes  complicated  and 
embarrassed  by  the  further  question,  how  far  the  knowledge, 
understanding,  or  intention  of  the  party  who  gives  the  money 
on  the  paper,  goes  to  determine  whether  it  be  a  purchase  or  a 
loan.  For  example,  if,  in  the  last  case  supposed,  lie  who  ad- 
vances the  money  becomes  the  first  owner  of  the  note,  does  this 
of  itself  make  it  a  usurious  loan  to  the  maker,  or  may  the 
advancer  of  the  money  insist  upon  the  fact  that,  in  point  of 

(/,)  The  following  Amcric.in  authorities  32G  ;  ITolfonl  r.  Blatclifonl,  2  Sandf.  Ch. 
(letcriiiiiic  tliat  where  a  note  has  been  fairly  14'.);  Iiif^alls  v.  Lee,  9  Barh.  647.  Par- 
executeil,  and  there  is  no  usury  between  .w/j.s,  C.  J.,  Chureiiillr.  Suter,  4  Mass.  162  ; 
the  ori^Miial  jiarties,  so  that  the  payee  lias  Lh)y(l  t\  Kcaeh,  2  Conn.  179  ;  Tuttic  v. 
acquired  a  h't,'al  rif,dit  to  sue  the  maimer  Chu-i<,  4  Conn.  l.'5;5;  King  r.  Jolinson,  ;i 
ujion  tiie  note,  lie  may  then  dispose  of  it,  MeCord,  36,') ;  Mus<rrovc  v.  Gibbs,  1  Dall. 
at  any  rate  of  disrount  from  its  face,  and  217;  Wycoff  v.  Lonshead,  2  Dall.  92; 
the  i)urr!iaser  will  have  a  ri{;hl  to  enforce  French  v.  Grindle,  1.5  Me.  163;  Farm- 
it  for  its  full  amount  against  the  maker,  cr  v.  Scwall,  16  Me.  4.'')6  ;  Lane  r. 
Ni<hr)ls  r.  Fearson,  7  I'd.  1(J7  ;  Moncuro  Steward,  20  Mc.  98;  Ilansborough  v. 
r.  Drrmolt.  13  I'ct.  345;  Jones,  Ch.,  Baylor,  2  ]\Iunf.  36 ;  Shackleford  c.  Mor- 
TowcU  r.  Waters,  8  Cowen,  68.') ;  Kicc  v.  riss,  1  J.  J.  Marsh.  497  ;  Oldham  v.  Tur- 
Mathcr,  3  Wend.  6.');  Cram  i\  Hendricks,  ner,  3  B.  Mon.  67  ;  Metcalf  ?•.  rilcher,  6 
7  Wend.  .'■)69  ;  Munn  v.  Commission  Co.  B.  Mon.  .'529;  May  ?•.  Campbell,  7  llamph. 
ir>  Johns.  .').');  llapelye  ?-.  Anderson,  4  4.'')() ;  Saltmarsh  r.  I'lanters  &  Merchants 
Hill,  472 ;  Holmes  (•.  Williams,  10  I'aigo,  Bank,  17  Ala.  768. 

[.||,S] 


CH.  VII.]  INTEREST   AND    USURY.  *423 

form,  he  purchased  the  paper,  and  that  he  did  not  in  reality- 
know,  and  could  not  have  inferred,  from  any  of  the  circum- 
stances of  the  case,  that  the  party  from  whom  he  bought  was 
not  either  the  owner  or  the  agent  of  the  owner  of  the  note,  for 
valuable  consideration  ?  Many  reasons  would  lead  us  to  favor 
this  defence;  and  to  hold  that  although,  if  a  note  be  *  given 
upon  the  reception  of  much  less  than  its  amount,  and  be  there- 
fore usurious  as  between  the  first  parties,  it  carries  this  taint 
with  it  into  the  hands  of  subsequent  bond  fide  holders,  yet  be- 
cause, in  order  to  constitute  a  usurious  contract  of  this  kind  a 
similar  intent  must  cooperate  in  both  parties  to  the  loan,  the 
fact  that  the  maker  of  the  note  or  bond  and  the  agent  to  whom 
he  delivered  it  to  dispose  of,  might  intend,  in  contemplation  of 
law,  to  commit  usury,  would  not  supply  the  want  of  such  in- 
tent on  the  part  of  the  party  intending  to  make  a  purchase,  and 
who  had  no  knowledge  or  intention  of  a  loan.  On  the  whole, 
therefore,  we  are  inclined  to  give,  as  the  prevailing  rule,  that 
where  one  supposes  himself  to  be  purchasing  negotiable  paper 
of  an  owner,  and  is  without  notice  to  the  contrary,  either  actual 
or  derivable  from  the  circumstances  of  the  case,  this  advancer 
of  the  money  would  have  all  the  privilege  and  safety  of  a  pur- 
chaser. (/)  There  are  no  authorities  within  our  knowledge, 
which,  upon  a  fair  construction,  go  beyond  this ;  although  it 
may  be  true  that  some  of  those  which  we  have  above  cited 
might  almost  justify  the  conclusion,  that  if  the  paper  be  pur- 
chased in  form,  the  maker  cannot  object  on  the  ground  that  it 
was  a  usurious  loan.  But  it  is  not  easy  to  recognize  'any  prin- 
ciples which  would  go  further  than  to  extend  the  attributes  of 
a  purchase  to  any  party  who  believed  in  good  faith  that  he  was 
a  purchaser. 

In  speaking  thus  far  of  the  sale  of  notes,  we  have  had  partic- 
ular reference  to  those  which  were  transferred  by  delivery  or  by 
indorsement  without  recourse.  Another  question  has  been 
raised,  however,  when  the  transfer  was  made  by  an  indorse- 
ment which  left  the  indorser  liable  if  prior  parties  did  not  pay ; 

(/)  This  view  is  supported  by  Law  v.  riss,  1  J.  J.  Marsh.  497 ;  Hansbrough  v. 
Sutherland,  5  Gratt.  357 ;  Whitworth  v.  Baylor,  2  Munf.  36  Holmes  v.  Williams, 
Adams,  5  Rand.  333 ;  Shaclileford  v.  Mor-     10  Paige,  326. 

38  *  [  449  ] 


424*  THE  LAW  OF  CONTRACTS.  [PART  IL 

and  this  question  is,  whether  the  transaction  did  not  then  be- 
come usurious,  if  the  note  was  sold  for  less  than  its  face,  be- 
cause the  indorser  would  then  be  bound  to  pay  a  larger  sum 
than  that  which  he  had  received,  with  lawful  interest  upon  it. 
The  cases  upon  this  subject  are  somewhat  conflicting,  but  the 
difficulty  has,  we  think,  arisen  from  *  disregarding  the  peculiar 
character  of  negotiable  paper,  and  also  from  forgetting  that  the 
whole  law  of  usury  is,  in  its  nature,  penal,  and  therefore  to  be 
strictly  construed.  If  one  transfer  a  note  by  indorsement,  he 
does  two  things ;  he  transfers  the  note,  and  he  also  becomes 
liable  for  its  payment ;  but  the  latter  is  incidental  to  the  former. 
The  substance  of  the  transaction  is  a  transfer  of  the  property  in 
the  note,  a  sale,  and  nothing  more  than  a  sale  ;  and  therefore 
we  say  that  the  price  paid  has  nothing  to  do  with  the  question, 
as  one  of  usury.  But  besides  this,  it  is  important  to  observe 
that  such  a  transaction  can  be  made  usury  only  by  a  very  large 
construction  of  that  word  ;  no  money  is  loaned  or  borrowed,  or 
forborne,  in  any  way  whatever ;  it  cannot  therefore  be  usury, 
within  any  accuracy  of  interpretation.  We  do  not  mean  to  say, 
of  course,  that  actual  and  intended  usury  could  be  successfully 
covered  by  a  mere  disguise  of  this  kind.  In  case  of  such  an 
attempt  it  would  be  declared  a  usurious  loan,  because  it  would 
be  such,  and  would  have  the  effect  of  usury ;  but  if  it  were  a 
bond  fide  sale  of  the  note,  the  indorsement,  and  the  liability 
derived  from  it,  would  not,  in  our  judgment,  impart  to  the 
transaction  a  usurious  character. 

A  further  question  may  then  he  raised ;  if  the  holder  sues 
the  iiidorser,  can  he  recover  the  face  of  the  note,  or  only  what 
Ik;  })ai(l,  with  legal  interest?  We  are  of  opinion  that  he  may 
recover  the  amount  upon  the  face  of  the  note,  from  his  indorser, 
as  well  as  from  any  prior  party.  It  is  Ihis  amount  he  buys;  it 
is  this  wliicli  lie  h;i(|  a  right  to  buy,  and  which  the  indorser  had 
a  right  to  sell,  and  a  right  to  guarantee. 

Uy  some  auihorilies  it  has  been  held  that  the  indorsement  of 
the  note,  by  the  nominal  seller,  or  the  giving  of  security  in  any 
way  for  its  paynicni.iu  case  of  the  failure  of  the  party  ])rimarily 
Jiable,  makes  tin;  transaction  usurious,  as  matter  of  law.  These 
cases  seem  to  proceed  upon  the  principle,  that  there  is  no  sub- 
[  4.30  ] 


CH.  VII.]  INTEREST   AND   USURY.  *425 

stantial  reason  why  the  holder  of  the  paper  should  dispose  of  it 
for  less  than  its  face,  when  he  may  be  called  upon  to  repay  its 
full  amount;  and  therefore  the  transaction  must  be  regarded  as 
intended  by  the  parties  to  be  an  *actual  loan,  upon  usurious  in- 
terest, (m)  According  to  the  weight  of  authority,  however, 
where  there  is  sufficient  evidence  that  the  transaction  was  a 
sale,  and  not  a  covert  loan,  the  fact  that  the  seller  indorsed  the 
paper,  is  not  considered  as  changing  the  character  of  the  con- 
tract, and  making  it  usurious.  Nevertheless,  these  cases  seem 
to  admit,  that  if  the  purchaser  could  recover  from  the  seller  and 
indorser  the  full  amount  of  the  face  of  the  paper  sold,  the  con- 
tract would  be  a  loan,  and  usurious  ;  and  they  therefore  decide 
that  the  purchaser  is  limited  in  his  action  against  the  seller  and 
indorser,  to  a  recovery  of  the  amount  actually  paid  by  him, 
with  lawful  interest  thereon.  («)  We  think,  however,  that  these 
cases  proceed  upon  a  wrong  principle,  and  the  courts  seem  to 
be  misled  by  a  difficulty  in  the  application  of  their  principles  to 
practice.  If  a  payee  of  a  note  actually  sell  it  to  a  purchaser, 
with  his  indorsement,  the  whole  transaction,  upon  analysis, 
will  be  found  to  be  this  :  It  is  not  a  loan  of  money,  but  the 
purchaser  of  the  note  buys  a  right  to  sue  the  maker  of  the  note, 
and  also  an  engagement  for  value  on  the  part  of  the  seller,  that 
the  maker  shall  pay  the  face  of  the  note.  There  is  no  more 
loan  in  the  case,  than  in  the  sale  of  goods,  with  a  warranty  that 
they  shall  be  fit  for  the  purposes  for  which  they  are  bought.  It 
may  be  true  that  he  can  get  much  more  for  the  note  if  he  in- 
dorses, than  if  he  does  not ;  and  it  may  be  true  that  he  will  get 
more  for  the  goods  if  he  warrants  them,  than  if  he  does  not ; 
but  in  neither  case  does  this  circumstance  convert  the  sale  into 
a  loan.  It  often  happens  that  the  seller  is  known  to  be  in  in- 
solvent or  very  precarious  circumstances,  without  any  probabil- 
ity of  being  able  to  refund,  in  case  of  the  maker's  default ;  here 


(?n)  Ballinger  v.  Edwards,  4  Ired.  Eq.  v.  Lee,  9  Barb.  647  ;  French  v.  Gwindle, 

449;  McEhvec  v.  Collins,  4  Dev.  &  B.  15  Me.    163;   Farmer  v.    Sewall,  16  id. 

209  ;  Wahcorth,  Cli.,  Cram  v.  Hendricks,  456  ;  Lane  v.  Steward,  20  id.  98 ;  Brock 

7  Wend.   573.      Coiven,   J.,    Rapelye   v.  v.  Thompson,  1  Bailey,  322.     See   also, 

Anderson,  4  Hill,  472.  Freeman  v.  Brittin,  2  Harrison,  191  ;  Met- 

(?0  Cram  v.  Hendricks,  7  Wend.  569;  calf  v.  Pilchcr,  6  B.  Mon.  530;  May  v. 

Rapelye  v.  Anderson,  4  Hill,  472 ;  Ingalls  Campbell,  7  Humph.  450. 

[451] 


426*  THE  LAW  OF  CONTRACTS.  [PART  IL 

the  value  of  the  paper  consists  of  the  indorser's  liability  to  pay ; 
but  it  would  be  difficult  to  show  that  ev§n  this  transaction  was 
essentially  a  loan  to  the  indorser.  Undoubtedly,  a  usurious 
transaction  *might  seek  the  disguise  of  this  form  of  contract,  as 
well  as  of  any  other.  And  neither  this  nor  any  disguise  should 
protect  it.  But  we  speak  of  actual  sales  of  notes  and  bills,  by 
indorsement,  in  good  faith.  And  of  these,  the  preceding  con- 
siderations have  led  us  to  the  conclusion  we  have  above  stated. 
We  go,  perhaps,  beyond  the  authorities,  but  not  beyond  the 
practice ;  and  we  cannot  but  think  that  the  rule  of  law  should 
be,  that  in  case  of  an  actual  sale  of  a  note,  at  a  discount,  with 
an  indorsement  by  the  seller,  the  indorser  should  be  held  liable 
for  the  full  amount,  on  the  maker's  default. 

These  considerations  lead  us  to  those  cases  where  one  in- 
dorses or  gives  accommodation  paper,  for  a  premium  paid  him, 
which  may  be  an  outright  sum,  or  a  percentage.  Such  a  trans- 
action has  been  thought,  by  many  courts  and  judges,  to  be 
usurious,  if  the  sum  paid  exceed  six  per  cent,  on  the  notes  in- 
dorsed or  given ;  but  we  think  it  is  not  so,  on  the  plain  ground 
that  a  man  may  sell  his  credit,  as  well  as  any  thing  else  that  he 
has,  and  may  sell  it  for  the  most  that  he  can  get. 

The  earlier  cases  on  this  subject  held  that  upon  a  sale  of 
one's  credit  in  this  manner,  the  party  indorsing  or  guaranteeing 
might  receive  a  compensation  for  so  doing,  provided  it  did  not 
exceed  lawful  interest  upon  the  amount  of  the  debt  guaranteed, 
or  the  credit  sold,  (o)  But  if  a  transaction  of  this  kind  can  be 
regarded  as  such  a  sale  of  credit  as  that  a  price  may  be  taken 
therefor  by  the  seller  as  his  payment,  we  do  not  sec,  upon  prin- 
ciple, any  limit  to  the  amount  which  may  be  taken,  other  than 
that  wliich  belongs  to  all  sales.  When  a  party  indorses  a  note, 
or  guarantees  a  debt,  as  surety  for  another,  he  actually  advances 
no  money,  and  is  therefore  at  no  pecuniary  loss,  until  compelled 
by  reason  of  his  suretyship,  to  pay  the  debt  for  which  he  was 
bound.  If  he  pays  tiiis,  the  lav^--  creates  at  once,  an  obligation 
upon  the  party  whose  debt  he  pays,  to  reimburse  to  him  the 


(o)  Dcy  r.  Dmilinni,  2Jolms.  Cli.  18'2;     ?•.  Boy.l,    1    TTolF.    Ch.    294;    Mooro    v. 
fanning  v.  Diiiiliam,  5  id.  122;  IJuIlock     Viinrc,  3  Dtum,  3G1. 

[  4u2  ] 


CH.  VII.]  INTEREST   AND    USURY.  *427 

sum  he  pays  with  legal  interest.  And  if  the  sum  originally  re- 
ceived by  a  party  thus  selling  his  credit,  is  to  be  considered  as 
interest,  added  to  the  amount  for  which  the  law  gives  him  this 
obligation,  there  is  a  larger  amount  secured  for  interest,  than  the 
legal  interest,  *whatever  be  the  amount  paid  for  the  credit ;  for 
all  that  is  paid  is  excess.  On  this  ground,  therefore,  the  bargain 
is  usurious,  whether  more  or  less  is  paid.  But  if  the  transaction 
is  to  be  considered  as  a  sale  of  the  credit  of  the  party  indors- 
ing ;  which  credit  is  his  property,  to  dispose  of  as  he  pleases, 
and  property  which  the  purchaser  may  profitably  and  lawfully 
buy,  the  price  paid  and  received  must  be  considered  as  entirely 
independent  of  the  resulting  right  of  the  indorser  or  guarantor 
to  get  indemnity  if  he  can,  for  whatever  he  is  obliged  to  pay. 
It  is  then  no  loan,  but  a  sale,  which,  in  respect  to  the  price  that 
may  be  paid,  is  like  any  other  sale  ;  and  this  view,  we  think,  is 
sustained  by  the  later  and  better  authorities,  (p) 

In  the  case  of  cross  notes,  where  A  gives  his  note  to  B,  and 
B  gives  his  note  to  A,  but  A's  credit  is  much  better  than  B's, 
and  it  is  a  part  of  the  bargain  that  the  notes  from  B  to  A  shall 
be  greater  than  the  notes  from  A  to  B,  or  that  A  shall  have  any 
sum  by  way  of  a  premium  on  the  transaction ;  this  has  been 
considered  usurious ;  but  not,  as  we  think,  on  sufficient  grounds. 
Here,  as  before,  we  deem  it  a  lawful  sale,  of  one's  credit,  and 
neither  borrowing  nor  lending,  nor  forbearing  money  in  any 
way.  (q)  We  repeat,  however,  the  remark,  to  avoid  misconcep- 
tion, that  we  speak  only  of  bond  fide  transactions  of  this  kind, 
and  not  of  those  which  are  used  as  mere  pretences  for  actual 
usury.  This,  however,  would  generally  be  a  question  of  fact 
for  the  jury,  and  not  a  question  of  law. 

(p)  See  Ketchum  z'.  Barber,  4  Hill,  224  ;  (7)  Sec  Dunham  ?>.  Gould,  16  Johns. 

Merer.  Hovviand,  4  Denio,  264;  Dry  Dock  367;  Dry  Doek  Bank  v.  American  Life 

Bank  i'.  American  Life  Ins.  &  Trust  Co.  Ins.  &  Trust  Co.  3  Comst.  344. 
3  Comst.  344. 

[453] 


428*  THE  LAW   OF   CONTRACTS.  [PART  II. 


SECTION    XIII. 


OP   COMPOUND   INTEREST. 


Contracts  for  compound  interest  are  sometimes  said  to  be 
usurious,  but  this  may  not  be  considered  quite  certain.  "We 
are  aware  of  no  case,  in  England  or  in  this  country,  in  which 
*a  contract  to  pay  compound  interest  has  been  held  usurious,  so 
as  to  become  totally  invalid,  or  in  which  the  actual  reception  of 
compound  interest  has  been  held  to  be  a  commission  of  the 
crime  of  usury,  and  punishable  as  such.  Indeed,  it  is  difficult 
to  see  how  this  could  be  the  case.  If  A  lend  to  B  one  hundred 
dollars,  for  two  years,  at  six  per  cent,  legal  interest,  payable 
annually,  and  it  is  agreed  that  if  B  does  not  pay  the  interest  at 
the  end  of  the  first  year,  it  shall  be  considered  as  principal,  and 
added  to  the  amount  of  the  loan  from  that  time  (which  is  a 
contract  for  compound  interest),  and  the  interest  not  being  paid 
annually,  A  becomes  entitled  at  the  end  of  the  two  years  to  re- 
ceive, and  does  receive,  under  the  agreement,  one  hundred  and 
twelve  dollars  and  thirty-six  cents,  instead  of  one  hundred  and 
twelve  dollars,  the  principal  and  simple  interest,  he  does  not 
receive  more  than  after  the  rate  of  six  dollars  per  year  for  the 
forbearance  of  one  hundred,  but  has  received  exactly  that  sum, 
and  six  per  cent,  legal  interest  upon  another  sum  which  B  was 
under  a  legal  obligation  to  pay  him,  for  which  B  might  have 
been  sued,  and  for  the  forbearance  of  which  he  has  agreed  to 
pay  its  legal  value.  Accordingly,  courts  do  not  generally  de- 
clare such  contracts  usurious,  and  the  extent  to  which  they 
have  gone  is  Ihat  of  refusing  to  enforce  a  contract  to  pay  inter- 
est thereafter  to  grow  due  ;  and  they  have  done  this,  not  upon 
the  ground  of  usury,  hut  ratlit^r  as  a  "  ruh:  of  jiublic  policy,"  be- 
cause such  agreements  "  .savor  of  usury,"  and  "  lead  to  oppres- 
sion." (/•) 

(r)  ()>siilston  I'.  Yarmoutli,  2  Sulk,  ("liaiiihcrs  r.  CioUlwin,  9  Vcs.  271  ;  Dawes 
44'J  ;  Wiiriiij^  i'.  Cunlifle,  1  Vus.  Jr.  'J'J ;     v.  I'iiiiicr,  2  Camp.  480;  Doc  v.  Warren, 


CH.  Vir.]  INTEREST  AND   USURY.  *429 

On  the  other  hand,  if  an  agreement  is  made  to  convert  inter- 
est already  due  into  principal,  or  if  accounts  between  parties 
are  settled  by  rests,  and  therefore  in  effect  upon  the  principle  of 
compound  interest,  which  may  be  done  by  an  express  account- 
ing, (s)  or  under  a  custom  of  forwarding  *accounts  quarterly, 
half  yearly,  or  yearly,  to  the  debtor,  who  acquiesces  in  them  by 
his  silence ;  (t)  these  transactions  are  valid,  and  sanctioned  by  the 
law ;  and  such  a  method  of  computation  is  sometimes  even 
directed  by  courts,  (u)  If  compound  interest  has  accrued,  even 
under  a  prior  bargain  for  it,  and  been  actually  paid,  it  cannot 
be  recovered  back,  (v)  nor  are  the  penalties  affixed  to  the  crime 
of  usury  annexed  to  such  taking ;  and  if  a  note  be  given  for 
such  payment,  the  note  has  a  sufficient  legal  consideration  to 
sustain  an  action  upon  it.  (iv) 

We  are  not  sure  that  contracts  to  pay  interest  upon  interest 
may  not  derive  illustration  from  a  comparison  with  those,  upon 
which  the  law,  as  we  have  seen,  is  quite  well  settled,  where  one 
engages  to  pay  money  at  a  certain  time,  and  then  binds  him- 
self to  pay  a  further  sura,  exceeding  interest,  if  the  principal 
sum  be  not  duly  paid ;  this  is  certainly  not  usurious.  One  of 
the  reasons  for  this  rule  is,  that  the  penalty  will  be  reduced,  in 
equity,  to  the  amount  of  the  debt;  but  another,  and  as  we 
think,  the  principal  reason  is,  that  the  debtor  may  pay  his  debt 
when  it  is  due,  and  thus  avoid  the  contract  which  obliges  him 
to  pay  a  penalty ;  so  that  there  is,  in  such  case,  no  absolute 
contract  for  the  payment  of  more  than  legal  interest.  Now, 
one  who  promises  to  pay  a  debt  at  a  certain  time,  and  interest 
to  be  compounded  as  it  falls  due,  can,  by  payment  of  the  debt  or 
of  the  interest  when  it  falls  due,  always  avoid  the  compounding. 

7    Greenl.   48;   Hastings   v.   Wiswall,    8  r.  Mather,  2  Yes.  15;  Bruce  v.  Hunter, 

Mass.  455;    Camp   v.   Bates,    11    Conn.  3    Camp.   466;   Moore   v.   Voughton,    1 

487  ;    Mowry  v.   Bishop,    5   Paige,   98  ;  Stark.  487  ;  Bainbridge  v.  Wilcox,  1  Bald. 

Childers  v.  JDeane,  4  Rand.  406  ;    Con-  536.     Sec  also,  Pinhorn  v.   Tuckington, 

necticut  v.  Jackson,    1    Johns.   Ch.    13;  3  Camp.  467. 

Wilcox  V.  Howland,  23  Pick.  169.  (u)  See  vol.  1,  p.  103  (b). 

(s)    Ossulston    V.   Yarmouth,    2    Salk.  (r)  Dow  v.  Drew,  3  N.  H.  40 ;  Mowry 

449 ;  Tarleton  v.  Backhouse,  G.  Cooper,  v.  Bishop,  5  Paige,  98. 

Ch.  231 ;  jMowry  v.  Bishop,  5  Paige,  98 ;  (w)  Otis  v.  Lindscy,  1  Fairf.  316  ;  Wil- 

Fobes   V.    Canttield,   3   Ham.    18;    Chil-  cox  r.  Howland,  23   Pick.  169;  Kellogg 

ders  V.  Dcane,  4  Rand.  406.  v.  Hickok,  1  Wend.  521  ;  Hill  v.  Meeker, 

(0    Caliot   V.    Walker,   2   Anst.   496  ;  23  Conn.  592. 
Eaton  V.  Bell,  5  B.  &  Aid.  34 ;  Morgan 

[  455  ] 


430*  THE   LAW   OF   CONTRACTS.  [PART  U. 

These  differences  between  contracts  for  compound  interest 
and  usurious  agreements,  clearly  establish  that  the  former  are 
not  in  their  nature  the  same  with  the  latter.  If  they  were  so,  a 
contract  to  pay  compound  interest  might  render  the  whole 
agreement  into  which  it  was  introduced  invalid,  so  that  not 
even  the  principal  nor  simple  interest  could  be  recovered,  and 
upon  the  actual  payment  of  compound  interest  it  could  be  re- 
covered by  the  payer,  and  no  subsequent  agreement  *could  give 
such  a  contract  any  validity  or  effect ;  all  of  which  we  have 
seen  is  not  the  case. 

Upon  the  whole,  although  it  seems  to  be  well  settled,  that 
compound  interest  cannot  be  recovered,  as  such,  even  if  it  be 
expressly  promised,  (x)  w.e  are  inclined  to  think,  that  the  only 
rule  of  law  against  the  allowance  of  compound  interest  is  this ; 
that  courts  will  not  lend  their  aid  to  enforce  its  payment,  unless 
upon  a  promise  of  the  debtor  made  after  the  interest,  upon 
which  interest  is  demanded,  has  accrued ;  and  this  rule  is 
adopted,  not  because  such  contracts  are  usurious,  or  savor  of 
usury,  unless  very  remotely,  but  upon  grounds  of  public  policy, 
in  order  to  avoid  harsh  and  oppressive  accumulations  of  inter- 
est. And  for  the  reason  that  this  aversion  of  our  law,  to  allow 
money  to  beg-et  money,  has  of  late  years  very  much  diminished, 
we  do  not  think  it  absolutely  certain,  that  a  bargain  in  advance 
for  the  payment  of  compound  interest,  in  all  its  facts  reasonable 
and  free  from  suspicion  of  oppression  would  not  be  enforced  at 
this  day  in  some  of  our  courts.  {//) 

(x)    Ossulston   r.    Yixrmoutli,  2    Salk.  payable  at  certain  fixed  times,  it  lias  been 

449;  Wariiij,'  v.  Cunliftb,  1   Vcs.  Jr.  99;  lieJd  tiiat  interest  may  be  cliargci!  upon 

Connecticut  )'.  Jaclison,  1  Johns.  Cli.  13;  the  interest,  from  tlie  time  it  is  payal)le. 

Mowry  V.  Ijisliop,  .'j  Paif^e,  98;  llastin,<;s  Kennon  v.  Dickens,  1  Taylor,  231,  Cam. 

V.  Wiswall,  8  M:iss.  4.").5;  Ferry  v.  Ferrv,  &  N.  357  ;    Gibhs  v.  Chisolm,  2  Nott  & 

2  Cush.  92  ;  Uo(ks  r.  JMythc,  2  B.  INIoii.  McC.  38  ;  Singleton  ?-.  Lewis,  2  Hill,  S. 

330;    Childcrs  v.   Deanc,"   i    Kami.  4()r) ;  C  408;    Doi;:;'y.  Barkley,  3  Kicli.   12."); 

Doe  V.  Warren,  7  Crcenl.  48.     But  .see  Tcirce  r.  Kowe,  1   N.  II.   179.     But  it  is 

Pawling'  /;.  I'awiinK,  4  Yeates,  220.     But  held  otherwise  in  Ferry  c.  Firry,  2  Cusli. 

annual  rests  in  merchants'  accounts,  arc  92  ;  Doc  v.  Warren,  7  GrecnI.  48.     Sec 

allowed.     Stou;,'hlon  ?».  Lynch,  2  Johns.  1  American  Lending;  Cases,  341,  371. 
Ch.   210,   214;    Barclay  ?•.    Kcnncdv,  3         (v)  Si'c    Wnodhnn/,  ,].,  Pcirce  r.  Howe, 

Wash.   C.   C.   3.')0;   li.ickus  v.  Mimir,  .3  1    N.    11.    1S3;    I*aw!iii;,r  ,..    Piuvlini':,   4 

Calif.  231  ;  hut  not  after  muluid  diaJin^s  Vi'aics,    220;    Kcnuon   r.  Dickens,   Tiiy- 

hnvc    ceased.       Dcmiiston    r.    Imlnic,    .3  lor,    2.35;    (Ijlilis    r.    ('hisolm,   2    Nutt   Ci. 

■Wnsli.   C.   C.  39(1,  '102  ;   Von   lliui-rt  r.  iMcf).   38;    'ralli.ifcrro  n.  Kiii^',  9  Dana, 

I'ortcr,  II  Mcf.  210.     In  cases  where  il  is  331. 
exprcHslv  siijiulated  that  interest  Khali  hu 

'[450] 


CH.  YII.] 


INTEREST  AND   USURY. 


-431 


We  add  the  following  Table  from  the 
Bankers'  Magazine  for  January,  1855, 
containing   a   statement,  in  a  condensed 


form,  of  the  laws  of  the  several  States  in 
relation  to  interest  and  usury  :  — 


Legal  Rate  of  Interest.       Per  cent.        Penalty  for  Violation  of  Usury  Laws. 


Maine,    . 

New  Hampshire, 

Vermont, 

Massachusetts, 

Rhode  Island, 

Connecticut, 

New  York, 

New  Jersey, 

Pennsylvania, 

Delaware,  . 

Maryland, 

Virginia,    . 

North  Carolina, 

South  Carolina, 

Georgia, 

Alabama,    . 

Arkansas, 

Florida, 

Illinois,  . 

Indiana, 

Iowa, 

Kentucky,  . 

Louisiana, 

Michigan,  . 

Mississippi, 

Missouri,    . 

Ohio,      . 

Tennessee, 

Texas,    . 

Wisconsin, 

California, 


6 
6 
6 
6 
6 
6 
7 
6 
6 
6 
6 
6 
6 
7 
7 
8 
6 
6 
6 
6 
6 
6 
5 
7 
6 
6 
6 
6 
8 
7 
10 


There  are  various  States  that  permit  a 
higher  rate  of  interest  on  special  contracts, 
namely:  —  In  Vermont,  7  per  cent,  may 
be  charged  upon  railway  bonds  ;  in  New 
Jersey,  7  per  cent,  may  be  charged  in 
Jersey  City  and  the  township  of  Hoboken. 
In  Maryland,  the  penalty  is  a  matter  of 
scjme  doubt,  in  consequence  of  a  late  de- 
cision of  Judge  Taney,  which  does  not, 
however,  meet  the  assent  of  the  bar  of 
Baltimore  ;  in  Arkansas,  10  per  cent,  may 


Excess  not  recoverable. 

Forfeit  three  times  the  interest. 

Excess  may  be  recovered  back. 

Forfeit  three  times  the  whole  interest. 

Excess  may  be  recovered  by  payer. 

Forfeiture  of  all  the  interest. 

Forfeiture  of  contract. 

Forfeiture  of  contract. 

Forfeiture  of  contract. 

Forfeiture  of  contract. 

Excess  recoverable  by  payer. 

Contract  void. 

Contract  void. 

Forfeiture  of  all  the  interest. 

Forfeiture  of  all  the  interest. 

Forfeiture  of  all  the  interest. 

Contract  void. 

Forfeiture  of  all  the  interest. 

Defendant  recovers  his  cost. 

Fine  of  five  times  the  whole  interest. 

Forfeiture  of  excess  of  interest. 

Contract  for  interest  void. 

Forfeiture  of  all  the  interest. 

No  penalty. 

Forfeiture  of  excess  of  interest. 

Forfeiture  of  excess  of  interest. 

Forfeiture  of  excess  of  interest. 

Liable  to  indictment  for  misdemeanor. 

Forfeitui'e  of  all  the  interest. 

Special  contracts,  12  per  cent. 

No  penalty. 

be  charged  on  special  contracts ;  in  Illi- 
nois, the  banks  may  charge  7  per  cent., 
and  10  per  cent,  may  be  charged  between 
individuals  on  special  contracts ;  in  Iowa, 
10  per  cent,  is  allowed  on  special  con- 
tracts ;  in  Louisiana,  8  per  cent,  may  be 
so  charged  ;  in  Michigan,  contracts  in 
writing  are  legal  to  charge  10  per  cent. ; 
the  same  in  Mississippi  and  Ohio  ;  in 
Texas,  12  per  cent,  may  be  charged  on 
special  contracts. 


VOL.  II. 


39 


[457] 


432  THE  LAW  OF  CONTRACTS.  [PART  II. 


CHAPTER    VIIL 

DAMAGES. 

Sect.  1.  —  Of  the  General  Ground  and  Measure  of  Damages. 

It  has  already  been  remarked  that  the  common  law  does  not 
aim  at  preventing  a  breach  of  duty,  or  compelling  the  fulfilment 
of  a  contract  by  direct  means.  This  equity  does.  But,  as  a 
general  rule,  the  common  law  contents  itself  with  requiring  him 
who  has  done  an  injury  to  another,  to  pay  to  the  injured  party 
damages.  And  even  where,  as  in  debt  or  assumpsit,  for  a  spe- 
cific sum,  the  action  is,  in  fact,  as  Lord  Mansfield  remarked,  (s) 
a  suit  for  specific  performance,  it  is  not  altogether  so  in  form. 

The  principle  which  measures  damages,  at  common  law,  is 
that  of  giving  comJDensation  for  the  injury  sustained  ;  —  a  com- 
pensation which  shall  put  the  injured  party  in  the  same  position 
in  which  he  would  have  stood  had  he  not  been  injured;  [a)  the 
simplest  form  of  which  occurs  where  the  ground  of  the  action 
is  the  wrongful  non-payment  of  money  due,  and  the  damages 
consist  of  the  money,  with  interest,  for  the  whole  period  inter- 
vening between  the  refusal  and  the  judgment.  But  in  some 
instances  the  law  lessens  this  compensation,  leaving  upon  the 
injured  party  a  part  of  his  loss;  and  in  others,  increases  the 
compensation,  by  way  of  punishment,  to  the  wrongdoer. 

[z)  "  rccuiiiiiry  (laiii:i;j;L's  upon  ji  con-         (a)  "  Omiina,"   says   Lord    Cote,    "in 

tract  for  payment  of  money,  arc,  from  the  tlic  common  law  Iiatli  a  special  significa- 

nature   of  the    tiling,  a  specilic  ])erform-  tion  for  the  rccom])cnse  that  is  given  by 

ance."     I'er  Lord  Alrnisjii/d,  In  liohinson  the  Jury  to  the  ])Iaintiff  or  demandant,  for 

V.  Bland,  2  IJurr.   1077,  l(>8<i.     Sec  also,  the  wrong  the  defendant  hath  done  unto 

Rudder  v.   Trice,  1   II.  151.  547,  Ool,  per  him."     Co.  J^itt.  L'57,  a. 
Lord  Lowjhhoroiujh. 


CII.  VIII.]  DAMAGES.  433 


SECTION   II. 

OF   LIQUIDATED   DAMAGES. 

The  law  will  permit  parties  to  determine  by  an  agreement 
which  enters  into  the  contract,  what  shall  be  the  damages 
which  he  who  violates  the  contract  shall  pay  to  the  other ;  but 
it  does  not  always  sanction  or  enforce  the  bargain  they  may 
make  on  this  subject.  Damages  thus  agreed  upon  beforehand, 
when  sanctioned  by  the  law,  are  called  liquidated  damages. 
Where  the  parties  make  this  agreement,  but  not  in  such  wise 
that  the  law  adopts  it,  then  the  damages  thus  agreed  upon 
are  a  penalty,  or  in  the  nature  of  a  penalty.  And  the  question 
whether  damages  agreed  upon  are  to  be  treated  as  liquidated, 
or  as  in  the  nature  of  a  penalty  and  therefore  reduced  to  the 
actual  damage,  often  occurs,  and  is  not  always  of  easy  or  ob- 
vious solution. 

By  a  bond  with  conditions  (an  ancient  and  somewhat  pecul- 
iar instrument),  a  party  (the  obligor),  first  acknowledges  him- 
self bound  to  another  party  (the  obligee),  in  a  certain  sum  of 
money.  Then  follows  an  agreement,  in  the  form  of  a  condition, 
that  if  the  obhgor  shall  do  a  certain  other  thing,  which  may  or 
may  not  be  the  payment  of  other  money,  the  obligation  above 
mentioned  shall  be  void.  It  is  obvious  that  the  primary  purpose 
of  the  instrument,  if  the  parties  are  honest,  is  that  the  thing  shall 
be  done  which  is  recited  in  the  condition.  And  the  secondary 
purpose  is,  that  if  that  thing  be  not  done,  the  money  for  which 
the  obligor  is  bound  shall  be  paid  by  way  of  compensation  to 
the  obligee,  and  by  way  of  punishment  to  the  obhgor.  Hence 
its  name  of  penalty.  And,  as  in  fact,  the  obligee  always  took 
care  that  the  penalty  should  be  high  enough  to  give  him  full 
compensation,  and  operate  as  a  powerful  motive  upon  the  ob- 
ligor, it  happened  generally,  if  not  always,  that  the  penalty 
was  much  more  than  compensation  for  the  wrong  done  by  a 
breach  of  the  condition.     But  the  law  had  no  remedy  for  this  ; 

[  459  1 


434*  THE  LAW   OF   CONTRACTS.  [PART  II. 

and  one  of  the  earlier  of  the  just  and  merciful  interpositions  of 
the  courts  of  equity,  was  to  reduce  the  sum  mentioned  in  the 
penalty  to  the  actual  measure  of  the  injury  sustained,  so  *as  to 
make  it  full  compensation,  but  no  more,  (b)  The  propriety  and 
expediency  of  this  relief  were  so  obvious,  that  courts  of  law, 
aided  by  statutes,  soon  applied  it,  and  now,  both  in  England 
and  America,  this  is  constantly  done  by  the  courts  of  law.  (c) 
And  in  this  practice,  and  the  reasons  for  it,  we  may  find  prin- 
ciples which  aid  us  in  drawing  the  distinction  between  liqui- 
dated damages  and  a  penalty.  For  it  is  obvious  that  where 
parties  agree  upon  the  damages  to  be  paid  for  a  breach  of  con- 
tract, whatever  name  they  give  to  it,  they  do  substantially  the 
same  thing  which  is  done  by  a  bond  with  penalty.  And  there 
is  no  more  reason  why  the  courts  should  regard  the  agreement, 
if  it  opposes  reason  and  justice,  in  the  one  case  than  in  the 
other. 

One  rule,  therefore,  is  this :  that  the  action  of  the  court  shall 
not  be  defined  and  determined  by  the  terms  which  the  parties 
have  seen  fit  to  apply  to  the  sum  fixed  upon.  Though  they 
call  it  a  penalty,  or  give  to  it  no  name  at  all,  it  will  be  treated 
as  liquidated  damages,  that  is,  it  will  be  recognized  and  en- 
forced as  the  measure  of  damages,  if  from  the  nature  of  the 
agreement  and  the  surrounding  circumstances,  and  in  reason 
and  justice  it  ought  to  be.  (d)     And  although  they  call  it  liqui- 

(b)  Tit.  Bond  and  Penalty,  Eq.  Cas.  surgeon  or  apothecary,  at  Macclesfield,  or 
Abr.  91,  92;  Bertie  v.  Falkland,  3  Ch.  \v\i\un  seven  mWcs  thwcof,  under  a  penalti/ 
Cas.  l.'3.'j,  per  Lord  Somers.  of  £500."     It  was  held  that  the  .£500  was 

(c)  4  Anne,  c.  IG,  §§  12,  13.  During  not  a  penalty,  hut  liciuidnted  damages. 
a  short  period  het'ore  this  statute,  the  prac-  Colt.mnn,  J.,  said  :  "  Although  the  word 
ticc  ap])ears  to  liave  been  this.  The  de-  '  penalty,'  which  would  prima  facie  ex- 
fendant,  on  motion,  was  allowed  to  bring  elude  the  notion  of  stipidated  damages,  is 
the  whole  amount  of  tiie  penalty  into  used  here,  yet  we  must  look  at  the  nature 
court,  and  the  proceedings  were  thereupon  of  the  agreement,  and  the  surrounding 
stayed.  The  plaintilF,  however,  received  circumstances,  to  see  whether  the  jjarties 
only  the  amount  of  tin;  princi])al,  interest,  intended  the  sum  mentioned  to  he  a  ])en- 
and  costs,  and  if  tliis  did  not  ccpial  tlic  alty  or  stipulated  damages.  Considering 
amount  of  the  penalty,  tiie  defendant  was  the  nature  of  the  agreement,  and  the 
allowed  to  tnkt;  out  the  remainder.  Ire-  didiculty  the  plaintifV  would  he  under  in 
land's  case,  0  Mod.  101  ;  Gregg's  case,  2  showing  what  specifics  damage  lie  had 
Salk.  .090;  Anonymous,  G  Mod.  l.VJ.  'i'ho  sustained  from  tlie  defendant's  l)reaeh  of 
court  said,  in  Burridgc  v.  I'^ortcsctic,  G  it,  1  think  we  can  only  rensonahly  con- 
Mod.  GO:  "It  is  an  i'(|iiit:d(l(:  motion  to  striie  it  to  he  a  contract  for  stipulated  and 
bo  reiicvcil  nguinst  the  penalty."  ascertained  damages."       t'hamlierlain   v. 

{(l)  In  Saiiit.-r  v.  Ferguson,  7  (.'.  B.  71G,  IJiigh'y,  1 1  N.  11.  2;!4,  240,  per  (Iphiim,  J. ; 
the  defenilant  agreed  not  to  "practice  us     Brewster  y.  Edgerlv,  13  id.  27.');  Mundy 

[4G0] 


CH.  viir.] 


DAMAGES. 


*435 


dated  damages,  it  will  be  treated  as  a  penalty,  if  from  a  *con- 
sideration  of  the  whole  contract  it  appears  that  the  parties  in- 
tended it  as  such,  (e)  or  if,  where  the  injury  is  certain,  the  sum 
fixed  upon  is  clearly  disproportionate  to  such   injury  and   the 


real  claim  which  grows  out  of  it. 


V.  Culver,  18  Barb.  336.  In  Cheddick  v. 
Marsh,  1  N.  J.  4G3,  465,  Creeii,  C.  J., 
said  :  "If  upon  tlie  face  of  the  instrument 
it  be  doubtful  whether  the  contracting  par- 
ties intended  that  the  sum  specified  in  the 
agreement  should  be  a  penalty  or  liqui- 
dated damages,  the  inclination  of  courts 
is  to  consider  the  contract  as  creating  a 
penalty  to  cover  the  damages  actually  sus- 
tained by  a  breach  of  the  contract,  and 
not  liquidated  damages."  Bagley  v.  Ped- 
die,  5  Sandf.  192;  Crisdee  v.  Bolton,  3 
C.  &  P.  240;  Tavloe  v.  Sandiford, 
7  Wheat.  13;  Shute  v.  Taylor,  5  Met. 
61,  67,  per  Shaw,  C.  J. ;  Baird  r.  FolUver, 
6  Humph.  186.     See  Lindsay  v.  Amesley, 

6  Ired.  186.  In  Smith  v.  Dickenson,  3 
B.  &  P.  630,  the  court  expressed  them- 
selves clearly  of  opinion,  that  the  word 
"  penalty  "  l)eing  used  in  the  agreement 
effectually  prevented  them  from  consid- 
ering the  sum  mentioned  as  liquidated 
damages.  The  bond,  in  Fletcher  v.  Dyche, 
2  T.  K.  32,  used  the  words  "forfeit  and 
pay;"  but  the  sum  mentioned  was  held 
as  liquidated  damages.  The  Supreme 
Court  of  the  U.  S.  in  Tayloe  v.  Sandiford, 

7  Wheat.  13,  say  this  case  is  clearly  dis- 
tinguishable from  a  case  where  the  word 
penalty  is  used;  also  per  Marshall,  C.  J. : 
"In  general  a  sum  of  money  in  gross,  to 
be  paid  for  the  non-performance  of  an 
agreement,  is  considered  as  a  penalty,  the 
legal  operation  of  which  is  to  cover  the 
damages  which  the  party  in  whose  favor 
the  stipulation  is  made,  may  have  sus- 
tained from  the  breach  of  contract  by  the 
opposite  party.  It  will  not,  of  course,  be 
considered  as  liquidated  damages  ;  and  it 
will  be  incumbent  on  the  party  who  claims 
them  as  such,  to  show  that  they  were  so 
considered  by  the  contracting  parties. 
Much  stronger  is  the  inference  in  favor  of 
its  being  a  penalty,  when  it  is  expressly 
reserved  as  one.  The  parties  themselves 
expressly  denominate  it  a  penalty ;  and  it 
would  require  very  strong  evidence  to  au- 
thorize the  court  to  say  that  their  own 
words  do  not  express  their  own  intention." 
But  in  Hodges  v.  King,  7  Met.  583,  588, 
per  Hubbard,  J. :  "  The  bond  has  indeed 

39* 


a  condition,  but  that  is  matter  of  form, 
and  cannot  turn  that  into  a  penalty, 
which,  but  for  the  form,  is  an  agreement 
to  pay  a  precise  sum,  under  certain  cir- 
cumstances." 

(e)  In  Davies  v.  Penton,  6  B.  &  C.  216, 
224,  Liltledale,  J.,  said :  "  Before  the 
8  &  9  W.  3,  the  whole  penalty  might  be 
recovered  at  law ;  and  the  party  against 
whom  it  was  recovered  was  driven  to  seek 
relief  in  a  court  of  equity.  The  statute 
only  contains  the  word  '  penalty.'  Since 
the  statute,  parties  in  framing  agreements, 
have  frequently  changed  that  word  for 
liquidated  damages ;  but  the  mere  alteration 
of  the  term  cannot  alter  the  nature  of  the 
thing ;  and  if  the  court  see,  upon  the 
whole  agreement,  that  the  parties  in- 
tended the  sum  to  be  a  penalty,  they 
ought  not  to  allow  one  party  to  deprive 
the  other  of  the  benefit  to  be  derived  from 
the  statute.  In  that  case  the  parties 
were  bound  'in  the  penal  sum  of  £500, 
to  be  recoverable  for  breach  of  the  said 
agreement,  in  any  court  or  courts  of  law, 
as  and  by  way  of  liquidated  damages.' " 
The  £500  was  held  to  be  a  penalty  and 
not  liquidated  damages.  See  Hoag  v. 
McGinnis,  22  Wend.  163.  The  limita- 
tions of  this  principle  appear  to  be  well 
stated,  in  Price  v.  Green,  16  M.  &  W. 
346,  354.  The  defendant  was  bound  in 
the  sum  of  £5,000  by  way  of  liquidated 
damages,  and  not  of  penalty,  not  to  carry 
on  his  trade  within  certain  limits.  It  was 
held  that  the  plaintift"  could  recover  the 
£5,000  as  liquidated  damages.  Patterson, 
J.,  said :  "  Where  it  is  a  sum  named  in 
respect  of  the  breach  of  one  covenant  only, 
and  the  intention  of  the  parties  is  clear 
and  unequivocal,  the  courts  have  indeed 
held,  that,  in  some  cases,  the  words  '  liqui- 
dated damages'  arc  not  to  be  taken  ac- 
cording to  their  obvious  meaning ;  but 
those  cases  are  all  where  the  doing  or 
omitting  to  do  several  things  of  various 
degrees  of  importance  is  secured  by  the 
sum  named,  and,  notwithstanding  the  lan- 
guage used,  it  is  plain  from  the  whole  in- 
strument that  the  real  intention  was  dif- 
ferent." 

[461] 


436*  THE   LAW   OP   CONTRACTS.  [PART  II. 

Among  the  principles  which  have  been  found  useful  in  deter- 
mining this  last  question,  perhaps  the  two  most  important  and 
influential  are  these.  The  sum  agreed  upon  will  be  treated  as 
penalty,  unless,  first,  it  is  payable  for  an  injury  of  uncertain 
amount  and  extent ;  and  second,  unless  it  be  payable  for  one 
breach  of  contract,  or  if  for  many,  unless  the  damages  to  arise 
from  each  of  them  are  of  uncertain  amount. 

The  first  rule  may  be  illustrated  by  a  promise  to  pay  one 
thousand  dollars  in  three  months,  with  an  agreement  that  if  the 
promisor  fails  in  this  payment  he  shall  pay  to  the  promisee  two 
thousand  dollars,  by  way  of  liquidated  damages.  Here  it  is  at 
once  obvious  and  certain  that  this  bargain  differs  in  no  respect 
but  that  of  form  from  a  bond  with  a  penalty  in  a  larger  sum, 
conditioned  to  pay  the  less ;  and  that  it  must  necessarily  be 
treated  in  the  same  way ;  that  is,  the  penalty  must  be  reduced 
to  the  measure  of  the  actual  damages.  The  general  reason  of 
this  rule  is,  that  where  *the  injury  resulting  from  a  breach  of 
contract,  is  ascertainable  at  once  by  computation,  or  is  capable 
of  immediate  and  exact  measurement  by  other  means,  so  that 
the  parties  could  have  certainly  provided  for  exact  compensa- 
tion, if  the  sum  they  agree  upon  is  more  than  this,  it  may  be 
presumed  that  it  was  really  intended  as  a  penalty,  or  that  there 
was  oppression  on  the  one  side  and  weakness  or  inadvertence 
on  the  other  ;  or  if  not  these,  that  the  principle  was  disregarded, 
which,  alone,  the  law  recognizes  as  the  first  measure  of  dam- 
ages, that  is,  the  principle  of  compensation.  And  the  court 
will  do,  with  the  aid  of  a  jury,  what  the  parties  have  not  done  ; 
that  is,  they  will  apply  this  principle.  (/)     But  where,  among 

• 

(f)  TlicTC  lias  been  much  conflict  in  ordinary  rules  of  construction,  and  carry 
the  decisions  which  have  been  made  upon  out  the  expressed  intention  of  the  parties, 
this  class  of  contracts.  Wiiile  some  of  unless  one  of  the  two  rules  laid  down  in 
the  courts  have  iiecn  disposed  to  apjily  to  the  text  is  found  to  apply.  The  lirst  rule 
them  tiie  ordinary  rules  of  construction,  which  appears  to  have  been  contined  to 
and  to  carry  out  the  intention  of  the  par-  the  case  in  which  it  is  agreed  to  ])ay  a 
tics,  as  expressed  in  tlie  instrument,  with-  larger  sum  of  money  as  liquidated  dam- 
out  regard  to  its  justice,  others  have  been  ages,  on  a  failure  to  pay  a  smaller  sum  on 
inclined,  in  almost  all  cases,  to  regard  the  a  given  contingency,  was  laid  down  in 
Hum  (ixcd  upon  as  a  peiudty,  and  to  settle  Orr  r.  ( 'iuircliiil,  1  II.  VA.227.  In  that 
themselves,  with  the  aid  of  a  jury,  the  case  a  high  rate  of  interest  was  to  be  paid 
quCHtion  of  damages,  notwithstanding  the  "  by  way  of  penalty,"  u))on  a  failure  to 
expressions  used  by  the  jiarlies.  I5iit  tlie  jiay  over  a  sum  of  money,  at  a  fixed  time, 
law  appi'ars  to  be  now  settled,  that  the  J>ord  Lowj/ihoioni/h  mud :  "Where  the 
courts  will  apply  to  tlieac  contracts  the  (piestion  is  concerning  the  non-jjayment 

[4G2] 


CH.  viir.] 


DAMAGES. 


"^437 


all  the  *possibilities  of  injury  resulting  from  a  breach  of  con- 
tract, it  is  imjDOSsible  to  select  the  certain  or  probable  results,  or 


of  money,  in  circumstances  like  tlie  pres- 
ent, the  law,  having  by  positive  rules  fixed 
the  rate  of  interest,  has  bounded  the  meas- 
ure of  damages  ;  otherwise  the  law  might 
be  eluded  by  the  parties.  It  may  often, 
indeed,  happen,  that  the  damages  sus- 
tained by  the  party  contracting,  by  the 
non-payment  of  money  at  the  time  agreed 
on,  may  by  the  particular  arrangement  of 
his  affairs,  be  greater  than  the  compensa- 
tion recovered  by  computing  the  interest ; 
but  where  money  has  a  real  rate  of  inter- 
est and  value,  the  other  party  is  not  to  be 
compelled  to  pay  more  than  the  law  has 
declared  to  be  such  rate  and  value."  The 
same  rule  was  recognized  in  Astley  v. 
Weldon,  2  B.  &  P.  346,  354,  where 
Chamhre,  J.,  said  :  "  There  is  one  case  in 
whiali  the  sum  agreed  for  must  always  be 
considered  as  a  penalty  ;  and  that  is,  where 
the  payment  of  a  smaller  sum  is  secured 
by  a  larger."  Again,  in  Kemble  v.  Far- 
ren,  6  Bing.  141,  148,  Timkd,  C.  J.,  said : 
"  That  a  very  large  sum  should  become 
immediately  payable,  in  consequence  of 
the  non-payment  of  a  very  small  sum,  and 
that  the  former  should  not  be  considered 
as  a  penalty,  appears  to  be  a  contradiction 
in  terms  ;  the  case  being  precisely  that  in 
which  courts  of  equity  have  always  re- 
lieved, and  against  which  courts  of  law 
have,  in  modern  times,  endeavored  to  re- 
lieve by  directing  juries  to  assess  the  real 
damages  sustained  by  a  breach  of  the 
agreement."  But  the  very  late  English 
authorities  have  shown  a  decided  inclina- 
tion to  disregard  this  rule,  and  to  carry 
out  the  intentions  of  the  parties  as  ex- 
pressed in  the  agreement.  See  Price  v. 
Green,  supra,  n.  (e).  In  Galsworthy  v. 
Strutt,  1  Exch.  6.59,  665,  Purke,  B.,  with 
Astley  V.  Weldon,  and  Kemble  v.  Farren 
before  him  said  :  "  I  take  it  that  it  would 
be  competent  for  the  parties  to  make  a 
stipulation  for  the  payment  of  a  certain 
sum  on  the  non-performance  of  a  covenant 
to  pay  a  smaller  sum ;  but  they  must  do 
so  in  express  terms  ;  and  if  that  be  done 
I  do  not  see  how  the  courts  can  avoid 
giving  effect  to  such  a  contract."  But  in 
this  country  the  rule,  as  stated  in  the  text 
and  in  the  earlier  cases,  appears  to  be 
generallv  recognized.  In  Gray  o.  Crosby, 
18  Johns.  219,  226,  IToof/MwiA,  J.,  in  re- 
marking ixpon  a  case  where  a  party  cov- 
enanted on  a  certain  contingency  to  pay 
a  sum  of  money,  with  proviso  that  if  he 


refused,  he  was  then  to  pay  a  larger  sum 
as  liquidated  damages,  said  :  "  Such  facts 
constitute  no  right  to  recover  beyond  the 
money  actually  due.  Liquidated  damages 
are  not  applicable  to  such  a  case.  If  they 
were,  they  might  afford  a  sure  protection 
for  iisurj%  and  countenance  ojipression 
under  the  forms  of  law."  See  Barley  v. 
Peddie,  5  Sandf.  192  ;  Williams  v.  Dakin, 

22  Wend.  211,  per  Walworth,  Ch. ;  Hoag 
V.  McGinnis,  id.  163  ;  Heard  v.  Bowers, 

23  Pick.  455,  462;  Sessions  t.  Richmond, 
1  R.  I.  298,  303  ;  Plummer  v.  ]\IcKean,  2 
Stewart,  423.  But  see  Jordan  v.  Lewis, 
id.  426.  This  rule  has  also  received  the 
sanction  of  the  Superior  Court  of  New 
Hampshire,  although  that  court  has  gen- 
erally been  decidedly  in  favor  of  applying 
the  ordinary  principles  of  construction  to 
agreements  for  the  liquidation  of  damages. 
Thus,  in  Mead  v.  Wheeler,  13  N.  H.  351, 
353,  Gilchrist,  J.,  said  :  "  It  is  settled  that 
when  there  is  an  agreement  to  pay  a  large 
sum,  if  the  party  fail  to  pay  a  smaller 
sum,  the  agreement  to  pay  the  penalty 
cannot  be  enforced  bej'ond  the  amount 
of  legal  interest.  Although  in  fact  the 
creditor  may  suffer  the  most  serious  in- 
jury from  the  want  of  punctual  payment 
of  his  debt,  and  the  payment  of  principal 
and  interest  may  very  inadequately  com- 
pensate him  for  his  disappointment,  still 
the  payment  of  more  than  legal  interest 
cannot  be  enforced  under  the  denomina- 
tion of  a  penalty,  although,  if  the  agree- 
ment to  pay  a  penalty  be  in  accordance 
with  the  general  usage  and  practice  of  a 
particular  trade,  it  has  been  held  that  it 
might  be  enforced,  even  if  it  should  ex- 
ceed the  legal  interest.  Fioyer  v.  Ed- 
wards, Cowper,  112;  Ex  parte  Ayns- 
worth,  4  Ves.  678.  The  payment  of 
money  being  the  thing  to  be  done,  as 
money  is  the  only  measure  of  damages, 
no  closer  approximation  to  the  damages 
sustained  can  be  made,  than  to  estimate 
them  at  the  sum  agreed  to  be  paid,  and 
the  interest  thereon.  This  consideration, 
with  the  necessity  of  enforcing  the  laws 
against  usury,  affords  perhaps  as  good  a 
reason  why  the  party  should  be  compelled 
to  pay  no  more  than  the  sum  specified, 
and  tiie  interest,  as  the  inequity  of  his 
paying  a  large  sum  for  tlic  omission  to 
pay  a  smaller  sura."  In  establishing  this 
rule  the  court  seem  to  have  been  influ- 
enced more  or  less  by  a  desire  to  prevent 

[463] 


438*  THE   LA  AY   OF   CONTRACTS.  [PART  II. 

to  define  them  *with  any  precision  by  reference  to  a  money 
standard,  here  the  parties  may  agree  beforehand  what  the  injury 
shall  be  valued  at,  or  what  shall  be  taken  for  a  compensation ; 
for  if  the  court  sets  it  aside,  it  can  only  do  what  it  may  be  sup- 
posed the  parties  had  a  right  to  do  and  have  done,  and  that  is, 
arrive  at  a  general  probability  by  a  consideration  of  all  the  cir- 
cumstances of  the  case.  Such  an  agreement,  therefore,  the 
court  will  not  set  aside,  unless  for  such  obvious  excess  and  dis- 
proportion to  all  rational  expectation  of  injury,  as  make  it 
certain  that  the  principle  of  compensation  was  wholly  disre- 
garded. 

The  second  rule  is  derived  from  similar  considerations.  Let 
us  suppose  a  contract  between  parties,  one  of  whom,  for  good 
consideration,  promises  to  the  other  to  do  several  things,  and 
then  it  is  agreed  that  the  promisor  shall  pay,  by  way  of  liqui- 
dated damages,  a  large  sum,  if  the  promisee  recover  against 
him  in  an  action  for  a  breach  of  this  contract.  It  must  be  sup- 
posed that  this  sum  is  intended  and  regarded  as  adequate  com- 
pensation for  a  breach  of  the  whole  contract ;  for  it  is  all  that 
the  promisor  is  to  pay  if  he  breaks  the  whole.  It  would,  of 
course,  be  most  unjust  and  oppressive  to  require  of  him  to  pay 
this  whole  sum,  for  violating  any  one  of  the  least  important 
items  of  the  contract.  But  such  would  be  the  effect  if  the 
words  of  the  parties  prevailed  over  the  justice  of  the  case.  The 
sum  to  be  paid  would,  therefore,  be  treated  as  a  penalty,  and 
reduced  accordingly,  unless  the  agreement  provided  that  it  should 
be  paid  only  when  the  whole  contract  was  broken,  or  so  much 
of  it  as  to  leave  the  remainder  of  no  value ;  or  unless  the  sum 
agreed  upon  was  broken  up  into  parts,  and  to  each  breach  of 
the  contract  its  appropriate  part  assigned ;  and  the  sum  or  sums 
payable  came  in  other  respects  within  the  principles  of  liqui- 
dated d:iin;ig«'s,  (x,') 

an  evasion  of  the  statutes  against  usury.  {;/)  In  Astlcy  ?•.  Wcldon,  2  H.  &  P. 

Ihit  as  it  is  settled  that  tliis  class  of  cases  .'J4(),  .'if).'!,  Heath,  J.,  said  :  "  AVlierc  arti- 

does  not  come  within  these-  stiitates.    Cut-  cles  contain  covenants  (or  the  perlorniance 

ler  V.  How,  8  Mass.  2.'j7  ;  Floyer  c.  Ivi-  of  several  thin^js,  and  then  one  larj;e  sum 

wards,  Cowp.   112,   IIT),  [)cr  Lord  Mans-  is  stated  at  the  end  to  lie  ])aid  npon  breach 

fiild;  we,  thiidv  the  rule  may  more  safely  of  ]ierf()rinance,  that  must  lie  considered  as 

rest  upon  tla-  ;;r(>nnds  taken  in  tin!  text,  apenalty."    'J'lie  sulise(iuent  case  of  I\eilly 

than  uj)on  considerations  of  that  initure.  v.  Jones,  1  liiiig.  3U2,  has  been  thought 

[KM] 


en.  VIII.] 


DAMAGES. 


439-M40 


With  the  exception  of  these  rules  of  construction,  which  seem 
to  have  grown  out  of  the  peculiar  nature  of  this  class  *  of  con- 


inconsistent  with  this  principle,  but  it  was 
not  so  consitlerecl  by  the  court,  but  the 
sum  mentioned  was  held  to  be  liquidated 
damages,  because  it  was  so  called  by  the 
parties,  and  the  agreement  was  in  sub- 
stance for  the  performance  of  one  thing 
onhj.  See  Barton  r.  Glover,  Holt,  N.  P. 
43.  In  Kemhlc  v.  Farren,  6  Bing.  141, 
the  action  was  assumpsit  by  the  manager 
of  Covent  Garden  Theatre,  against  an 
actor  to  recover  liquidated  damages  for 
the  violation  of  an  engagement  to  perform. 
There  were  several  stipulations,  of  various 
degrees  of  importance,  on  each  side,  "  some 
soundinc/  in  uncertain  damages,  others  relat- 
ing to  certain  pecuniary  payments ;  and  the 
agreement  contained  a  clause,  that  if 
either  of  the  parties  should  neglect  or  re- 
fuse to  fulfil  tiie  said  engagement,  or  any 
part  thereof,  or  any  stipulation  therein  con- 
tained, such  party  should  pay  to  the  other 
the. sum  of  £1,000,  to  which  sum  it  was 
thereby  agreed  that  the  damages  sustained 
by  any  such  omission,  neglect,  or  refusal 
should  amount  ;  and  which  sum  was 
thereby  declared  by  the  said  parties  to  he 
liquidated  and  ascertained  damages,  and  not 
a  penalty  or  penal  sum,  or  in  the  nature 
thereof."  Notwithstanding  the  strong  ex- 
pressions used  by  the  parties,  the  sum 
was  held  to  be  a  penalty,  and  not  liqui- 
dated damages.  But  Tindal,  C.  J.,  said  : 
"  If  the  clause  liad  been  limited  to  breaches 
which  were  of  an  uncertain  nature  and 
amount,  we  should  have  thought  it  would 
have  had  the  effect  of  ascertaining  the 
damages,  upon  any  such  breach,  at  £1,000  ; 
thus  restricting  the  application  of  the  gen- 
eral rule  cited  above,  from  Astley  v.  Wel- 
don,  to  cases  in  which  some  of  the  stipu- 
lations are  of  certain  nature  and  amount." 
This  decision  has  been  followed  in  Eng- 
land in  Edwards  ;;.  Williams,  5  Taunt. 
247  ;  Crisdee  v.  Bolton,  3  C.  &  P.  240, 
243  ;  Boys  v.  Ancell,  5  Bing.  N.  C.  390, 
7  Scott,  364  ;  Street  v.  Rigby,  6  Ves. 
815;  Beckham  v.  Drake,  8  M.  &  W. 
846,  853  ;  Horner  v.  Flintofi",  9  id.  678  ; 
Galsworthy  v.  Strutt,  1  Exch.  659  ;  At- 
kyns  V.  Ivinnier,  4  Exch.  776.  The 
present  state  of  the  law  in  England  may 
be  gathered  from  the  following  remarks 
of  Parke,  B.,  in  Atkyns  v.  Kinnier. 
"  The  rule  of  law,  as  laid  down  in  Kem- 
ble  V.  Farren  (which  I  cannot  help  think- 
ing was  somewhat  stretched)  was,  that 
although  the  parties  used  the  words  '  liqui- 


dated damages,'  yet,  when  the  context 
was  looked  at,  it  was  impossible  to  say 
that  they  intended  that  the  amount  named 
should  be  other  than  a  penalty,  inasmuch 
as  the  agreement  contained  various  stipu- 
lations, some  of  which  were  caiiable  of 
being  measured  by  a  precise  sum,  and 
others  not;  as,  for  instance,  the  plaintiff 
was  to  pay  the  defendant  a  certain  weekly 
salary,  which  was  capal)le  of  being  strictly 
measured,  and  was  far  below  £1,000  ; 
therefore,  upon  a  reasonable  construction 
of  the  covenant,  the  words  '  liquidated 
damages  '  were  to  be  rejected,  and  the 
amount  treated  as  a  penalty.  That  de- 
cision has  since  been  acted  upon  in  sev- 
eral cases,  and  I  do  not  mean  to  dispute 
its  authority'.  Therefore,  if  a  party  agrees 
to  pay  £1,000,  on  several  events,  all  of 
which  are  capable  of  accurate  valuation, 
the  sum  must  be  construed  as  a  penalty, 
and  not  as  liquidated  damages.  But  if 
there  be  a  contract,  consisting  of  one  or 
more  stipulations,  the  breach  of  which 
cannot  be  measured,  then  the  parties  must 
be  taken  to  have  meant  that  the  sum 
agreed  on  was  to  be  liquidated  damages, 
and  not  a  penalty.  In  this  case  there  is 
no  pecuniary  stipulation  for  which  a  sum 
certain,  of  less  amount  than  £1,000,  is  to 
be  paid,  but  all  the  stipulations  are  of  un- 
certain value.  Possibly  this  may  have 
been  a  very  imprudent  contract  for  the  de- 
fendant to  make  ;  but  with  that  we  have 
nothing  to  do.  Upon  the  true  construc- 
tion of  the  deed,  the  amount  is  payable  by 
way  of  liquidated  damages,  and  not  as 
penalty."  The  decision  of  Kemble  v. 
Farren  was  questioned  by  Gilchrist,  J., 
in  Brewster  v.  Edgerly,  13  N.  H.  275, 
278,  but  it  has  been  generally  recognized 
in  this  country  as  sound  law.  Williams 
V.  Dakin,  17  Wend.  447,  455,  22  Wend. 
201,  212;  Niver  v.  Eossman,  18  Barb. 
50  ;  Jackson  v.  Baker,  2  Edw.  Ch. 
471;  Heard  v.  Bowers,  23  Pick.  455; 
Siiute  V.  Taylor,  5  Met.  61,  67,  per  Shaw, 
C.  J.  ;  Moore  v.  Platte  Co.  8  Mo.  467  ; 
Gower  v.  Saltmarsh,  11  Mo.  271  ;  Car- 
penter i\  Lockhart,  1  Cart.  Ind.  434, 
443  ;  Bright  i\  Rowland,  3  How.  Miss. 
398,  413  ;  Cheddick  v.  Marsh,  1  N.  J. 
463  ;  Curry  v.  Larer,  7  Penn.  St.  470. 
In  the  late  cases  of  Beale  v.  Hayes,  5 
Sandf.  640,  and  Bagley  v.  Peddle,  id. 
192,  this  question  has  been  ably  discussed, 
and  this  rule   established.     The   case  of 

[465] 


440- 


THE   LAW   OF   CONTRACTS. 


[part  II. 


tracts,  courts  are  guided  by  the  intentions  of  the  parties  in  deter- 
mining whether  the  sum  contracted  to  be  paid  upon  the  non- 
performance of  a  covenant  is  to  be  considered  as  liquidated  dam- 
ages, to  be  enforced  according  to  the  terms  of  the  agreement, 
or  as  a  penalty  to  be  controlled  by  an  assessment  of  damages 
by  a  jury ;  and  in  ascertaining  these  intentions  of  the  contract- 
ing parties,  the  ordinary  rules  of  construction  are  applied,  [h) 


Beale  v.  Hayes  arose  out  of  a  theatrical 
eno;agement,  and  was  not  distinguishable 
in  its  material  facts  from  Kemble  v.  Far- 
ren,  supra,  which  the  court  followed  in 
deciding  the  case.  In  Bagley  v.  Peddie, 
the  defendants  were  bound  to  pay  "  three 
thousand  dollars,  liquidated  damages," 
in  case  A.,  one  of  the  defendants,  should 
refuse  to  continue  with,  or  serve  the  plain- 
tiff, or  should  violate  any  of  several  other 
covenants  contained  in  the  agreements. 
Some  of  the  covenants  were  clearly  "  cer- 
tain in  their  nature,  and  the  damages  for 
their  breach  could  be  readily  ascertained 
by  a  jury."  The  sum  was  held  to  be  a 
penalty.  Sandford,  J.,  in  delivering  a 
very  al)le  opinion  said  :  "  The  courts  have 
leaned  very  hard  in  favor  of  construing 
covenants  of  this  kind  to  be  in  the  nature 
of  penalties,  instead  of  damages,  fixed 
and  stipulated  between  the  parties ;  and 
in  so  doing  have  established  certain  rules 
which  will  serve  to  guide  us  in  determin- 
ing tliis  case.  It  may,  perhaps,  be  justly 
said,  tiiat  in  this  struggle  to  relieve  parties 
from  what,  on  a  different  construction, 
would  be  most  improvident  and  absurd 
agreements,  the  courts  have  sometimes 
gone  very  far  towards  making  new  con- 
tracts for  them,  somewhat  varied  from  the 
stipulations,  which,  under  other  circum- 
stances would  1)0  deduced  from  the  lan- 
guage they  used  ;  but  we  believe  no  com- 
mon-law court  has  yet  gone  so  far  as  to 
reduce  the  damages  conceded  to  have  liecn 
liquidatcfl  and  stipulated  between  the  par- 
ties, to  such  an  amount  as  the  judges  deem 
reasonal)le,  which  is  the  course  in  countries 
where  tlic  civil  law  jirevails.  Among  the 
principles  that  ajijiear  to  be  well  estab- 
lished, are  tii'-se :  1.  Wlicre  it  is  doubtful 
on  the  face  of  the  instrument,  wiicther  the 
sum  mentioned  was  ititended  to  l)e  stipu- 
lafcfl  damages,  or  a  penaltv  to  cover  act- 
ual damug(!S,  the  courts  lioiil  it  to  be  the 
latter.  2.  On  the  contrary,  wliere  the 
language  used  is  dear  and<'xpl'eit,  to  that 
cfi'ect,  th(!  amoimt  is  to  be  deemed  litpii- 


dated  damages,  however  extravagant  it 
may  appear,  unless  the  instrument  be 
qualified  by  some  of  the  circumstances 
hereafter  mentioned.  3.  If  the  instrument 
provide  that  a  larger  sum  shall  be  paid, 
on  the  failure  of  the  party  to  pay  a  less 
sum,  in  the  manner  prescribed,  the  larger 
sum  is  a  penalty,  whatever  may  be  the 
language  used  in  describing  it.  4.  When 
the  covenant  is  for  the  performance  of  a 
single  act,  or  several  acts,  or  the  abstain- 
ing from  doing  some  particular  act  or 
acts,  which  are  not  measurable  by  any 
exact  pecuniary  standard,  and  it  is  agreed 
that  the  party  covenanting  shall  pay  a 
stipulated  sum  as  damages  for  a  violation 
of  any  such  covenants,  that  sum  is  to  be 
deemed  liquidated  damages,  and  not  a 
penalty.  The  cases  of  Reilly  v.  Jones, 
1  Bing.  302 ;  Smith  v.  Smith,  4  Wend. 
468;  ivnapp  v.  Maltby,  13  id.  587;  and 
Dakin  v.  Williams,  17  id.  447,  s.  c.  in 
error,  22  id.  201,  were  of  this  class.  5. 
"Where  the  agreement  secures  the  pei'- 
formance,  or  omission,  of  various  acts, 
of  the  kind  mentioned  in  the  last  propo- 
sition, together  with  one  or  more  acts,  in 
respect  of  which  the  damages  on  a  breach 
of  the  covenant,  are  certain,  or  readily 
ascertainable  by  a  jury,  and  there  is  a  sum 
stipulated  as  damages,  to  be  paid  by  each 
party  to  the  other,  for  a  breach  of  any  one 
of  the  covenants,  such  sum  is  held  to  be  a 
penalty  merely." 

(h)  in  Perkins  v.  Lyman,  11  Mass.  76, 
81,  the  court  said  :  "  The  (lucstion  whether 
a  sum  of  money  mentioned  in  an  agree- 
ment shall  be  considered  as  a  jienalty, 
and  so  subject  to  the  chancery  ])ovvers  of 
this  court,  or  us  damages  liquidated  by 
the  parties,  is  always  a  (jucstion  of  con- 
struction, on  which,  as  in  other  cases 
where  a  (piestion  of  the  meaning  of  the 
jiarties  in  a  contract  provable  by  a  written 
instrument,  arises,  the  court  nuiy  take 
some  aid  to  themselves  from  circum- 
stances extraneous  to  the  writing.  In 
order  to  determine  upon  the  words  used, 


CH.  VIII.] 


DAMAGES. 


441-*442 


SECTION    III. 

OF   CIRCUMSTANCES   WHICH   INCREASE   OR   LESSEN   DAMAGES. 

We  have  said  that  the  principle  of  compensation  is  that  which 
lies  at  the  foundation  of  the  common  law  measurement  of 
damages.  And  this  is  not  the  less  true,  although  there  are 
difficulties  in  the  application  of  this  principle,  and  exact  and 
adequate  compensation  is  seldom  the  result  of  a  lawsuit.  Thus 
the  expenses  of  reaching  this  result,  as  counsel  fees  and  the  like, 
and  the  labor  and  anxiety  even  of  successful  litigation,  are  not 
often  compensated,  in  fact,  although  the  theory  of  the  law,  per- 
haps, includes  so  much  of  this  as  is  actual  labor  and  expense,  in 
the  costs  recovered.  (/)     In  some  *suits,  especially  in  those  for 


there  may  be  an  inqiiin-  into  the  subject- 
matter  of"  the  contract,  the  situation  of  the 
parties,  the  usages  to  which  they  may  be 
understood  to  refer,  as  well  as  other  facts 
and  circumstances  of  their  conduct ;  al- 
though their  words  are  to  be  taken  as 
proved  by  the  writing  exclusively."  The 
fact  that  the  amount  of  the  damages  is 
uncertain,  and  cannot  easily  be  determined 
by  a  jury,  inclines  the  courts  to  treat  the 
sum  fixed  upon  as  liquidated  damages. 
Sainter  v.  Ferguson,  7  C.  B.  716 ;  Fletcher 
V.  Dyche,  2  T.  R.  32  ;  Gammon  v.  Howe, 
14  Me.  250;  Tingley  v.  Cutler,  7  Conn. 
291  ;  Mott  V.  Mott,  11  Barb.  127.  See 
Lowe  V.  Peers,  4  Burr.  2225 ;  Smith  v. 
Smhh,  4  Wend.  468.  If  the  payment  of 
the  money  appears  to  have  been  intended 
only  to  secure  the  perfonnauce  of  the 
main  object  of  the  agreement,  the  comls 
incline  to  hold  it  a  penalty.  Sloman  v. 
Walter,  1  Bro.  Ch.  418  ;  Graham  v.  Bick- 
ham,  4  Dall.  149;  Merrill  v.  Merrill,  15 
Mass.  488. 

(/)  In  the  theory  of  the  law  the  taxed 
costs  are  full  indemnity  for  the  expenses 
of  a  suit.  In  Doe  v.  Filliter,  13  M.  &  W. 
47,  in  an  action  of  trespass  for  mesne 
profits,  the  question  was,  whether  the 
plaintiff  was  entitled  to  full  costs,  in  the 
action  of  ejectment,  as  between  attorney 
and  client,  or  whether  the  taxed  costs  were 
to  be  considered  as  a  full  indemnity.    The 


court  held  the  latter.  Alderson,  B.,  said  : 
"  The  taxed  costs  are  intended  to  be  a  full 
indemnity  to  the  plaintiff  for  his  expenses 
in  getting  back  the  land.  That  is  the 
principle ;  whether  it  be  fully  carried  out 
in  practice,  is  another  matter.  The  ques- 
tion is,  what  is  to  be  the  criterion  by 
which  the  costs  of  getting  back  land  are 
to  be  estimated  '?  A  plaintiff  in  ejectment 
is  in  the  same  situation  as  other  suitors, 
all  of  whom  sue  for  their  rights,  and  ob- 
tain costs  as  an  indemnity;  and  as  other 
plaintiffs  submit  to  have  their  costs  taxed, 
so  ought  a  plaintiff  in  ejectment.  If  the 
taxed  costs  are  not  a  full  indemnity,  they 
ought  to  be  made  so."  But  in  cases 
where  the  costs  are  not  taxed,  the  plaintiff 
may  i-ecover  his  full  expenses.  Grace  v. 
Morgan,  2  Bing.  N.  C.  534 ;  Doe  v.  Fil- 
liter, supra,  per  Pollock,  C.  B.  In  Admi- 
ralty courts,  where  the  costs  are  at  the 
discretion  of  the  judge,  counsel  fees  and 
the  full  expenses  of  litigation  are  often 
allowed.  The  Amiable  Nancy,  3  AVheat. 
546  ;  The  Venixs,  5  Wheat.  127  ;  The 
Apollon,  9  id.  362;  Canter  v.  American 
and  Ocean  Ins.  Co.  3  Pet.  307.  And  in  the 
common-law  courts,  even  in  cases  where 
the  costs  are  taxed,  this  theory  has  not 
always  been  acted  upon.  In  actions  on 
covenants  of  warranty,  and  of  seisin  in  the 
sale  of  real  estate,  the  reasonable  expenses 
of  defending  a  previous  suit  for  the  re- 

[467] 


442- 


THE   LAW   OF   CONTRACTS. 


[part  ir. 


the  infringement  of  patents,  the  magnitude  of  the  expense,  in 
proportion  to  the  sum  recoverable  in  the  suit  itself,  has  led  some 
courts  to  allow  juries  to  include  this  expense  in  their  verdicts; 
but  we  cannot  think  this  legal,  (j)  The  principle  of  compensa- 
tion has,  nevertheless,  great  power,  and  courts  now  seek  to 
apply  it  to  the  measurement  of  damages  even  more  than  for- 
merly. One  of  its  consequences  is,  that  the  plaintiff  can,  gener- 
ally, recover,  according  to  his  proof,  more  or  less  than  the  amount 
specified  in .  his  declaration,  [k)     The  only  absolute  limitation 


covery  of  the  property,  consisting  of  coun- 
sel fees  and  the  like,  have  been  recovered. 
Staats  V.  Ten  Eyck,.  3  Caines,  111  ; 
Pitcher  v.  Livingston,  4  Johns.  1  ;  Waldo 
V.  Long,  7  id.  173;  Sumner  v.  Williams, 
8  Mass.  162  ;  Swett  v.  Patrick,  3  Fairf.  9  ; 
Hardv  v.  Nelson,  27  Me.  52.5.  But  sec 
Leffingwell  r.  Elliott,  10  Pick.  204; 
Robinson  v.  Bakewfll,  25  Penn.  St.  424. 
So  the  expenses  of  defending  a  prior  suit, 
on  a  breach  of  an  implied  warranty  of 
title,  on  the  sale  of  personal  projierty, 
■were  allowed  in  Kingsbury  ?'.  Smith,  13 
N.  H.  109;  but  in  Armstrong  v.  Percy,  5 
AVend.  535,  tlie  court  refused  to  allow 
more  than  the  taxed  costs.  See  Blasdalc 
V.  Babcock,  1  Johns.  518;  Lewis  v. 
Peake,  7  Taunt.  153.  In  actions  on  the 
case  and  trespass,  juries  have  sometimes 
been  allowed,  in  assessing  damages,  to 
take  into  consideration  counsel  fees  and 
other  i-easonablo  expenses  in  prosecuting 
the  suit.  Linsley  v.  Bushnell,  15  Conn. 
225,  ir^nVr,  J.,  dissenting;  Noycsy.  Ward, 
19  id.  250;  Marshall  v.  Betncr,  17  Ala. 
832 ;  Wliijiple  v.  Cumberland  Manuf.  Co. 
2  Story,  0(11  ;  Thurston  r.  Martin,  5 
Mason,  497.  And  sec  Ah  Thaic  v.  Quan 
AV'au,  3  Calif.  210.  But  the  weight  of 
authority  ajipcars  to  be  against  such 
allowance.  ]Jariiard  r.  Poor,  21  Pick. 
378;  Lincoln  v.  S.  &  S.  11.  R.  Co.  23 
"Wend.  425;  Good  r.  Mylin,  8  Barr,  51, 
overruling  Wilt  v.  Vickcrs,  8  Watts,  235, 
anil  Hogcr.s  v.  Pales,  5  ]'arr,  154,  159; 
Young  V.  Turner,  4  Blackf.  277.  'J'iie 
authority  of  Wiiipple  v.  Cumberland 
Manuf.  Co.,  and  Thurston  v.  Martin,  is 
overthrown  in  the;  late  case  of  Day  r. 
"Woodworih,  13  How.  303,  wlicre  I'.ar- 
nanl  i\  I'oor,  and  Lincoln  ?».  S.  i.^  S.  U.  1(. 
Co.  wen-  a|)j)rovcil,  and  wiiat  appears 
to  be  tiie  true,  rule  was  stated  by  (ii'nr, 
J.,  who,  after  asserting  tluit  viudictivc  or 


exemplary  damages  may  be  given  in  cer- 
tain cases,  adds :  "  It  is  true  that  damages, 
assessed  by  way  of  example,  may  thus 
indirectly  compensate  the  plaintiff  for 
money  expended  in  counsel  fees ;  but 
the  amount  of  these  fees  cannot  be  taken 
as  the  measure  of  punishment  or  a  neces- 
sar}-  element  in  its  infliction." 

(/)  Counsel  fees  and  other  expenses 
were  allowed  in  Boston  Manuf.  Co.  v. 
Fiske,  2  Mason,  120;  Pierson  v.  Eagle 
Screw  Co.  3  Story,  402 ;  Allen  v.  Blunt, 
2  Woodb.  i&  M.  121.  But  the  authority  of 
these  is  much  shaken,  if  not  overthrown, 
in  Stimpson  v.  The  Railroads,  1  Wallace, 
Jr.  164,  and  by  a  dictum  in  Day  v.  Wood- 
worth,  13  How.  372,  where  Grier, 
J.,  said :  "  The  only  instance  in  which 
this  power  of  increasing  the  '  actual  dam- 
age '  is  given  by  statute,  is  in  the  Patent 
Laws  of  the  United  States.  But  there  it 
is  given  to  the  court  and  not  to  the  jury. 
The  jury  must  find  the  '  actual  damages' 
incurred  by  the  plaintiff'  at  the  time  his 
suit  was  brought,  and  if,  in  the  opinion  of 
the  court,  the  defendant  has  not  acted  in 
good  faith,  or  has  been  stubbornly  litig- 
ious, or  has  caused  unnecessary  trouble 
and  expense  to  the  plaiutifl',  the  court  may 
increase  the  amount  of  the  verdict,  to  the 
extent  of  trebling  it.  But  this  penalty 
cannot,  and  ought  not,  to  be  twice  in- 
flicted ;  first,  at  the  discretion  of  the  jury, 
and  again  at  the  discretion  of  the  court. 
The  expenses  of  the  defendant,  over  and 
al)0ve  the  taxed  costs,  are  usually  as  great 
as  those  of  the  plaintiff;  and  yet  neither 
court  nor  jury  can  com])cnsate  him,  if  the 
verdict  ami  judgment  be  in  his  favor,  or 
amerce  the  \Ai\u\Ui)'  ])ro  fitlso  clamore  be- 
yond taxed  costs. " 

(/•)  liutchins  ('.  Adams,  3  Greenl.  174, 
Gould's  Pleading,  Ch.  4,  ^  37. 


en.  viil]  damages.  *443 

being  the  amount  of  the  ad  damnum  which  cannot  be  *exceed- 
ed.  (/)  We  shall  recur  to  this  question,  of  including  expenses 
in  damages,  again. 

Another  effect  is,  that  circumstances  may  be  shown,  in  miti- 
gation, or  in  aggravation  of  the  damages,  which  did,  or  do,  in 
fact,  mitigate  or  aggravate  the  injury ;  and,  as  we  think,  only 
these,  (w)  We  are  not  now  speaking  of  exemplary  or  vindictive 
damages.  And  in  cases  which  do  not  raise  this  question,  evi- 
dence of  the  defendant's  motives,  or  of  any  thing  which  affects 
only  the  moral  character  of  the  transaction,  ought  not  to  be 
admitted,  or  to  have  any  weight  with  the  jury.  The  intention, 
therefore,  is  not  an  element  in  the  case,  unless  it  belongs  di- 
rectly to  the  issue.  That  is,  the  intention  should  not  be  shown 
by  either  party,  to  increase  or  lessen  the  damages,  unless  a  bad 
purpose  is  one  of  the  allegations  of  the  plaintiff,  expressly,  or  by 
implication  of  the  law,  because  necessarily  involved  in  the  alle- 
gations. («)  Or,  perhaps,  unless  a  part  of  the  case  consists  of 
words  or  acts  which  are  harmless,  if  they  are  said  or  done  as 
the  manifestation  of  one  intention  or  feeling,  and  injurious  if  of 
another,  (o) 

Compensation  for  injuries  to  property,  or  for  a  breach  of  con- 
tract in  relation  to  property,  is  far  more  easily  measured  by 
money,  than  when  it  is  sought  for  an  injury  to  the  person  or 
reputation.  Nevertheless,  it  is  compensation  only  which  is  to 
be  given ;  and  the  jury  must  measure  this  as  well  as  they  can, 
taking  into  consideration  the  whole  injury  which  was  sustained, 
and  all  its  parts ;  as  suffering,  bodily  and  mentally,  loss  of  time, 
or  of  money,  or  of  labor,  and  the  many  mischiefs  which  ensue 
from  a  loss  of  reputation,  in  a  community  where  one  without  a 
reputation  is  in  effect  an  outlaw. 

The  bodily  pain  resulting  from  an  injury  is  always  to  be  con- 


(?)  Hoblins   v.   Kimble,  1   Bulst.  49  ;  question  is  discussed  with  great  learning 

Bac.  Abr.  tit.  Damages  ;  Curtiss  v.  Law-  and  ability,  by  Mr.  Justice  Metcalf. 
rence,  17  Johns.  Ill;  Fish  v.  Dodge,  4         (n)  As  in  actions  for  malicious  prose- 

Denio,  311 ;  Fournier  V.  Faggott,  3  Scam,  cution.     Jones  y.  Gwynn,  10  Mod.  148; 

347  ;  Cameron  v.  Boyle,  2  Greene,  Iowa,  Wiggin  v.  Coffin,  3  Story,  1. 
154;  Palmer  17.  Reynolds,  3  Calif.  396;         io)  Weatherston  v.  Hawkins,  1  T.  R. 

Day  V.  Berkshire  Woollen  Co.  1    Gray,  110;  Rogers  w.  Clifton,  3  B.  &  P.  587. 

420.  See  Bromage  v.  Prosser,  4  B.  &  C.  247. 

{m)  See  3  Am.  Jurist,  287,  where  this 

VOL.  II.  40  [  469  ] 


444* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


siderecl  in  estimating  damages,  (p)  But  mere  mental  *siiffering 
seems,  in  the  cases,  to  be  generally  disregarded,  unless  the  injury 
be  wanton  and  malicious,  (q)  Where  a  contract  is  broken 
under  aggravating  circumstances,  these  may  sometimes  be  given 
in  evidence  to  increase  the  damages,  (r)  In  general,  however, 
the  intention  is  not  regarded  ;  for  it  seems  to  be  the  rule  of  the 
common  law,  that  a  man  suffers  the  same  injury  from  an  actual 
trespass,  whether  it  was  intentional  or  not ;  that  is,  the  same 
amount  of  what  the  law  calls  injury,  when  inquiring  what  shall 
be  compensated,  (s)  Hence  a  lunatic  has  been  held  liable  for 
the  injury  he  inflicted.  (/)  But,  in  such  a  case,  nothing  can 
enter  into  the  damages  which  savors  of  a  vindictive  or  exem- 
plary character,  (u)  If  circumstances  are  admitted  in  aggrava- 
tion of  damages  which  did  not  aggravate  the  injury,  a  wrong  is 
done.  But  there  are  cases  in  which  circumstances  may  be  ad- 
mitted, that  show  the  true  character  of  the  facts  which  constitute 
the  injury,  and  may  thus,  in  effect,  aggravate  the  damages, 
although  they  formed  no  part  of  the  injury  complained  of.  Thus 


(p)  Morse  v.  Auburn  &  S.  E.  R.  Co. 
10  Barb.  621;  Bcardslcy  v.  Swann,  4 
McLean,  333. 

(ry)  Flemington  v.  Smithers,  2  C.  &  P. 
292;  Blako  v.  Midland  R.  Co.  18  Q.  B. 
93,  10  Eng.  L.  &  Eq.  437.  Sec  Morse  v. 
Auburn  &  S.  R.  R.  Co.  10  Barb.  621. 

(r)  In  Coppin  v.  Braithwaite,  8  Jur. 
87.'j,  tlie  action  was  assumpsit  on  a  con- 
tract to  carry  the  plaintiff  in  a  sbip  from 
London  to  Sbeerness.  It  was  alleged,  as 
a  breacb,  that  tiie  defendants  by  their 
agents,  caused  the  plaintiff  to  be  disem- 
barked at  an  intermediate  port,  in  a  scan- 
dalous and  disgraceful  manner,  and  used 
towards  him  conteni])tuous  and  insulting 
language.  It  was  liehl  that  these  aggra- 
vating circumstances  could  be  shown  to 
incrca.sc  the  damages.  J'dike,  B.,  said  : 
"  Witii  respect  to  wliat  was  said  by  tlie 
captain,  at  the  time  of  turning  the  plaintiff 
out  of  the  vessel,  I  think  it  was  propeily 
received.  Tiiere  can  be  nochjiilit  tliat  the 
defendants  are  liable  for  eveiy  tiling  done 
in  breach  of  tlie  contract  by  the  cajitain, 
acting  as  their  servant.  The  breach  of 
contract  alleged  in  thv,  dc^claration,  is  the 
refusing  to  carry  the  plaintin'  in  the  shij), 
and  turning  him  out  of  it  in  a  contemptu- 
ous manner,  bcfriir  the  terniinatioii  of  the 
voyage.     The  turning  him  out  is  part  of 

[470] 


the  breach,  and  the  mode  of  turning  him 
out  is  part  of  the  evidence  in  the  case.  A 
contract  is  broken,  and  it  is  quite  impos- 
sible to  exclude  from  the  view  of  the  juiy 
the  circumstances  under  which  it  was 
broken.  Surely,  it  would  make  a  most 
material  difference  if  the  contract  were 
broken  because  it  would  be  inconvenient 
to  carry  him  to  his  journey's  end,  and  if 
he  were  turned  out  under  circumstances 
of  aggravation.  Suppose,  instead  of  a 
man  landed  at  Gravescnd  from  a  steam- 
boat, this  had  been  the  case  of  a  passenger 
in  a  ship  bound  to  the  West  Indies,  and 
that  he  were  put  ashore  on  a  desert  island, 
without  food,  or  cxiiosed  to  the  burning 
sun  and  the  danger  of  wild  beasts,  or  even 
landed  among  savages ;  would  not  evi- 
dence be  receivable  to  show  the  state  of 
the  island  where  be  was  left,  and  the  cir- 
cumstances attending  the  violation  of  the 
contract  '.  " 

(.s)  3  Am.  Jurist,  391,  ct.  scq. ;  Lambert 
?'.  IJessey,  T.  Kavm.  421  ;  James  v.  Camp- 
bell, 5  0.  &  P.  372  ;  Hay  v.  The  Cohoes 
Co.  3  Barb.  42  ;  M'Bribe  v.  M'Laughlin, 
5  Watts,  376. 

{!)  Morse  y.  Crawford,  17  Vt.  499. 

(u)  Krom  v.  Sclioonraaker,  3  Barb- 
647. 


CH.  VIII.] 


DAMAGES. 


*445 


in  *an  action  of  slander,  it  has  been  said  that  the  plaintiff  may 
prove,  in  aggravation  of  damages,  other  words  than  those  he 
sets  forth  as  constituting  the  slander.  This  we  think  very 
doubtful,  in  point  of  law  and  of  right.  But  he  may  show  other 
words,  in  order  to  illustrate  and  make  apparent  the  meaning, 
character,  and  effect  of  the  words  which  he  alleges.  These 
other  words  may  inflict  other  and  further  injury,  but  must  not 
be  used  or  considered  by  the  jury  for  the  purpose  of  increasing 
the  damages  to  be  rendered  in  this  action,  because  damages  for 
those  very  words  may  be  recovered  in  an  action  founded  upon 
them.  It  seems  reasonable,  however,  that  a  jury  may  use  these 
other  words  in  explanation  of  those  declared  upon,  although  a 
distinct  action  may  be  brought  upon  them,  provided  they  are 
not  permitted  to  be  considered  as  increasing  the  injury  inflicted 
by  the  words  declared  on,  and  so  of  increasing  the  damages,  (v) 


(v)  There  is  much  diversity  in  the 
English  Nisi  Prius  decisions,  upon  the 
questions  arising  relative  to  the  introduc- 
tion of  other  words  than  those  for  which 
the  action  is  brought,  as  evidence  in  suits 
for  slander  or  libel.  The  subject  was  first 
thoroughly  considered  in  Westminster 
Hall,  in  the  late  case  of  Peerson  v.  Le- 
inaitre,  5  Man.  &  G.  700,  6  Scott,  N.  R. 
607,  where  the  Nisi  Prius  decisions  were 
cited  and  commented  on  by  counsel.  The 
action  was  for  libel,  and  the  communica- 
tion was  not  equivocal,  or  prima  facie 
privileged,  so  that  express  malice  need  be 
shown,  in  order  to  maintain  the  action. 
It  was  held  that  other  communications, 
containing  in  substance  a  repetition  of  the 
same  libellous  matter,  and  published  after 
the  suit  was  brought,  and  in  themselves 
actionable,  could  be  introduced  to  show 
that  the  defendant  was  actuated  by  malice 
in  fact.  Tindal,  C.  J.,  said:  "And  this 
appears  to  us  to  be  the  correct  rule,  viz., 
that  either  party  may,  with  a  view  to  the 
damages,  give  evidence  to  prove  or  dis- 
prove tlie  existence  of  a  malicious  motive 
in  the  mind  of  the  publisher  of  defamatory 
matter ;  but  that,  if  the  evidence  given  for 
that  purpose  establishes  another  cause  of 
action,  the  jury  should  be  cautioned 
against  giving  any  damages  in  respect  of 
it.  And,  if  such  evidence  is  offered  mere- 
ly for  the  purpose  of  obtaining  damages 
for  such  subsequent  injury,  it  will  be  prop- 
erly  rejected.     .     .     .     Upon    principle, 


we  think  that  the  spirit  and  intention  of  the 
party  publishing  a  libel,  are  fit  to  lie  con- 
sidered by  a  jury,  in  estimating  the  injury 
done  to  the  plaintiff;  and  that  evidence 
tending  to  prove  it,  cannot  be  excluded, 
simply  because  it  may  disclose  another 
and  different  cause  of  action."  The  law 
does  not  appear  to  be  settled  in  this  coun- 
try. In  Thomas  v.  Crosswell,  7  Johns. 
264,  and  Inman  v.  Foster,  8  Wend.  602, 
it  was  held,  in  the  first  case,  that  in  actions 
for  libel  the  plaintiff  may  give  in  evidence 
other  publications  which  are  not  libellous  ; 
and  in  the  second  case,  that  in  actions  for 
verbal  slander,  the  plaintiff  may  prove 
other  slanderous  words,  where  the  statute 
of  limitations  has  run  as  to  those  words. 
And  in  Root  v.  Lowndes,  6  Hill,  518,  in 
a  case  where  malice  was  implied  by  law, 
the  court  held  that  the  repetition  of  the 
same  words  should  be  received,  but  would 
not  allow  the  plaintiff  to  prove  any  words 
which  might  be  the  subject  of  another 
action.  See  Keenholts  v.  Becker,  3 
Denio,  346;  Kendall  v.  Stone,  2  Sandf. 
269.  In  Bodwell  v.  Swan,  3  Pick.  376,  it 
was  held  that  a  repetition  of  the  words  for 
whicli  the  action  was  brought,  or  tlie  ut- 
tering of  words  of  similar  import,  might 
be  given  in  evidence,  to  show  that  the 
first  uttering  of  the  words  was  malicious. 
But  the  court  also  declared  that  they 
could  go  no  further,  and  that  they  could 
not  permit  a  distinct  calumny,  uttered  by 
the  defendant,  to  be  given  in  evidence  to 

[471] 


446  THE  LAW  OF  CONTRACTS.  [PART  U. 


SECTION    IV. 

OP  EXEMPLARY   AND   VINDICTIVE   DAMAGES. 

Whether  damages  may  be  vindictive  or  exemplary,  in  the 
strict  sense  of  these  words,  that  is,  whether  in  actions  ex  delicto 
(to  which  it  is  generally  admitted  that  exemplary  damages 
must  be  confined),  [tv)  after  a  jury  have  gone  to  the  full  length 
of  adequate  compensation  for  the  whole  injury  sustained  by 
the  plaintiff,  the  law  authorizes  them  to  begin  anew,  and  add 
to  these  damages  something  more  by  way  of  punishment  to  the 
defendant,  is  a  grave  and  difficult  question,  and  high  authorities 
stand  ranged  upon  the  affirmative  and  negative.  On  the  one 
hand,  it  is  said  that  there  is  nothing  punitive  in  the  nature  of 
civil  actions,  and  that  if  any  thing  of  the  kind  enters  into  them, 
it  is  an  error  or  an  abuse  whicTi  does  the  great  mischief  of  con- 
founding two  perfectly  distinct  jurisdictions.  If  one  man  sues 
for  an  injury,  it  should  not  enter  into  Ids  compensation  that  the 
wrong  done  was  of  bad  example  and  injurious  effect  to  others; 
for  if  so,  others  who  are  injured  can  sue  also  ;  and  if  beyond  the 
injury  which  can  be  reached  thus,  there  lies  a  mass  of  general 
wrong  which  no  one  man  can  take  hold  of,  let  the  State  come 
with  its  criminal  process.  But  if  these  two  things  are  mingled, 
then  the  civil  process  for  remedy  and  compensation  loses  its  just 
measure,  and  the  criminal  process  is  either  not  applied,  or  is 
made  inefficient,  by  the  fact  that  its  work  is  done,  however  im- 
perfectly, elsewhere. 

On  the  other  hand,  it  was  distinctly  asserted,  so  long  ago  as 

prove  liis  malice  in  spcnkiiif;  tlic  words  for  Blackf.  202,  it  was  Iicld  tiiat  a  re]ietition 

whicli  the  action  was  broiigiit.     Sec  Wat-  of  tiic  same  words  since  the  commence- 

8on  V.  Moore,  2  Cusii.  l.'i.'J.     In  Wallis  v.  nient  of  the  suit  could  not  lie  taken  into 

Mease,   .'{   Hinncy,  r)4(),   it  was  laid  tiiat  consideiatiou   in    assessing    dainafj;es,   al- 

otlier  words  than  those  in  tlie  dc(  laralioTi  tiion;^h  tiiey  mi;:ht  he  jiiven  to  show  mal- 

couhl  he  introduced  to  siiow  malice,  l»ut  ice.      See    IJurson  v.  Edwards,  1    Smith, 

that  the  damajres  must  be  given  for  those  Ind.  7  ;    Itif^den  ?'.  Walcott,  6   Gill  «&  J. 

words   oidy   for   which    the    a(;tion    was  41.'J  ;  VVa|;ncr  n.  llolhrunner,  7  Gill,  296. 
hrou^^'ht.     Si'e  Ivcan  ik  M'Lauf;hlin,  2  S.         (w)  See  Coppiii  r.  Hraithwaite,  8  Jurist, 

&  K.  4(i'.).      Ill  Schoonover  v.  liowe,  7  875,  cited  sujira,  n.  (/). 

[■172] 


en.  VIII.]  DAMAGES.  *447 

by  Lord  Camden,  that  "damages  are  designed  not  only  *as  a 
satisfaction  to  the  injured  person,  but  as  a  punishment  to  the 
guilty."  {x)  And  as  all  law  should  have  for  its  constant  end 
the  prevention  of  wrong,  the  principle  of  punishment  may  well 
be  mingled  with  that  of  compensation,  in  order  to  effect  this 
purpose.  And  on  this  subject  authorities  are  so  numerous,  so 
various,  and  so  strong,  that  it  must  be  conceded  as  a  nearly 
established  rule  of  law,  that  in  certain  cases,  as  in  actions  for 
libel,  slander,  assault  and  battery,  false  imprisonment,  malicious 
prosecution,  seduction  and  the  like,  the  jury  may  give  some 
damages  for  the  purpose  of  punishment,  which  on  other  grounds 
they  would  not  give,  [y) 

In  regard  to  the  authorities,  it  may  be  confessed  that  by  far 
the  greater  part  are  obiter,  and  some  of  them  quite  uncalled  for; 
and  that  of  some  of  those  which  would  have  most  weight,  the 
meaning  is  qualified  and  explained  by  other  expressions  used, 
or  greatly  restrained  by  the  facts  of  the  case.  Moreover,  in 
nearly  all  cases  in  which  there  is  such  malice  as  will  allow  the 
giving  of  exemplary  damages,  there  is  some  insult  or  injury  to 
the  feelings  for  which  the  damages  cannot  be  assessed  by  any 
definite  rule.  Hence  it  may  be  difficult  to  show,  in  any  par- 
ticular case,  that  damages  have  been  allowed  beyond  the 
amount  of  the  pecuniary  loss  and  the  injury  to  the  person  and 
to  the  feelings,  unless  we  rely  upon  the  precise  words  used  in 
the  instructions  of  the  court.  But  with  all  allowance,  there  re- 
main positive  adjudications,  and  distinct  and  emphatic  asser- 
tions, which  go  very  far  indeed  to  establish  the  lawfulness,  in 
certain  cases,  of  vindictive  damages. 

We  cannot  believe  that  it  was  ever  a  principle  of  the  ancient 
and  genuine  common  law,  that  damages  should  be  punishment, 
or  that  the  civil  remedy  for  a  wrong  done  should  be  punitive  to 
the  wrongdoer  as  well  as  compensative  to  the  sufferer.     Dam- 


far)  5  Campbell's  Lives   of  the  Lord  note,  by  Mr.  Greenleaf :  and  on  the  other 

Chancellors,  207.  side,  in  the  Law  Eeporter  for  June,  1847, 

(?/)  This  question  has  been  ably  argued  and  in  Sedgwick  on  the  Measure  of  Dam- 
on the  side  against  allowing  exemplary  ages,  by  Mr.  Sedgwick.  The  two  articles 
damages,  in  3  Am.  Jurist,  287,  by  Hon.  in  the  Law  Reporter  are  also  published  in 
Theron  Metcalf,  and  in  the  Law  Reporter  the  Appendix  to  the  second  edition  of 
for  April,  '47,  and  in  2  Greenl.  Ev.  §  253,  Sedgwick  on  the  Measure  of  Damages. 

40  *  [  473  J 


448*  THE   LAW   OF   CONTRACTS.  [PART  II. 

ages  were  not,  originally,  at  least,  designed  *for  any  such  pur- 
pose. But  it  may  still  be  a  question  whether  the  introduction 
of  this  principle,  to  a  certain  extent,  and  in  certain  cases,  may 
not  rest  on  good  reasons,  as  well  as  good  authorities.  The 
common  law  is  not  perfect,  nor  so  unwise  as  to  call  itself  per- 
fect. It  has  its  civil  process  for  compensation,  and  its  crimi- 
nal process  for  punishment,  and  it  wisely  demands  that  these 
should  be  kept  distinct.  But  it  might  not  be  wise  to  insist  that 
the  work  of  punishment  should  not  be  done  at  all,  or  should  be 
done  very  imperfectly,  because  the  proper  criminal  process  is 
unequal  to  the  requirements  of  some  cases,  although  this  work 
can  be  well  and  adequately  done  by  the  civil  process  in  precisely 
these  cases.  There  are  many  wrongs,  ^^jjessimi  exe?npli,^'  of 
which  the  interest  of  the  community  demands  the  prevention, 
but  which  criminal  process  cannot  reach  at  all,  or  cannot  punish 
with  any  adequacy.  The  crime  of  seduction,  sometimes  worse 
in  the  character  which  it  indicates,  and  in  the  injury  which  it 
inflicts,  than  murder,  is  one  which  criminal  law  cannot  touch  ; 
and  very  many  cases  where  a  very  great  injury  is  compounded 
of  elements  which  the  criminal  law  if  it  does  not  ignore  does 
not  profess  to  regard  as  important,  illustrate  the  occasional  in- 
sufficiency of  this  branch  of  law.  What  good  reason  is  there 
why  what  it  cannot  do,  although  it  ought  to  be  done,  should  not 
be  done  for  it,  by  a  collateral  branch  of  the  law?  In  the  action 
for  seduction,  which  must  be  brought  for  loss  of  service,  or  for  a 
trespass  quare  clausiwi,  laying  the  seduction  only  as  an  incident, 
the  law  first  requires  that  the  service,  or  the  trespass,  should  be 
proved ;  but  when  this  formal  requirement  is  proved,  it  is  for- 
gotten, and  the  damages  are  measured  by  a  totally  different 
standard.  It  may  be  said,  that  here  only  the  substantial  grava- 
men is  made  the  measure  of  compensation,  instead  of  the  formal 
gravamen.  But  it  seems  to  be  a  rule  in  modern  times,  that 
when,  in  such  a  case,  or  at  least  in  an  action  for  breach  of 
promise  of  marriage,  a  defendant  defends  himself  by  impeach- 
ing the  character  of  tlu^  woman,  wliicli  Ik^  may  do,  if  he  makes 
this  a  distinct  point  of  his  defence-  and  llicn  fails  in  the  proof  of 
it  on  llie  trial,  the  jury  may  consider  Ihis  attemi)t  as  good  cause 
for  swelling  the  damages.  Such  ruling  recommends  itself  to 
[474] 


CH.  VIII.] 


DAMAGES. 


*449 


our  *moral  feelings,  and  to  a  sense  of  right  and  justice ;  but  it 
would  be  very  difficult  to  maintain  it  as  a  rule  of  law,  on  any 
other  than  the  punitive  principle,  [ya) 

It  is  unfortunate  that  the  word  "  vindictive  "  has  been  used 
as  descriptive  of  these  damages;  "exemplary"  is  much  better. 
For,  on  the  whole,  we  are  satisfied  that  the  courts  of  this  coun- 
try generally  permit  a  jury  to  give,  in  certain  cases,  damages 
which  exceed  the  measure  of  legal  compensation,  and  are  justi- 
fied by  the  principle  that  one  found  guilty  of  so  great  an  of- 
fence should  be  made  an  example  of,  in  order  to  deter  others 
from  the  like  wrong-doing,  (c)  In  New  Hampshire,  {a)  Con- 
necticut, [b)  New  York,  (c)  Pennsylvania,  [d)  Alabama,  (e)  and 
Louisiana,  (/)  this  has  been  distinctly  asserted,  and  the  Su- 
preme Court  of  the  United  States  has  positively  and  em- 
phatically  recognized    "exemplary    damages"    as    lawful,  (g^) 


{ya)  See  vol.  1,  p.  551,  note,  (/). 

(z)  There  are  numerous  English  cases 
in  which  it  has  been  held  that  juries  may 
give  exemplary  damages;  —  as  in  tres- 
pass for  assault  and  imprisonment  under 
a  general  warrant  issued  by  the  Secretary 
of  State,  Huckle  v.  Money,  2  Wilson,  205; 
—  in  trespass  quure  clausum  fregit  for  en- 
tering the  plaintifif's  land,  tiring  at  game, 
and  using  intemperate  language,  Merest 
V.  Harvey,  5  Taunt.  442; — in  trespass 
quare  cluusum /regit  for  entering  the  j^lain- 
tifTs  close,  and  poisoning  the  plaintiff's 
poultry,  Sears  v.  Lyons,  2  Stark.  .317  ;  — 
in  trespass  for  debauching  the  plaintift''s 
daughter,  Tullidge  v.  Wade,  3  Wilson,  18. 
In  Doe  V.  Filliter,  13  M.  &  W.  47,  it  was 
said:  "In  actions  for  malicious  injuries, 
juries  have  been  allowed  to  give  vindictive 
damages  and  to  take  all  the  circumstances 
into  consideration."  In  Brewer  v.  Dew, 
1 1  M.  &  W.  625,  it  was  held,  that  vin- 
dictive damages  might  be  given  in  an  ac- 
tion of  trespass,  for  seizing  the  plaintiti''s 
goods  under  a  f'alse  and  unfounded  claim, 
whereby  he  was  prejudiced  in  his  busi- 
ness, and  believed  by  his  customers  to 
be  insolvent,  and  certain  lodgers  left  his 
house. 

(a)  Sinclair  v.  Tarbox,  2  N.  H.  135 ; 
Whipple  V.  Walpole,  10  id.  130. 

(b)  Linsley  v.  Bushnell,  15  Conn.  225  ; 
Huntley  v.  Bacon,  15  id.  273. 

(c)  Tillotson  V.  Cheetham,  3  Johns. 
56  ;  Woert  v.  Jenkins,  14  id.  352  ;  King 


V.  Root,  4  Wend.  113,  139;  Brizsee  v. 
Maybee,  21  Wend.  144,  where  exemplary 
damages  were  allowed  in  an  action  of 
replevin;  Tifft  v.  Culver,  3  Hill,  180; 
Kendall  v.  Stone,  2  Sandf.  269.  See  the 
able  argument  of  counsel  in  Kendall  v. 
Stone,  1  Seld.  14. 

(r/)  Sommer  v.  Wilt,  4  S.  &  R.  19; 
M'Bride  v.  M'Laughlin,  5  Watts,  375; 
Phillips  V.  Lawrence,  6  Watts  &  S.  154; 
Amer  v.  Longstreth,  10  Penn.  St.  148. 

(e)  Donnell  v.  Jones,  13  Ala.  490,  502; 
Ivey  V.  McQueen,  17  id.  408;  Mitchell 
V.  Billingley,  17  id.  391. 

(/)  Nelson  v.  Morgan,  2  Mart.  La. 
256;  Gaulden  v.  McPhaul,  4  La.  Ann. 
79.  Exemplary  damages  are  also  al- 
lowed in  Kentucky;  Jennings  v.  Maddox, 
8  B.,  Mon.  430;— in  Illinois,  Grable  v. 
Margrave,  3  Scam.  372  ;  McNamara  v. 
King,  2  Gilman,  432;  —  in  North  Caro- 
lina, Wylie  i\  Smitherman,  8  Ired.  236  ; 
Gilreath  v.  Allen,  10  Ired.  67  ;  —  in  South 
Carolina,  Spikes  v.  English,  4  Strobh.  34  ; 

—  in  Delaware,  Steamboat  Co.  v.  Whill- 
din,  4  Ilarring.  228 ;  Jefferson  v.  Adams, 
id.  321  ;  Cummings  v.  Spruance,  id.  315  ; 

—  in  Missouri,  Milburn  v.  Beach,  4  Mo. 
104. 

(^r)  In  Day  r.  Wood  worth,  13  How. 
363,  the  action  was  trespass  for  pulling 
down  a  mill-dam.  Grier,  J.,  in  deliver- 
ing the  opinion  of  the  court,  said  :  "  It  is 
a  well-established  principle  of  the  com- 
mon law,  that  in  actions  of  trespass,  and 

[475  J 


450" 


THE   LAW   OF   CONTRACTS. 


[part  II. 


And  we  are  not  aware  of  any  authoritative  *and  direct  judicial 
decision,  which  declares  that  such  damages  are  never  lawful. 
But,  at  the  same  time,  we  think  there  is  a  growing  caution  as 
to  the  application  of  this  rule,  and,  perhaps,  a  tendency  to  re- 
strict it  to  cases  in  which  the  direct  criminal  process  fails  wholly 
or  in  a  good  degree,  and  not  to  allow  it  to  justify  an  excessive 
and  unreasonable  enlargement  of  damages,  (h) 


all  actions  upon  the  case  for  torts,  a  jury 
may  inflict  wliat  are  called  exemplary, 
punitive,  or  vindictive  damages  upon  a 
defendant,  having  in  view  the  enormity  of 
his  offence,  rather  than  the  measure  of 
compensation  to  the  plaintiif.  We  are 
aware  that  tiie  propriety  of  tliis  doctrine 
has  heen  questioned  by  some  writers ;  but 
if  repeated  judicial  decisions  for  more 
than  a  century  are  to  be  received  as  the 
best  exposition  of  what  the  law  is,  the 
question  will  not  admit  of  argument.  By 
the  common,  as  well  as  by  statute  law, 
men  are  often  punished  for  aggravated 
misconduct,  or  lawless  acts,  by  means  of 
a  civil  action,  and  the  damages  inflicted 
by  way  of  penalty  or  punishment,  given 
to  the  party  injured.  In  many  civil  ac- 
tions, such  as  libel,  slander,  seduction, etc., 
the  wrong  done  to  the  plaintiff"  is  incapa- 
ble of  being  measured  by  a  money  stand- 
ard ;  and  the  damages  assessed  depend  on 
the  circumstances,  showing  the  degree  of 
moral  turpitude  or  atrocity  of  the  defend- 
ant's conduct,  and  may  properly  be  term- 
ed exemplary,  or  vindictive,  rather  than 
compensatory.  In  actions  of  trespass, 
where  the  injury  has  been  wanton  and 
malicious,  or  gross  and  outrageous,  courts 
permit  the  juries  to  add  to  tiie  measured 
compensation  of  the  plaintiff",  which  he 
would  have  been  entitled  to  recover  had 
the  injury  been  inflicted  witliout  design  or 
intention,  sometliing  furtlier,  by  way  of 
punishment  or  example,  wiiicli  has  some- 
times iiccu  called  '  smart  money.'  This 
has  been  always  left  to  the  discretion  of 
the  jury,  ns  the  degree  of  punislinient  to 
be  thus  inflicted  must  depend  on  the  pe- 
culiar circumstances  of  each  case."  Sec 
also  Conard  v.  riuific  Ins.  Co.  G  I'ct. 
262;  Walker  v.  Smith,  1  Wash.  C.  C. 
I.'j2  ;  Boston  Maiiui".  Co.  v.  Fiskc,  2 
Mason,  120;  Stimi)S()n  /'.  The  Kailroads, 
1  Wallace,. Jr.  164  ;  Ralston  v.  The  State 
Kights,  Crabbe,  22. 

(/<)   III  Austin  r.  Wil.son,  4  Cush.  27.'}, 
it  wa.s  held  that  exemplary  damages  could 

[47G] 


not  be  recovered  in  an  action  for  an  in- 
jury which  is  also  punishable  by  indict- 
ment. Metcalf,  J.,  in  delivering  the  opin- 
ion of  the  court,  said  :  "  Whether  exem- 
plary, vindictive,  or  punitive  damages,  — 
that  is,  damages  beyond  a  compensation, 
or  satisfaction  for  the  plaintift"'s  injury,  — 
can  ever  be  legally  awarded,  as  an  exam- 
ple to  deter  others  froin  committing  a 
similar  injury,  as  a  punishment  of  the  de- 
fendant for  his  malignity  or  wanton  viola- 
tion of  social  duty,  in  committing  the 
injury  which  is  the  subject  of  the  suit,  is 
a  question  upon  which  we  are  not  now  re- 
quired or  disposed  to  express  an  opinion. 
The  argument  and  the  authorities  on  both 
sides  of  this  question  are  to  be  found  ia 
2  Greenleaf  on  Ev.  tit.  Damages,  and 
Sedgwick  on  Damages,  39,  et  seq.  If 
such  damages  are  ever  recoverable,  we 
arc  clearly  of  opinion  that  they  cannot  be 
recovered  in  an  action  for  an  injury  which 
is  also  punishable  by  indictment,  as  libel, 
and  assault  and  battery.  If  they  could  be, 
the  defendant  might  be  punished  twice  for 
the  same  act.  We  decide  the  present 
case  on  this  single  ground.  See  Thorley 
V.  Kerry,  4  Taunt.  355  ;  Whitney  v. 
Hitchcock,  4  Denio,  461  ;  Taylor  v.  Car- 
penter, 2  Woodb.  &  M.  1,  22."  But  in 
Cook  V.  Ellis,  6  Hill,  466,  Jcfl'crson  v. 
Adams,  4  Harring.  321,  vindictive  dam- 
ages were  allowed,  although  the  de- 
fendants had  been  indicted  and  fined  for 
the  same  injury.  See  Jacks  v.  Bell,  3 
C.  &  r.  316.  In  Whitney  r.  Hitchcock, 
4  Denio,  461,  it  was  held  that  in  tres- 
pass for  assault  and  battery  upon  the 
child  or  servant  of  the  plaintiff,  tho 
measure  of  damages  is  the  actual  loss 
which  the  jdaintiff  has  sustained ;  and 
exemplary  damages  cannot  be  given, 
though  tiie  assault  bo  of  an  indecent  char- 
acter, upon  a  female,  and  under  circum- 
stances of  great  aggravation.  The  court 
said  :  "  The  present  suit  is  brought  for 
the  loss  of  the  services  of  his  servant, 
which  the  plaintifl"  says  ho  has  sustained 


CH.  VIII.] 


DAMAGES. 


451-*452 


There  is,  however,  a  difficulty,  as  well  as  a  great  dinbrence 
among  the  courts,  in  their  practice  in  relation  to  verdicts  which 
are  alleged  to  be  excessive.  In  those  cases  in  which  compen- 
sative damages  may  be  ascertained  within  narrow  limits,  by 
computation,  it  is  easy  to  say  when  these  limits  are  certainly 
exceeded.  And  generally,  in  these  cases,  and  in  actions  upon 
contract  or  on  tort  when  no  actual  bad  motive  is  relied  upon, 
it  is  for  the  court  to  direct  the  jury  in  what  way,  or  by  what 
rule  or  measure,  they  should  assess  the  damages.  But  there 
are  cases  which  seem  to  justify  the  remark  sometimes  made  in 
them  by  the  courts,  that  there  is  no  rule  by  which  the  damages 
can  be  measured,  and  they  must  be  left  to  the  discretion  of  the 
jury,  {i)     And  in  such  *cases  a  verdict  would  not  be  disturbed 


in  consequence  of  the  injury  which  the 
defendant  has  inflicted  upon  her.  This 
he  is  entitled  to  recover;  and  if  sickness 
had  followed,  he  could  have  claimed  to 
be  reimhurscd  for  the  expenses  attending 
such  sickness;  but  we  all  think  that  he 
cannot  recover  beyond  his  actual  loss. 
The  young  female  can  herself  maintain 
an  action,  in  which  her  damages  may  be 
assessed  according  to  the  rule  laid  down 
at  the  trial ;  and  if  the  father  could  like- 
wise recover  them  in  this  case,  they  could 
be  twice  claimed  in  civil  actions,  and  the 
defendant  would  also  be  liable  to  indict- 
ment. The  action  for  seduction  is  pecul- 
iar, and  would  seem  to  form  an  excep- 
tion to  theTule,  that  actual  damages  only 
can  be  recovered,  where  the  action  is  for 
loss  of  service  consequential  upon  a  direct 
injury ;  but  there  the  party  directly  in- 
jured cannot  sustain  an  action,  and  the 
rule  of  damages  has  always  been  consid- 
ered as  founded  upon  special  reasons  only 
applicable  to  that  case."  In  llippey  v. 
Miller,  11  Ired.  247,  it  was  held,  under 
a  statute  enacting  that  all  actions  of  tres- 
pass and  trespass  on  the  case  shall  sur- 
vive, when  they  are  not  merely  vindictive, 
that  in  an  action  against  the  representa- 
tives of  one  deceased,  who  had  committed 
a  trespass  upon  the  property  of  the  plain- 
tiff, the  plaintiff  cannot,  no  matter  how- 
ever aggravated  the  trespass  may  have 
been,  recover  vindictive  damages.  In 
Amer  v.  Longstreth,  10  Penn.  St.  145,  it 
was  held,  in  an  amicable  action  of  tres- 
pass instituted  to  try  the  rights  of  the  par- 
ties, that  tlie  damages  must  be  measured 
by  the  actual  injury,  although  there  might 


have  been  a  wanton  invasion  of  the  plain- 
tiff's rights.  In  Singleton  v.  Kennedy, 
9  B.  Mon.  222,  it  was  held  that  in  an 
action  on  the  case  for  fraud,  in  the  sale 
of  personal  property,  the  jury  were  not 
autliorized  to  assess  vindictive  damages. 
But  see  Spikes  v.  English,  4  Strobh.  34. 
In  Barnard  u.  Poor,  21  Pick.  378,  it  was 
held,  in  an  action  on  the  case  against  the 
defendant,  for  carelessly  and  negligently 
setting  fire  on  his  own  land,  whereby  the 
plaintiff's  property  on  adjoining  land  was 
destroyed,  that  it  was  not  material  whether 
the  proof  established  gross  neglii/cnce  or 
only  want  of  ordinary  care,  for  in  either 
case  the  plaintiffs  would  be  entitled  to  re- 
cover in  damages  the  actual  amount  of 
loss  sustained,  and  no  more,  in  the  form 
of  vindictive  damages  or  otherwise.  But 
in  Whipple  v.  Walpole,  10  N.  H.  130,  it 
was  held  that  in  cases  of  gross  negligence 
exemplarv  damages  might  be  recovered. 

(i)  In  Beny  v.  Vreeland,  1  N.  J.  183, 
Green,  C.  J.,  in  delivering  the  opinion  of 
the  court  in  an  action  of  trespass  quare 
clausuin  fregit,  said  :  "  The  court,  in  ac- 
tions of  trespass,  especially  for  personal 
torts,  when  damages  can  be  gauged  by  no 
fixed  standard,  but  necessarily  rest  in  the 
sound  discretion  of  the  jury,  interferes 
with  a  verdict  on  the  mere  ground  of  ex- 
cessive damages,  with  reluctance,  and 
never  except  in  a  clear  case.  But  when 
the  plaintiff  complains  of  no  injury  to  his 
person  or  his  feelings  ;  where  no  malice 
is  shown  ;  where  no  right  is  involved  be- 
yond a  mere  question  of  property  ;  where 
there  is  a  clear  standard  for  a  measure  of 
damages,  and  no  difficulty  in  applying  it; 
[477] 


453" 


THE   LAW   OP   CONTRACTS. 


[part  II. 


for  excess,  unless  it  indicated  wilful  perversity,  or  blinding 
prejudice  or  passion,  or  an  entire  misapprehension  of  the  merits 
of  the  case  and  the  duty  of  the  jury  (j) 

From  all  injuries  the  law  implies  that  damages  are  sustained. 
If  the  injury  be  nothing  more  than  the  invasion  of  a  legal  right, 
the  law,  usually  at  least,  implies  nothing  more  than  nominal 
damages,  for  these  suffice  to  determine  the  question  of  right, 
and  more  will  not  be  given  unless  actual  injury  be  shown. 
But  the  actual  injuries  need  not  always  be  set  forth  in  the 
declaration.  If  the  injury  be  one  from  which  actual  loss,  suf- 
fering, or  mischief  must  necessarily  ensue,  this  the  law  will 
generally  infer,  and  it  need  not  be  specifically  alleged.  But 
that  which  occurs  directly,  yet  not  necessarily  and  as  a  certain 
or  inevitable  consequence,  should,  as  a  general  rule,  *be  spe- 
cifically   stated,   and    then,   being    proved,   damages   may   be 


the  measure  of  damages  is  a  question  of 
law,  and  is  necessarily  under  the  control 
of  the  court."  See  also,  Leland  v.  Stone, 
10  Jlass.  462,  per  Jackson,  J. ;  Farrand  v. 
Bouchell,  Harper,  87  ;  Akler  v.  Keighley, 
15  M.  &  W.  117;  Walker  v.  Smith,  1 
Wash.  C.  C.  152;  Wylie  v.  Smitherman, 
8  Ired.  2.36 ;  Commonwealth  v.  Sessions 
of  Norfolk,  5  Mass.  437,  per  Parsons, 
C.J. 

(/)  Iluckle  V.  Money,  2  Wilson,  205; 
Sharp  r.  Brice,  2  W.  131.  942 ;  Williams 
V.  Currie,  1  C.  B.  841  ;  Cook  v.  Hill,  3 
Sandf.  ;j.'51  ;  Woodruff  v.  Richardson,  20 
Conn.  238.  In  Huckle  v.  Money,  2  Wilson, 
206,  Prutt,  C.  J.,  said:  "The  law  has 
not  laid  down  what  shall  he  the  measure 
of  damages  in  actions  of  tort ;  the  measure 
is  vague  and  uncertain,  depending  upon 
a  vast  variety  of  causes,  facts,  and  circuui- 
stances;  torts  or  injuries  which  may  l)c 
done  hy  one  man  to  another  are  infinite; 
in  ca.scs  of  criminal  conversation,  battery, 
imprisonment,  slander,  malicious  prose- 
cutions, etc.,  the  state,  degree,  quality, 
trade,  or  jirofession  of  tli(!  jiarty  injured, 
as  well  as  of  tlu;  person  who  diil  the  injury, 
must  he,  and  generally  are  considered  hy 
the  jury  in  giving  damages  ;  the  few  cases 
to  he  found  in  the  hooks  of  new  trials  for 
tort.9,  bIiow  that  courts  of  justice  have 
most    commonly   set    their  faces    against 

them It  is  very  dangerous  for  the 

judges   to   intermeddle   itt    damages    for 

[478] 


torts;  it  must  be  a  glaring  case  indeed  of 
outrageous  damages  in  a  tort,  and  which 
all  mankind  at  first  blusli  must  think  so, 
to  induce  a  court  to  grant  a  new  trial  for 
excessive  damages."  The  same  rule  is 
acted  upon  by  tlie  courts  in  actions  for 
breach  of  promise  to  marry.  Clark  v. 
Pendleton,  20  Conn.  495 ;  Perkins  v. 
Hersey,  1  R.  I.  495.  But  in  all  these 
cases,  new  trials  are  granted  if  the  dam- 
ages are  clearly  excessive.  Chambers  v, 
liobinson,  2  Stra.  691  ;  Price  v.  Severn, 
7  Bing.  310;  Boyd  v.  Brown,  17  Pick. 
453;  McConncll  v.  Hampton,  12  Johns. 
234 ;  Wiggins  v.  Coffin,  3  Story,  1  ;  Col- 
lins V.  The  A.  &  S.  R.  R.  Co."  12  Barb. 
492  ;  Diblin  v.  Murjihy,  3  Sandf  19.  In 
Sharp  V.  Brice,  2  W.  Bl.  942,  De  Grey, 
C.  J.,  said  :  "  It  has  never  been  laid  down 
that  the  court  will  not  grant  a  new  trial 
for  excessive  damages  in  any  case  of  tort. 
It  was  held  so  long  ago  as  in  Comb.  357, 
that  the  jury  have  not  a  despotic  jjower  in 
sueli  actions.  The  utmost  that  can  bo 
said  is,  and  very  truly,  that  the  same  rule 
does  not  prevail  upon  (|uestions  oi'  tort,  as 
of  contract.  In  contract  the  measure  of 
damages  is  generally  matter  of  account, 
and  the  damages  given  nniy  ho  demon- 
strated to  b(!  right  or  wrong.  But  in  forts 
a  greater  latitude  is  allowed  to  the  jury, 
anil  the  daniMgcs  nnist  be  excessive  and 
outrageous  to  rc(juire  or  warrant  a  new 
trial." 


en.  VIII.]  DAMAGES.  -453 

founded  upon  it.  (k)  Thus,  if  one  who  owes  money  refuses 
to  pay  it,  the  creditor  may  sue  and  declare  himself  damaged, 
without  specifying  in  what  way,  because  the  law  understands 
that  when  one  cannot  get  money  which  is  due  to  him,  he  must 
sustain  loss.  So,  if  in  slander,  the  words  charge  an  indictable 
offence,  or  a  contagious  disease,  or  impute  insolvency  to  a  mer- 
chant, or  make  any  other  imputation  which,  if  believed,  must 
tend  to  exclude  a  man  from  society,  subject  him  to  punish- 
ment as  a  criminal,  or  interfere  with  his  lawful  occupation, 
the  plaintiff  need  not  here  say  in  what  way  he  is  damaged, 
for  the  law  asserts  that  such  slander  as  this  must  be  inju- 
rious. (/)  But  if  the  words  charged  are  of  other  matters,  and 
the  defamation  may  or  may  not  have  been  injurious,  the  plain- 
tiff must  now  set  forth  specifically  the  damages  he  has  sus- 
tained, and  either  prove  them  as  alleged,  specifically,  or  prove 
facts  from  which  the  jury  may  infer  them,  (m)  These  dam- 
ages are  called  special  damages.  They  are  such  consequences 
of  the  injury  as  are  both  actual  and  natural,  but  not  necessary. 


(1c)  1  Chitty's  PI.  332;  Steyens  j;.  Ly-  more  v.  Cutter,  1  Gallis.  429,  per  Stoiy, 
ford,  7  N.  H.  360 ;  Furlong  v.  PoUeys,  J. ;  Swan  v.  Tappan,  5  Cush.  104. 
30  Me.  491;  Bedell  v.  Powell,  13  Barb.  (?«)  Bacon's  Abr.  tit.  Slander,  (C). 
183.  In  Vanderslice  I'.  Newton,  4  Comst.  In  Beach  v.  Eanney,  2  flill,  309,  it  was 
130,  the  action  was  for  a  breach  of  a  con-  held,  that  such  damages  must  be  pecuniary, 
tract  to  tow  the  plaintiff's  boat.  Ruggles,  and  that  proof  of  mere  mental  or  bodily 
J.,  in  delivering  the  opinion  of  the  court  suffering,  loss  of  society,  or  of  the  good 
said  :  "  With  respect  to  tlio  damages,  the  opinion  of  neighbors,  would  not  be  suffi- 
general  rule  in  questions  of  this  nature  is,  cient.  But  it  has  been  held,  that  a  refusal 
that  the  plaintiff'  is  entitled  to  recover,  as  to  receive  the  plaintiff  as  a  visitor,  on  ac- 
a  recompense  for  his  injury,  all  the  dam-  count  of  the  slander,  was  sufficient  evi- 
ages  which  are  the  natural  and  proximate  dence  to  support  an  allegation  of  special 
consequence  of  the  act  complained  of.  (2  damage.  Moore  v.  Meagher,  I  Taunt. 
Grcenl.  Ev.  §  256.)  Those  which  weces-  39  ;  Williams  w.  Hill,  19  Wend.  305.  So, 
sarily  result  from  the  injury  are  termed  where  the  plaintiff  was  refused  civil  treat- 
general  damages,  and  may  be  shown  un-  ment  at  a  public-house ;  Olmsted  v.  Mil- 
der the  general  allegation  of  damages,  at  Icr,  1  Wend.  506.  In  Bradt  v.  Towsley, 
the  end  of  the  declaration.  But  such  13  Wend.  253,  the  plaintiff  having  been 
damages  as  are  the  natural,  although  not  called  a  prostitute,  brought  her  action  of 
the  necessary  result  of  the  injury,  are  slander,  alleging  as  special  damage,  loss 
termed  special  damages,  and  must  be  of  health,  and  a  consequent  derangement 
stated  in  the  declaration,  to  prevent  a  of  business ;  the  defendant  demurred,  and 
surprise  upon  the  defendant ;  and  being  there  was  judgment  on  the  demurrer  for 
so  stated  may  be  recovered."  the  plaintiff.     See  also,  Hartley  v.  Her- 

(/)  Bacon's   Abr.    tit.    Slander,    (B.);  ring,  8  T.  R.  130. 
1   Stark,   on  Slander,   10.     See  Whitte- 

[479] 


454  THE  LAW  OF  CONTRACTS.  [PART  II. 


SECTION    V. 

OF   DIRECT,    OR  REMOTE,    CONSEQUENCES. 

Damages  will  not,  in  general,  be  given  for  the  consequences 
of  wrong  doing,  which  are  not  the  natural  consequences,  be- 
cause it  is  only  for  them  that  the  defendant  is  held  liable. 
Thus,  if  .he  has  beaten  the  plaintiff,  he  must  compensate  for  all 
the  evils  which  naturally  flow  from  the  beating,  whatever  they 
may  be ;  but  if  a  slight  bruise  has  been  so  ill-treated  by  a  sur- 
geon, that  extensive  inflammation  and  gangrene  have  super- 
vened and  a  limb  is  lost,  the  defendant  is  not  answerable  for 
this.  Nor,  on  the  same  principle,  ought  he  to  be  held  respon- 
sible if  the  same  consequences  follow  from  a  slight  bruise,  by 
reason  of  the  peculiarly  unhealthy  condition  of  the  plaintiff",  if 
the  defendant  had  no  means  of  knowing  this.  Still,  it  is  some- 
times difficult  to  draw  the  line  between  what  are  and  what  are 
not  the  natural  consequences  of  an  injury.  Always,  however, 
if  the  consequences  of  the  act  complained  of  have  been  in- 
creased and  exaggerated  by  the  act,  or  the  omission  to  act,  of 
the  plaintiff",  this  addition  must  be  carefully  discriminated  from 
those  natural  consequences  of  the  act  of  the  defendant,  for 
which  alone  he  is  responsible.  If  the  plaintiff  chooses  to  make 
his  loss  greater  than  it  need  have  been,  he  cannot  thereby  make 
his  claim  on  the  defendant  any  greater,  (n) 

(;))  Millcrr.  Miirincr's  Cliurch,  7  Grccnl.  lative,  and  contingent  consequences,  which 

51  ;  Walker  v.  Ellis,  1  Snecd,  515  ;  Davis  the  party  injured  might  easily  have  avoid- 

v.  Fish,  1  Greene,  Iowa,  406  ;  Dorwin  ?'.  cd  by  his  own  act.    ISu])pose  a  man  should 

Potter,  5  Deiiio,  .300.     In  Loker  r.   Da-  enter  his  neighlior's  field  unlawfully,  and 

inon,  17   Pick.   2K4,  the  action  was  tres-  leave  the  gate  ojien  ;  if  before  the  owner 

pasH  for  removing  a  few  rods  offence,  knows  it,  cattle  enter  and  destroy  the  cro]i, 

nnd  it  was  ludd  that  tlie  pro)»er  measure  of  the  trespasser  is  responsible.     But  if  the 

diimnges  was  the  cost  of  repairing  it,  and  owner  sees  the  gate   o]ien  and  passes  it 

not  tlie  injury  to  the  croj)  of  the  subsc-  frc(|uentiy,  and  wilfully,  and  obstinately; 

quent  year,  arising  from  the  difcct  in  the  or  through  gross  negligence,  leaves  it  open 

fence,  "it  ajipearing  that  such  defect  was  all  summer,  and  cattle  get  in,  it  is  his  own 

known  to  the  plaiiililf.     Sli< nr,  (',.,].,  mud  :  fully.     So  if  one  tiirow  a  stone  and  break 

"  In  asHi'Ssiiig  damages,  tin-  direct  and  iin-  a  window,  the  cost  of  repairing  the  window 

mediate  conscipicnccs  of  the  injurious  act  is  the  ordinary  measure  of  damage.     liut 

arc  to  be  regarded,  and  uot  remote,  spccu-  if  the  owner  Buil'crs  the  window  to  remain 

[480] 


CH.  viil]  damages.  455 

It  is  an  ancient  and  universal  rule,  resting  upon  obvious  rea- 
son and  justice,  that  a  wrongdoer  shall  be  held  responsible  only 
for  the  proximate,  and  not  for  the  remote  consequences  of  his 
actions.  One  does  not  pay  money  which  is  due ;  the  creditor, 
in  his  reliance  on  this  payment,  has  made  no  other  arrange- 
ments ;  he  is  therefore  unable  to  meet  an  engagement  of  his 
own  ;  his  credit  suffers,  his  insolvency  ensues,  and  he  is  ruined. 
All  this  is  distinctly  traceable  to  the  non-payment  of  his  debt 
by  the  defendant ;  yet  he  shall  be  held  liable  only  for  its 
amount  and  interest;  causa proxima,  non  remota,  spectatur ;  and 
the  proximate  cause  of  the  paintiff 's  insolvency  was  his  non- 
payment of  the  debt  he  himself  owed.  The  cause  of  this  cause 
was  the  defendant's  failure  to  pay  his  debt.  But  this  was  a 
remote  cause,  being  thrown  back  by  the  interposition  of  the 
proximate  cause,  (o)  In  such  a  case  as  this  the  reason  of  the 
rule  is  plain  enough.  If  every  one  were  answerable  for  all  the 
consequences  of  all  his  acts,  no  one  could  tell  what  were  his 
liabilities  at  any  moment.  The  utmost  caution  would  not  pre-" 
vent  one  who  sustained  any  social  relations  from  endangering 
all  his  property  every  day.  And  as  very  few  causes  continue 
to  operate  long  without  being  combined  and  complicated  with 
others,  it  would  soon  become  impossible  to  say  which  of  the 
many  persons  who  may  have  contributed  to  a  distant  result 
should  be  held  responsible  for  it,  or  in  what  proportions  all 
should  be  held. 

We  must  then  stop  somewhere ;  but  the  question  where  we 
shall  stop  is  sometimes  one  of  great  uncertainty.  Not  only  is 
there  no  definite  rule,  or  clear  and  precise  principle  given  by 
which  we  may  measure  the  nearness  or  remoteness  of  effect  in 
this  respect;  but  the  highest  judicial  authorities  are  so  directly 
antagonistic,  that  they  scarcely  serve  as  guides  to  lead  us  to  a 

without  repairing  a  great  length  of  time  the  injury,  or  otherwise  I^rought  it  upon 

after  notice  of  the  fact,  and  liis  furniture,  himself.     Fraser  v.  Berkely,    7    C.  &  P. 

or  pictures,  or  other  valuable  articles,  sus-  621  ;  Watts  v.  Fraser,  7  id.  309  ;  Calcraft 

tain  damage,  or  the  rain  beats  in  and  rots  v.  Harborough,  4  C.  &  P.  499.     But  the 

the  window,  this  damage  would  be  too  re-  provocation  must  have  been  so  recent  as 

mote."     But  see   Heancy  v.  Hcency,  2  to  induce  a  presumption  that  the  injury 

Denio,  625  ;  Green  j;.  Mann,  11  111.613.  was   inflicted   under   the  influence  of  it. 

So  in  actions  for  pei'sonal  injuries,  evi-  Lee  v.  Woolsey,  19  Johns.  319. 

dencc  is  admissible  in  mitigation  of  dam-  (o)  Archer  i?.  Williams,  2  Car.  &  K.  26. 
ages,  to  show  that  the  plaiutift'  provoked 

VOL.  II.  41  [481] 


456' 


THE   LAW   OF   COXTRACTS. 


[part  II. 


conclusion.  For  example,  the  Court  *of  King's  Bench,  and  the 
Supreme  Com-t  of  the  United  States  decide  this  question  as  it 
is  presented  to  them  in  circumstances  of  almost  exact  similarity, 
in  precisely  opposite  ways,  (p)  We  have  been  disposed  to 
think  that  there  is  a  principle,  derivable  on  the  one  hand  from 
the  general  reason  and  justice  of  the  question,  and  on  the  other 
hand  applicable  as  a  test,  in  many  cases,  and  perhaps  useful, 
if  not  decisive  in  all.  It  is  that  every  defendant  shall  be  held 
liable  for  all  of  these  consequences  which  might  have  been  fore- 
seen and  expected  as  the  results  of  his  conduct,  but  not  for 
those  which  he  could  not  have  foreseen,  and  was  therefore  under 
no  moral  obligation  to  take  into  his  consideration,  (q)  There 
seems  little  reason  to  object  to  this  rule  in  cases  where  the  act 
complained  of  was  voluntary  and  intentional.  And  if  it  be 
said  that  where  the  act  is  wholly  involuntary,  as  where  the  de- 
fendant's ship  runs  down  another  at  anchor,  in  a  dark  night, 
there  is  no  reason  for  asking  what  consequences  he  should  have 
•  expected,  when  he  had  not  indeed  the  least  thought  of  doing 
the  thing  itself,  it  may  be  answered  that  even  here  it  will  gener- 
ally be  found,  that  the  consequences  which  at  the  time  would 
have  been  foreseen,  by  a  person  of  intelligence  and  deliberate 


(p)  An  insured  vessel,  havinp;  siuik  an- 
other vessel,  by  accidental  collision,  was 
sentenced  by  a  foreign  Admiralty  Court 
(acting  on  a  peculiar  local  law),  to  pay 
one  lialf  the  value  of  tiic  lost  vessel.  It 
was  held  in  Peters  v.  Tiie  Warren  Ins. 
Co.  3  Sumner,  389,  14  Peters,  99,  that  a 
peril  of  the  sea  was  the  ])roxiniate  cause 
of  tiie  loss  of  the  sum  thus  ])aid,  and  tliat 
the  insurers  were  liable  for  it.  The  very 
same  point  arose  about  the  same  time  in 
the  Court  of  Kind's  ]]ciicli,  and  received  a 
directly  tjppohite  adju(li<"ition.  J)c  Vaux 
V.  Salvador,  4  A.  &  E.  420.  And  on 
this  (piestion  we  cannot  but  ])rcfcr  the 
reasons  and  conchisions  of  the  Knglish 
court.  The  muxim,  cauaa  proj'una,  von 
remold,  sfii'itdliir,  nniy  be  applied  with 
more  strict ncrts  to  contracts  ol'  insurance, 
than  ill  (|ncKlioiis  ri'spcctiu};  ihinia;4cs,  but 
the  dilliculty  and  uncertaiuty  in  its  aji|)li- 
cation  are  e(|ualiy  (;reat  in  both  cases. 
Tlic  authority  of  I'eters  t'.  Warren  Ins. 
Co.  is  mucii  lessened  liy  the  hitcr  cases 
of  Gen.  M.  Ins.  C'o.  v.  Sherwood,  14  How. 

[482] 


352,  and  Matthews  v.  Howard  Ins.  Co. 
1  Kern.  9.  See  2  Parsons  on  Maritime 
Law,  225-230. 

((/)  Greenland  v.  Chaplin,  5  Exch.  243. 
In  Kigby  v.  Hewitt,  5  Exch.  240,  an 
action  on  the  case  was  brought  for  an  in- 
jury to  the  ])laintitl',  from  the  negligent 
driving  of  the  defendant's  omnibus.  Pol- 
lock, C.  15.,  in  giving  the  opinion  of  the 
court,  said  :  "  I  am  disposed  not  quite  to 
acquiesce  to  the  full  extent  in  the  propo- 
sition, that  a  person  is  responsible  for  all 
the  possible  consc(juences  of  iiis  negli- 
gence. I  wish  to  guard  against  laying 
down  the  jiroposition  so  universally  ;  but 
of  this  1  am  (piite  clear,  that  every  ])crson 
wiio  does  a  wrong,  is  at  least  resi)onsiblo 
for  all  the  misdnevous  conse(]uences  that 
may  reasonably  i)e  expected  to  result, 
under  ordinary  circumstances,  from  such 
misconduct."  This  rule  apjicars  Avlicro 
contracts  are  broken,  without  fraud  or 
malice.  Pothier  on  Obligations  (l)y  Ev- 
ans), I'art  1,  c.  2,  art.  Ill,  ]).  90.  See 
Williams  v.  Barton,  13  La.  410. 


en.  viri.] 


DAMAGES. 


*4o7 


observation,  are  just  those  which  are  so  far  the  direct,  immedi- 
ate, and  natural  effects  of  the  act,  that  the  doer  of  the  act 
*ought,  on  the  general  principles  of  common  justice,  to  be  held 
responsible  for  them.  But  it  is  difficult,  and  perhaps  impossi- 
ble, to  lay  down  a  definite  rule,  which  shall  have,  in  all  cases, 
practical  value  or  efficacy  in  determining  for  what  conse- 
quences of  an  injury  a  wrongdoer  is  to  be  held  responsible,  (r) 


(r)  111  Harrison  v.  Berkley,  1  Strobh. 
5-18,  ][^ardlaiv,  J.,  said  :  "  Every  incident 
will,  when  carefully  examined,  be  found 
to  be  the  result  of  combined  causes,  and 
to  be  itself  one  of  various  causes  which 
produce  other  events.  Accident  or  design 
may  disturb  the  ordinary  action  of  causes, 
and  produce  unlocked  for  results.  It  is 
easy  to  imagine  some  act  of  trivial  mis- 
conduct or  slight  negligence,  which  shall 
do  no  direct  harm,  but  set  in  motion  some 
second  agent  that  shall  move  a  third,  and 
so  on  until  the  most  disastrous  conse- 
quences shall  ensue.  The  first  wrong- 
doer, unfortunate  rather  tlian  seriously 
blamable,  cannot  be  made  answerable  for 
all  these  consequences.  He  simll  not  an- 
swer for  those  which  the  party  grieved  has 
contributed  by  his  own  lilamable  negli- 
gence or  wrong  to  produce,  or,  for  any 
which  such  party,  by  proper  diligence, 
might  have  prevented.  (Com.  Dig.  Ac- 
tion on  the  Case,  141,  B.  4  ;  11  East,  60; 
2  Taunt.  314;  7  Pick.  282.)  But  this  is 
a  very  insufficient  restriction ;  outside  of 
it  would  often  be  found  a  long  chain  of 
consequence  upon  consequence.  Only 
the  proximate  consequences  shall  be  an- 
swered for.  (2  Greenleafs  Ev.  210,  and 
cases  there  cited.)  The  difficulty  is  to 
determine  what  shall  come  M'ithin  this 
designation.  The  next  consequence  only 
is  not  meant,  whether  we  intend  thereby 
the  direct  and  immediate  result  of  the  in- 
jurious act,  or  the  first  consequence  of 
that  result.  What  cither  of  these  would 
be  pronounced  to  be,  would  often  de- 
pend upon  the  power  of  tlie  microscope 
with  which  we  should  regard  the  aifair." 
The  general  character  of  the  adjudications 
upon  the  subject  may  be  gathered  from 
the  following  cases.  In  Ashley  v.  Harri- 
son, 1  Esp.  48,  Peake,  194,  a  performer 
employed  by  the  plaintiff  was  libelled  by 
the  defendant,  and  in  consequence  refused 
to  appear  upon  the  stage.  It  was  alleged 
as  special  damage  that  tlie  oratorios  had 
been  more  thinly  attended  on  that  account. 
It  was  held  that  the  injury  was  too  remote, 


and,  per  Lord  Keni/on:  "  If  this  action  is 
to  be  maintained  I  know  not  to  what  ex- 
tent the  rule  maj'  be  carried.     For  aught 

1  can  see  to  the  contrary,  it  may  equally 
be  supported  against  every  man  who  cir- 
culates the  glass  too  freely,  and  intoxi- 
cates an  actor,  by  which  he  is  rendered 
incapable  of  performing  his  part  on  the 
stage.  If  any  injury  has  happened,  it  was 
occasioned  entirely  by  the  vain  fears  or 
caprice  of  the  actress."  See  also,  Moore 
V.  Adam,  2  Chitty,  198;  Boyle  v.  Bran- 
don, 13  M.  &  W.  738  ;  Lincoln  v.  The  S. 
&  S.  R.  R.  Co.  23  Wend.  425;  Donnell 
r.  Jones,  13  Ala.  490.  It  was  held  that 
an  action  for  slanderous  words  not  in 
themselves  actionable  could  not  be  main- 
tained on  the  ground  that  injury  resulted 
from  the  repetition  of  these  words  by  a 
third  person.  Ward  v.  Weeks,  7  Bing. 
211  ;  Stevens;;.  Hartwell,  11  Met.  542.  In 
Vicars  v.  Wilcocks,  8  East,  1,  the  defend- 
ant asserted  that  his  cordage  had  been  cut 
by  the  plaintiff,  in  consequence  of  which 
the  latter,  who  was  hired  for  a  time  certain, 
was  discharged  from  employment  by  his 
master.  It  was  held  that  the  defendant 
was  not  liable  for  damages  caused  by  the 
discharge,  and,  per  Lord  Ellenborough : 
"  The  special  damage  must  be  the  legal 
and  natural  consequence  of  the  words 
spoken,  otherwise  it  did  not  sustain  the 
declaration  ;  and  here  it  was  an  illegal 
consequence  ;  a  mere  wrongful  act  of  the 
master ;  for  which  the  defendant  was  no 
more  answerable,  than  if,  in  consequence 
of  the  words,  other  persons  had  afterwards 
assembled  and  seized  the  j)laintiff'  and 
thrown  him  into  a  horse-pond,  by  way  of 
punishment  for  his  supposed  transgression. 
And  his  Lordship  asked  whether  any  case 
could  be  mentioned  of  an  action  of  this 
sort  sustained  by  the  tortious  act  of  a  third 
person."     See  also,  Morris  v.  Lungdale, 

2  B.  &  P.  284,  289;  Crain  v.  Petrie,  6 
Hill,  522;  Kendall  v.  Stone,  1  Seld.  14. 
But  the  decision  in  Vicars  v.  Wilcocks 
has  been  questioned,  in  1  Stark.  Slander, 
205-207 ;    Green   r.   Button,    2    Crorap. 

[483] 


458-459* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


Both  in  England  and  America,  it  is  generally  held   that 
profits  are  not  to  be  included  in  the  injury  for  which  *compen- 


M.  &  R.  707  ;  Coppin  v.  Braithwaite,  8 
Jur.  875,  per  Parke,  B. ;  and  in  Keene  v. 
Dilke,  4  Exch.  3S8,  it  was  held,  that,  "  if 
a  sheriff  wrongfully  seizes  goods  which 
are  afterwards  taken  from  him  by  another 
wrongdoer,  the  owner  of  the  goods  may, 
in  an  action  against  the  sheriff,  recover  as 
special  damage  the  amount  necessarily 
paid  to  the  other  wrongdoer,  in  order  to 
get  back  the  goods."  But  Alderson,  B., 
distinguished  the  case  from  Vicars  v.  Wil- 
cocks,  by  remarking  that  "  in  Vicars  v. 
Wilcocks  there  was  no  cause  of  action 
without  special  damage.  Here  it  is  only 
a  question  as  to  the  amount  of  damages." 
See  also.  Moody  v.  Baker,  5  Cowen,  3.51. 
In  actions  for  a  breach  of  warranty  this 
question  has  arisen.  In  Borradaile  v. 
Brunton,  8  Taunt.  535,  2  J.  B.  Moore, 
582,  the  defendant  sold  the  plaintiff  a 
chain  cable,  warranted  to  last  two  years, 
as  a  sulistitute  for  a  rope  cable  of  six- 
teen inches.  Within  two  years  the  cable 
broke  and  was  lost,  together  with  the 
anchor  attached  to  it.  It  was  held,  in  an 
action  for  breach  of  the  warranty,  that  the 
value  of  both  the  cable  and  anchor  could 
be  recovered.  In  Hargous  v.  Ablon,  5 
Hill,  472,  the  defendant  sold  cloth,  war- 
ranting the  invoice  to  be  correct ;  it 
proved  to  be  much  overstated,  and  in 
consequence  tiie  duties  on  the  cloth,  when 
exported  to  a  foreign  market,  were  over- 
paid. It  was  held,  in  an  action  for  breach 
of  the  warranty,  that  the  excess  of  duties 
could  not  be  recovered  as  damages.  Cow- 
en,  J.,  said  :  "  The  only  question  before 
us,  therefore,  relates  to  the  amount  of 
damages  recoverable.  The  general  rule 
would  sto])  with  awarding  to  the  plaintiff 
so  much  only  as  would  make  good  the 
differen(;e  i)etween  the  price  paid  and  the 
value  which  the  article  fell  sliort  in  con- 
sequence of  the  warranty  being  broken. 
A  warranty  or  promise  concerning  a  thing 
being  general,  tliat  is  to  say,  not  having 
reference  to  any  jiurpase  for  which  it  is  to 
be  u.'ied  out  oi'  the  ordinary  course,  the 
law  does  not  go  lieyond  the  general  mar- 
ket in  seanii  fur  iin  indemnity  against  its 
breach.  (See  lilandiard />.  Ely,  21  Woiid. 
.342,  317,  .'UH  ;  Vouriices  v.  Earl,  2  Hill, 
288,  2!)2,  a.)  The  exceptiinis  will  all  be 
found  If)  lie  in  the  special  nature  of  tlio 
promise!  r)r  warranty  itself,  express  or  im- 
plied. 'J'liii'-,  in  the  case  of  Horrafiaih-  v. 
Brunton  (2  .1.  W.  Moore,  582),  mentioned 

[  481  ] 


at  the  bar  and  mainly  relied  on  for  the 
plaintiff,  the  warranty  was,  that  a  cable 
should  last  two  years.  It  failed  before,  in 
consequence  of  which  the  anchor  was  lost. 
The  plaintiff'  was  allowed  to  recover,  not 
only  for  the  cable,  but  the  anchor;  the 
court  saying  the  loss  of  the  last  was  con- 
sequential to  the  insufficiency  of  the  cable. 
Where  goods  are  purchased  for  a  particu- 
lar market,  and  that  known  to  both  par- 
ties, the  damages  have  been  governed  by 
the  price  of  that  market.  (Bridge  ^^ 
Wain,  1  Stark.  504.)  But  where  the 
warranty  is  general,  an  accidental  dam- 
age even  in  the  vendee's  own  affairs  is 
not  regarded."  See  also,  Langridge  r. 
Levy,  2  M.  &  "W.  519,  4  id.  337.  In  an 
action  by  a  lessee  against  his  lessor,  for 
refusing  to  allow  the  lessee  to  enter  upon 
the  demised  premises,  the  plaintiff  is  enti- 
tled to  recover  the  damage  sustained  by 
him  in  his  removal  to  the  premises. 
Drigsis  V.  Dwight,  17  AVend.  71;  Giles 
V.  O'Toole,  4  Barb.  261  ;  Johnson  v. 
Arnold,  2  Cush.  46;  Lawrence  v.  Ward- 
well,  6  Barb.  423.  Although  the  injury 
may  have  been  inflicted  by  the  immediate 
agency  of  a  third  person,  the  wrongdoer 
will  be  liable  if  his  wrongful  act  naturally 
led  to  the  injury  ;  as  where  the  defendant 
descended  in  a  balloon  into  the  plaintiff's 
garden,  and  drew  to  his  assistance  a 
crowd,  who  trod  down  the  vegetables  and 
flowers,  the  defendant  was  held  liable  for 
these  injuries.  Guille  v.  Swan,  19  Johns. 
381  ;  Scott  V.  Shepherd,  2  W.  Bl.  892; 
Vandenburgh  r.  Truax,  4  Denio,  464; 
so  also,  if  caused  by  the  act  of  a  horse ; 
Gilbertson  r.  Richardson,  5  C.  B.  502. 
See  also,  Lynch  v.  Nirden,  1  Q.  B.  29.  A 
lapse  of  time  may  intervene  between  the 
wrongful  act  and  the  injury ;  Dickinson 
V.  Boyle,  17  Tick.  78.  In"  Tarieton  r. 
M'Gawley,  Pcake,  205,  tlie  defendant  was 
held  liable  for  firing  cannon  at  tlic  natives 
on  the  coast  of  Africa,  to  ])revcnt  their 
trading  with  the  ]ilaintirt'.  Firing  near 
the  plaintilfs  decoy  pond,  to  frighten 
away  the  wild  fowl,  was  iield  actionable 
in  Keeble  r.  Ilickeringill,  11  East,  574, 
iiolr.  In  Watson  /•.  A.  N.  i<:  B.  Railway, 
15  Jur.  418,  ,3  lOiig.  L.&  Ivj.  497,  the  plain- 
till' s(;iit  a  ](lan  and  model  to  a  committee 
who  had  oliered  a  prize  for  the  best  one  of 
the  kind.  By  the  negligence  of  the  com- 
mon carrier  it  did  not  arrive  in  season  to 
be  presented.     It  was  held,  that  the  chance 


CH.  VIII.] 


DAMAGES. 


*460 


sation  is  to  be  made.  Yet  these  would  seem  to  be  precisely 
those  consequences  which  the  owner  of  merchandise  did  ex- 
pect, and  the  loss  of  them  would  be  that  which  one  who  inter- 
fered with  the  owner,  as  by  unlawful  capture,  must  have  con- 
templated as  certain.  But  the  answer  is,  that  profits  are  ex- 
cluded, not  because  they  are  in  themselves  remote,  but  because 
they  depend  wholly  upon  contingencies,  which  are  so  many,  so 
various,  and  so  uncertain  ;  as  the  arrival  of  goods,  the  time, 
place,  and  condition  of  arrival,  the  state  of  the  market  at  that 
moment,  and  the  like,  that  it  would  be  impossible  to  arrive  at 
any  definite  determination  of  the  actual  loss,  by  any  trust- 
worthy method.  And  the  future  profits  of  a  business  which 
has  been  interrupted  by  the  defendant,  are  open  also  to  the  ob- 
jection of  remoteness  as  well  as  uncertainty,  (s)     But  *where 


of  obtaining  the  prize  could  not  be  con- 
sidered in  assessing  the  damages.  Where 
the  plaintiff's  horses  escaped  into  the 
defendant's  field,  in  consequence  of  a  de- 
fect in  his  fence,  and  were  there  killed  by 
the  falling  of  a  haystack,  which  it  was 
alleged  was  kept  in  an  improper  and  dan- 
gerous manner,  the  defendant  was  held 
liable  for  the  loss  of  the  horses.  Powell 
V.  Salisbury,  2  Young  &  J.  391.  The 
expense  of  searching  for  property  wrong- 
fully taken  has  been  held  recoverable  as 
special  damage,  in  an  action  on  the  case 
for  the  taking  of  the  property.  Bennett 
V.  Lockwood,^0  Wend.  223. 

(s)  The  probable  profits  of  a  voyage 
have  not  been  allowed  as  damages,  when 
it  has  been  broken  up  by  the  illegal  cap- 
ture of  the  vessel.  The  schooner  Lively, 
1  Gallis.  315;  The  Amiable  Nancy,  3 
Wheat.  546,  560  ;  La  Amistad  de  Rues,  5 
Wheat.  385  ;  or  by  a  collision  occasioned 
by  the  fault  of  the  defendant ;  Fitch  v. 
Livingston,  4  Sandf.  492,  514  ;  Cummins 
V.  Spruance,  4  Harring.  315;  Steam- 
boat Co.  V.  Whildin,  4  id.  2.33;  Finch  v. 
Brown,  13  Wend.  601 ;  or  by  legal  attach- 
ment of  the  ship  ;  Boyd  ;;.  Brown,  17 
Pick.  453.  In  Smith  v.  Condry,  1  How. 
28,  35,  Taneij,  C.  J.,  said:  "It  has  been 
repeatedly  decided,  in  cases  of  insurance, 
that  the  insured  cannot  recover  for  the 
loss  of  probable  profits  at  the  port  of  des- 
tination, and  that  the  value  of  the  goods 
at  the  place  of  shipment  is  the  measure  of 
compensation.  There  can  be  no  good 
reason  for  establishing  a  different  rule  in 

41* 


cases  of  loss  by  collision.  It  is  the  actual 
damage  sustained  by  the  party,  at  the 
time  and  place  of  the  injury,  that  is  the 
measure  of  damages."  But  see  Wilson 
V.  Y.  N.  &  B.  R.  Co.,  at  nisi  prius,  cited 
18  Eng.  L.  &  Eq.  557,  note.  And  in  The 
Narragansett,  1  Blatchf.  C.  C.  211  (a  case 
in  admiralty),  the  value  of  the  services  of 
the  vessel,  while  undergoing  necessary  re- 
pairs for  injuries  received  by  collision, 
was  allowed  as  a  part  of  the  damages  sus- 
tained by  her  owners.  See  also  William- 
son V.  Barrett,  13  How.  101,  and  1  Par- 
sons on  Maritime  Law,  204.  It  was  held, 
in  an  action  by  the  builder  of  a  steamboat 
for  its  price,  that  the  owner  could  not  re- 
coup the  amount  of  profits  which  would 
probably  have  arisen  from  trips,  which 
were  prevented  by  defects  in  the  construc- 
tion of  the  boat.  Blanchard  v.  Ely,  21 
Wend.  342.  See  Tajdor  v.  Maguire,  13 
Mo.  517  ;  Davis  v.  Tallcot,  2  Kern.  184. 
In  an  action  against  a  lessor,  for  refusing 
to  allow  the  lessee  to  enter  upon  the  de- 
mised premises,  the  profits  which  the 
lessee  might  have  made  in  his  business, 
had  he  occupied  the  premises,  cannot  be 
recovered  as  damages.  Giles  i\  O'Toole, 
4  Barb.  261.  In  an  action  for  the  breach 
of  a  contract  to  make  and  deliver  certain 
machinery  within  a  certain  time,  the 
profits  which  might  have  accrued  fiom 
the  manufacture  of  an  article  witli  the 
machinery,  had  the  contract  not  been 
broken,  cannot  be  considered  in  estimating 
the  profits.  Freeman  i'.  Clute,  3  Barb. 
424.    So  in  Hadley  v.  Baxendale,  9  Exch. 

[485] 


461' 


THE   LAW    OF   CONTRACTS. 


[part  II. 


profits  are  not  liable  to  either  of  these  objections,  there  they 
should  be  admitted,  as  giving  a  right  to  compensation  in  dam- 
ages. This  admission  seems,  however,  in  general,  to  be  limited 
to  cases  in  which  the  profits  are  the  immediate  fruit  of  the  con- 
tract, and  are  independent  of  any  collateral  engagement  or 
enterprise,  entered  into  in  expectation  of  the  performance  of  the 
principal  contract,  [t)     In  some  instances,  *the  courts  have  gone 


341,  26  Eng.  L.  &  Eq.  398.  A  com- 
mon carrier  contracted  with  a  miller  to 
caiTV  for  hire  two  pieces  of  iron,  forming 
the  broken  shaft  of  a  mill,  and  deliver  the 
same  to  an  artilicer,  to  serve  as  a  model 
for  a  new  one.  A  shaft  being  indispen- 
sable to  the  working  of  the  mill,  and  the 
miller  not  having  another,  the  mill  neces- 
sarily remained  idle  until  the  new  shaft 
could  be  supplied,  but  of  this  the  carrier 
was  not  aware.  He  did  not,  however, 
deliver  the  iron  to  the  artificer  within  a 
reasonable  time,  and,  a  delay  having  con- 
sequently arisen  in  the  delivery  of  the  new 
shaft,  he  was  sued  by  the  miller  for  a  breach 
of  his  agreement.  Ilchl,  that  the  plaintift' 
could  not  recover  as  damages  the  loss  or 
profits  incurred  by  the  stoppage  of  the 
mill ;  and  Alderson,  B.,  said  :  "  We  think 
the  proper  rule  in  such  a  case  as  the  pres- 
ent is  this  :  Where  two  parties  have  made 
a  contract  which  one  of  them  has  broken, 
the  damages  which  the  other  party  ought 
to  receive  in  respect  of  such  breach  of  con- 
tract should  he,  cither  such  as  may,  fairly 
and  reasonably,  be  considered  arising 
naturally,  that  is,  according  to  the  usual 
course  of  things,  from  such  breach  of  con- 
tract itself,  or,  such  as  may  rcasonaldy  be 
supposed  to  have  been  in  the  contempla- 
tion of  botli  parties  at  the  time  they  made 
the  contract,  as  the  probable  result  of  the 
breach  of  it.  Now,  if  the  special  circum- 
stances, under  which  the  contract  was 
actually  made,  were  conununicatcd  by  the 
plaintilf  to  the  defendant,  and  thus  known 
to  both  parlies,  the  damages,  resulting 
from  the  breach  of  such  a  contrac't  which 
they  woidrj  reasotuibly  contemplate,  would 
be,  the  amount  of  injury  which  would  or- 
dinarily follow  from  II  breach  of  contract 
under  those  special  circumstances,  so 
known  and  communicated.  I!ut,  on  the 
other  hand,  if  those  special  circumstances 
were  wholly  unknown  to  the  i)arly  lireak- 
ing  the  ('(jntruct,  he  at  the  most  conlil  only 
be  supposed  to  have  liail  in  his  eonleni- 
piation  lh(^  amount  of  injuries  whieli 
would  arise  generally,  atid  iu  the  great 

[  -1^'i  ] 


multitude  of  cases  not  affected  by  any 
special  circumstances,  from  such  a  breach 
of  contract.  For  had  the  special  circum- 
stances been  known,  the  parties  might 
have  especially  provided  for  the  breach  of 
contract,  by  special  terms  as  to  the  dam- 
ages in  that  case,  and  of  this  advantage 
it  would  be  very  unjust  to  deprive  them." 
But  in  Waters  'v.  Towers,  8  Exch.  401,  20 
Eng.  L.  &  Eq.  410,  wbere  the  action  was 
for  the  non-fulfilment  of  a  ^ontract  to  fur- 
nish machinery  in  a  reasonable  time,  it 
was  held  that  the  jury  might  assess  dama- 
ges for  loss  of  profits  to  be  derived  from 
contracts  with  third  parties,  if  the  jury  be- 
lieved that  such  profits  would  have  been 
obtained.  But  the  loss  of  profits  was  set 
forth  in  the  declaration.  A  vendee  of 
property  cannot  recover  against  the  ven- 
dor, in  an  action  for  a  breach  of  the  con- 
tract to  sell,  damages  on  account  of  an 
advantageous  contract  of  resale,  made  by 
the  vendee  with  a  third  ])erson.  Lawrence 
V.  Wardwcll,  6  Barb.  42.3.  In  Wibert  v. 
The  New  York  and  Erie  Railroad  Co.  19 
Barb.  36,  it  was  held,  that  in  an  action 
against  the  defendants  for  negligence  in  not 
conveying  a  quantity  of  butter  to  market 
within  a  reasonable  time,  the  plaintiffs 
cannot  recover,  as  damages,  the  difference 
between  the  price  of  butter  at  the  time  it 
should  have  been  delivered  and  its  jiricc 
at  the  time  when  the  butter  in  question 
was  in  fact  delivered.  But  evidence  of 
the  amount  of  ])rol)ablc  profits,  has  some- 
times been  admitted,  not  as  a  measure  of 
damages,  but  to  aid  the  jury  in  estinuvting 
the  loss.  JM'Neill  r.  Keid",  i)  Bing.  68; 
Ingram  ?'.  Lawson,  (i  l?ing.  N.  C.  212; 
Donnell  r.  dones,  17  Ala.  C89. 

(I)  'i'bns  where  a  jiarty  refuses  to  fulfil 
a  contract,  the  other  ]iarty  may  recover  as 
damages  the  difierence  between  the  sum 
he  was  to  bo  |)aid  for  jierforming  it  and 
what  it  would  have  cost  him  to  complete 
it.  In  Masterion  ?•.  I\layor  of  Brooklyn, 
7  Hill,  61,  the  plaintiU's  agreed  to  fm-nish 
the  nnuble  necessary  for  a  |>ublie  building 
at  u  specified  sum.     The  (lefendants  sus- 


en.  yiil] 


DAMAGES. 


-461 


so  far,  in  affect,  as  to  allow,  as  damages,  the  amount  of  the 
profits  which  would  probably  have  arisen  from  contracts  that 
depended  upon  the  performance  of  the  principal  contract,  (w) 


pcndcd  operations,  and  tlic  plaintiffs  were 
thereby  prevented  from  furnisliing  the  full 
amount.  An  action  of  covenant  Avas 
brought.  Nelson,  C.  J.,  said :  "  When 
the  books  and  cases  speak  of  the  profits 
anticipated  from  a  good  bargain,  as  mat- 
ters too  remote  and  uncertain  to  be  taken 
into  the  account  in  ascertaining  the  meas- 
ure of  damages,  they  usually  have  relation 
to  dependent  and  collateral  engagements, 
entered  into  on  the  faith  and  in  expecta- 
tion of  the  ])erformance  of  the  principal 
contract.  The  performance  or  non-per- 
formance of  the  latter  may  and  often 
doubtless  does  exert  a  material  influence 
upon  the  collateral  enterprises  of  the 
party;  and  the  same  may  be  said  as  to  his 
general  affairs  and  business  transactions. 
But  the  influence  is  altogether  too  remote 
and  subtile  to  be  reached  by  legal  proof  or 
judicial  investigation.  But  profits  or  ad- 
vantages which  are  the  direct  and  imme- 
diate fruits  of  the  contract  entered  into 
between  the  parties,  stand  upon  a  different 
footing.  These  are  part  and  parcel  of  the 
contract  itself,  entering  into  and  constitut- 
ing a  portion  of  its  very  elements ;  some- 
thing stipulated  for,  the  right  to  the  enjoy- 
ment of  which  is  just  as  clear  and  plain  as 
to  the  fulfilment  of  any  other  stipulation. 
They  are  jjresumed  to  have  been  taken 
into  consideration  and  deliberated  upon 
before  the  contract  was  made,  and  formed 
perhaps  the  onh'  inducement  to  the  ar- 
rangement  The  contract  here  is 

for  the  delivery  of  marble  wrought  in  a 
particular  manner,  so  as  to  be  fitted  for 
use  in  the  erection  of  a  certain  building. 
The  plaintiiPs  claim  is  subttantially  one 
for  not  accepting  goods  bargained  and 
sold ;  as  much  as  if  the  subject-matter  of 
the  contract  had  been  bricks,  rough  stone, 
or  any  other  article  of  commerce  used  in 
the  process  of  building.  The  only  diffi- 
culty or  embarrassment  in  applying  the 
general  rule,  grows  out  of  the  fiict  that 
the  article  in  question  does  not  appear  to 
have  an)'  well-ascertained  market  value. 
But  this  cannot  change  the  principle 
which  must  govern,  but  only  the  mode  of 
ascei'taining  the  actual  value  of  the  arti- 
cles, or  ratlier  the  cost  to  the  party  pro- 
ducing it.  Where  the  article  has  no  mar- 
ket value,  an  investigation  into  the  con- 
stituent elements  of  the  cost  to  the  party 


who  has  contracted  to  furnish  it,  becomes 
necessary;  and  that  compared  with  the 
contract  price  will  afford  the  measure  of 
damages."  See  Fox  v.  Harding,  7  Cush. 
516.  The  N.  Y.  &  H.  R.  Co.  v.  Story,  6 
Barb.  419;  Lawrence  v.  Wardwell,  6  id. 
42.3  ;  Seaton  v.  The  Second  Municipality, 
3  La.  Ann.  44;  Goodloe  v.  Rogers,  9 
id.  273.  The  principle  laid  down  in 
Masterton  v.  Mayor  of  Brooklyn,  was 
approved  in  the  Sujireme  Court  of  the 
United  States,  in  P.  W.  &  B.  R.  R.  Co.  v. 
Howard,  13  How.  307,  344.  Curtis, 
J.,  in  delivering  the  opinion  of  the  court, 
said:  "Actual  damages  clearly  include 
the  direct  and  actual  loss  which  the  plain- 
tiff sustains  propter  rem  ipsam  non  habitam. 
And  in  case  of  a  contract  like  this,  that 
loss  is,  among  other  things,  the  difference 
between  the  cost  of  doing  the  work  and 
the  price  to  be  paid  for  it.  This  difference 
is  the  inducement  and  real  consideration 
which  causes  the  contractor  to  enter  into 
the  contract.  For  this  he  spends  his  time, 
exerts  his  skill,  uses  his  capital,  and  as- 
sumes the  risks  which  attend  the  enter- 
prise. And  to  deprive  him  of  it  when 
the  other  party  has  broken  the  contract, 
and  unlawfully  put  an  end  to  the  work, 
would  be  unjust.  There  is  no  rule  of  law 
which  requires  us  to  inflict  this  injustice. 
Wherever  profits  are  spoken  of  as  not  a 
subject  of  damages,  it  will  be  found  that 
something  contingent  upon  future  bar- 
gains, or  speculations,  or  states  of  market, 
are  referred  to,  and  not  the  diflerence  be- 
tween the  agi'eed  price  of  something  con- 
tracted for  and  its  ascertainable  value,  or 
cost.  See  Masterton  v.  Mayor  of  Brook- 
lyn, 7  Hill,  61,  and  cases  there  referred 
to.  AVe  hold  it  to  be  a  clear  rule,  that 
the  gain  or  profit  of  which  the  contractor 
was  deprived,  by  the  refusal  of  the  com- 
pany to  allow  him  to  proceed  with  and 
complete  the  work,  was  a  proper  subject 
of  damages." 

(h)  In  Clifford  v.  Richardson,  18  Vt. 
620,  the  defendant  put  machinery  into 
the  plaintiff's  mill  in  an  unskilful  man- 
ner, whereby  he  lost  the  use  and  profit  'of 
the  mill  for  a  long  space  of  time,  and  was 
put  to  great  expense  in  repairing  the  ma- 
chinery. It  was  held,  that  both  the  loss 
of  the  use  of  the  mill,  and  the  expense 
of  repairs,   were   to   be  compensated  for 

[487] 


462*  THE   LAW   OF   CONTRACTS.  [PART  II. 

The  general  principle  as  to  remoteness  has  been  applied  to 
cases  where  sureties  were  put  to  extraordinary  loss  and  incon- 
venience, on  account  of  the  obligations  of  their  suretyship  ;  and 
it  is  held  that  they  can  recover  only  what  they  have  paid,  with 
interest,  and  necessary  expenses,  (v)  As  a  general  rule,  a  surety 
for  the  payment  of  money  cannot  sue  his  principal,  until  he  pays 
the  debt,  {w)  And  if  there  be  no  express  contract  between  the 
principal  and  sure  y,  it  would  seem  that  the  only  remedy  for 
the  latter  is  assumpsit  for  money  paid,  in  which  only  the  money 
actually  paid,  with  *interest,  can  be  recovered.  But  the  prin- 
cipal may  give  to  the  surety  a  distinct  promise  to  pay  money 
or  do  some  specific  act,  and  then  the  surety  may  have  an  action 
before  he  pays  any  thing  for  his  principal.  Thus,  if  one  is 
surety  for  another,  who  is  bound  to  pay  a  third  party  a  certain 
sum  at  a  certain  time,  and  the  principal  promises  the  surety 
that  he  will  pay  that  sum  at  that  time,  so  as  to  discharge  the 
surety,  if  he  fails  to  pay  it  so  that  the  surety  becomes  liable,  the 
surety  may  recover  from  the  principal  on  his  promise,  before 
the  surety  pays  the  debt ;  (x)  and  if  the  principal  agree  with  the 
surety  to  pay  the  debt  at  a  certain  time,  and  fail  to  pay  it  at 
that  time,  the  surety  may  thereupon  recover  the  whole  amount 
of  the  debt  without  showing  any  actual  damage.  (//)     If  the 

in  damnges.  Sec  Green  v.  Mann,  11  his  own  debt.  But  extraordinary  ex- 
Ill.  613;  White  v.  Moseley,  8  Tick,  penscs,  which  might  have  been  avoided  by 
356.  In  Tliompson  v.  Shattuek,  2  Met.  payment  of  the  money,  or  remote,  and 
615,  the  defend;mt  had  covenanted  to  unexpected  consequences,  are  never  con- 
keep  in  repair  half  of  the  plaintiff's  mill-  sidered  as  coming  within  the  contract." 
dam ;  it  was  held  that  a  loss  of  profits  And  see  Low  v.  Archer,  2  Kern.  277 ; 
occasioned  by  a  delay  in  repairing  could  Dolph  v.  White,  id.  296. 
not  lie  recovered,  as  the  ])iaiiitilf  might  (w)  Taylor  r.  Mills,  Cowp.  525  ;  Pow- 
havc  made  the  repairs  immediately,  at  the  cU  v.  Smith,  8  Johns.  249. 
defendant's  expense.  But  see  Blanchard  (x)  Cutler  v.  Southern,  1  Wms.  Saund. 
V.  Ely,  21  Wend.  .'542,  supra,  n.  (.s).  116,  n.  (1 ) ;  Holmes  v.  Rhodes,  1  B.  &  P. 
(/•)  In  Ilajdcn  v.  Cabot,  17  Mass.  169,  638;  Hodgson  v.  Bell,  7  T.  K.  97  ;  Port 
the  action  was  assumpsit,  by  a  surety  v.  Jackson,  17  Johns.  339;  Thomas  v. 
against  his  principal,  on  a  written  ])romisc  Allen,  1  Hill,  145;  Churchill  r.  Hunt, 
of  indc  imiity.  /'(///vr,  C.  J.,  said  :  "  The  3  Denio,  321;  Gilbert  v.  Wiman,  1 
common  construction  of  such  a  contract  Comst.  550;  Lathrop  v.  Atwood,  21 
is,  that  if  the  surety  is  obliged  to  pay  the  Conn.  117. 

bond,  by  suit  or  otherwise,  the  jjrincipid         (y)  Looscmoro  v.  Radford,  9  M.  &  W. 

Bhilll  repay  him  the  sum  he  has  been  obli-  057;   Robinson  v.  Itoiiinson,  Q.  B.  1855, 

Rcd    to  advance,  tog(!tbcr  with  all    such  29  Kng.  L.  &  Kcp  212  ;  A'.r  parte  Negus, 

reasonable  cxpeiiseH  as  be  may  have  been  7  Wend.  499  ;  Churchill  r.  Hunt,  3  Denio, 

obliged   tr)  incur,  and  wliieli  may  be  con-  321  ;  J.elhbridge  r.  Mytton,  2  B.  &  Ad. 

Kidered  as   tlu'  necessary  ronseipicjU'C  of  772;  Port  r.  Jackson,  1  7  Jolms.  239. 
the  neglect  of  the  piincijial  to  discharge 

[488] 


CH.  VIII.]  DAMAGES.  *463 

promise  of  the  principal  to  the  surety  be  only  to  indemnify  and 
save  him  harmless,  it  seems  that  if  the  surety  sees  fit  to  bring 
an  action  on  this  promise,  before  paying  the  debt  of  the  prin- 
cipal, he  cannot  maintain  it,  unless  he  can  show  that  he  has 
given  his  own  notes,  or  made  other  arrangements  in  the  way  of 
acknowledging  and  securing  the  debt,  which  are  equivalent  to 
its  payment.  From  the  current  of  authority,  and  from  reason, 
it  may  be  regarded  as  a  general  rule,  if  not  a  universal  one, 
that  where  one's  obligation,  whether  express  and  voluntary,  or 
implied,  or  created  by  law,  is  only  in^iirect  and  collateral,  there 
is  no  cause  of  action,  or  at  least  no  right  to  recover  actual  com- 
pensation, unless  there  has  been  an  actual  damage  arising  from 
an  actual  discharge  of  the  obligation.  (~) 


*SECTION  VI. 

OP  THE  BREACH  OP  A  CONTRACT  THAT  IS  SEVERABLE  INTO  PARTS. 

It  may  happen  that  the  injury  complained  of  is  the  breach  of 
a  contract  that  extends  over  a  considerable  space  of  time,  and 
includes  many  acts  ;  or  it  is  a  tort  divisible  into  many  parts. 
The  question  then  arises  whether  the  action  should  be  for  the 
whole  breach  or  the  whole  tort,  and  damages  be  given  accord- 
ingly. This  must  depend  upon  the  entirety  of  the  contract  or 
of  the  tort.  If  it  be  a  whole,  formed  of  parts  which  are  so  far 
inseparable  that  if  any  are  taken  away  there  is  no  completed 
breach  or  tort  left,  all  must  be  included  in  the  demand  and  in 
the  damages,  (a)     But  if  they  are  separable  into  many  distinct 

{z)  Gilbert  v.  Wlman,  1   Comst.  550  ;  plaintiff.     But  if  the  covenant  or  promise 

Kotlman  v.  Heddcn,  10  Wend.  498.     In  be,  to  perform  some  act  for  the  plaintiff's 

Lathrop  v.  Atvvood,  21   Conn.  117,  123,  benefit,  as  well  as  to  indemnify  and  save 

Church,  C.  J.,  said  :   "  We  think  an  ex-  him    harmless  from  the  consequences  of 

amination  of  the  cases  will   show   these  non-performance,  the  neglect   to  perform 

reasonable  doctrines ;  that,  if  a  condition,  the  act,  being  a  breach  of  contract,  will 

covenant,  or  promise,  be  only  to  indemnify  give  an  immediate  right  of  action." 
and  save  harmless  a  party  from  some  con-         (a)  Ilanibleton  v,  Veere,  2  Saund.  169, 

sequence,  no  action  can  be  sustained  for  note ;  Masterton  v.  The  Mayor  of  Brook- 

the  liability  or  exposure  to  loss,  nor  until  lyn,    7    Hill,    61.     In    Shaffer  v.  Lee,  8 

actual  damage,   capable   of  appreciation  Barb.  412,  after  an  elaborate  review  of  the 

and  estimate,  has  been  sustained  by  the  cases,  it  was  held,  that  a  bond  conditioned 

[489] 


464^ 


THE  LAW   OF   CONTRACTS. 


[part  II. 


breaches  or  torts,  then  an  action  may  be  brought  as  if  each 
stood  alone,  and  damages  recovered,  (b)  *There  would  seem, 
however,  to  be  this  qualification  to  this  rule.  If  there  are  many 
parts  of  the  contract,  and  some  have  been  broken,  and  others 
not  yet;  as  if  money  was  to  be  paid  on  the  first  of  every  month 
for  two  years,  and  one  year  has  expired  and  nothing  has  been 
paid,  the  creditor  may  bring  his  action  for  one  or  more  of  all 
the  sums  due,  and  recovering  accordingly,  may,  when  the  others 
fall  due  and  are  unpaid,  sue  for  them,  (c)     But  if  at  any  time 


to  furnish  to  the  obligee  and  his  wife  all 
necessary  meat,  drink,  lodging,  washing 
clothes,  &c.,  during  both  and  each  of  their 
natural  lives,  was  an  entire  contract,  and 
that  a  failure  by  the  obligor  to  provide  for 
the  obligee  and  his  wife,  according  to  the 
substance  and  spirit  of  the  covenant, 
amounted  to  a  total  breach  ;  and  that  full 
and  tinal  damages  should  be  recovered, 
for  the  future  as  well  as  the  past.  In 
Royalton  v.  The  R.  &  W.  Turnpike  Co. 
14  Vt.  311,  tlie  defendants  agreed  to  keep 
a  bridge  in  repair  for  twenty  yeai's,  on  the 
plaintiff's  paying  him  twenty-five  dollars  a 
year.  The  money  was  paid  and  the 
bridge  kept  in  repair  according  to  the 
agreement  for  eight  years,  when  the  de- 
fendant ceased  to  repair,  and  the  action 
was  then  brought.  lieJJield,  J.,  said,  tliat 
the  jury  should  "  assess  tlie  entire  damages 
for  the  remaining  twelve  yeai-s."  Sec  our 
remarks  on  entirety  of  contracts,  with  the 
notes,  vol.  2,  pp.  29-32. 

(b)  Grain  v.  Beach,  2  Barb.  120  ;  Bris- 
towe  V.  Fairclongh.l  Man.  &  G.  143 ;  Clarl* 
V.  Jones,  1  Denio,  .516  ;  Puckett  r.  vSmith, 
5  Strobh.  26  ;  supra,  note  («),  and  cases 
cited.  In  Grain  v.  Beach,  2  Barb.  120, 
the  defendants  had  covenanted  to  keep  a 
certain  gate  in  repair,  and  to  use  common 
care  in  shutting  it,  and  in  passing  and  re- 
pa.ssing  tiie  same  ;  it  was  held,  tliat  if  tlio 
gate  should  be  suffered  to  i)e  out  of  repair, 
or  sliouiil  be  allowed  to  remain  ojicn  by 
the  (k-f'euilants,  the  damages  in  an  action 
for  the  breach  of  their  covenant  would  bo 
determined  by  tiic  amount  of  the  jilainf  iff's 
loss,  by  means  of  the  l)n'ae!i  proved  on 
the  trial  of  the  ciiuse,  ami  tliat  tbe  recovery 
thereof  would  be  no  bar  to  a  fiilun;  action 
for  a  renewed  breach  of  the  eovc'iiant. 
8.  c.  in  Error,  2  Gomst.  H6.  W'rii/lil,  ,]., 
said  :  "  To  constitute  an  effectual  liar,  the 
cause  of  action  in  the  former  suit,  should 
ho  identical  with  that  of  the  ]iresent.  It 
is  the  same  cause  of  action  where  the  same 

[•i;)0] 


evidence  will  support  both  the  actions, 
although  they  hapjjen  to  be  grounded  on 
different  writs.  Rice  i'.  King,  7  Johns. 
20.  But  the  evidence  in  both  actions  may 
be  in  part  the  same  ;  yet  the  subject-mat- 
ter essentially  different,  and  in  such  case 
there  is  no  bar.  For  example,  if  money 
be  awarded  to  be  paid  at  different  times, 
assumpsit  will  lie  on  the  award  for  each 
sum  as  it  becomes  due.  So  on  an  agree- 
ment to  pay  a  sum  of  money  by  instal- 
ments, an  action  will  lie  to  I'ecovcr  each 
instalment  as  it  becomes  due.  In  covenant 
for  non-payment  of  rent,  or  of  an  annuity 
payable  at  different  times,  the  plaintiff 
may  bring  a  new  action  toties  quotles,  as 
often  as  the  respective  sums  become  due 
and  payable  ;  yet  in  each  of  these  exam- 
ples, the  evidence  to  support  the  different 
actions  is  in  part  the  same.  In  this  case 
the  same  covenant  was  the  foundation  of 
both  actions ;  the  same  evidence,  there- 
fore, in  part,  is  alike  common  to  both  ; 
but  there  is  this  diflei'ence ;  in  the  former 
suit  the  breach  was  assigned,  and  the 
actual  damages  laid  as  having  accrued 
])rior  to  the  commencement  thereof;  in 
the  present,  damages  are  sought  to  be  re- 
covered for  a  breach  subsequent  to  such 
former  action.  In  the  present  action  the 
plaintiff  could  not  have  recovered  for 
damages  that  had  accrued  prior  to  the  first 
suit,  for  he  is  not  ])ermittcd  to  split  up  an. 
entire  demand,  and  bring  several  suits 
thereon  ;  but  he  may  sliow  a  breach  sub- 
sequent to  the  former  suit,  and  recover  the 
actual  damages  arising  from  such  subse- 
quent breach." 

{(■)  Cooke  V.  Whorwdod,  2  Saund.  337. 
In  Asiiford  v.  Hand,  Andrews,  370,  an 
action  on  the  case  was  brought  by  an  in- 
dorsee, upon  a  note  of  hand,  for  ]iaying 
t)l.  .'j.s.  by  instalments  ;  and  the  last  day  of 
payment  being  not  yet  come,  he  counted 
only  for  such  jiart  as  was  due.  "It  was 
resolved,  that  though  in  the  case  of  an 


CII.  VIII.]  DAMAGES.  *465 

he  sues  for  a  part  only  of  the  suras  due,  a  judgment  will  be  held 
to  be  satisfaction  of  all  the  sums  which  could  have  been  in- 
cluded in  that  action,  and  were  due  and  payable  by  the  terms 
of  that  contract ;  and  therefore  no  further  suit  can  be  maintained 
on  any  of  them,  (d)  The  reason  for  this  rule  is  the  prevention 
of  unnecessary  and  oppressive  litigation.  And  it  would  doubt- 
less be  regarded  in  actions  founded  on  tort,  whenever  it  was 
distinctly  applicable  to  them. 


*SECTION    VII. 

OF   THE   LEGAL   LIMIT   TO   DAMAGES. 

The  law  would  avoid  unnecessary  litigation,  would  make  it, 
w^iere  necessary,  efficacious  and  conclusive  in  its  action,  and 
would  protect  each  party  against  the  other,  by  doing  exact  jus- 
tice to  both.  These  are  its  ends  ;  and  as  its  rules  are  only 
means  for  these,  they  are  of  secondary  value ;  but  as  without 
them  there  would  be  no  certainty  in  judicial  action,  and  no 
accurate  knowledge  of  personal  rights  and  obligations,  these 
rules  are  adhered  to,  although  in  one  case  or  in  another  they 
work  a  hardship,  until  it  is  found  that  their  general  effect  is 
mischievous.  In  that  case  they  are  set  aside  ;  or  controlled  by 
those  more  general  rules  by  which  the  particular  rules  may  be 
qualified  and  varied  in  their  operation,  and  yet  leave  judicial 
action  systematic  and  regular.  These  general  remarks  have  an 
especial  bearing  on  the  subject  of  damages.  Of  the  ancient' 
rules  some  have  been  abrogated,  and  others  greatly  qualified. 

entire  contract  an  action  cannot  be  brought  upon  one  or  more  items,  woiikl  bar  a  sub- 

until  all  tlie  days  are  past,  yet  where  the  sequent  suit  on   other  items  due  at   the 

action  sounds  in  damages  (which  is  the  time  of  the  first  suit.    Guernsey  J-".  Carver, 

present   case),  the   plaintiff  may   sue,  in  8   Wend.    492;    Bendernagle    i\    Cocks, 

order  to  recover  damages  for  every  default  supra ;  Lane  v.  Cook,  3  Day,  255  ;  Avery 

made  in  payment."  v.   Fitch,   4    Conn.   362.      The  opposite 

(d)  Bendernagle  v.   Cocks,   19   "Wend,  doctrine  was  held  in  Badgers.  TitcomD, 

207;  Colvin  v.   Corwin,  15  Wend.  557;  15  Pick.  409.     If  any  of  the  items  were 

Pinncy  v.  Barnes,  17  Conn.  420.     In  case  not  due  at  the  time  of  the  action,  a  suit 

of  a  running  account,  for  goods  sold  or  for    them    would    not  be  thereby  barred, 

monev  lent,  it  has  been  held,  that  a  suit  McLaughlin  v.  Hill,  6  Vt.  20. 

[491] 


466* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


And  in  modern  times,  courts  seek  to  apply  to  each  case  such 
rules  as  will  carry  out  the  universal  rule,  as  far  as  may  be,  that 
the  actual  damages  must  measure  the  compensation  given  for 
it  by  the  law. 

1.  Ill  an  Action  against  an  Attorney  or  Agent. 

Thus,  in  an  action  against  an  attorney  for  negligence,  it 
was  once  said  that  the  jury  might  find  what  damages  they 
pleased,  (e)  But  the  law  would  not  now  relinquish  its  func- 
tions in  this  way ;  for  although  quite  as  strongly  disposed  as 
ever,  that  an  agent  should  compensate  his  principal,  or  a  ser- 
vant his  employer,  for  any  wrong  done,  it  would  endeavor  to 
measure  the  injury,  and  by  the  injury  to  measure  the  compen- 
sation, as  carefully  in  this  case  as  in  any  other.  In  accordance 
with  this  principle,  it  has  been  decided  that  where  an  agent  is 
directed  to  sell  goods,  if  he  *can  get  a  certain  price,  and  not  to 
sell  for  less,  but  does  in  fact  sell  for  less,  but  without  fraudulent 
purpose,  the  actual  value  of  the  goods  sold,  or  the  highest  value 
before  the  action,  or  even  before  the  trial,  and  not  the  price  set 
upon  them,  must  be  considered  in  estimating  the  damages.  (/) 


(e)  Russell  V.  ralmer,  2  Wilson,  328. 

(/)  Blot  r.  Boiceau,  3  Comst.  78,  over- 
rulinn;  s.  c.  1  Saiulf.  Ill;  Austill  v. 
Crawford,  7  Ala.  33.5  ;  Ainsworth  v.  Par- 
tillo,  13  Ala.  460.  In  Frotliingham  v. 
Everton,  12  N.  11.  239,  the  plaintiffs, 
March  27th,  1837,  received  of  the  defend- 
ant a  consignment  of  wool,  with  instruc- 
tions not  to  sell  it  for  less  than  twenty- 
four  cents  a  pound.  The  price  of  wool 
fell  soon  after  the  consij^nnient,  and  con- 
tinued to  decline  until  Octolier  .'jth,  1837, 
when  the  ])laintiirs,  without  previous  no- 
tice to  the  defendants,  sold  the  wool  for 
fourteen  cents  per  ])ound,  which  was  then 
the  fair  market  [irice,  and  as  hif,di  as  wool 
sold  at  any  siilisei|uciit  time  l)cfore  the 
suit  was  hroiifiht.  An  advance  was 
made  iiy  the  ])lainti(ts,  at  the  time;  of  the 
consi{;iimcnt,  and  this  action  was  hroufjlit 
To  recover  the  diirerenco  hetwcen  the 
amount  of  (hat,  and  the  proceeds  of  the 
wool.  It  was  held,  that  the  plaintilf  could 
recover,  l^orh  r,  C.  .1.,  said  :  "  The  next 
cpiCBtion  is,  to  what  extent  the  plaiMtilis 
are  accountal)lc  to  the  defendant  for  this 

[  492  ] 


breach  of  his  instructions.  If  to  the 
amount  of  the  price  limited,  which  would 
be  the  result  of  treating  them  as  purchas- 
ers at  the  price  limited,  it  goes  to  the 
whole  of  the  plaintiff's  action.  But  upon 
what  principle  are  they  to  be  made  ac- 
countable to  that  extent  ?  The  general 
principle  is,  that  where  one  suffers  by  the 
negligence  or  breach  of  duty  of  another, 
the  latter  is  answerable  in  damages  for  the 
amount  of  the  injury.  Had  these  goods 
been  destroyed  by  the  negligence  of  the 
])laintiffs,  they  would  h.ave  been  answer- 
able for  the  value,  and  the  damages  could 
not  have  been  extended  beyond  that, 
merely  because  the  defendant  had  ordered 
them  to  sell  at  a  certain  price,  and  not  for 
less.  If,  instead  of  a  loss  by  negligence, 
the  loss  be  by  a  disobedience  of  orders, 
without  fraud,  the  result  must  be  tho 
same.  Had  tho  defendant  brought  his 
action  against  the  iilaintilVs,  for  wrongfully 
selling  below  the  limit,  he  would  have 
been  entitled  to  recover  the  damages  sus- 
tained by  the  wrongful  act.  If  the  goods 
of  the  jirincipal   are  negligently  lost  or 


CH.  YIII.]  DAMAGES.  *467 

If  a  factor,  having  made  advances  on  goods  consigned  to  him 
for  sale  at  a  limited  price,  do  afterwards,  in  good  faith,  and  with 
reasonable  delay  and  proper  precautions,  sell  them  for  les»  than 
their  limited  price,  but  at  a  fair  market  price,  he  may  recover 
the  balance  of  his  advances,  if  the  consignor  or  principal  refuse 
to  pay  them,  on  a  proper  application  and  after  a  sufficient 
*time.  (g)  Still,  it  may  be  true  that  if  the  sale  were  fraudulent 
on  the  part  of  the  agent,  then  it  might  be  said  that  the  agent 
had,  as  it  were,  taken  for  his  own  use  the  goods  of  his  principal, 
and  must  pay  for  them  the  price  which  he  knows  that  the  prin- 
cipal had  set  on  them. 

If  the  failure  of  the  agent  to  purchase  goods  ordered  by  his 
principal  to  be  sent  on  a  mercantile  adventure,  be  the  ground  of 
the  action,  it  is  a  question  whether  the  price  of  the  goods  when 
they  should  have  been  purchased,  or  the  price  at  which  they 
would  have  been  sold,  should  be  taken  in  making  up  damages. 
We  have  already  seen  that  the  law  generally  disregards  profits, 
from  their  remoteness  and  uncertainty.  (A)  But  in  this  case, 
we  think  it  should  be  held  that  the  loss  of  the  principal  was 
not  of  the  goods  alone,  but  of  the  adventure  ;  and  that  he 
should  have  by  way  of  compensation,  such  profits  of  the  adven- 
ture as  he  can  prove  with  reasonable  certainty ;  that  is,  the 
plaintiff  should  be  actually  indemnified,  (i)     And  on  the  other 

tortiously  disposed  of,  by  the  agent,  he  is  market  value,  they  will  take  the  peril  of  a 
made  liable  for  the  actual  value  of  the  rise  in  the  value  of  the  goods  at  any  time 
goods,  at  the  time  of  the  loss  or  convcr-  before  an  action  is  brought  for  the  wrong, 
sion.  Story  on  Agency,  215.  And  if,  and  perhaps  down  to  the  trial.  The 
instead  of  bringing  his  action  to  recover  •  owner  has  a  right  to  keep  his  goods  for  a 
this  actual  value,  the  consignor  set  up  the  better  price  ;  and  if  the  market  value  ad- 
breach  of  duty,  in  defence  of  a  suit  by  the  vances  after  the  wrongful  sale,  the  in- 
factor  for  moneys  advanced  upon  the  creased  price  will  form  the  standard  for 
goods,  the  measure  of  his  right  must  be  ascertaining  his  loss,  which  the  factor, 
the  same.  It  cannot  be  extended  beyond  wdio  has  departed  from  instructions,  must 
the  amount  of  tlie  injury  sustained  by  him.  make  good." 

And    there    can   be   no   sound   principle  (g)   Parker  v.  Brancker,  22  Pick.  40  ; 

which  will  enlarge  his  rights  in  this  respect,  Marfield  v.  Goodhue,  3  Comst.  62.     See 

merely  because  he  has  obtained  a  general  also,  Prothingham  ik  Everton,  supra. 

advance  on  the  goods,  unless  there  were  (/()  See  pp.  459,  460,  and  notes, 

an  agreement  that  the  factor  should  look  ((')  Ryder  v.  Thayer,  3  La.  Ann.  149. 

to  the  goods  alone  for  his  reimbursement."  In   IJell    i\  Cunningham,   3    Pet.   69,   5 

In  Blot  V.   Boiceau,  supra,   Branson,  J.,  Mason,  161,  the  owners  of  The  Halcyon, 

said:  "It  is  said  that  this  rule  of  damages  at  Boston,    sent    her  from    Havana    to 

will  enable  factors  to  violate  the  instruc-  merchants  at  Leghorn,  wth  directions  to 

tions  of  their   principals  with    impunity,  invest  a  part  of  her  freight  in  marble  tiles 

But  that  is  a  mistake.     If  they  sell  below  and  the  balance  in  wrapping  paper,  to  be 

the  instruction  price,  though  at  the  then  sent  to  Havana.     The  consignees,  in  vio- 

VOL.  11.  42  [  493  ] 


468* 


THE   LAW   OF   CONTRACTS. 


[part  n. 


hand,  as  the  converse  of  this  rule,  the  defendant  may  show  what 
the  actual  loss  is,  and  reduce  the  claim  of  the  plaintiff  accord- 
ingly- U) 

*If  an  agent  sues  his  principal,  or  a  servant  his  employer,  the 
same  rule  will  be  applied.  He  can  recover  compensation  for 
the  injury  sustained  by  the  fault  of  the  defendant,  and  no 
more,  (k)  If  he  claims  repayment  of  extra  expenses,  it  is  a 
good  defence  that  they  were  caused  by  his  own  negligence.  (/) 

If  he  claims  commissions  it  is  a  good  defence  that  he  has 
caused  to  his  principal  a  greater  loss  than  his  claim,  because 
this  loss,  for  which  he  is  liable,  has  more  than  repaid  his 
claim,  (m) 

2.  Tn  an  Action  against  a  Common  Carrie. 

If  an  action  be  brought  against  a  common  carrier  for  not 
carrying  or  not  delivering  goods,  all  the  elements  which  enter 
into  the  actual  loss  must  be  taken  into  consideration  as  in  other 
cases.     The  general  rules  adopted   seem   to    be   these.      K  a 


lation  of  these  directions,  invested  the  en- 
tire freight  in  wrapping  paper,  on  the  sales 
of  which  a  heavy  loss  was  sustained. 
The  marble  tiles  would  have  yielded 
a  considerable  profit.  The  action  was 
brought  against  the  consignees  for  breach 
of  orders.  The  court  Juki  that  the  actual 
value  of  the  tiles  at  Havana  was  to  be  con- 
sidered in  estimating  the  damages,  thus 
allowing  the  probable  profits  of  the  adven- 
ture. Marshall,  C.  J.,  said  :  "  We  do 
not  mean  that  speculative  damages,  de- 
pendent on  possible  successive  schemes, 
ought  ever  to  be  given  ;  but  positive  and 
direct  loss,  resulting  jjlaiidy  and  immedi- 
ately from  the  breach  of  orders,  may  bo 
taken  into  the  estimate.  Thus,  in  this 
case,  an  estimate  of  ])ossible  profit  to  bo 
derived  from  investments  at  the  Ilavaiui, 
of  the  money  arising  from  the  sale  of  the 
tiles,  taking  into  view  a  distinct  opci-ation, 
would  have  been  to  transcend  tlic  proper 
limits  which  a  jury  ought  tu  rcsjicct ;  but 
the  actual  value  of  the  tiles  themselves,  at 
the  Havana,  alfords  a  reasonable  standard 
for  the  estimate  of  damages."  See  Mas- 
terton  v.  'J'he  Mayor,  &e.  of  Brooklyn,  7 
11111,01. 

{j)  AlIi'U  )'.  Suydam,  20  Wend.  321  ; 

[.i;j.i] 


Hoard  v.  Garner,  3  Sandf  179;  Brown 
V.  Arrott,  6  Watts  &  S.  402,  6  Whart. 
9 ;  Van  Wart  v.  WooUey,  5  Dow.  &  R. 
374.  See  also,  Harvey  v.  Turner,  4  Rawle, 
223.  In  Allen  v.  Suydam  the  agent  was 
negligent  in  not  presenting  a  bill  for  ac- 
ceptance at  the  proper  time.  It  was  held 
that  the  measure  of  damages  was  prima 
facie  the  amount  of  the  bill ;  but  that  the 
defendant  was  at  liberty  to  show  circum- 
stances tending  to  mitigate  damages  or 
to  reduce  the  recovery  to  a  nominal 
amount. 

(k)  Stocking  v.  Sage,  1  Conn.  522; 
Powell  V.  Newburg,  19  Johns.  284;  Ad- 
amson  r.  Jarvis,  4  Bing.  66. 

(/)  Montriou  r.  Jelieries,  2  C.  &  P.  113; 
Howard  v.  Tucker,  1  B.  &  Ad.  712;  Ed- 
mistou  V.  Wright,  1  Camp.  88. 

(w)  Dodge  V.  Tileston,  12  Pick.  328  ; 
Whiter.  Chapman,  1  Stark.  113;  Kelly 
?■.  Smith,  1  Biatehf  C.  C.  290.  Sec  also, 
Bell  /•.  I'almer,  6  Cowen,  128;  The  Al- 
laire Works  r.  Gnion,  10  Barb.  .55.  But 
damages  cannot  be  rccoui)ed,  uidess  they 
arise  in  the  ])articular  contract  on  which 
the  action  is  founded;  Doming  v.  Kemp, 
4  Sandf  147. 


en.  VIII.]  DAMAGES.  *469 

carrier  loses  goods  or  makes  a  wrong  delivery,  in  such  a  manner 
as  to  render  himself  liable  for  them,  the  net  value  of  the  goods 
at  the  place  of  delivery  is  the  measure  of  damages,  (n)  But  if 
he  fails  to  perform  his  contract,  the  goods  being  still  within  the 
power  of  the  owner,  the  difference  between  their  value  at  the 
place  where  he  receives  them  and  their  net  value  at  the  place  of 
delivery,  at  the  time  when  they  would  have  arrived,  if  they  had 
been  carried  according  to  the  contract,  is  the  measure  of  dam- 
ages ;  (o)  and  it  seems  that  a  jury  may  give  interest  by  way  of 
damages,  when  a  loss  arises  from  the  misconduct  of  the 
carrier,  (p) 

*But  from  the  elements  which  make  up  the  actual  loss,  are  to 
be  eliminated  those  causes  of  loss  which  spring  not  merely  from 
the  plaintiff's  conduct,  but  also  from  his  omission  to  do  what 
he  might  by  reasonable  endeavors  have  done,  to  lessen  the  loss. 
For  if  when  a  carrier  breaks  his  contract  to  carry  goods,  the 
owner  can,  by  the  exercise  of  ordinary  diligence,  obtain  other 
means  of  conveyance,  he  is  bound  to  obtain  and  use  them,  and 
cannot  recover  more  than  the  loss  occasioned  by  the  extra  ex- 
pense, trouble,  and  delay,  (q)  So  if  a  party  contracts  to  fur- 
nish a  certain  quantity  of  cargo,  and  fails  to  deliver  the  entire 
quantity,  the  carrier  is  bound  to  receive  goods  from  third  per- 
sons, if  ofTered,  sufficient  to  make  up  the  deficiency,  even  at  a 
reduced  rate  of  compensation,  if  offered  at  the  current  prices; 
and  place  the  net  earnings  of  the  goods  thus  substituted  to  the 
credit  of  the  person  who  originally  agreed  to  furnish  the  whole 
cargo,  (r)     And  if  the  owner  of  goods  has  received  injury  by  the 

(n)  "Watkinson  v.  Laughton,  8  Johns.  But  see  Smith  v.  Kichardson,  3  Caines, 

213;  Amoiy  u.  McGregor,  15  Johns.  24,  219. 

38;  Brandt  v.  Bowlby,  2  B.  &  Ad.  932;  (p)  Watkinson  v.  Laughton,  8  Johns. 

Arthur  v.  The  Schooner  Cassias,  2  Story,  213.      In  Black  v.  Baxendale,  1  Exch. 

81.     And  see  Green  v.  Chxrke,  2  Kern.  410,  it  was  held  that  the  necessary  ex- 

343.     In  Wheelright  v.   Beers,    2    Hall,  penses  to  which  the  owner  is  put  in  con- 

391,  it  was  held  by  a  majority  of  the  court,  sequence  of  the  carrier's  delay  to  fulfil  his 

that  in  such  cases  the  invoice  price  is  to  contract,  are  recoverable  as  damages, 

be   the   measure  of  damages,  unless  the  (q)  O'Conner    v.    Forster,    10    Watts, 

carrier  be  guilty  of  fraud  or  fault;    but  418. 

Oakley,    J.,  gave  a  very  able   dissenting  (/■)  Heckscher  v.   McCrea,   24   Wend, 

opinion  in  fiivor  of  the  rule  as  laid  down  304.     See  also.  Shannon  v.  Comstock,  21 

above.  Wend.  457 ;  Costigan  v.  M.  &  H.  R.  R. 

(o)  Brackett?.'.  M'Nair,  14  Johns.  170;  Co.  2  Denio,  609;  Walworth  v.  Pool,  4 

O'Conner    v.    Forster,    10    Watts,   418.  Eng.  394;  Robinson  t\  Noble,  8  Pet.  181. 

[495] 


470* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


negligence  of  the  carrier,  the  acceptance  of  the  goods  is  no  bar 
to  the  action,  but  may  be  considered  in  mitigation  of  dam- 
ages, (s) 

In  this  action,  as  well  as  in  some  others,  the  question  has 
arisen  whether  the  value  of  the  goods  to  be  taken  as  a  measure, 
is  that  value  which  could  be  realized  in  open  market,  without 
reference  to  the  true  worth  of  the  thing.  If  some  wild  specula- 
tion, or  the  prevalence  of  a  gross  error  has  given  to  certain 
articles  for  a  brief  time,  a  value  altogether  in  excess  of  its  nat- 
ural value,  and  the  fault  of  the  defendant  has  prevented  the 
plaintiff  from  obtaining  this  price  by  selling  at  the  highest  point 
of  the  market,  can  the  defendant  show  in  mitigation  of  damages, 
the  utter  unreasonableness  of  such  a  price  and  its  brief  duration? 
The  answer  both  of  reason  and  of  authority  seems  to  be,  that 
the  ])laintiff  cannot  avail  himself  of  any  acts  on  his  part  of 
a  fraudulent  character,  while  he  is  entitled  to  compensation  *for 
his  actual  loss  of  any  price  he  might  have  honestly  obtained,  (t) 


(s)  Bowman  v.  Teall,  23  Wend.  306. 

(t)  Smith  V.  Griffith,  3  Hill,  333.  This 
was  an  action  against  common  carriers, 
for  injury  to  a  quantity  of  mulberry  trees, 
in  consequence  of  delaying  to  transport 
them.  After  the  plaintiff  had  given  evi- 
dence of  their  market  value  at  the  time 
the  injury  occurred,  the  defendant  offered 
to  prove  that  at  that  time  the  market  value 
was  factitious ;  that  from  subsequent  ex- 
periments tiiis  kind  of  trees  had  been  as- 
certained to  be  of  no  intrinsic  value  ;  that 
they  were  not  worth  cultivating  for  the 
purpose  of  raising  silk-worms  ;  and  that, 
if  as  much  had  been  known  of  them,  when 
the  injury  occurred,  as  at  the  time  of  the 
trial,  they  could  have  been  bought  at  a 
very  low  price.  This  evidence  was  hold 
inadmissible,  Cowcn,  .J.,  dissenting.  Nel- 
son, C.  J.,  said  :  "Assuming  that  there  is 
no  defect  in  the  quality  of  the  article,  the 
fair  test  of  its  value,  and  conseqU':;ntly  of 
the  loss  to  the  owner,  if  it  luvs  l)een  de- 
stroyed, is  the  ])rice  at  the  time  in  the 
market.  This  makes  him  whole,  bccau-ie 
the  fund  recovered  eiialtlcs  him  ti)  go  into 
the  market  and  supply  himself  again  with 
the  g()f)d-i  of  which  he  has  been  deprived. 
The  objection  to  the  evidence  otlered,  is 
that  it  pro|i((>eil  to  take  into  consideration 
the  lluctuations  of  the  market  value  long 


subsequent  to  the  time  when  the  injuiy 
happened  ;  thereby  making  the  measure 
of  damages  depend  u])on  the  accidental 
fall  of  prices  at  some  future  period,  which 
might  or  might  not  occur  ;  and  if  it  did, 
the  loss  might  or  might  not  have  fallen 
upon  the  plaintiff,  as  for  aught  the  court 
or  jury  could  know,  he  may  have  parted 
with  the  property  before  depreciation.  .  .  . 
I  admit  that  a  mere  speculating  price  of 
the  article,  got  up  by  the  contrivance  of 
a  few  interested  dealers,  to  control  the 
market  for  their  own  private  ends,  is  not 
the  true  test.  The  law,  in  regulating  the 
measure  of  damages,  contemplates  a  range 
of  the  entire  market,  and  the  average  of 
])ric'es,  as  thus  found,  running  through  a 
reasonable  ]ieriod  of  time.  Neither  a  sud- 
den and  transient  intiation  or  depression 
of  prices  should  control  the  question. 
These  are  often  accidental,  produced  by 
interested  and  illegitimate  combinations, 
for  temporary,  special,  and  selfish  oiijects, 
independent  of  the  influences  of  lawful 
commi-rce,  —  a  forced  and  violent  ])erver- 
sioi\  of  the  laws  of  trade,  not  within  tho 
contemplation  of  the  regular  dealer,  and 
not  deserving  to  be  regarded  as  a  proper 
basis  upon  which  to  determine  the  value, 
when  tlie  fact  becomes  material  in  the  ad- 
ministration of  justice." 


en.  VIII.]  DAMAGES.  *471 


3.  In  the  Action  of  Trover. 

In  the  action  of  trover,  to  which  a  plaintiff  generally  resorts 
for  remedy  when  his  personal  property  has  been  appropriated  by 
another,  the  value  of  the  property  is,  in  general,  the  measure  of 
the  damages,  [u)  It  is  true  that  this  is  sometimes  no  adequate 
compensation  for  the  injury  he  has  sustained ;  but  then  he 
should  have  sued  in  trespass,  in  which  action  he  might  have 
recovered  also  compensation  for  the  additional  damage  he  has 
sustained,  if  it  were  the  direct  and  natural  consequence  of  the 
injury.  He  must  be  limited  by  the  action  he  brings;  for  if  he 
waives  the  tort  altogether,  and  brings  assumpsit  for  money  had 
and  received,  he  can  recover  *only  the  amount  which  the  defend- 
ant has  actually  received  by  the  sale  of  the  property,  although 
this  may  be  much  less  than  its  value,  [v)  K  an  owner  bring 
trover  after  he  has  regained  the  possession  of  his  property,  or 
otherwise  had  the  equivalent  benefit  of  it,  he  can  only  recover 
damages  to  the  extent  of  the  injury  he  has  sustained ;  as,  for 
example,  for  the  injury  to  the  chattel,  and  the  value  of  its  use.  {iv) 
If  the  defendant  has  a  lien  on  the  property  for  a  certain  amount, 
that  amount  may  be  deducted  by  the  jury  from  the  value,  in 
assessing  the  damages,  [x) 

In  trover  for  a  bill  or  note,  or  other  chose  in  action,  the 
measure  of  damages  is,  primd  facie,  the  value  on  its  face.  (//) 
But  the  insolvency  of  the  parties  liable  thereon,  payment,  in 
whole  or  in  part,  or  any  other  facts  tending  directly  to  reduce 
its  value,  may  be  shown  in  mitigation  of  damages,  [z) 

Whether,  in  this  or  any  action,  instead  of  the  actual  value, 

(m)  Mercer  v.   Jones,   3    Camp.   477 ;  1  ;  Curtis  v.  "Ward,  20  Conn.  204 ;  Ew- 

Kenncdy  v.  Strong,  14  Johns.  128;  Ken-  ing  v.  Blount,  20  Ala.   694;  Sparks  v. 

nedy  v.  Wliitwell,  4  Pick.  466  ;  Sargent  v.  Purdy,  11  Mo.  219  ;  Hunt  v.  Haskell,  24 

Franklin  Ins.  Co.  8  Pick.  90;  Parks  r.  Me.  339  ;  Angler  t-.  Taunton  Paper  Man. 

Boston,    1.5   Pick.    198,   207,   per  Shaw,  Co.  1  Gray,  621. 
C.  J.  (.r)   Green   v.   Farmer,  4   Burr.   2214, 

(v)  3  Am.  Jur.  288,  289;  Bac.  Abr.  2223;    Chamberlin    v.    Shaw,    18    Pick. 

Trover,  A.;  Lindon  v.  Hooper,  Cowp.  283;  Fowler  i'.  Gilman,  13  Met.  267. 
419,  per  Lord  Mansfield;  Hunter  v.  Prin-  (ij)  Mercer  v.  Jones,  3  Camp.  477. 
sep,  10  East,  378,  391,  per  Lord  Ellen-         (z)  Ingalls  v.   Lord,    1    Cowen,   240; 

borough.  Komig  v.  Komig,  2  Rawle,  241. 

(w)  Greenfield  Bank  v.  Leavitt,  17  Pick. 

42  *  [ 497  ] 


472*-473*  THE   LAW   OF   CONTRACTS.  [PART  II. 

that  which  the  plaintiff  puts  upon  the  property,  as  a  gift,  per- 
haps of  a  dear  friend,  or  for  other  purely  personal  reasons,  can 
be  recovered,  is  not  perhaps  certain.  We  think  it  quite  clear, 
however,  that  this  p)'etiifm  affcctionis  cannot  be  recovered  unless 
in  cases  where  the  conversion  or  appropriation  by  the  defend- 
ant was  actually  tortious ;  and  izi  that  case  we  should  be  dis- 
posed to  hold,  that  the  defendant  should  be  made  to  pay  what 
he  would  have  been  obliged  to  give  if  he  had  bought  the  arti- 
cle ;  or,  at  least,  that  the  damages  might  be  considerably 
enlarged  in  such  a  case,  on  the  principle  of  exemplary  dam- 
ages. («) 

*The  value  of  the  property  being  the  measure  of  damages  in 
trover,  as  this  value  may  be  different  at  different  times  and  in 
different  places,  the  question  occurs  which  of  these  values  is  to 
be  this  measure.  If  goods  are  taken  from  the  owner,  and  some 
months  afterwards  an  action  is  brought,  the  owner  may  have 
lost  the  opportunity  of  selling  them  at  the  highest  price  they 
have  reached  in  the  interval.  Is  he  limited  to  their  value  when 
converted;  or  if  they  have  a  higher  value  when  he  brings  his 
action  or  tries  it,  may  he  have  that  value  ;  or  if  they  have  been 
higher,  and  are  now  lower,  may  he  have  the  highest  price  that  he 
could  at  any  time  have  received  for  the  property,  had  it  remained 
in  his  possession  ?  Similar  questions  arise  sometimes  in  actions 
for  breach  of  contract  to  sell  for  a  price  payable  in  specific  arti- 
cles, in  replevin,  and  in  some  other  cases.  The  answer  to  these 
questions,  to  be  deduced  from  the  general  current  of  authority, 
is,  that  the  value  of  the  property  at  the  time  of  the  conversion, 
with  interest  thereon,  measures  the  damages,  {b)     *But  it  is 

(n)  Lord  Kiiimcs's  Principles  of  E(niity,  or  court,  in  estimating  tlic  value."  In 
b.  1,  part  1,  cli.  4,  §  5,  p.  159;  Sedg-  Mississijipi,  in  the  case  of  a  slave,  tho 
wick  on  Damages,  p.  474;  Suydam  v.  owner  is  permitted  to  seek  equitable  re- 
Jenkins,  .'5  Sunilf.  021,  per  Duki-,  J.:  lief,  and  to  claim  a  specific  return  of  the 
"  In  most  cases,  tiic  market  value  of  tiie  property,  where  at  common  law  he  would 
property  is  the  liest  criterion  of  its  value  have  been  limited  to  an  action  for  dam- 
to  the  owner,  but  in  some  its  value  to  llio  ages.  Butler  v.  Ilieks,  11  Smcdes  &  M. 
owner  may  greatly  exceed  the  sum  tiiat  78;  Hull  v.  Clark,  14  Smedcs  &  M.  187. 
any  i)urch,iser  would  be  willing  to  pay.  (h)  Kennedy /'.  Strong,  14  Johns.  128; 
The  value  to  the  own(T  may  lie  cnlianccd  Ilcpliuru  r.  Scwcll,  .')  Harris  &  J.  211  ; 
by  personal  or  family  considerations,  as  Kennedy  r.  Wliitwcll,  4  I'ick.  4(J6  ;  Pierce 
in  the  cas(!  of  family  picturi'S,  plate,  etc.,  v.  IJenjan)in,  14  Pick.  .3.'j(),  ."iOl  ;  Parks  v. 
and  we  do  not  doubt  that  the  'iintium  lioston,  l.'i  Pick.  l'J8;  Johnson  v.  Sum- 
fij/i'iio/ii's,'  instead  of  the  market  pri<'e,  ner,  1  Met.  172;  Clark  v.  Whitaker, 
ouyht  then  to  be  considered  by  the  jury  I'J  Conn.  319;   Smethurst  v.  Woolston, 

[  4;)8J 


en.  VIII.] 


DAMAGES. 


-473 


certain  that  the  courts  are  by  no  means  in  agreement  on  this 
point ;  and  some  exceptions  to  the  rule  should  certainly  be  ad- 


5  Watts  &  S.  lOG;  Watt  v.  Potter, 
2  Mason,  77;  Lillard  v.  Wliitaker,  3 
Bibb,  92;  Sproiilc  v.  Ford,  3  Lilt.  25. 
In  the  case  of  Suydain  v.  Jenkins,  3 
Sandf.  614,  tliis  subject  was  discussed 
with  great  ability,  in  a  very  elaborate 
opinion,  delivered  by  Duer,  J.  The 
cases  of  West  v.  Wcntworth,  3  Cowen, 
82,  and  of  Clark  v.  Pinney,  7  Cowen, 
681,  in  which  it  was  held  tliat  the  measure 
of  dania<:;es  in  cases  where  property  has 
been  withheld,  is  the  highest  market  price 
between  the  time  of  the  wrongful  with- 
holding and  the  time  of  the  trial,  were 
questioned,  and  the  general  measure  of 
damages  was  held  to  be  tlie  value  of 
the  property  at  the  time  the  riglit  of 
action  accrued,  with  interest  thereon. 
But  if  it  can  be  sliown  that  the  addition 
of  interest  fails  to  compensate  the  owner 
for  his  actual  loss,  or  to  prevent  the 
wrongdoer  from  realizing  a  profit,  it  was 
held  that  a  further  compensation  should 
be  made.  Duer,  J.,  said :  "  It  may  be 
shown  that  had  the  owner  retained  pos- 
session, he  would  have  derived  a  larger 
profit  from  the  use  of  the  property  tlum 
the  interest  upon  its  value  ;  or  that  he  had 
contracted  to  sell  it  to  a  solvent  purchaser 
at  an  advance  upon  the  market  price ;  or 
that  when  wrongfully  taken  or  converted, 
it  was  in  the  couft;e  of  transportation  to  a 
profitable  market,  where  it  would  certainly 
have  arrived ;  and  in  each  of  these  cases 
the  difference  between  the  market  value 
when  the  right  of  action  acciued,  and  the 
advance  which  the  owner,  had  he  retained 
the  possession,  would  have  realized, 
ought  plainly  to  be  allowed  as  compen- 
satory damages,  and  as  such  to  be  in- 
cluded in  the  amount  for  which  judgment 
is  rendered.  So  where  it  apjiears  that 
the  owner  in  all  probability  would  have 
retained  tlie  possession  of  the  property 
until  the  time  of  trial  or  judgment,  and 
that  it  is  then  of  greater  value  than 
when  he  was  dispossessed,  the  difference 
may  fairly  be  considered  as  a  part  of  the 
actual  loss  resulting  to  him  ftom  the 
change  of  possession,  and  should  there- 
fore be  added  to  the  original  value  to 
complete  iiis  indemnity.  .  .  .  Even  where 
the  market  value  of  the  property,  when 
the  right  of  action  accrued,  would  more 
than  suffice  to  indemnify,  it  is  not,  in 
all  cases,  that  the  liability  of  the  wrong- 
doer should  be  limited  to  that  amount. 


It  is  for  the  value  that  he  has  himself 
realized,  or  might  realize,  tlu^t  he  is 
bound  to  account,  and  for  which,  judg- 
ment should  be  rendered  against  him. 
Hence,  should  it  appear  in  tlie  evidence 
upon  the  trial,  that  he  had  in  fact  obtained 
on  the  sale  of  the  property  a  larger  price 
than  its  value  when  he  acquired  posses- 
sion, or  that  he  still  retained  the  posses- 
sion, and  that  an  advanced  price  could 
then  be  obtained,  in  each  case  the  in- 
crease upon  the  original  value  (which 
would  otherwise  remain  as  a  profit  in  his 
hands),  ought  to  be  allowed  as  cumulative 
damages.  ...  It  seems  to  us  exceed- 
ingly clear,  that  the  highest  price  for 
which  the  property  could  have  been  sold 
at  any  time  after  the  right  of  action  ac- 
crued, and  before  the  entry  of  judgment, 
cannot,  except  in  special  cases,  be  justly 
considered  as  the  measure  of  damages. 
When  the  evidence  justifies  the  conclu- 
sion that  a  higher  price  would  have  liceu 
obtained  by  the  owner,  had  he  kept 
the  possession,  or  has  been  obtained  by 
the  wrongdoer,  we  have  admitted  and 
shown  that  it  ought  to  be  included  in  the 
estimation  of  damages ;  in  the  first  case, 
as  a  portion  of  the  indemnity  to  which 
the  owner  is  entitled,  and  in  the  second, 
as  a  profit  which  the  wrongdoer  cannot 
be  permitted  to  retain ;  but  we  cannot 
admit  that  the  same  rule  is  to  be  followed 
where  nothing  more  is  shown  than  a  bare 
possibility  that  the  highest  price  would 
have  been  realized,  and  still  less  where  it 
is  shown  that  it  would  not  have  been  ob- 
tained by  the  owner,  and  has  not  bepfl 
obtained  by  the  wrongdoer."  The  high- 
est market  value  between  the  time  of  the 
conversion  and  that  of  the  trial,  was  held 
to  be  the  measure  of  damages  in  the 
following  cases :  Greening  i\  Wilkinson, 
1  C.  &  P.  625  ;  West  v.  Wcntworth,  3 
Cowen,  82;  Clark  v.  Pinney,  7  Cowen, 
681;  Schley  y.  Lyon,  6  Ga. '530  ;  Ewing 
V.  Blount,  20  Ala.  694 ;  Kid  v.  Mitchell,  1 
Nott  &  McC.  334.  In  debt  on  bonds  for 
the  replacement  of  stock,  the  higher  value 
of  the  stock  at  the  time  of  the  trial  has 
been  held  the  just  measure  of  damages. 
Shepherd  i'.  Johnson,  2  East,  211  ;  McAr- 
thur  V.  Seaforth,  2  Taunt.  257  ;  Harrison 
V.  Harrison,  1  C.  &  P.  412.  These  cases 
are  examined  in  Suydam  v.  Jenkins,  3 
Sandf.  614,  632.  But  see  Kortright  v. 
Buffalo  Com.  Bank,  20  Wend.  91,  22  id. 

[499] 


474' 


THE   LAW   OF   CONTRACTS. 


[part  ir. 


mitted.  Thus,  if  it  can  be  shown  that  the  plaintiff  suffered  by 
the  wrongdoing  of  the  defendant,  a  specific  injury,  as  by  the 
failure  of  a  specific  purpose  for  which  he  had  bought  the  goods, 
or  perhaps  by  the  loss  of  a  specific  opportunity  of  selling  them, 
at  a  certain  profit,  the  principle  of  compensation  would  require 
that  this  should  be  taken  into  consideration,  (c)  And  if  a  wil- 
ful and  actual  tort  enter  into  the  plaintiff's  case,  it  has  been 
held  that  the  defendant  should  be  compelled  to  pay  to  the  plain- 
tiff all  that  the  plaintiff  may  have  lost  in  any  way  by  his  wrong- 
doing, (d) 

We  have  considered  the  subject  of  accession  or  confusion 
of  goods,  to  some  extent,  in  the  first  volume.  If  a  question  arises 
in  such  a  case  as  to  the  damages  to  be  recovered,  the  law  on  this 
subject,  as  stated  generally,  by  Blackstone,  (e)  is,  no  doubt,  in 
force  at  this  day,  and  in  this  country,  so  far  as  it  relates  to  the 
title  to  property,  which  is  all  that  he  is  speaking  of.    He  uses  the 


348.  In  Massachusetts,  the  rule  which 
makes  the  value  at  the  time  the  right  of 
action  accrues,  with  interest  thereon,  the 
measure  of  damages  for  withholding  prop- 
erty, seems  to  be  established  in  all  cases. 
Gray  v.  Porthmd  Bank,  3  Mass.  364  ;  Sar- 
gent V.  Franklin  Ins.  Co.  8  Pick.  90,  and 
cases  cited,  supra. 

(c)  Dnnlop  v.  Higgins,  1  H.  L.  Cas. 
381,  402,  per  Cottenham,  Ld.  Ch.  See 
supra,  note  (b). 

(d)  Dennis  v.  Barber,  6  S.  &  R.  420 ; 
Harger  v.  M'Mains,  4  Watts,  418.  But 
see  supra,  note  {j«). 

(e)  Say-s  Bhickstone :  "  The  doctrine  of 
property  arising  from  accession  is  ground- 
ed on  the  right  of  occupancy.  By  the 
Roman  hiw,  if  any  given  corporeal  sub- 
stance received  afterwards  an  accession 
by  natural  or  artificial  means,  as  by  the 
growth  of  vegctaides,  the  pregnancy  of 
animals,  the  (■ml)r<jidcring  of  doth,  or  the 
conversion  of  wood  or  metal  into  vessels 
and  utensils,  the  original  owner  of  the 
tiling  was  enlillcd,  by  bis  right  of  pos- 
session, to  the  projicrly  of  it  under  such 
its  state  of  im])rovem('nt ;  but  if  the  thing 
itself,  by  such  operation,  was  changed 
into  a  diirercnt  s])e(ies,  —  as,  by  nnd<ing 
wine,  oil,  or  bread  out  of  another's  grajjcs, 
olives,  or  wheat, —  it  belonged  to  the  new 
0[)eralor,  who  was  only  to  !nake  a  satis- 
faction to  the  former  ])roiirietor  for  the 
materials   which   ho   luid    so    converted. 

[500] 


And  these  doctrines  are  implicitly  copied 
and  adopted  by  our  Bracton,  and  have 
since  been  confirmed  by  many  resolutions 
of  the  courts.  It  hath  even  been  held  if 
one  takes  away  and  clothes  another's  wife 
or  son,  and  afterwards  they  return  home, 
the  garments  shall  cease  to  be  his  prop- 
erty who  provided  them,  being  annexed 
to  the  person  of  the  child  or  woman.  But 
in  the  case  of  confusion  of  goods,  where 
those  of  two  persons  are  so  intermixed 
that  the  several  portions  can  be  no  longer 
distinguished,  the  English  law  partly 
agrees  with,  and  partly  dift'ers  from,  the 
civil.  If  the  intermixture  be  by  consent, 
I  apprehend  that,  in  both  laws,  the  pro- 
prietors liavc  an  interest  in  common,  in 
proportion  to  their  respective  shares.  But 
if  one  wilfully  intermixes  his  money, 
corn,  or  hay,  with  that  of  another  man, 
without  his  api)robation  or  knowledge,  or 
casts  gold  in  like  manner  into  another's 
melting-pot  or  crucible,  the  civil  law, 
though  it  gives  the  sole  jn-oiierty  of  the 
whole  to  him  who  has  not  interfered  in 
the  mixture,  yet  allows  a  satisfaction  to 
the  other  for  what  he  has  so  iin|)rovidently 
lost.  But  our  law,  to  guaid  against 
fraud,  gives  the  entire  property,  without 
any  account,  to  him  whose  original  do- 
minion is  invaded,  and  endeavored  to  bo 
rendered  uncertain,  without  bis  own  con- 
sent."    2  Black.  Com.  404,  405. 


CII.  VIII.]  DAMAGES.  *475 

word  "  wilfully,"  in  speaking  of  confusion.  But  it  maybe  doubt- 
ed, even  on  the  authority  of  the  civil  law,  to  which  Blackstone 
refers,  whether,  in  a  case  of  fraudulent  confusion,  the  party  in 
fault  does  not  lose  his  goods ;  and  on  the  other  hand,  it  may  be 
doubted  whether,  if  the  confusion  be  voluntary,  but  perfectly 
honest,  the  other  party  takes  the  whole  property,  without  any 
allowance  for  the  value  added  to  his  own.  We  cannot  but 
think  that  the  intent  of  the  parties,  and  the  moral  character  of 
the  transaction,  would  enter  into  the  law  of  the  case.  (/)  *So, 
also,  in  a  case  of  accession,  to  take  the  very  instances  given  by 
Blackstone,  if  one  innocently  took  a  piece  of  cloth,  or  an  ingot 
of  gold,  believing  it  to  be  his  own,  and  quadrupled  the  value  of 
the  article  by  his  skill  and  labor  expended  upon  it,  and  refused 
to  deliver  it  to  the  true  owner,  in  the  honest  belief  of  his  title, 
and  without  moral  fault,  —  if  the  owner  succeeded,  in  trover,  in 
proving  the  property  to  be  his,  we  are  of  opinion  that  the  de- 
fendant would  be  allowed  something  by  way  of  mitigation  of 
damages,  of  recoupment,  or  in  some  other  way,  so  that  while 
the  plaintiff  was  fully  compensated,  he  should  not  be  permitted 
to  gain  greatly,  and  the  defendant  made  to  suffer  greatly,  by  his 
mere  mistake.  Indeed,  the  rule,  as  given  in  Blackstone,  and 
sustained  to  some  extent  by  the  authorities  in  the  Year-Books, 
"V^ould  lead  to  this  strange  conclusion :  that  if  one  takes  anoth- 
er's property,  and  expends  upon  it  ten  times  its  value  in  his 
labor,  but  without  going  so  far  as  to  change  it  into  a  different 


(/)  Willarrl  v.  Rice,  1 1  Met.  493 ;  two  parcels  together,  supposing  both  to 
Pratt  V.  Bryant,  20  Vt.  333  ;  Wingate  v.  be  his  own,  or  that  he  was  about  to  min- 
Smith,  20  Me.  287.  In  Ryder  v.  Hath-  gle  his  with  his  neighbor's  by  agreement, 
away,  21  Pick.  298,  trespass  was  brought  and  mistakes  the  parcel.  In  such  cases, 
for  carrying  away  and  converting  twenty-  which  may  be  deemed  accidental  mix- 
three  cords  of  wood.  The  defendant  jus-  tures,  it  would  be  unreasonable  and  unjust, 
tified  on  the  ground  that  the  plaintiff  had  that  he  should  lose  his  own,  or  be  obliged 
so  mixed  his  own  wood  with  the  defend-  to  take  his  neighbor's.  If  they  were  of 
ant's,  that  it  was  impossible  to  distinguish  equal  value,  as  corn,  or  wood,  of  the  same 
them.  Morton,  J.,  after  citing  from  2  kind,  the  rule  of  justice  would  be  obvious. 
Kent's  Com.  297:  "If  A  wilfully  inter-  Let  each  one  take  his  own  given  quantity. 
mix  his  corn  or  hay,  with  tliat  of  B,  so  But  if  they  were  of  unequal  value,  the 
that  it  becomes  impossible  to  distinguish  rule  would  be  more  difficult.  And  if  the 
what  belonged  to  A  from  what  belonged  intermixture  were  such  as  to  destroy  the 
to  B,  the  whole  belongs  to  B,"  said  :  property,  the  whole  loss  should  fall  on 
"But  this  rule  only  applies  to  wrongful  or  him  whose  carelessness,  or  folly,  or  mis- 
fraudulent  intermixtures.  There  may  be  fortune  caused  the  destruction  of  the 
an  intentional  intermingling,  and  yet  no  whole."  See  Colwill  v.  Reeves,  2  Camp, 
wrong  intended ;  as  where  a  man  mixes  575. 

[501] 


476* 


THE  LAW   OF   CONTRACTS. 


[part  II. 


species,  he  loses  all  his  labor,  and  the  original  owner  gains  it. 
But  if  he  goes  so  much  further  as  to  make  this  change,  then  he 
saves  all  the  value  of  his  labor,  and  the  original  owner  can 
recover  only  the  primitive  value  of  the  property  taken,  (g-) 

*There  are  strong  reasons,  and  authorities  of  much  weight,  in 
favor  of  the  doctrine  that  special  damages  may  be  recovered  in 
the  action  of  trover,  that  is,  damages  in  addition  to  the  value  of 
the  goods,  for  losses  or  expenses  directly  and  naturally  resulting 
from  the  conversion ;  but  it  would  seem  that  these  special  dam- 
ages should  be  specially  alleged  in  the  declaration.  (A) 


{7)  In  cases  where  a  party  has,  under  a 
contract  with  the  owner,  increased  the 
value  of  goods  by  his  hibor  and  then  con- 
verted them  to  his  own  use,  the  vahie  of 
the  goods  before  the  labor  has  been  ex- 
pended, has  been  given  in  damages. 
Dresser  IManuf.  Co.  v.  Waterston,  3  Met. 
9.  See  Green  v.  Farmer,  4  Burr.  2214. 
But  wliere  goods  have  been  wrongfully 
taken  and  their  value  increased  by  acces- 
sion, the  rule  laid  down  in  the  Year-Book, 

5  H.  7,  fol.  15,  is  tliat  the  owner  can  fol- 
low his  property  as  long  as  the  identity 
of  the  original  material  can  .be  proved  ; 
but  if  the  nature  of  the  thing  be  changed, 
as  grain  into  malt,  or  silver  into  money, 
so  that  the  original  material  cannot  be 
identified,  tlie  original  owner  loses  his 
property,  and  can  only  claim  damages 
for  the  article  as  originally  taken.  The 
first  part  of  the  rule  that  the  owner  can 
follow  his  property  as  long  as  the  identity 
of  the  original  material  can  be  shown, 
and  take  it  without  remunerating  the 
wrongdoer  for  his  trouble,  has  often  been 
sanctioned.  Bctts  v.  Lee,  5  Johns.  349  ; 
Curtis  V.  Groat,  6  id.  168  ;  Brown  i'.  Sax, 
7  Cowen,  9.5;  Snvder  v.  Vaux,  2  Kawle, 
427;  Martin  r.  Porter,  .5  M.  &  AV.  3,')1  ; 
Wood  );.  Moicwood,  3  C^.  B.  440,  in  notis. 
As  regards  the  first  part  of  the  i-ule,  no 
distinction  has  been  taken  in  any  of  the 
adjudications  between  a  case  wiiero  the 
wrongful  taking  was  fraudulent  and  where 
it  was  by  ini'-titke.  I5ut  as  regards  tlic 
second  jiart  of  the  rule,  in  tlie  late  case  (jf 
Silsbury  '•.  Mcf'oon,  .'1  ('omst.  .379,  a  nni- 
jority  of  th<'  Court  of  Apjicais  overruled 
two  previous  decisions  of  the  Supremo 
Court,    in    the   same    rase,    reported    in 

6  Hill,  42.'),  and  4  Denio,  332,  ami  de- 
cidcfl,  after  a  very  able  iwgument  of  tiie 
ciwc,  tiiat  a  ;/•///■;(/  wrongdoer  cim  acquire 
no  property  in  the  good.s  of  another,  by 

[>>02] 


any  change  whatsoever  wrought  in  them 
by  his  labor  or  skill,  provided  it  can  be 
shown  that  the  improved  article  was 
raade  from  the  original  material ;  and 
consequently  it  was  held,  that  the  title  to 
corn  was  not  changed  by  its  conversion 
into  whiskey.  The  second  part  of  the 
rule  in  the  Year-Books  was  said  to  have 
no  application  in  the  case  of  a  wilful 
wrongdoer.  But  where  the  improved 
property  was  not  changed  in  its  nature, 
so  that  it  could  be  reclaimed  by  the  origi- 
nal owner  in  all  cases,  no  distinction  was 
taken  between  the  rights  of  a  wrongdoer 
who  has  acted  with  a  fraudulent  purpose, 
and  one  who  has  acted  by  mistake.  litig- 
(jles,  J.,  in  delivering  the  opinion  of  a  ma- 
jority of  tlie  court,  said :  "  So  long  as 
property  wrongfully  taken  retains  <ts 
original  form  and  substance,  or  may  be 
reduced  to  its  original  materials,  it  be- 
longs, according  to  the  admitted  princi- 
ples of  the  common  law,  to  the  original 
owner,  without  reference  to  the  degree  of 
improvement,  or  the  additional  value 
given  to  it  i)y  the  labor  of  the  wrongdoer. 
Nay  more,  this  rule  holds  good  against  an 
innocent  ]iurchaser  from  the  wrongdoer, 
although  its  value  be  increased  an  hun- 
dred-f'ohl  by  the  labor  of  tlie  ))urchascr. 
Tiiis  is  a  necessary  consequence  of  the 
continuance  of  the  original  ownership." 
But  this  rigid  rule  has  been  (luestioned 
and  the  opinion  expressed  in  the  text 
approved  by  several  authorities.  Brown 
('.  Sax,  7  Cowen,  9.'),  ])cr  Siil/teihind,  J. ; 
Silsiairy  r.  McCoon,  4  Denio,  .332,  337, 
per  Jiiiinsiin,  ,1.  See  Benjamin  v.  Ben- 
jamin, \!)  Conn.  347,  358. 

(/()  In  S«vdaiTi  v.  Jenkins,  3  Sandf. 
614,  627,  /W,  J.,  said:  "In  ICngland, 
the  law  may  be  considered  as  settled,  that 
additional  damages,  if  laid  in  the  declara- 
ti(;n,  and  directly  resulting  from  the  wrong- 


CH.  VIII.] 


DAMAGES. 


*477 


If  the  plaintiff  claims  the  property  converted  merely  by  a  lien 
to  secure  a  debt,  he  recovers  only  the  amount  of  the  debt,  be- 
cause that  is  the  measure  of  his  interest,  if  the  defendant  have 
any  title  or  interest  at  all.  («")  But  if  the  defendant  be  *a  mere 
stranger,  the  plaintiff  has  a  title  to  the  whole,  as  against  him, 
and  recovers  the  whole  value.  (J)  Where  a  pledgee  tortiously 
withholds  the  pledge,  or  has  sold  it,  without  calling  on  the 
pledgor  to  redeem,  and  the  pledgor  bring  an  action  against  him, 
the  pledgee  may  have  the  amount  of  his  debt  deducted  or  re- 
couped in  the  assessment  of  damages,  (k) 


4.  In  the  Action  of  Replevin. 

By  the  action  of  replevin,  the  plaintiff,  having  taken  property 
which  he  calls  his  own,  seeks  to  establish  his  title ;  and  the  de- 
fendant, denying  the  plaintiff's  title,  endeavors  to  establish  his 
own.     But,  incidental  to  these  questions  of  title,  are  those  of 


fill  act  of  the  defendant,  are  recoverable. 
(Davis  V.  Oswell,  7  C.  &  P.  804 ;  Bod- 
ley  V.  Reynolds,  8  Q.  B.  779;  Eogers 
V.  Spence,  13  M.  &  W.  571.)  And 
an  early  decision  to  the  same  effect,  is 
found  in  our  own  reports.  (Shotwellu. 
Wendover,  1  Johns.  65.)  It  is  true,  that 
in  Brizsee  v.  Maybee  (21  Wend.  144), 
Mr.  J.  Cowen,  speaking  as  the  organ  of  the 
court,  seems  to  have  held  that  under  no 
circumstances  ought  the  jury  to  be  permit- 
ted to  find  special  damages  in  the  action 
of  trover ;  and  the  Supreme  Court  of 
Pennsylvania  seems  to  have  given  its 
sanction  to  the  same  doctrine  (Farmers 
Bank  v.  McKee,  2  Penn.  St.  318);  but 
as  this  doctrine,  literally  understood,  in 
effect  denies  the  right  of  the  plaintiff  to  a 
full  indemnity,  however  certain  the  evi- 
dence of  his  loss,  the  language  of  the 
learned  judges  ought  perhaps  to  be  con- 
strued as  only  meaning  special  damages 
ought  never  to  be  allowed,  where,  from 
the  nature  of  the  case,  the  estimate  must 
be  uncertain  and  conjectural ;  and  the  doc- 
trine thus  explained  and  limited,  we  are 
far  from  wishing  to  controvert." 

(i)  Hays  v.  Riddle,  1  Sandf.  248  ;  In- 
gersoU  t\  Van  Bokkelin,  7  Cowen,  670; 
Spoor  V.  Holland,  8  Wend.  445 ;  Lloyd 
V.  Goodwin,  12  Smedes  &  M.  223;  Strong 
V.  Strong,  6  Ala.  345  ;  Cameron  v.Wynch, 


2  Car.  &  K.  264.  In  Hickok  ?;.  Buck,  22 
Vt.  149,  the  defendant  leased  to  the  plain- 
tiff a  farm  for  one  year,  and  by  the  con- 
tract was  to  provide  a  horse  for  the  plain- 
tiff to  use  upon  the  farm  for  that  term. 
He  furnished  the  horse,  but  took  him  away 
and  sold  him  before  the  expiration  of  the 
term,  without  providing  another.  It  was 
held  that  the  plaintiff  acquired  a  special 
property  in  the  horse,  and  was  entitled  to 
recover  in  an  action  of  trover,  damages  for 
the  loss  of  the  use  of  the  horse  during  the 
residue  of  the  term. 

(,/)  White  V.  Webb,  15  Conn.  302; 
Lyle  V.  Barker,  5  Binney,  457  ;  Schley  v. 
Lyon,  6  Ga.  530.  In  Heydon  &  Smith's 
case,  13  Rep.  67,  it  is  laid  down :  "  So 
is  the  better  opinion  in  11  H.  4,  23, 
that  he  wlio  hath  a  special  property  in 
goods,  shall  have  a  general  action  of  tres- 
pass against  him  who  hath  the  general 
property,  and  upon  the  evidence  damages 
shall  be  mitigated ;  but  clearly  the  bailee, 
or  he  who  hath  a  special  property,  shall 
have  a  general  action  of  trespass  against  a 
stranger,  and  shall  recover  all  in  damages, 
because  that  he  is  chargeable  over."  These 
remarks  apply  as  well  to  trover  as  to  tres- 
pass. 

{k)  Jarvis  v.  Rogers,  15  Mass.  389; 
Stearns  v.  Marsh,  4  Denio,  227.  And  see 
ante,  vol.  1,  p.  600-602. 

[503] 


478*  THE   LAW    OF    COXTRACTS.  [PART  II. 

damages.  The  plaimift'  claims  compensation  for  the  wrong 
done  to  him,  in  taking  his  goods  and  compelling  him  to  resort 
to  this  process  to  recover  them.  The  defendant  claims  to  have 
his  goods  back  again,  and  also  damages  for  taking  them  by  this 
process.  (/)  We  should  apply  here  the  same  principles  which 
have  been  already  stated  in  relation  to  trover :  each  party  may 
claim  complete  compensation,  and  no  more.  The  plaintiff"  has 
the  goods,  and  if  he  succeeds  should  have  so  much  more  as  he 
has  lost,  or  the  defendant  has  gained,  or  might  well  have  gained 
by  the  taking  and  detention  of  them.  If  the  defendant  succeed, 
he  should  have,  beside  his  judgment  for  a  return,  damages  to 
'cover  his  direct  loss  by  the  taking  and  detention.  (/«)  ^yhich- 
ever  party  establishes  his  property  in  the  goods,  has  also  a  right 
to  have  made  good  to  him  by  damages,  any  deterioration  which 
they  may  have  suffered  while  ^^Tongfully  in  the  hands  of  the 
other  party.(/*)  This  rule,  however,  is  subject  to  the  qualifica- 
tion, that  a  plaintitf  in  replevin  who  retains  the  articles  replevied 
until  judgment  in  the  suit,  cannot  claim  damages  for  any  de- 
preciation in  their  value,  during  that  period :  because  he  might 
sell  them  immediately  in  such  a  manner  as  to  ascertain  their 
value,  for  which  alone  he  is  answerable  on  his  bond,  (o) 

It  has  been  held  that  an  action  on  the  replevin  bond  is  defeated 
by  the  destruction  of  the  property-  in  the  hands  of  the  plaintiff 
in  replevin,  by  the  act  of  God  before  the  judgment,  (p)  But 
this  decision  has  been  much  doubted,  on  the  ground  that  if  one 
takes  property  from  its  true  owner,  if  it  be  destroyed  in  the  hands 
of  the  taker,  it  should  be  regarded  as  his  los^,  and  not  as  the 
loss  of  the  owner,  (q)  Such  would  doubtless  be  the  decision  if 
the  same  defence  were  attempted  against  an  action  of  trespass 
or  trover. 

The  question  as  to  the  time  when  the  value  of  the  goods 
should  Ik-  taken,  to  which  we  have  alluded  in  speaking  of  trover, 

(/»  Timtv  r.  Learned.  4  Ma«s.  614.  617,         (m)  Howler  v.  GJbh?,  14  Johns.  SS5. 
per    ■■  r.  J.     If  t'  '    '    '  (o)  Gonion  r.  Jonnev,  16  Mass.  465. 

pn  p^rt  in  :  {/>)  Carpenter  r.   Stevens,    12    AVend. 


P 


589. 


ar.  .H43.         (./)  Sn.Tvlsim  r.  Jenkins,  3  Sandf.  614, 

1  3So.     643,  per  "Z^*u<T,  J. 

[501] 


CII.  VII r.]  IfAMAGES.  *479 

may  also  arise  in  an  action  on  the  replevin  bond,  or  if  the  de- 
fendant prevails  in  the  original  suit;  and  we  think  it  must  be 
governed  by  the  principles  we  have  already  stated  as  applicable 
to  that  action.  (/■) 

In  an  action  upon  a  replevin  bond,  the  value  of  the  property, 
as  indorsed  upon  it,  is,  at  the  plaintiff's  election,  taken  as  its 
true  value,  (.s-) 

*If  the  writ,  in  replevin,  is  sued  out  maliciously,  it  has  been 
held  that  exemplary  damages  may  be  given  in  this  case,  as  for 
a  wanton  and  malicious  trespass,  (t)  But  in  an  action  on  a 
replevin  bond,  it  is  also  said  that  counsel  fees,  or  compensation 
for  attendance  at  court  in  the  replevin  suit,  cannot  be  recov- 
ered, (u) 

If  one  of  the  parties  has  but  a  qualified  right  in  the  property, 
as  by  attachment  or  lien  to  secure  a  debt,  he  recovers  only  to 
the  extent  of  that  lien  or  interest,  unless  the  other  party  fails  to 
make  out  any  rightful  title  or  interest  whatever,  (v)  Nor  can 
the  defendant  recover  the  value  of  the  whole  property,  if,  after 
the  action  commenced,  he  repossessed  himself  of  a  part  of  it. 
Although  the  plaintiff"  is  nonsuited  in  an  action  of  replevin,  he 
may  still  offer  testimony  to  prove  ownership  of  the  property  in 
himself,  upon  inquiry  into  the  right  of  the  defendant's  possession, 
for  the  purpose  of  showing  that  the  defendant  has  sustained  no 
substantial  damage,  as  the  plaintiff  was  the  owner  of  the  prop- 

(r)  Supra,  note  (b).     The  value  of  the  and  Suydam  v.  Jenkins,  3  Sandf.   614, 

goods  at  the  time  of  the  service   of  the  645,  per  Duer,  J. 

writof  replevin,  with  interest  until  the  ren-         U)  M'Donald  v.   Scaife,  11  Penn.  St. 

dition  of  judgment,  is  held  to  be  the  ordi-  381  ;  Brizsee  v.  Maybee,  21  Wend.  144; 

nary  measure  of  damages  when  the  de-  Cable  v.  Dakin,  20  id.  172;   M'Cabe  v. 

fendant  prevails.     Brizsee  v.  Maybee,  21  Morehead,  1  Watts  &  S.  516. 
Wend.  144;  Mattoon  v.  Pearee,  12  Mass.         (u)  Davis  v.  Crow,  7  Blackf  129. 
406;    Barnes    i'.    Bartlett,    15    Pick.    71;         (i?)  Scrughara  r.  Carter,  12  Wend.  131 ; 

M'Cabe  v.  Morehead,  1  Watts  &  S.  516;  Lloyd  v.  Goodwin,  12  Smcdes  &  M.  223. 

Caldwell  r.  West,  1  N.  J.  411,  422.  In  Jennings  v.  Johnson,  17  Ohio,  154,  it 

(s)  Middleton  v.  Bryan,  3  M.  &  S.  155 ;  was  held  that  if  property  be  replevied  from 

Huggeford  v.  Ford,  1 1  Pick.  223 ;  Parker  a  sheriff  holding  it  under  execution,  and 

V.   Simonds,  8  Met.  205.     In  an  action  the  issue  be  found  for  the  defendant,  if  the 

of  debt  on  a  replevin  bond,  the  original  value  of  the  property  be  greater  than  the 

plaintiffs  having  failed  in  their  action,  and  amount  of  the  execution,  the  rule  of  dam- 

a  writ  of  restitution  having  been  issued,  ages  is  the  amount  of  the  execution  with 

by  virtue  of  which  the  defendant  demand-  interest  thereon  ;  but  if  the  value  of  the 

ed  the  goods,  he  was  held  entitled  to  the  property  be  less  than  the  amount  of  the 

value  of  the  goods  at  the  time  of  the  do-  execution,  then  the  measure  of  damages- 

mand.     Swift  v.  Barnes,   16  Pick.   194.  is  the  full  value  of  the  property. 
See  also  Howe  v.  Handlej-,  28  Me.  241, 

VOL.  II.  43  '  [  oOo  ] 


480*  THE   LAW   OF   CONTRACTS.  [PART  11. 

erty.  (?r)  This  action  being,  as  it  is  said,  in  substitution  of  the 
old  action  de  bonis  asportatis,  must  be  governed,  at  least  in  this 
respect,  by  the  rules  of  that  action,  {x) 


5.    Where  a  Vendee  sues  a  Vendor. 

If  a  vendee,  to  whom  the  vendor  has  not  delivered  the  articles 
sold  agreeably  to  his  contract,  brings  an  action  for  the  breach, 
he  may  be  said  to  have  sustained  no  loss  unless  the  articles 
have  risen  in  value.  He  could  not  maintain  his  action  without 
tendering  the  price,  and  if  the  articles  would  bring  no  more  than 
this,  he  would  gain  nothing  if  they  were  delivered  to  him,  and 
loses  nothing  if  they  are  withheld.  *But  although  they  may 
have  gained  nothing  in  value  up  to  the  time  when  they  should 
have  been  delivered,  they  may  have  gained  greatly  since,  and 
it  is  precisely  for  the  loss  of  this  gain  that  the  vendee  demands 
compensation.  A  distinction  is  made  here,  by  some  authorities, 
which  does  not  appear  to  us  to  rest  upon  perfectly  satisfactory 
and  conclusive  reasons.  It  is  said  that  if  the  vendee  bought  on 
credit,  the  value  of  the  goods  at  the  time  of  the  purchase,  or  at 
the  time  when  delivery  was  due,  should  be  taken  as  the  meas- 
ure of  damages.  But  if  he  paid  the  price  down,  or  in  advance, 
then  he  is  entitled  not  only  to  their  increase  in  value  at  the 
time  he  brings  his  action,  but  to  any  increase  which  may  have 
taken  place  at  any  intermediate  period  between  the  purchase 
and  the  action,  even  if  the  value  had  fallen  again  before  the 
action.  (//)     But  if  compensation  is  to  be  the  measure,  it  would 

(re)  Iliirman  v.  Goodrich,  1  Greene,  ply  to  .a  case  where  advances  of  money 
Iowa,  1.3.  Sec  also,  WaUace  v.  Clark,  had  been  made  by  the  purchaser  under  the 
7  IJlackf.  298.  contract."  This  distinction  was  adopted 
(x)  l)c  AVitt  V.  Morris,  1.3  Wend.  490.  in  Ghirk  r.  I'inncy,  7  Cowen,  081,  with 
()/)  Slifphcrr]  r.  Hampton,  .'!  ^V^l('at.  the  qualilicatiou  that  in  ofdcr  to  recover 
200  ;  il/a/-.s//r(//,  (J.  J.  :  " 'J'he  only  ([ucstion  the  lii!j;licst  price  between  the  period  for 
is,  whether  the  price  of  tiie  article  at  the  delivery  and  tiie  day  of  trial,  the  suit  must 
time  of  the  breach  of  the  contract,  or  at  be  brouj^ht  within  a  reasonable  time, 
any  subsefiucnt  time  i)cf()n;  suit  brought,  Davis?-.  Shi(;lds,  24  Wend.  a2'J.  Insults 
constitutes  the  proper  rule  of  daina^ics  in  on  bonds  for  the  replacement  of  stock,  the 
this  case.  Tiie  unanimous  opinion  of  the  hi^licr  vabii^  thereof  on  the  day  of  trial 
court  is,  that  tli(!  price  of  the  iiilieh;  at  the  has  been  allowe(l  as  the  measure  of  dam- 
time  it  was  to  be  delivered,  is  the  measure  a;,M's.  Shepherd  v.  Johnson,  2  l''ast,  211  ; 
of  darna(;es.  For  myself  only,  I  can  say  M'Arthin-  r.  Scaforth,  2  Taunt.  2.'j7  ;  llar- 
tliat  I  should  not  think  the  rule  would  up-  rison  v.  Harrison,  1  C.  &  T.  412  ;  Downcs 

[MC] 


CH.  viir.] 


DAMAGES. 


*481 


be  difficult  to  find  a  very  good  reason  for  this  difference.  It 
may  indeed  be  said,  that  one  who  buys  not  only  on  credit,  but 
without  any  definite  period  of  payment,  and  who  acquires  a 
right  to  the  goods  only  by  tendering  the  price,  and  makes  this 
tender  only  when  he  brings  the  action,  necessarily  fixes  that 
time  as  the  time  of  the  purchase,  of  the  delivery,  and  of  the 
standard  of  value,  (c)  But  if  one  buys  to-day,  the  goods  to  be 
delivered  to-day,  and  the  price  is  to  be  paid  in  three  months, 
and  the  goods  are  withheld  without  sufficient  cause,  there  does 
not  seem  to  be  any  clear  and  *convincing  reason  for  giving  him 
a  compensation  different  from  that  to  which  he  would  be  entitled 
as  damages,  if  he  paid  the  price  down,  (a)  "We  have  consid- 
ered a  similar  question,  —  as  to  the  time  when  the  value  of 
property  is  to  be  taken,  —  repeatedly,  because  different  principles 
have  been  applied  to  it  in  different  actions.  But  we  doubt  if 
this  be  wise  or  just.  If  we  adhere  to  the  simple  rule  of  com- 
pensation, we  should  say,  that  in  every  action  to  recover  dam- 


r.  Back,  1  Stark.  318.  See  Tempests. 
Kilner,  3  C.  B.  249.  But  the  authority 
of  these  cases  in  this  country  is  very  doubt- 
ful ;  Wells  V.  Abernethy,  5  Conn.  227, 
per  Hosmer,  C.  J.  ;  Gray  v.  The  Portland 
Bank,  3  Mass.  390  ;  Suydam  v.  Jenkins, 
3  Sandf.  632-636.  They  have,  however, 
been  recently  approved  of  in  Connecticut. 
West  V.  Pritchard,  19  Conn.  212.  See 
Com.  Bank  of  Buffalo  v.  Kortwright,  22 
Wend.  348 ;  Wilson  v.  Little,  2  Comst. 
443. 

(z)  Suydam  v.  Jenkins,  3  Sandf.  639. 

(n)  This  distinction  has,  in  some  cases, 
been  overruled,  and  the  value  of  the  prop- 
erty at  the  time  and  place  of  the  promised 
delivery  taken  as  the  measure  of  damages, 
without  reference  to  the  previous  payment 
of  the  consideration.  Smethnrst  v.  Wool- 
ston,  5  Watts  &  S.  106  ;  Smith  v.  Dunlap, 
12  III.  184;  Bush  v.  Canfield,  2  Conn. 
485 ;  Wells  v.  Abernethy,  5  id.  222 ; 
Vance  v.  Tourne,  13  La.  225;  Sargent 
V.  The  Franklin  Ins.  Co.  8  Pick.  90; 
Startup  v.  Cortazzi,  2  Cromp.  M.  &  R. 
165.  Where  the  price  has  not  been  paid 
by  the  vendee,  the  authorities  generally 
agree  ;  some  of  them  not  noticing  the  dis- 
tinction we  liave  mentioned,  that  the  dif- 
ference between  the  market  value  of  the 
goods  at  the  time  of  the  promised  delivery, 
and  the  contract  price,  is  the  measure  of 


damages.  Leigh  v.  Paterson,  8  Taunt. 
540  ;  Gainsford  v.  Carroll,  2  B.  &  C.  624  ; 
Peterson  v.  Ayre,  13  C.  B.  383,  24  Eng. 
L.  &  Eq.  382  ;  Boorman  v.  Nash,  9  B.  & 
C.  145  ;  Shaw  v.  Holland,  15  M.  &  W. 
136  ;  Douglass  v.  M'Allister,  3  Cranch, 
298,  Cranch,  C.  C.  241;  Gilpins  v. 
Consequa,  Pet.  C.  C.  85  ;  Dey  v.  Dox,  9 
Wend.  129;  Beals  v.  Terry,  2  Sandf. 
127  ;  Clark  v.  Dales,  20  Barb.  42;  Dana 
r.  Fiedler,  2  Kern.  40 ;  Tobin  v.  Post,  3 
Calif.  373;  Shaw  v.  Nudd,  8  Pick.  9; 
Swift  V.  Barnes,  16  id.  194;  Smith  v. 
Berry,  18  Me.  122;  Marchhesseau  v. 
Chaffee,  4  La.  Ann.  24.  There  are  cases 
which  hold  that  in  trover  the  highest 
value  of  the  goods  at  any  intermediate 
period  between  the  conversion  and  the 
trial  is  the  measure  of  damages.  West  i-. 
Wcntworth,  3  Co  wen,  82 ;  Greening  v. 
Wilkinson,  1  C.  &  P.  625.  See  Fisher  v. 
Prince,  3  Burr.  1363  ;  Whitten  r.  Fuller, 
2  W.  Bl.  902.  In  detinue,  for  railway 
scrip,  the  measure  of  damages  was  held  to 
be  the  difference  between  its  value  when 
demanded  and  its  depreciated  value  when 
delivered  u]).  Williams  v.  Archer,  5  C. 
B.  318,  2  Car.  &  K.  26  ;  Tempest  v.  Kul- 
ner,  3  C.  B.  249.  See  Com.  Bank  of 
Buffalo  V.  Kortright,  22  Wend.  348 ;  Wil- 
son V.  Little,  2  Comst.  443. 

[507] 


482*  THE  LAW  OF   CONTRACTS.  [PART  II. 

ages  for  the  wrongful  detention  of  personal  property,  the  plaintiff 
should  recover  full  compensation  for  the  loss  of  all  that  he  might 
fairly  have  gained  during  the  whole  period  of  the  defendant's 
misappropriation ;  and  the  defendant  should  be  supposed  to 
have  made  his  wrongful  act  as  profitable  to  himself  as  the  mar- 
ket at  any  time  permitted,  —  excepting,  perhaps,  accidental  and 
momentary  inflations,  —  and  should  be  compel  ed  to  give  over 
this  profit  to  the  plaintiff".  And  it  will  be  seen  in  our  notes, 
that  we  have  recent  authority  for  this  general  rule,  (b) 

*In  determining  what  is  the  market  value  of  property  at  any 
particular  time,  the  jury  may  sometimes  take  a  wide  range;  for 
this  is  not  always  ascertainable  by  precise  facts,  but  must 
sometimes  rest  on  opinion ;  (c)  and  it  would  seem  that  neither 
party  ought  to  gain  or  lose  by  a  mere  fancy  price,  or  an  inffated 
and  accidental  value  suddenly  put  in  force  by  some  speculative 
movement,  and  as  suddenly  passing  away,  (d)  The  question 
of  measurement  of  damages  by  a  market  value  is  peculiarly 
one  for  the  jury.  But  a  court  would  not  willingly  permit  them 
to  take  any  extreme  of  valuation,  whether  high  or  low,  which 
contradicted  existing  facts,  and  rested  only  on  a  merely  specu- 
lative opinion  of  a  future  want  or  excess.  The  plaintiff"  should 
not  be  permitted  to  make  a  profit  by  the  breach  of  his  contract, 
which  he  could  not  have  naturally  expected  to  make  by  its 
performance ;  nor  should   he    be  subjected  to  a    loss,  and  the 

(b)  Suydam  v.  Jenkins,  3  Sandf.  614.  received  if  the   party  liad  performed  his 

See  supra,  note  {b).     Dunlop  v.  Ilig^gins,  contract.     No  other  rule  is   reconcilable 

1  H.  L.  Cas.  .381,  403.     Lord  Chancellor  with  justice,  nor  with  the  duty  wliicli  the 

Cotlenluim :    "  Su|)|j0sc,    for    instance,    a  jury  had    to  perform  —  that   of  deciding: 

party  who  has  ajjreed  to  purchase  2,000  the   amount  of  damapjc  which  the  party 

tons  of  j)];;  iron,  on  a  particular  day,  has  had  suffered   by  the   broacii  of  his    con- 

himselfentcroil  into  a  contract  with  some-  tract."     Eut  in  trover,  for  jioods  sold,  it 

body    else,    condition    for   the    supply    of  was  held  in  IMassachusetts  that  the  rule  of 

2,000  tons  of  |)i;;  iron,  to  be  delivered  on  damages  is  their  value  at  the  time  of  the 

that  day,  anil   that  he,  not  being  able  to  conversion,   notwithstanding    the    vendor 

obtain   those   2,000  tons  of  j)ig    iron    on  has  resold    them    at   an    advanced    price 

that  ])articular  day,  loses  tlie  benefit  aris-  before    the  trial.     Kennedy   r.   Whitwcll, 

ing  from  that  contract.     If  jiig  iron  had  4    I'ick.    400.     Sec    Ilanna   r.   llarter,    2 

only  risen  a  shilling  ii  ton  in  the  inaiki't,  I'ikc,   .'iOT,  where  in   an  action   against  a 

but   the  pursuers  had  lost  .£1 ,000  iip<jii  a  vendor  for  refusing  to  complete  a  contract 

contract  with  a  railway  company,  in   my  of  sale,  it  was  held  that  the  sum  at  which 

opinion   they  ought  not  only  to  recover  he  resold  the  article  does  not  establish  its 

the  damage   which  would   have   arisen  if  market  value. 

they  had  gone  into  the  nuwkct  and  bought         (c)  Joy  v.  Hopkins,  5  Denio,  84. 
the   pig   iron   at  that  increased   juice,  i)iit         ((/)   Younger  v.  Givcns,  G  Dana,  1. 
also   tluit   profit   which  would  huvo  been 


CH.  VIII.] 


DAMAGES. 


*483 


defendant  be  permitted  to  make  a  saving,  on  a  merely  specula- 
tive possibility.  The  inquiry  always  should  be,  what  was  the 
value  of  the  thing  at  that  time,  taking  into  consideration  all 
proved  facts  of  price  and  sale,  and  all  rational  and  distinct 
probabilities,  and  nothing  more,  (e) 

*If  the  vendee  objects  that  the  articles  are  not  such  as  he 
bargained  for,  he  may  rescind  the  contract  as  a  whole,  biit  as 
we  have  seen,  not  as  to  a  part.  If,  therefore,  he  has  received  a 
part  of  the  goods,  he  cannot  retain  them  and  have  damages  on 
the  non-delivery  of  the  whole  ;  nor  can  he  require  the  delivery 
of  the  residue,  after  he  has  ascertained  their  quality,  and  then 
have  his  claim  for  damages,  for  their  inferiority.  (/) 

If  the  vendee  sues  the  vendor  because  he  has  not  been  able 


(e)  Blvdenburgh  v.  Welsh,  1  Baldw. 
331,  340^  Per  HopJcinson,  J. :  "  It  is  the 
price  —  the  market  price  of  the  article  that 
is  to  furnish  the  measure  of  damages. 
Now  what  is  the  price  of  a  thing,  partic- 
ularly the  market  price?  We  consider  it 
to  be  the  lvalue  —  the  rate  at  which  the 
thing  is  sold.  To  make  a  market,  there 
must  be  buying  and  selling,  purchase  and 
sale.  If  the  owner  of  an  article  holds  it 
at  a  price  which  nobody  will  give  for  it, 
can  that  be  said  to  be  its  market  value  ? 
Men  sometimes  put  fantastical  prices  upon 
their  property.  For  reasons  personal  and 
peculiar,  they  rate  it  much  above  what 
any  one  would  give  for  it.  Is  that  its 
value  ?  Further,  the  holders  of  an  article, 
as  flour,  for  instance,  under  a  false  rumor, 
which  if  true  would  augment  its  value, 
may  suspend  their  sales  and  put  a  price 
upon  it,  not  according  to  its  value  in  the 
actual  state  of  the  market,  or  the  actual 
circumstances  which  affect  the  market,  but 
according  to  what,  in  their  opinion,  will 
be  its  market  price  or  value,  provided  the 
rumor  shall  prove  to  be  true.  In  such  a 
case,  it  is  clear  that  the  asking  price  is  not 
the  worth  of  the  thing  on  the  given  day,  but 
what  it  is  supposed  it  will  be  worth  on  a 
future  day,  if  the  contingency  shall  hap- 
pen which  is  to  give  it  this  additional 
value.  To  take  such  a  price  as  a  rule  of 
damages  is  to  make  a  defendant  pay  what 
never  in  truth  was  the  value  of  the  article, 
and  to  give  the  plaintiff  a  profit,  by  a 
breach  of  the  contract,  which  he  never 
could  hove  made  by  its  performance." 
See    Smith     v.    Griffith,   3    Hill,    333; 

43* 


Younger  v.  Givens,  6  Dana,  1.  Evidence 
of  value  at  places  in  the  vicinity  of  the 
place  of  delivery  may  be  admitted  to  show 
the  value  at  that  place.  But  where  the 
evidence  is  clear  and  explicit  as  to  the 
value  at  that  place,  such  value  must  con- 
trol, no  matter  what  the  value  is  at  other 
places.  Gregory  v.  McDowel,  8  Wend. 
435. 

(/)  Shields  v.  Pettee,  2  Sandf.  262. 
The  defendants  purchased  of  the  plaintiffs 
one  hundred  and  fifty  tons  of  pig  iron. 
No.  1,  to  arrive  in  the  ship  Siddons.  The 
iron  which  arrived  was  not  of  that  quality, 
and  for  that  reason  the  defendants,  after 
receiving  a  part,  refused  to  receive  the 
remainder,  or  pay  the  contract  price  for 
the  part  already  received.  In  the  mean 
time  the  market  price  had  risen,  so  that 
iron  of  the  quality  delivered  was  worth 
two  or  three  dollars  per  ton  more  than  the 
contract  price.  This  action  was  brought 
for  the  value  of  the  iron  delivered.  Oak- 
ley, C.  J.,  said:  "Assuming  the  contract 
to  be  obligatory,  the  defendants,  on  find- 
ing the  iron  they  were  receiving  was  not 
No.  1 ,  were  at  liberty  to  continue  to  re- 
ceive it  as  a  fulfilment  of  their  purchase,  or 
they  could  have  repudiated  the  delivery 
and  brought  their  action  for  damages. 
But  they  could  not  do  both.  They  had 
no  right  to  receive  a  part  of  the  goods,  re- 
tain such  part,  and  refuse  to  receive  the 
residue."  Accordingly  it  was  held  that 
the  defendants  could  not  recoup  damages 
for  the  non-fulfilment  of  the  contract  by 
the  plaintiffs,  but  that  they  were  bound  to 
pay  the  market  price  of  the  iron  delivered.. 

[509] 


484* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


to  make  a  good  title  under  his  contract,  it  is  said  that  he  may 
recover  for  the  expense  of  investigating  the  title,  but  not  dam- 
ages for  the  loss  of  the  bargain,  or  his  endeavors  to  substitute 
a  new  one.  (fa) 

6.    Where  a  Vendor  sues  a  Vendee. 

If  a  vendor  sues  the  vendee,  he  demands,  by  way  of  damages, 
the  price  the  vendee  should  have  paid.  Usually  this  is  fixed 
by  the  parties  ;  if  not,  it  may  be  fixed  by  subsequent  facts,  as 
by  a  bond  fide  sale  by  the  vendee,  {g)  If  not,  then  a  fair  price 
must  be  given,  as  ascertained  by  testimony.  If  the  goods  re- 
main in  the  vendor's  hands,  it  may  be  said  that  now  all  his 
damage  is  the  difference  between  their  value  and  the  price  to 
be  paid;  which  maybe  nothing.  This  would  be  true  if  the 
vendor  chose  to  consider  the  articles  as  his  own,  or  if  the  law 
obliged  him  to  consider  them  as  his  *own.  [h)  But  it  does  not 
seem  that  the  law  lays  upon  him  any  such  obligation.  He  may 
consider  them  as  his  own,  if  there  has  been  no  delivery;  or  he 


(fa)  Pounsett  v.  Fuller,  17  C.  B.  660. 

(q)  In  Greene  v.  Bateman,  2  Woodb.  & 
M.  359,  there  was  such  a  misunderstand- 
ing as  to  the  price  that  no  express  con- 
tract could  he  proved.  But  the  vendee 
having  ottered  to  return  the  goods,  and 
the  otter  having  been  decHned,  sold  them. 
It  was  /((-/(/,  in  an  action  of  assumpsit, 
that  he  must  be  treated  as  the  trustee  of 
tlic  vendor,  selling  on  his  account  and  for 
his  benefit,  and  liable  to  the  vendor  for 
the  price  received,  deducting  compensa- 
tion for  Ills  services. 

(h)  Stanton  v.  Small,  3  Sandf.  230; 
McNaugliter  v.  Cassaliy,  4  McLean,  530; 
"Whittnore  /'.  Coats,  14  Mo.  9  ;  Thompson 
V.  Alger,  12  Met.  428;  Girard  v.  Tag- 
gart,  5  S.  &  11.  19.  In  Allen  v.  Jarvis, 
20  Conn.  .38,  tlie  defendant  contracted 
with  the  pliiintitt  to  manufacture  a  num- 
ber of  sur;:iial  instruments,  of  whicli  the 
defendant  was  patentee.  After  tiiey  were 
finisheil,  the  defendant  refused  to  accept 
them.  Tlie  plaintitt"  recovered  tlie  full 
price  agreed  upon,  on  tlie  groun<l  that  the 
instruments  were  of  no  value  to  him. 
Starrs,  .J.,  said  :  "  Tlic  rule  of  damages, 
in  an  action  for  the  non-acceptance  of 
property  soM  or  contracted  for,  is   the 

[510] 


amount  of  actual  injury  sustained  by  the 
plaintiflp,  in  consequence  of  such  non- 
acceptance.  This  is  ordinarily  the  differ- 
ence between  the  price  agreed  to  be  paid 
for  it,  and  its  value,  where  such  price  ex- 
ceeds the  value.  If  it  is  worth  that  price 
the  damages  are  only  nominal.  But  there 
may  be  cases  where  tlie  pro])erty  is  utterly 
worthless  in  the  hands  of  the  jilaintitt",  and 
there  the  whole  price  agreed  to  be  paid 
should  be  recovered.  The  present  ap- 
pears to  us  to  be  a  case  of  this  ilcscription. 
The  articles  contracted  for  were  those  for 
the  exclusive  right  of  making  and  vend- 
ing which  the  defendant  has  obtained  a 
patent.  They  could  not  be  lawfully  sold 
by  the  plaintitt's,  and  were,  therefore, 
worthless  to  them."  Where  the  vendee 
gives  notice  before  the  day  of  delivery  that 
he  will  not  accept  the  goods,  the  measure 
of  damages  in  an  action  against  him  by 
the  vendor,  is  till  the  dill'erenee  between 
tli(!  t'ontraet  jiriee  and  the  market  ])rice, 
when  they  should  have  been  delivered, 
and  he  cannot  have  them  assessed  at  the 
market  value  of  the  goods  at  the  time 
when  the  notice  was  given.  I'hillpotts  v. 
Evans,  5  M.  &  W.  475. 


CH.  YIII.] 


DAMAGES. 


484 


may  consider  them  as  the  vendee's,  and  sell  them,  with  due 
precaution,  to  satisfy  his  lien  on  them  for  the  price,  and  then 
he  may  sue  and  recover  only  for  the  unpaid  balance  of  the 
price  ;  or  he  may  consider  them  as  the  property  of  the  vendee, 
subject  to  his  call  or  order,  and  then  he  recovers  the  whole  of 
the  price  which  the  vendee  should  pay.  (i)  As  the  action,  in 
either  case,  proceeds  upon  the  breach  of  the  contract  by  the 
vendee,  it  seems  reasonable  that  this  election  should  be  given 
to  the  vendor,  and  no  part  of  it  to  the  vendee.     But  if  the  ven- 


(i)  Sands  v.  Taylor,  5  Johns.  395 ; 
Lanofort  v.  Tiler,  1  Salk.  113;  6  Mod. 
162  ;  Jones  v.  Marsh,  22  Vt.  144  ;  Wilson 
i>.  Broom,  6  La.  Ann.  381;  Gaskell  v.  Mor- 
ris, 7  Watts  &  S.  32  ;  Boorman  r.  Nash,  9 
B.  &  C.  145.  In  Sands  v.  Taylor,  the  de- 
fendants purchased  of  the  ])laintifts  a  cargo 
of  wheat.  After  accepting  a  part  they 
refused  to  accept  the  remainder.  After 
giving  notice  to  the  defendants  the  plaia- 
titfs  sold  the  wheat  in  their  liands  at  auc- 
tion. Van  Xess,  J.,  said  :  "  Nothing, 
therefore,  is  more  reasonable,  than  that 
the  plaintiffs,  who  were  not  bound  to  store 
or  purchase  the  wheat,  should  be  per- 
mitted to  sell  it,  at  the  best  price  that 
could  be  obtained.  The  defendants  have 
no  right  to  complain.  Had  they  taken 
the  wheat,  as  they  ought  to  have  done,  a 
sale  by  the  plaintiffs  would  not  have  been 
necessary.  The  recovery  here  is  only  for 
the  difference  between  tlie  net  proceeds  of 
that  sale,  and  the  price  agreed  upon  in 
the  original  contract."  Bemcnt  i\  Smith, 
15  Wend.  493;  Graham  r.  Jackson,  14 
East,  498.  In  Bement  v.  Smith,  the  plain- 
tiff built  a  carriage  for  the  defendant,  ac- 
cording to  an  agreement,  tendered  it  to 
him,  and  on  his  refusal  to  accept  it,  de- 
posited it  with  a  third  person  on  his  ac- 
count, giving  the  defendant  notice  of  the 
deposit,  and  brouglit  an  action  of  assump- 
sit. It  was  held  that  the  plaintiff  was  en- 
titled to  recover  the  price  agreed  upon. 
But  in  Laird  v.  Pirn,  7  M.  &  W.  474,  478, 
Parke,  B.,  said;  "A  party  cannot  re- 
cover the  full  value  of  a  chattel,  unless 
under  circumstances  which  import  that 
the  property  has  passed  to  the  defendant, 
as  in  the  case  of  goods  sold  and  delivered, 
where  they  have  been  absolutely  parted 
with,  and  cannot  be  sold  again."  See 
also,  Dunlop  v.  Grotc,  2  Car.  &  K.  153; 
Thompson  v.  Alger,  12  Met.  428,  443. 
In  this  last  case,  the  contract  "iN-as  for  the 


purchase  of  railroad  shares,  and  they  had 
already  been  transferred  to  the  vendee,  on 
the  books  of  the  company,  and  he  refused, 
after  the  transfer,  to  receive  them ;  the 
vendor  was  held  entitled  to  recover  the 
contract  price ;  but  the  court  were  of 
opinion  that  if  the  refusal  had  preceded 
the  transfer,  the  difference  between  the 
agreed  price  and  the  market  value  on  the 
day  of  delivery  would  have  been  the 
measure  of  damages.  Dewey,  J.  :  "  The 
plaintiff'  is  entitled  to  recover  the  whole 
amount  stipulated  to  be  paid  for  the  stock. 
The  argument  against  such  recovery  is, 
that  this  stock  was  never  accepted  by  the 
defendant ;  that  this,  at  most,  was  a  mere 
contract  to  purchase ;  and  that  the  de- 
fendant, having  repudiated  it,  is  only  lia- 
ble to  pay  the  difference  between  the 
agreed  price  and  the  market  value  of  the 
stock  on  the  day  of  the  delivery.  Such 
would  be  the  general  rule  as  to  contracts 
for  the  sale  of  personal  property  ;  and  such 
rule  would  do  entire  justice  to  the  vendor. 
He  would  retain  the  property  as  fully  in 
his  hands  as  before,  and  a  payment  of  the 
difference  between  the  market  price  and 
that  stipulated  would  fully  indemnify  him. 
Such  would  have  been  the  rule  in  this 
case  if  nothing  had  been  done  to  change 
the  relations  of  the  parties.  If,  for  in- 
stance, the  defendant  had  repudiated  the 
contract,  before  any  transfer  of  stock  to 
him  had  been  made  on  the  books  of  the 
corporation,  it  might  properly  have  ap- 
plied here.  But  this  is  a  case  of  some- 
what peculiar  character,  in  this  respect. 
The  contract  of  the  vendor  to  sell  to  the 
defendant  one  hundred  and  eighty  shares 
of  railroad  stock  required  a  previous 
ti'ansfer  of  the  shares  on  the  books  of  the 
corporation.  This,  from  the  very  nature 
of  the  case  was  a  previous  act ;  and  wlien 
done,  it  passed  the  property  on  the  books 
of  the  comjaany  to  the  defendant." 

[511] 


485*-486*  THE   LAW    OF   CONTRACTS.  [PART  II. 

dor  has  not  the  goods  himself,  but  contracts  with  a  third  party 
for  them,  it  is  said  (but  not,  as  we  thijik,  for  good  reasons),  that 
he  now  recovers  only  the  difference  between  the  market  value 
and  the  contract  price.  But  if  this  contract  to  buy  was  abso- 
*Iute  and  obligatory,  and  he  had  the  goods  in  his  control,  so  that 
his  vendee  might  have  them  on  demand,  it  might  not  be  easy 
to  discriminate,  this  case  from  the  other,  on  principle,  (j) 

If  the  goods  are  sold  on  credit,  that  is,  if  it  is  a  part  of  the 
contract  of  sale,  that  payment  shall  be  made  at  a  future  day, 
there  can,  of  course,  be  no  suit  for  the  price  until  that  day. 
But  if  it  is  also  a  part  of  the  contract  that  a  note  or  bill  of 
exchange  shall  be  given  immediately,  which  is  to  be  payable  on 
that  future  day,  if  this  be  not  given  an  action  can  at  *once  be 
maintained  for  it;  not  only  because  it  is  a  separate  promise, 
but  because,  by  the  practice  of  merchants,  this  note  or  bill 
might  be  made,  by  the  vendor's  getting  it  discounted,  the  means 
of  present  payment,  (k) 

If  the  sale  was  with  warranty,  and  an  action  is  brought  on  a 
breach  of  the  warranty,  if  the  vendee  may  not  rescind  the  con- 
tract and  return  the  goods,  —  a  question  we  have  considered 
elsewhere,  (l)  —  he  can  have  no  other  compensation  than  that 
which  would  make  up  the  difference  between  what  the  goods 
are  and  what  they  ought  to  be.  Nor  is  the  price  paid  for  the 
article  any  thing  more  than  prima  facie  evidence  of  the  value 
which  it  should  have  had,  if  it  is  even  so  much.  The  jury  can- 
not assume  that  the  warrantor  only  agreed  that  the  thing  pur- 
chased should  be  worth  what  was  given  for  it,  because  the  pur- 
chaser may  have  been  induced  by  the  low  price  to  make  the 

{j)  For  this  distinction,  see  Scdj^wick  goods  as  the  vendee's  ;  hut  may  also  elect 

on   Damaf^cs,   j).  28.'!,  citin<^    Stanton  v.  to  consider  tiiem  as  his  own,  tiie  contract 

Small,    :i     Satidf.     2.'}(»;    M(Naii;;htcr    r.  heinjj^  rescinded,   and  sue  for  the  special 

Cassally,  4  McLean,  5.'i().     JJiir  we  thiidc  damaj^c;  i.  e.  tiic  ditlcrence  ])etween  the 

this    distinction    is    with(jut    foundation,  market  value  and  the  aj^recd  ]n-ice. 

The  circumstance,  in   the  first  case,  tiiat  (/,•)    llanna   i\    Mills,    21    Wend.    90; 

the  floods  were   not   in    the   jiossession  of  IviiicliMrt  r.  Olwine,  T)   Watts  &  (S.   157; 

the  vcinlor,  hut  onlv  coiUractcd  for,  was  Hutchinson  ;•.   Ucid,  ;j  Camp.  .■!29.     See 

not  ailuflud  to  I)y  tint  court  in  assessinf^  also,  Musscn   i'.  Trice,  4  I'^ast,  147;  Dut- 

dama;,rcs.       The    iiiaintill'    only    chiimcd  ton  v.  Soh)inonson,  .'!   15.  &  1'.  ,')82.     In 

what  the  court  aHowcd.     'J'he  cases  seem  the  ai'tion   for  not   f^ivinj;   the    note,    the 

to  show  tiiat  a  vendor  may,  on  default  of  measure  of  damaf^cs  is  the  full  ]irice  of  the 

vendee,  not  oidy  elect  to  resell  and  cliarj;(i  floods.     Ilanna  v.  Mills;  Kinehart  f .  01- 

the  vend(te  for  the   loss  on  tlie  resale,  or  wine. 

BUG  for  the  contract  price  considering  the  (/)  Vol.  1,  p.  474. 

[512] 


en.  VIII.] 


DAMAGES. 


*487 


purchase.  He  has  a  right  to  have  just  such  goods  as  the 
vendor  agreed  to  sell,  and  compensation  for  the  whole  differ- 
ence by  v^diich  they  fall  short  of  this,  without  reference  to  the 
price  paid  for  the  goods,  (m)  He  may  *also  recover  for  the  con- 
sequential injury  he  has  sustained  by  reason  of  the  breach  of 
warranty,  if  it  were  the  immediate,  direct,  and  natural  conse- 
quence, but  not  otherwise,  (n)  Thus,  if  goods  are  warranted  fit 
for  a  particular  purpose,  the  purchaser  is  entitled  to  recover,  in 
his  action  for  breach  of  the  warranty,  what  they  would  have 
been  worth  to  him  if  they  had  conformed  to  the  warranty,  (o) 


7.    Whether  Expenses  may  he  included  in  Damages. 
A  question  sometimes  occurs  in   these   cases,    and   also   in 


(m)  Clare  v.  Maynartl,  7  C.  &P.  741,  6 
A.  &  E.  519,  note;  Curtis  v.  Hannay,  3 
Esp.  82  ;  Woodward  v.  Thatcher,  21  Vt. 
580;  Worthy  v.  Patterson,  20  Ala.  172; 
Slaughter  v.  Mt-Rac,  3  La.  Ann.  453  ; 
Thornton  v.  Thompson,  4  Gratt.  121  ; 
Voorhecs  v.  Earl,  2  Hill,  288  ;  Freeman 
V.  Clute,3  Barb.  424  ;  Comstock  v.  Hutch- 
inson, 10  id.  211.  In  Gary  v.  Gruman,  4 
Hill,  G25,  the  action  was  for  a  breach  of 
a  warranty,  in  the  sale  of  a  horse.  The 
measure  of  damages  was  held  to  be  the 
difference  between  what  would  have  been 
its  value  as  a  sound  horse  and  its  value 
with  the  defects.  Coiven,  J.,  said  :  "  The 
rule  undoubtedly  is,  that  the  agreed  price 
is  strong  evidence  of  the  actual  value ; 
and  this  should  never  be  departed  from, 
unless  it  be  clear  that  such  value  was  more 
or  less  than  the  sum  at  which  the  parties 
fixed  it.  It  is  sometimes  the  value  of  the 
article  as  between  them,  rather  than  its 
general  worth,  that  is  primarily  to  be 
looked  to;  a  value  which  very  likely  de- 
pended on  considerations  which  they  alone 
could  appreciate.  Things  are,  however, 
very  often  purchased  on  account  of  their 
cheapness.  In  the  common  language  of 
vendors,  thej'  are  offered  at  a  great  bar- 
gain, and  when  taken  at  that  offer  on  a 
warranty,  it  would  ijc  contrary  to  the  ex- 
press intention  of  the  parties,  and  perhaps 
defeat  this  warranty  altogether,  should  the 
price  be  made  the  inflexible  standard  of 
value.  A  man  sells  a  bin  of  wheat  at  fifty 
cents  per  bushel,  warranted  to  be  of  good 
quality.     It  is   worth   one   dollar  if  the 


warranty  be  true ;  but  it  turns  out  to  be 
so  foul  that  it  is  worth  no  more  than  sev- 
enty-five cents  per  bushel.  The  purchaser 
is  as  much  entitled  to  his  twenty-five  cents 
per  bushel  in  damages  as  he  would  have 
been  by  paying  his  dollar,  or  if  he  had 
given  two  dollars  per  bushel  he  could  re- 
cover no  more."  The  measure  of  dam- 
ages was  once  held  to  be  the  difference  be- 
tween the  price  paid  and  the  value  of  the 
article  with  defects.  Caswell  v.  Coare,  1 
Taunt.  566.  The  measure  of  damages  in 
an  action  brought  for  a  breach  of  an  im- 
plied warranty  of  title,  in  the  sale  of  a 
horse,  is  the  price  paid  by  the  purchaser 
with  interest  thereon  and  the  cost  recov- 
ered of  him  or  his  vendee,  in  a  suit  brought 
by  the  actual  owner.  Armstrong  v.  Percy, 
5  Wend.  535.  In  Coolidge  v.  Brigham,l 
Met.  547,  where  the  indorsements  on  a 
promissory  note  warranted  genuine  proved 
to  be  forged,  it  was  held,  that  the  measure 
of  damages  would  be  the  difference  be- 
tween the  amount  of  the  note  and  its  actual 
value,  whatever  that  may  be. 

(n)  In  an  action  for  the  breach  of  war- 
ranty on  a  sale  of  a  horse,  the  expense  of 
selling  him,  and  of  keeping  him  for  such 
reasonable  time  as  may  be  necessary  to 
effect  a  sale  at  the  best  advantage,  is  re- 
coverable as  special  damage.  Clare  v. 
Maynard,  7  C.  &  P.  741  ;  Ellis  v.  Chin- 
nock,  7  C.  &  P.  169;  M'Kenzie  v.  Han- 
cock, Ryan  &  M.  436 ;  Chesterman  v. 
Lamb,  4  Nev.  &  M.  195,  2  A.  &  E.  129. 

(o)  Bridge  v.  Wain,  1  Stark.  504. 

[513] 


488*  THE   LAW   OF   CONTRACTS.  [PART  II. 

many  other  actions  where  damages  are  demanded,  as  we  have 
already  intimated,  which  cannot  always  be  answered  by  direct 
and  unquestioned  authority.  It  is,  whether  the  plaintiff  may 
include  in  his  damages  the  expenses  of  litigation.  Thus,  if  one 
sells  a  horse  with  warranty,  and  the  buyer  is  notified  by  a  third 
party  that  the  horse  is  his,  and  requested  to  deliver  it  to  him, 
and  this  the  buyer  refuses  to  do,  and  defends  against  an  action 
in  which  this  third  person  succeeds  in  proving  the  horse  to  be 
his  property ;  and  then  the  buyer  resorts  to  the  seller  on  his 
warranty,  can  he  now  claim  from  him  the  expenses  of  his  un- 
successful defence,  either  on  the  ground  that  it  was  the  direct 
and  immediate  consequence  of  the  breach  of  warranty,  or  that 
it  was  for  the  benefit  of  the  seller. 

It  is  obvious,  in  the  first  place,  that  this  question  must  be 
affected  somewhat  by  the  presence  or  absence  of  fraud,  or  any 
wilful  wrong,  on  the  part  of  the  defendant ;  for  if  that  comes 
into  the  case  it  would  seem  to  enlarge  the  discretion  of  the  jury 
as  to  the  amount  of  damages,  and  also  the  equity  of  the  *plain- 
tifPs  claim.  But  if,  supposing  no  wilful  wrong  to  be  alleged 
or  shown,  and  therefore  that  both  parties  are  equally  innocent, 
if  we  then  say  that  the  plaintiff  may  always  reclaim  his  ex- 
penses of  litigation,  this  would  give  him  the  power  of  subject- 
ing the  defendant  to  the  heavy  costs  of  defending  against  a 
suit  where  there  was  no  defence,  which  the  defendant  never 
would  have  defended,  nor  the  plaintiff,  had  he  not  known  that 
he  was  doing  so  out  of  another's  purse.  But  if  we  say  that 
these  expenses  shall  never  be  recovered,  the  plaintiff  must  then 
either  be  justified  in  abandoning  the  thing  he  bought  to  the  first 
adverse  claimant,  and  the  mere  fact  of  the  claim  be  held  enough 
to  establish  his  right  to  sue  on  the  warranty,  which  would  be 
absurd,  or  else  he  would  be  bound  to  maintain  at  his  own  cost 
a  title  whi(-h  he  had  paid  for  and  which  another  iiad  warranted. 

In  truth  it  would  be  impossible  to  lay  down  a  universal  rule, 
because  the  question  as  it  arises  in  each  case  must  be  deter- 
mined by  the  merits  and  circumstances  of  that  case.  But 
through  all  of  them  the  principle  of  compensation  must  be  re- 
garded ;  and  this  would  lead  to  the  conclusion  that  wherever 
the  litigation  was  entered  into  by  the  buyer,  not  only  in  good 
[5H] 


CH.  VIII.]  DAMAGES.  *489 

faith,  but  on  reasonable  grounds,  and  it  could  be  viewed  as  a 
measure  of  defence  proper  for  the  interests  both  of  buyer  and 
seller,  and,  perhaps,  when  due  notice  of  the  claim,  the  action 
and  the  proposed  defence  were  given  to  the  warrantor,  there  the 
plaintiff  should  be  allowed  the  expenses  of  the  defence  in  his 
damages,  and  otherwise,  not.  For  practical  purposes,  it  would 
be,  we  think,  of  great  importance  for  a  buyer  threatened  with 
the  loss  of  his  purchase  by  an  adverse  claimant,  to  give  notice 
to  his  seller  and  warrantor,  somewhat  on  the  old  principle  of 
voucher.  For  if  the  seller  did  not  choose  to  defend,  the  buyer 
might  then  safely  abandon  the  property,  unless  he  preferred  to 
defend  his  title  on  his  own  account.  And  if  the  seller  took 
notice  and  defended  the  suit,  the  buyer  would  either  have  his 
title  confirmed  without  costs  to  himself,  or  an  unquestionable 
claim  on  the  warranty,  (p)  And,  for  the  same  reasons,  it  would 
doubtless  be  *expedient  for  any  party  to  give  notice,  who  is  to 
look  to  another  for  compensation  for  property  taken  from  him 
by  a  third  party,  on  other  grounds  than  those  of  warranty. 


8.   When  Interest  is  included. 

There  is  another  element  which  enters  into  the  damages 
given  for  breach  of  contract,  for  the  purpose  of  making  these 
damages  compensation  ;  and  this  is  interest.     In  general,  where 

(p)  Blasdale  v.  Babcock,  1  Johns.  517;  no  directions  from  the  defendant  to  give 

Coolidgc   V.   Brigham,    5   Met.   68.      In  up  the  case,  he  proceeded  to  defend,  and 

Lewis  ?;.  Peake,  7  Taunt.  153,  the  plain-  was  cast;  those  costs  and   damages  are 

tiff  bought  a  horse  of  the  defendant,  with  therefore  a  part  of  the  damages  which  the 

wan-anty,  and  relying  thereon  sold  it  to  plaintiff  has  sustained  by  reason  of  the 

one   Dowling,   with    a    warranty.      The  false  warranty  found  against  the  defend- 

plaintitf,  being   sued   by  Dowling  for   a  ant.     I  therefore  am  of  opinion,  that  the 

breach  of  the  warranty,  gave  notice  of  the  plaintiff  was    entitled    to   recover    these 

action  to  the  defendant,  and,   as   he   re-  damages."     But  the  expense  of  defending 

ceived  no   answer,   defended   the  action,  a  suit  beyond  the  taxed  costs  cannot,  it 

Dowling  recovered  the  price  of  the  horse  seems,  be  recovered.    Armstrong  y.  Percy, 

and  £88  costs.     The  plaintiff,  in  an  ac-  5  Wend.  535;  ante,  p.  441,  n.  (i).     And 

tion  against  the  defendant  for  a  breach  of  the  taxed  costs  cannot  be  recovered,  even 

the  warranty,  was  held  entitled  to  recover  if  notice  of  the  suit  have  been  given,  if  the 

the  costs  which  he  had  paid  in  the  suit  defect  in  the  tiling  warranted  could  have 

brought  by  Dowling.     Gibbs,  C.  J.,  said  :  been  discovered  on  a  reasonable  exami- 

"  The  plaintiff  was  induced  by  the  war-  nation,  so  that  the  defence  of  the  action 

ranty  of  the   defendant,  to  warrant   the  was  rash  and  improvident.     Wrightup  v. 

horse  to  a  purchaser;  he  gave  notice  to  Chamberlain,  7  Scott,  598.     See  Penley 

the  defendant  of  the  action,  and  receiving  v.  Watts,  7  M.  &  W.  601,  per  Parke,  B. 

[515] 


490*  THE   LAW   OF   CONTRACTS.  [PART  11. 

the  injury  complained  of  consists  in  the  non-joayment  of  money, 
the  amount  unduly  withheld,  together  with  the  interest  on  that 
amount,  during  the  period  of  the  withholding,  makes  up  the 
whole  compensation,  because  the  law  assumes  that  interest, 
or  the  money  paid  for  the  use  of  money,  is  the  exact  measure 
of  the  worth  of  money.  This  would  be  very  nearly  true,  in 
fact,  of  the  rate  of  interest  actually  paid  in  the  market,  if  this 
were  wholly  unaffected  by  the  usury  laws.  But  the  law  as- 
sumes that  the  rate  of  interest  which  it  allows  is  that  which, 
on  the  whole,  interest  ought  to  be,  and  fixes  the  rate  on  that 
ground,  and  therefore  assumes  in  every  case  that  this  standard 
measures  the  use  which  the  plaintiff  might  have  made  of  his 
money.  The  questions  which  arise  in  relation  to  interest,  we 
have  already  considered  in  our  previous  chapter  on  interest  and 
usury. 


*SECTION    VIII. 

OF    THE    BREACH   OF   CONTRACT    TO   PAY   MONEY   OR    GOODS,   IN    THE 

ALTERNATIVE. 

If  a  note  or  written  promise  be  to  pay  so  much  money,  but 
in  goods  specified,  and  at  a  certain  rate,  and  the  promise  is 
broken,  it  is  not  quite  settled  whether  the  law  will  regard  this 
as  a  promise  to  pay  money,  or  deliver  these  goods;  and  it  may 
be  a  very  important  question  if  the  goods  have  varied  much  in 
value.  Thus  if  one  fails  in  his  promise  to  pay  one  thousand 
dollars  in  Hour,  at  five  dollars  a  barrel,  and  when  the  flour 
should  be  delivered  it  is  worth  six  dollars  a  barrel,  and,  not 
being  delivered,  an  action  is  brought,  the  question  is  whether 
the  defendant  should  pay  one  thousand  dollars,  or  the  worth  of 
two  hundred  l)arrels  of  flour  at  six  dollars  each,  that  is,  twelve 
hundred  dollars.  The  true  question  is  whether  it  was  intended 
that  the  promisor  might  elect  to  pay  the  money  or  deliver  the 
articles;  or,  in  oIImt  words,  whether  it  was  agreed  only  that  he 
owed  so  iiiiich  money,  and  might  pay  it  either  in  cash  or  goods, 
as  he  saw  fil.  'I'here  might  be  something  in  the  form  of  the 
[5IG] 


en.  viir.] 


DAMAGES. 


^491 


promise,  in  the  res  g-eslce,  or  in  the  circumstances  of  the  case, 
which  by  showing  the  intention  of  the  parties,  would  decide 
the  general  question ;  but  in  the  absence  of  such  a  guide,  and 
supposing  the  question  to  be  presented  merely  on  the  note 
itself,  as  above  stated,  we  should  say  that  the  more  reasonable 
construction  would  be  that  it  was  an  agreement  for  the  delivery 
of  goods  in  such  a  quantity  as  named,  and  of  such  a  quality  as 
that  price  then  indicated.  And  on  a  breach  of  this  contract,  the 
promisor  should  be  held  to  pay,  as  damages,  the  value  of 
so  much  of  such  goods,  at  their  increased  or  diminished 
price,  (q)     But  if  the  *promise  be  only  to    pay  one   thousand 


(7)  Meason  v.  Philips,  Addis.  346; 
Price  V.  Jiistrobc,  Harper,  111  ;  Cole  v. 
Ross,  9  B.  Men.  393  ;  Clark  v.  Pinnev,  7 
Cowen,  681  ;  Mattox  v.  Craijr,  2  Bilib, 
584  ;  M'Donald  v.  Hodge,  5  Havw.  8.5 ; 
Edgar  v.  Boies,  11  S.  &  R.  445,  per 
Gibson,  J.  See  Wilson  v.  George,  10  N. 
H.  445.  In  Meason  v.  Philips,  the  de- 
fendant, the  lessee,  covenanted  to  pay  rent 
in  good  merchantable  grain ;  wheat,  at 
four  shillings  ;  ryo,  at  three  shillings  ;  and 
corn,  at  two  shillings  and  sixpence  per 
bushel.  It  was  held,  that  the  damages 
were  to  be  ascertained  by  valuing  the 
grain  at  the  current  prices,  at  the  time  of 
delivery,  with  interest  from  that  time.  In 
Cole  V.  Ross,  9  B.  Mon.  393,  it  was  held 
that  "  a  covenant  to  pay  $:},3S3.33,  payable 
in  good  merchantable  pig  metal,  delivered 
on  tlie  bank  in  Greenupsburg,  at  twenty- 
nine  dollars  per  ton,  could  not  be  dis- 
charged by  the  payment  of  $3,333.33  on 
the  day  appointed  for  the  payment."  Per 
Sampson,  J.:  "The  expression  'payable 
in  good  merchantable  pig  metal,'  clearly 
points  out  the  thing  which  is  to  be  paid; 
it  is  not  of  the  same  import  with  the  ex- 
pression mat/  be  paid  in  pig  metal.  The 
latter,  if  used,  would  have  implied  an 
election  to  pay  in  the  thing  named  or  not, 
as  it  might  suit  the  convenience  of  the 
obligors  ;  the  former  in  direct  and  positive 
language,  makes  the  amount  payable  in 
the  thing  specified,  and  shows  that  it  was 
really  a  contract  for  pig  metal,  and  not 
for  money,  which  might  be  paid  by  the 
delivery  of  the  article  named ;  and  that 
the  sum  mentioned  was  merely  the  me- 
dium by  which  the  quantity  of  the  thing 
contracted  for  was  to  be  ascertained,  ac- 
cording to  its  stipulated  value  per  ton. 
There  is  no  substantial  difference  between 

VOL.  II.  44 


the  writing  sued  on  in  this  case,  and  the 
one  upon  which  the  suit  was  brought,  in 
the  case  of  Mattox  v.  Craig  (2  Bibb, 
584).  In  the  last-named  case,  the  note 
was  for  the  payment  of  '  eighty-nine  dol- 
lars, to  be  discharged  in  good  merchant- 
able brick,  common  brick  at  four  dollars 
per  thousand,  and  sand  brick  at  five  dol- 
lars per  thousand.'  The  court  decided 
that  the  note  was  not  for  the  payment  of 
money,  but  for  the  payment  of  brick.  It 
is  the  opinion  of  a  majority  of  the  court 
(Judge  Graham,  dissenting),  that  the  note 
in  this  case  was  payable  alone  in  pig  metal, 
and  could  not  be  discharged  by  paying 
the  sum  mentioned  in  money."  But 
there  are  authorities,  of  perhaps  equal 
weight,  which  hold  that  a  note  promising 
to  pay  a  certain  sum,  in  specific  articles  at 
a  given  price,  may  be  discharged  by  the 
delivery  of  the  articles,  or  by  the  payment 
of  the  sum  stated,  at  the  debtor's  election; 
but,  after  the  time  fixed  for  delivery  has 
elapsed,  they  become  obligations  for  the 
payment  of  that  sum.  Pinnev  v.  Gleason, 
5  Wend.  393,  5  Cowen,  152,  411 ;  Brooks 
I'.  Hubbard,  3  Conn.  58 ;  Perry  v.  Smith, 
22  Vt.  301.  In  Pinney  v.  Gleason,  5 
Wend.  397,  the  note  was  in  this  form : 
"For- value  received,  I  promise  to  pay  A. 
B.  $79.50  on,  &c.,  in  salt,  at  fourteen  shil- 
lings per  barrel."  Per  Walworth,  Ch. : 
"  Potkier  says  these  agreements  for  paying 
any  thing  else  in  lieu  of  what  is  due,  are 
always  presumed  to  be  made  in  fovor  of 
the  debtor,  and  therefore  he  has  always  a 
right  to  pay  tiie  thing  which  is  actually 
due,  and  the  creditor  cannot  demand  any 
thing  else  ;  and  he  puts  the  case  of  a  lease 
of  a  vineyard  at  a  fixed  rent,  expressed 
in  the  usual  terms  of  commercial  currency, 
but  pavable  in  wine.     In  such  a  case,  he 

[517] 


492* 


THE  LAW   OF   CONTRACTS. 


[part  n. 


dollars  at  a  certain  time,  *in  flour,  then  this  sum  is  to  be  paid, 
either  in  flour  or  in  money,  at  the  election  of  the  payor,  (r) 


SECTION    IX. 


OF  NOMINAL   DAMAGES. 

As  damages  are  compensation  for  some  actual  -injury  sus- 
tained, it  might  seem  that  where  a  wrong  was  done,  but  no 
actual  injury  sustained,  there  could  be  no  action  for  damages, 
for  there  is  nothing  which  requires  compensation.  It  would 
appear  to  be,  in  the  language  of  the  law,  injuria  sine  damno. 
And  there  are  ancient  and  strong  authorities  for  the  rule,  that 
no  action  for  damages  will  lie  unless  an  actual  injury  is  either 
sustained,  or  is  inevitable,  [s)  But  there  is  also  high  authority, 
and,  in  our  view,  decisive  authority,  for  the  assertion,  that  every 


says,  the  lessee  is  not  obliged  to  clelivcr 
wine,  hut  may  pay  the  rent  in  money.  2 
Ev.  Poth.  .347,  JJ.  497.  Chipman,  in  his 
valuable  treatise  on  the  law  of  contracts 
for  the  delivery  of  specific  articles,  puts 
the  case  of  a  note  for  $100,  payable  in 
wlieat,  at  75  cents  ])er  bushel,  and  con- 
cludes that  it  comes  within  tlie  principle 
referred  to  by  Pothicr,  and  tliat  tlie  debtor 
may  pay  tlie  $100  in  monc}',  or  in  wheat 
at  the  price  specified.  He  says  the  na- 
ture of  the  contract  is  this  :  The  credi- 
tor agreed  to  receive  wheat  instead  of 
money,  and  as  the  parties  concluded  the 
prir-c  of  wheat  at  the  time  of  payment 
would  be  7.')  cents  per  bushel,  to  avoid 
disputes  about  the  price  they  fixed  it;  at 
T.")  cents  in  the  contrac't.  If  at  the  time 
fixed  for  i)ayment,  wlieat  he  at  50  cents  a 
bushel,  the  debtor  may  jiay  it  in  wheat  at 
tin;  rate  of  75  cents.  Tliaf,  if  the  parties 
had  iiiteudcil  the  risk  in  tli(;  lisc  and  fall 
of  the  wheat  should  be  eipial  witii  both, 
the  contract  would  have  been  simidy  for 
tlie  payment  of  a  certain  nund)er  of  bush- 
els, (.'hip.  on  ('on.  .'55.  This  construc- 
tion of  the  contract  appears  to  be  rational, 
and  is  pri)b:ii)ly  in  accordance  with  the 
jiracticc  of  tiios(!  ])arts  of  tin;  country 
where  these  contracts  are  most  frequently 
made.  The  lanj^uagc  is  certainly  not  tlu; 
best  which  couhl  be  used  to  express  such 

[518] 


an  intent;  and  probably  if  the  contract 
were  drawn  by  a  lawyer  he  would  put  it 
in  the  alternative,  giving  the  debtor  the 
option  in  express  terms,  to  pay  the  debt  in 
money,  or  in  wheat  at  the  fixed  rate  per 
bushel.  But  certainly  if  the  intention  of 
the  parties  was  that  a  certain  number  of 
bushels  of  wheat  should  be  absolutely  de- 
livered in  payment,  a  lawyer  would  draw 
the  note  for  so  many  bushels  of  wheat  in 
direct  terms."  Where  notes  are  given  for 
a  specified  sum,  payable  in  bank-notes  or 
other  choses  in  action,  the  measure  of 
damages  has  been  held  to  be  the  value  of 
such  jiaper  at  the  time  the  notes  become 
due.  Smith  v.  Dunlap,  12  111.  184; 
Clay  ?'.  Huston,  1  I5ibb,  461  ;  Anderson 
V.  Ewing,  3  Litt.  245  ;  Phelps  v.  liWoy,  3 
Conn.  2G6  ;  Coldren  v.  Miller,  1  Blackf. 
296;  Van  Vleet  v.  Adair,  1  id.  346  ;  Gor- 
don r.  Parker,  2  Smedcs  &  M.  485  ;  Hixon 
V.  Hixon,  7  Humph.  33;  llobinson  v. 
Noble,  8  Pet.  181. 

(/■)  IJrooks  ?'.  Hubbard,  3  Conn.  GO,  per 
Iloamcr,  C.  J. ;  Mettler  v.  Moore,  1  Blackf. 
342. 

(s)  19  II.  6,  44;  Wfttcror  V.  Freeman, 
Hob.  2(')7  (d),  per  Ilohnrt,  C.  J.  ;  Ashby 
V.  White,  2  Ld.  Uayin.  938,  1  Smith, 
I.d.  ('as.  105,  i)er  Curiam,  Lord  Hull,  dis- 
sentin^r. 


en.  VIII.] 


DAMAGES. 


*493 


injury  imports  a  damage,  (t)  This  *injury  sometimes  consists 
in  the  denial  of  a  right,  or  of  property,  which  is  implied  by 
the  wrongful  act,  and  not  in  any  consequences  which  have 
yet  flowed,  or  can  be  immediately  apprehended  from  it.  And 
it  often  happens  that  an  action  is  brought,  sounding  only  in 
damages,  but  intended  merely  to  ascertain  and  establish  a  right, 
without  any  thought  of  compensation.  For  this  purpose  any 
verdict  and  judgment,  for  the  smallest  sum,  is  as  effectual  in 
law  as  if  for  a  larger.  And  it  is  now  the  established  practice 
in  England  and  in  this  country,  to  give  a  plaintiff  damages  if 
he  succeeds  in  proving  that  the  defendant  has  broken  his  con- 
tract with  him,  or  has  trespassed  upon  his  property,  or  in  any 
way  invaded  his  rights.  But  if  no  actual  injury  has  been  sus- 
tained beyond  that  which  the  verdict  and  judgment  will  them- 
selves correct,  and  the  case  does  not  call  for  exemplary  damages, 
the  jury  would  then  be  directed  to  give  nominal  damages;  that 
ia,  a  sum  of  insignificant  value,  but  called  damages,  (w) 


(t)  Ashby  V.  White,  2  Ld.  Raym. 
938,  955,  1  Salk.  19,  1  Smith's  Ld. 
Cases,  U)5,  per  Lord  Ilult;  Williams  i\ 
Mostyn,  4  M.  &  W.  145,  153,  per  Parke, 
B. ;  Mellor  v.  Spateman,  1  Wms.  Saund. 
346  («),  note  2.  In  Webb  v.  Portland 
Manuf.  Co.  3  Sumner,  189,  192,  Slori/, 
J.,  said :  "  I  can  very  well  understand, 
that  no  action  lies  in  a  case,  where  there 
is  damnum  absque  injuria,  that  is,  where 
there  is  a  damage  done  without  any 
wrong  or  violation  of  any  right  of  the 
plaintiff.  But  I  am  not  able  to  under- 
stand how  it  can  be  correctly  said,  in  a 
legal  sense,  that  an  action  will  not  lie, 
even  in  a  case  of  wrong  or  violation  of  a 
right,  unless  it  is  followed  by  some  per- 
ceptible damage,  which  can  be  established 
as  a  matter  of  fact ;  in  other  words,  that 
injuria  sine  damno  is  not  actionable.  On 
the  contrary,  from  my  earliest  reading,  I 
have  considered  it  laid  up  among  the 
very  elements  of  the  common  law,  that 
wherever  there  is  a  wrong,  there  is  a  rem- 
edy to  redress  it ;  and  that  every  injury 
imports  damage  in  the  nature  of  it,  and 
if  no  other  damage  is  established,  the 
.  party  injured  is  entitled  to  a  verdict  for 

nominal  damages So  long  ago  as 

the  great  case  of  Ashby  v.  White  (2  Ld. 
Raym.  938,  6  Mod.  45,  Holt,  524),  the  ob- 
jection was  put  forth  by  some  of  the  judges. 


and  was  answered  by  Lord  Ilolt,  with  his 
usual  ability  and  clear  learning ;  and  his 
judgment  was  supported  by  the  House  of 
Lords,  and  thatof  hisbrethrenoverturned." 
By  the  favor  of  an  eminent  judge.  Lord 
Holt's  opinion,  apparently  copied  from  his 
own  manuscript,  has  been  recently  printed. 
[London:  Saunders  and  Benning,  1837.] 
In  this  last  printed  opinion  (p.  14),  Ld. 
Holt  says :  "  It  is  impossible  to  imagine 
any  such  thing  as  injuria  sine  damno. 
Every  injury  impoi'ts  damage  in  the  na- 
ture of  it." 

(m)  Thus  the  owner  of  a  several  fishery 
recovered  nominal  damages  of  the  de- 
fendant, in  an  action  of  trespass,  for  fish- 
ing in  it,  although  no  fish  were  taken. 
Patrick  v.  Greenway,  1  Saund.  346,  b. 
So  nominal  damages  may  be  recovered 
for  an  unlawful  flowing  of  the  plaintifFs 
land,  although  no  actual  damage  is  done. 
Chapman  ;:.  Thames  Manuf.  Co.  13  Conn. 
269 ;  Whipple  v.  Chamberlain  Manuf. 
Co.  2  Story,  661  ;  Pastorius  v.  Fisher,  1 
Rawle,  27  ;  Ripka  v.  Sergeant,  7  Watts 
&  S.  9.  So  they  may  be  recovered  for 
the  diversion  of  a  watercourse,  without 
proof  of  actual  damage.  Webb  v.  Port- 
land Manuf.  Co.  3  Sumner,  189;  Plum- 
leigh  V.  Dawson,  1  Oilman,  544;  Dickinson 
V.  Grand  Junction  Canal  Co.  7  Exch. 
282,   9   Eng.   Law   and   Eq.  513.     And 

[519] 


494* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


Thus,  in  respect  to  easements,  or  a  continuing  disregard  of  a 
right  of  any  kind,  it  is  usual,  at  least  in  England,  to  give,  in  the 
first  action,  little  more  than  nominal  damages,  because  the  judg- 
ment determines  the  right ;  and  if  the  defendant  persists  in  his 
wrongdoing,  the  plaintiff  may  bring  successive  actions,  until  re- 
peated and  exemplary  damages  compel  him  to  desist  from  his 
wrong,  (ua) 

Cases  of  this  class  have  sometimes  been  decided  on  the  ground 
that  nominal  damages  may  be  recovered  for  only  probable,  or 
even  possible  damages,  (v)  *And  sometimes  a  jury  uses  the 
same  means  of  expressing  its  opinion  that  the  plaintiff  has 
failed  substantially^  although  he  has  succeeded  formally.  As 
when  in  slander  or  assault  and  battery,  the  jury  find  for  the 
plaintiff,  but  assess  damages  at  a  few  cents,  [rv) 


see  Appleton  v.  Fullerton,  1  Gray,  186. 
The  principle  upon  which  these  cases  rest, 
is  thus  stated  by  Sergeant  Williams,  Mel- 
lor  r.  iSpatcnian,  1  Saund.  346,  b,  note  (b) : 
"  Wherever  any  act  injures  another's 
.right,  and  would  be  evidence  in  future  in 
favor  of  the  wrongdoer,  an  action  may  be 
maintained  for  an  invasion  of  the  right, 
■without  proof  of  any  specific  injury." 

(««)  HattishiU  v.  Keed,  18  C.*B.'696. 

(v)  Wells  V.  Watling,  2  W.  Bl.  1233; 
Weller  r.  Baker  (the  case  of  the  Tun- 
bridge  Well-Dippers),  2  Wilson,  414;  Al- 
laire V.  Whitney,  1  Hill,  484.  Generally 
in  an  action  for  a  breach  of  a  contract,  the 
breach,  but  no  actual  damage,  being 
proved,  nominal  damages  will  be  awarded. 
Boorman  r.  Brown,  3  Q.  B.  .515,  11  Clark 
&  F.  1  ;  Marzetti  v.  Williams,  1  B.  & 
Ad.  415.  So,  if  an  agent  violate  instruc- 
tions, although  no  actual  damage  be 
shown.  Frotbingham  v.  Everton,  12  N. 
H.  239;  Blot  v.  Boiceau,  3  Comst.  78, 
84.  So  if  a  sherilF  neglect  his  duty,  al- 
though no  actual  damage  arise.  I>aHin 
V.  Willard,  10  I'ick.  64  ;  Glezen  v.  Kood, 
2  Met.  4'Ji) ;  Bruce  v.  Pettengill,  12  N. 
II.  341.  The  Supreme  Court  of  Ver- 
mont seems  to  have  gone  very  far  in  re- 
fu-ing  to  SMSIaiii  an  action  of  trespass  for 
the  taking  of  jiersonal  property.  In  Paul 
V.  Sliison,  22  Vt.  2.31,  the  defendant,  a 
slicritV,  allarhcd  hay,  iicloniiing  to  the 
plaintilf,  and  in  removing  it,  used  the 
plaiiitiirs  pitilifork.  For  tiie  taking  of 
this  among  other  things  tlic  action  of  tres- 
pass was  iiroiight.  The  comt  below 
"  charged   the  jury,   that   if  they   found 

[  520  ] 


that  it  was  merely  used  for  a  portion  of  a 
day  in  removing  the  plaintiff's  property, 
thus  attached,  and  was  left  where  it  was 
found,  so  that  the  plaintiff  had  it  agaifi, 
and  that  it  was  not  injured  by  the  use, 
they  were  not  bound  to  give  the  plaintiff 
damages  for  such  use."  This  charge  was 
sustained,  and  Poland,  J.,  in  delivering 
the  opinion  of  the  court  said  :  "  It  is  true, 
that,  by  the  theory  of  the  law,  whenever 
an  invasion  of  a  right  is  established, 
though  no  actual  damage  be  shown,  the 
law  infers  a  damage  to  the  owner  of  the 
property  and  gives  nominal  damages. 
This  goes  upon  the  ground,  that  either 
some  damage  is  the  probable  result  of  the 
defendant's  act,  or  that  his  act  would 
have  effect  to  injure  the  other's  ri<iht,  and 
would  be  evidence  in  future  in  favor  of 
the  wrongdoer,  if  his  right  ever  came  in 
(piestion.  In  these  cases  an  action  may 
be  supported,  though  tiiere  be  no  actual 
damage  done ;  because  otherwise  the.party 
might  lose  his  right.  So,  too,  whenever 
any  one  wantotdy  invades  another's  right, 
for  the  purjiose  of  injury,  an  action  will 
lie  though  no  actual  damage  be  done  ; 
the  law  presumes  damage  on  account  of 
the  unlawful  intent.  But  it  is  believed 
that  no  case  can  be  found,  where  dam- 
ages have  been  given  for  a  tresjiass  to 
])('rsonal  property,  w'hcn  no  unlawfid  in- 
tent, or  <iisturliaiice  nf  a  rii^iit  or  posses- 
sion, is  shown,  and  when  not  only  all 
lirubdlitr,  but  all  possible  damage  is  ex- 
pressly disproved." 

(ir)    Where  the  plaintiff  bad  destroyed 
h('r  own  character  by  her  dissolute  con- 


CH.  VIII.]  DAMAGES.  *49o 


SECTION    X 


OF   DAMAGES   IN  REAL   ACTIONS. 


Thus  far  we  have  treated  only  of  damages  for  the  breach  of 
personal  contracts ;  or  for  personal  torts.  In  real  actions, 
strictly  speaking,  damages  were  not  demanded  or  given  at 
common  law  ;  (x)  one  writ,  that  of  estrepement,  after  judgment, 
gave  compensation  in  some  cases ;  (//)  but  damages  were  given 
by  early  statutes,  and  properly  belong  to  all  mixed  actions,  and 
to  personal  actions  relating  to  land,  (z)  In  ejectment  they  are 
in  general  nominal  only  ;  (a)  and  a  subsequent  action  of  trespass 
is  brought  for  the  mesne  profits,  (b)  But  where  the  plaintiff  Jias 
a  title  and  estate  *which  would  maintain  his  action,  and  the 
estate  terminates  or  the  title  expires  while  the  action  is  pend- 
ing, actual  damages  may  be  recovered,  including  mesne  prof- 
its, (c)  Sometimes  trespass  for  mesne  profits  is  brought,  not 
only  for  them,  but  to  try  the  title  to  the  estate,  [d) 

The  question,  what  damages  may  be  recovered,  is  not  only 
determined  in  this  as  in  other  cases  by  the  principle  of  compen- 
sation, but  this  principle  is  carried  very  far.  Thus,  the  rent  of 
the  land  is  barely  primd  facie  evidence  of  its  annual  value  or 


duct,  the  jury  in  an  action  of  slander,  may  Beach  v.  Beach,  20  Vt.  83  ;  Edgerton  v. 

give  nominal  damages.     Flint  v.  Clark,  Clark,    id.    264.      But    the    recovery   of 

13  Conn.  361.  mesne  profits  in  the  action  of  ejectment 

{x)  Sayer  on  Damages,  p.  5 ;  Stearns  has  been  held  to  be  no  bar  to  a  subse- 

on  Real  Actions,  390.  quent  action  for  trespass  for  wanton  inju- 

{y)  2  Inst.  329;   3   Bl.    Comm.  225;  ries.     Walker  v.  Hitchcock,  19  Vt.  634. 

Sayer  on  Damages,  34.  See  Gill  v.  Cole,  1  Harris  &  J.  403. 

[z)  20  Hen.  III.  c.  3  ;  52  Hen.  III.  c.         (c)  Thurstout  i-.   Grey,  2   Stra.  1056; 

16;  6  Ed.  I.  c.  1  ;  Tilford's  Case,  10  Co.  Bobinson   v.  Campbell,  3    Wheat.    212; 

115;  Stearns  on  Real  Actions,  389  e<  sei/.  Wilkes  v.  Lion,  2    Cowen,  333;  Brown 

(a)  Van  Alen  v.  Rogers,  1  Johns.  Cas.  v.  Galloway,  Pet.  C.  C.  291,  299  ;  Alex- 

281  ;  Harvey  V.  Snow,  1  Yeates,  156.  ander  v.   Herr,   11   Penn.   St.   537.     See 

(h)  Van  Alen  v.  Rogers,  1  Johns.  Cas.  Stockdale  v.  Young,  3  Strobh.  501. 
281  ;    Adams    on    Ejectment,   328.      In         (d)  Bullock  v.  Wilson,  3  Porter,  382 ; 

some  States,  mesne  profits  are  recovered  Sumpter  v.  Lehie,  1  Consist.  R.  102.     In 

in  the    action    of   ejectment.      Boyd   v.  Massachusetts,   both    the   land   and    the 

Cowan,  4  Dall.  138;  Battin  v.  Bigelow,  mesne  profits  are  recovered  by  a  writ  of 

Pet.  C.  C.  452  ;  Starr  w.  Pease,  8  Conn,  entry.     Rev.    St.    ch.    101;   Washington 

541 ;    Denn  v.    Chubb,    1    Coxe,    466  ;  Bank  v.  Brown,  2  Met.  293. 

44*  [521] 


49S*  THE  LAW   OF   CONTRACTS.  [PART  II. 

profit,  and  the  jury  may  exceed  it  very  much,  indeed  to  what- 
ever extent  is  necessary  to  give  the  plaintiff"  adequate  compen- 
sation, (e)  The  damages  have  been  held  to  be  "  as  uncertain 
as  in  an  action  of  assault;"  and  because  the  action  is  in  fact 
as  well  as  form  for  a  tort,  bankruptcy  is  no  sufficient  plea  in 
defence.  (/)  So,  to  make  up  the  value,  the  rents  have  been 
allowed  and  interest  upon  them,  (g-)  and  the  costs  of  the  litiga- 
tion by  which  the  title  was  established,  (h) 

The  common  law,  unlike  the  Roman  law  and  the  modern 
codes  founded  upon  it,  gives  to  a  bond  fide  holder  without  title, 
no  claim  for  his  improvements  against  the  true  owner.  If  he 
loses  the  land,  he  loses  with  it  all  the  improvements  which  have 
become  fixed  to  the  realty.  (?')  In  many  of  our  States  the  civil 
law  principle  has  been  adopted  *and  statutory  provisions  made, 
by  which  such  defendant,  being  ousted  by  a  better  title,  may 
recover  the  value  of  his  improvements,  as  assessed  by  a  jury  of 
the  vicinage,  (j)  Besides  this,  however,  it  has  been  held  in  this 
country,  that  a  holder  of  land  in  entire  good  faith,  if  ousted  by 
a  better  title  of  which  he  was  ignorant,  and  afterwards  called 
upon  to  refund  the  mesne  profits,  may  set  off"  his  improvements 
against  the  mesne  profits.  (A;)  But  such  improvements  must  be 
in  their  nature  permanently  beneficial  to  the  estate.  (/)  In  that 
case  a  Court  of  Equity  will  sustain,  against  the  actual  owner, 
after  recovery  of  the  premises,  a  bill  brought  by  a  bond  fide  pos- 
sessor, for  the  value  of  his  improvements,  {rn) 

(e)  Goodtitle  v.  Tombs,  3  Wilson,  118;  316;  Baron  v.  Abcel,  3  Johns.  481.     See 
Dewey  ?;.  Osborn,  4  Cowen,  329  ;  Drexel  Alexander  v.  Ilerr,  1 1  Penn.  St.  .'iST. 
V.  Man,  2  Penn.  St.  271,  276 ;  Adams  on  (/)  Powell  r.  M.  &  B.  Maniif.  Co.  3  Ma- 
Eject.  328.  son,  369;  2  Kent's  Com.  334-338. 

(/■)    Goodtitlo  V.   North,   Dong.    584,  (j)  Mass.  R.  St.  ch.  101  ;  Oliio  R.  St. 

per /J(///<'r,  .1.  ch.  77;  N.  H.  R.  St.  ch.  190;  2  Kent's 

(7)  Jackson  ?;.  Wood,  24  Wend.  443.  Com.   335,   336;   Lamar  v.   Minter,    13 

(li)   Asiin  V.  Parkin,  2  IJnrr.  665.     The  Ala.   31;  Bailey  v.  Hastings,   15  N.  H. 

rule  ii[)i)<'ars  to  l)e   tliat  where   tlie  costs  525. 

have;    lict'n   taxiid    in   the   ejectment  suit,  (k)  Murray  v.    Gouvcrneur,    2   Johns, 

nothing  more  than  those  can  he  recovered.  Cas.    438,    441;    Jackson    v.    Loomis,    4 

Doc  u.  Davis,  1   Esp.  .'(58;  Doe  v.  Hare,  Cowen,  168;  Green  v.  Biddlc,  8  Wheat. 

4  Tyrw.  29.     Sec  (intc,  jiagc  441,  n.  (/).  1,  81,  citing  Coulter's  Case,  5    Co.   30; 

But  where  tiiey  liavc  iKjt  hci^n  taxed,  as  in  Tlyhon  /•.   IJrown,  2  Wash.   C.    C.    165; 

case  of  a  judgment  by  di  I'auh,  or  wIk  re  Dowd  i\  J''aueett,  4  Dev.  92,  95;  Beverly 

there  is  a  writ  of  crrcfr,  evidence  may  lie  r.  Huikc,  9  (ia.  -IK);  Burrows  v.  Pierce, 

introduced  to  show  their  amount.    Nowell  6  La.  Ann.  303,  3{)S. 

V.    Hoake,    7    J5.    &    C.    404;    Brooke  c.  (/)  Worihington  r.  Young,  8  Ohio,  401  ; 

Bridges,    7    J.    B.    Moore,    471;    Doe  c.  Maltlicws  o.  Davis,  6  Humph.  324. 

lluddart,  5  Tyrw.  846,  2  Crom]).,  M.  &  R.  (m)  Brigiit  v.  Boyd,  1  Story,  494,  2  id. 

[522] 


CH.  VIII.] 


DAMAGES. 


*497 


A  doweress  from  whom  land  is  withheld  may  recover  dama- 
ges, (n)  But  when  the  suit  is  brought  for  land  upon  *which 
valuable  improvements  have  been  made,  by  building  houses,  for 
instance,  either  by  the  alienee  of  the  husband  or  by  the  heir,  it  is 
not  positively  settled  whether  she  has  damages  to  cover  her  claim 
to  dower  in  these  improvements,  or  must  be  limited  to  her  dower 
in  the  land  as  the  purchaser  took,  or  the  heir  inherited  it.  There 
are  certainly  strong  reasons,  if  not  conclusive  authority,  in  favor 
of  the  principles  applied  to  this  question  in  some  of  our  courts ; 
namely,  that  wdiere  the  heir  adds  improvements  to  the  estate, 
the  widow  shall  have  her  dower  in  them ;  but  not  in  the  im- 


605  ;  Herring:  v.  Pollard,  4  Humph.  362; 
Matthews  V.  Davis,  6  id.  324 ;  Martin  r. 
Atisinson,  7  Ga.  228  ;  Bryant  v.  Ham- 
brick,  9  Ga.  133  ;  2  Story's  Eq.  Juris. 
§§  799,  6.  1237,  1238.  But  see  Putnam 
V.  Ritchie,  6  Paige,  390,  403. 

{n)  The  law  on  this  subject,  as  it  stood 
under  the  statute  of  Merton,  was  clearly 
stated  by  Booth,  J.,  in  Layton  v.  Butler, 
4  Harrinfj.  Del.  507,  509.  "  Dower  uncle 
nihil  habet  is  a  real  action,  in  the  nature  of 
a  writ  of  riglit ;  and  therefore,  by  the  com- 
mon law,  no  damages  were  recoverable  by 
the  wife  for  its  detention.  By  the  statute 
of  Merton  it  was  enacted,  that  where 
■widows  were  eftorced  of  their  dower,  and 
cannot  have  it  imihout  plea,  they  who  ef- 
forced  them  of  their  dower,  of  tiie  lands 
whereof  their  husbands  died  seised,  shall, 
upon  the  recovery  thereof  by  such  widows, 
yield  them  damages, 'that  is  to  say:  the 
value  of  the  whole  dower  (namely,  the  one 
third  of  the  armual  profits  of  tiie  land), 
from  the  death  of  the  husband  unto  the 
day  that  the  widow,  by  the  judgment  of 
the  court,  has  recovered  seisin  of  her 
dower.  Where  the  husband  has  aliened 
the  land,  no  damages  can  be  recovered  by 
the  widow  against  the  alienee,  without  a 
demand  of  dower  and  a  refusal ;  and  then 
only  from  the  time  of  making  tlie  demand. 
Where  the  husband  dies  seised  of  the  in- 
heritance, as  the  possession  immediately 
devolves  on  the  heir,  damages  may  be 
recovered  against  him  from  the  time  of  the 
husband's  death.  But  according  to  Co. 
Litt.  32,  b.,  the  heir  may  save  himself 
from  damages,  if  he  comes  into  court  upon 
the  summons  the  first  day,  and  pleads 
that  lie  ^has  always  been  ready  and  yet  is 
ready  to  render  dower,  and  prays  tiiat  she 


may  not  have  damages  ;  in  which  case  if 
the  wife  has  not  requested  her  dower,  she 
loses  her  damages.  But  if  to  the  plea  she 
replies  a  demand  of  her  dower,  and  issue 
is  thereupon  taken  and  found  for  her,  she 
recovers  damages  from  the  death  of  her 
husband.  If  the  heir  succeeds  on  the 
issue,  he  is  saved  from  damages  from  the 
time  of  the  husband's  death  ;  but  still  the 
widow  recovers  damages  from  the  test  of 
the  original  writ,  which  in  law  is  consid- 
ered as  a  demand.  So,  too,  in  the  case 
of  the  husband's  alienee,  damages  are 
given  from  the  time  of  the  suing  out  of  the 
writ,  although  no  demand  was  in  fact 
made.  It  seems  necessary,  therefore,  to 
entitle  the  widow  to  damages,  eitheragainst 
the  alienee  or  the  heir,  that  she  should 
make  a  demand  of  her  dower  previous  to 
bringing  her  action  of  dower  iinde  nihil 
habet.  By  the  damages  in  this  action  are 
meant  the  one  third  of  the  annual  profits 
of  the  land,  beyond  all  reprises  (that  is, 
after  deducting  land-taxes,  repairs,  &c.), 
and  also,  such  damages  as  the  wife  has 
sustained  by  the  detention  of  her  dower, 
which  in  the  inquisition  taken  upon  a  writ 
of  inquiry,  are  usually  assessed  severally; 
although  it  is  said,  damages  may  be  given 
generally,  without  rinding  the  value  of  the 
land."  See  Watson  i\  Watson,  10  C.  B. 
3,  1  Eng.  L.  &  Eq.  371.  In  many  States 
the  damages  for  the  detention  of  dower 
are  regulated  by  statutes.  N.  Y.  Rev.  St. 
vol.  2,  pt.  2,  tit.  3,  p.  151  ;  Mass.  Rev.  St. 
ch.  102;  4  Kent's  Com.  65.  It  seems 
that  in  some  of  the  States  the  statute  of 
IMerton  is  held  not  to  be  in  force,  and  no 
damages  are  given.  Ilcyward  v.  Cuth- 
burt,  1  McCord,  386;  Bank  of  U.  S.  v. 
Dunseth,  10  Ohio,  18. 

[523] 


498* 


THE   LAW   OF   CONTRACTS. 


[part  II. 


provements  made  by  a  purchaser ;  (o)  but  that  she  shall  have, 
against  a  purchaser,  her  dower  in  the  increased  value  of  the 
land,  caused  by  the  general  growth  and  prosperity  of  the  coun- 
try, (p) 

*Where  an  action  is  brought  for  wrongful  interference  with 
real  estate,  or  with  the  occupation  or  enjoyment  of  it,  and  the 
action  not  only  sounds  in  tort,  but  is  for  actual  injury,  there  it 
seems  quite  settled,  and  illustrated  by  a  variety  of  cases  in  this 
country,  that  compensation  may  be  recovered  by  way  of 
damages  for  all  the  direct  and  natural  consequences  of  the 
injury,  (q) 


(o)  It  is  well  settled  that  a  widow  is 
entitled  to  dower  out  of  any  improvements 
that  may  have  been  made  by  the  heir  pre- 
vious to  the  assifcnment.  Co.  Litt.  32,  a. ; 
1  Koper  on  Husband  and  Wife,  346,  347  ; 
Catlin  V.  Ware,  9  Mass.  218;  Powell  v. 
M.  &  B.  Manuf.  Co.  3  Mason,  346,  365  ; 
but  not  out  of  any  improvements  made  by 
the  alienee  of  her  deceased  husband.  Gore 
V.  Brazier,  3  Mass.  544  ;  Ayer  v.  Spring, 
9  id.  8;  10  id.  80;  Stearns  v.  Swift,  8 
Pick.  532;  Wooldridge  v.  Wilkins,  3 
How.  Miss.  360 ;  Humphrey  v.  Phinney,  2 
Johns.  484  ;  Wilson  v.  Oatman,  2  Blackf. 
223;  Mahonv  v.  Young,  3  Dana,  588; 
Leggett  V.  Steele,  4  Wash.  C.  C.  305; 
Barney  u.  Frowncr,  9  Ala.  901  ;  1  Roper 
on  Husband  and  Wife,  346.  If  the  land 
is  impaired  in  value  between  the  time  of 
the  husband's  death  and  the  assignment 
by  the  heir,  the  widow  is  only  entitled  to 
dower  out  of  its  value  at  the  time  of  the 
assignment.  Co.  Litt.  32,  a;  Hale  v. 
James,  6  Joiiiis.  Cii.  258,  260,  per  Ciian- 
ccllor  Kent.;  Powell  v.  M.  &  B.  Man.  Co. 
3  Mason,  347,  368,  per  Stori/,  J.  But  if 
the  alienee  luts  impaired  the  value  of  the 
premises,  the  wiiiow  seems  to  be  entitled 
to  dower,  according  to  the  value  at  the 
time  of  the  alienation.  Hale  r.  James,  6 
Johns.  Ch.  258. 

(p)  This  distinction  between  the  in- 
crea.sc  in  valuR  arising  from  extrinsic 
causes,  and  that  arising  from  improve- 
ments made  i)y  the  alienee  of  the  husband, 
ajipcars  to  havr-  been  first  taken  by  J\ti- 
sniis,  ('.  .].,  in  (Jore  r.  Hra/icr,  .'{  Mass. 
52.'t,  544.  It  was  adopted  in  'J'lioiiipson 
V.  Marrow,  5  S.  &,  li.  2H'j,and,  after  mmli 
consideration,  by  Slorij,  .1.,  in  I'oweil  r. 
M.  &  B.  Manuf.  Co.  3  Mason,  347,  365, 
and  is  Hanctioiictl  by  Chancellor  Kvnl,  4 

[  ^^1  ] 


Kent's  Com.  68.  Sec  also,  Shirtz  v. 
Shirtz,  5  Watts,  255;  Dunscth  v.  The 
Bank  of  U.  S.  6  Ohio,  76.  But  it  has 
been  held  otherwise  in  Tod  v.  Baylor,  4 
Leigh,  498,  and  in  New  York,  under  a 
statute.  Walker  v.  Schuyler,  10  Wend. 
480 ;  Humphrey  v.  Phinney,  2  Jolms. 
484;  Dorchester  r.  Coventry,  11  Johns. 
510;  Shaw  v.  White,  13  Johns.  179. 

((l)  Tlie  general  principles,  in  regard  to 
the  immediate  and  remote  conseciuences 
of  an  unlawful  act,  apply  to  this  class  of 
cases.  See  ante,  p.  457,  note  (r).  la 
White  V.  Moseley,  8  Pick.  356,  in  an 
action  of  trespass  ijitare  clausum  frerjit,  for 
entering  the  plaintiff's  close  and  destroy- 
ing a  mill-dam,  the  plaintilf  recovered  for 
"  the  interruption  to  the  use  of  the  mill 
and  the  diminution  of  the  plaintiff's  profits 
on  that  account."  See  Dickinson  v. 
Boyle,  17  Pick.  78.  In  Barnum  v.  Van- 
duscn,  16  Conn.  200,  where  the  defend- 
ant's sheep  entered  upon  the  plaintiffs 
land  and  communicated  an  infectious  dis- 
ease to  his  sheep,  it  was  htid  that  the 
plaintiff  was  entitled  to  recover,  in  an 
action  of  tresjiass,  for  the  loss  of  the  sheep 
and  for  the  trouble  and  expense  in  taking 
care  of  them.  See  Anderson  v.  Buckton, 
Stra.  192.  In  Johnson  v.  Courts,  3 
Harris  &  McH.  510,  where  the  defendant 
entered  u])on  the  jjlaintilfs  land  and  with 
clid)s  drove  away  eight  negroes,  it  was 
liflil,  in  action  of  trcs|)ass  <iMire  rhuisnm 
/'iiyil,'i\r.\t  the  ])laintitl'  could  recover  for 
injuries  to  his  crops,  conse<iuent  u])ou  the 
dri\ing  iiway  of  bis  lu'groes.  In  an  action 
f'oi'  cnti'riug  u])on  the  iilainiitV's  close, 
damages  may  be  recovered  for  debauch- 
ing tli(!  ))laintifi"s  daughter  and  servant. 
See  Bennett  v.  Alleott,  2  T.  li.  166; 
Jteam  v.  Bank,  3  S.  &  K.  215. 


en.  VIII.]  DAMAGES.  *499 

If  the  action  be  brought  on  the  common  covenants  of  a  deed, 
the  rules  in  respect  to  compensation  seem  to  differ,  according  as 
it  is  one  or  another  of  these  covenants  which  has  been  .broken. 
The  covenant  that  the  grantor  is  lawfully  seised,  and  that  he 
has  good  right  to  convey  (which  has  been  held  the  same  with 
the  covenant  of  seisin),  (r)  and  that  the  premises  are  free  from 
incumbrances,  are  broken  as  soon  as  the  deed  is  executed,  if  the 
grantor  has  no  seisin,  or  the  land  be  incumbered,  (.s)  And  if 
an  action  is  brought  on  the  covenant,  that  the  grantor  is  law- 
fully seised,  although  the  plaintiff  may  prevail,  by  proving  the 
actual  breach  of  the  covenant,  as  that  the  grantor  had  no  seisin, 
he  will  have,  it  is  said,  as  damages,  only  the  price  he  has  paid, 
and  interest ;  on  the  ground  that  he  has  lost  no  land,  because, 
if  this  covenant  were  broken  when  the  deed  was  given,  it  fol- 
lows that  no  land  ever  passed  to  him.  (t)  And,  if  it  is  made  to 
appear  that  the  plaintiff  has  lost  less  than  the  value  of  the  land, 
as  by  a  purchase  at  a  low  price  of  an  *outstanding  title,  he  will 
recover  less,  (w)  If  the  grantor  has  acquired  a  title  which  will 
enure  to  the  grantee  by  way  of  estoppel,  the  damages  will  be 
only  nominal.  (??)  But  it  has  been  also  held,  that  a  release  of 
land  without  warranty,  by  the  grantee  to  a  third  person,  will 
not  prevent  the  grantee's  recovery  of  full  damages,  [lu) 

The  covenants  that  the  grantee  shall  have  quiet  enJ9yment, 
and  that  the  grantor  will  warrant  and  defend  against  all  lawful 
claims,  are,  in  general,  broken  only  by  actual  ouster,  (.t)  and 
then  such  damages  will  be  recovered,  according  to  the  rule  laid 

{}■)  Willard  V.  Twitchell,  1  N.  H.  177,  Cox  v.  Strode,  2  Bibb,   273.     In  an  ac- 

458;    Rii'kert  v.  Snyfler,  9   Wend.  416,  tion  for  the  breach  of  this  covenant,  dam- 

421.     But  the  covenants  are  not  in  all  re-  ages   cannot   be   recovered   for   iinprove- 

spects  synonymous,  as  a  party  may  have  ments  or  the  increased  value  of  the  land, 

a  good  riglit  to  convey,  and  yet  not.be  Staats    v.    Ten    Eyck,    3    Caines,    111; 

seised  of  a  legal  estate.     Eawle  on  Cove-  Pitcher  v.  Livingston,  4  Johns.  1  ;  Ben- 

nants  for  Title,  127.  net  r.  Jenkins,    13  Johns.  50  ;  Bender  v. 

(s)  See  ««^e,  vol.  1,  p.  199.  rronibcrger,    4    Dall.   436;    Weiting  v. 

(t)  Staats  V.  Ten  Eyck,  3  Caines,  111  ;  Nissley,  13  Penn.  St.  650. 

Bickford  r.  Page,  2  Mass.  455  ;  Marston  (i()  "Tanner  v.   Livingston,  12    Wend. 

V.  Hobbs,  2  id.  433  ;   Caswell  v.  Wendell,  83 ;  Spring  r.   Chase,  22  Me.  505  ;  Lef- 

4  id.  108;  Smith  r.  Strong,  14  Pick.  128 ;  fingwcU    v.    Elliott,    8  Pick.  455,   10  id. 

StnblKs  r.  Page,  2  GrcenL  378;  Mitchell  204;  Loomis  v.  Bedel,   11   N.   H.  74,87. 

V.  Ilazen,  4  Conn.  495;  Weiting  v.  Niss-  (v)  Baxter  v.  Bradbury,  20  Me.  260. 

ley,  13  Penn.   St.   650,   655;   Seamore  i'.  (m;)  Cornell  i\  Jackson,  3  Cush.  506. 

Harlan,  3  Dana,  415;  Martin  y.  Long,  3  (.r)    Rawle    on    Covenants    for    Title, 

Mo.  391  ;   Clark  v.  Parr,    14   Ohio,   118.  182,339. 
See  also,  Parker  v.  Brown,  15  N.  H.  176  ; 

[525] 


500*  THE   LAW   OF   CONTRACTS.  [PART  II. 

down  in  one  of  the  earliest  cases  on  this  subject,  as  shall  give 
to  the  injured  party  full  and  adequate  compensation,  (y) 

But  if  we  suppose  a  case  where  land  is  conveyed  with  war- 
ranty, the  grantor  and  grantee  both  believing  the  title  to  be 
good,  and  there  is  no  taint  or  suspicion  of  fraud,  and  the  land 
rises  greatly  in  value,  either  by  the  increased  worth  of  real 
estate  in  that  vicinity,  or  by  expensive  improvements  made  by 
the  grantee,  and  then  the  grantee  is  ousted  and  comes  on  the 
warranty  against  the  grantor,  the  question  arises,  what  is  the 
compensation  to  which  the  plaintiff  is  entitled.  It  is  obvious 
that  an  error  has  been  made  by  which  some  innocent  party 
must  lose  much  ;  and  it  cannot  be  said  that  this  error  is  to  be 
imputed  as  a  wilful  fault  to  one  party  more  than  to  the  other. 
If  the  covenantor  is  bound  to  make  good  the  value  of  all  that 
the  grantee  loses,  "  no  man,"  says  Kent,  "  could  venture  to  sell 
an  acre  of  ground  to  a  wealthy  purchaser,  without  the  hazard 
of  absolute  ruin."  (~)  But  if  not,  the  innocent  grantee  may 
lose  by  a  failure  of  a  title,  for  *the  warranty  of  which  he  had 
paid  a  valuable  consideration,  the  greater  part  of  the  value  of 
his  estate.  In  some  States  the  value  of  the  estate  at  the  time 
of  the  conveyance  is  the  measure  of  damage's ;  and  where  this 
value  determines  in  the  assessment  of  damages,  it  is  itself  de- 
termined, generally,  at  least,  by  the  amount  of  the  consideration 
paid,  with  interest.  But  if  mesne  profits  have  been  received  by 
the  grantee,  they  will,  in  general,  be  held  equivalent  to  the  in- 
terest; and  then  no  interest  will  be  allowed  to  the  grantee,  or 
only  that  which  is  commensurate  with  his  liability  for  the 
mesne  profits  to  the  holder  of  the  paramount  title;  and  there- 
fore   he   can   recover  interest  only  for  six   years,  (a)     In  some 

(y)  Grny   v.   Briscoe,  Nov,  142;  Pin-  in  that  case,  the  allowance  of  interest  to 

comlic  V.   Riid^e,   Yelv.  139  ;  Ilobart,  3,  the  p;rantec  will   only  he   coinnicnsurate 

and  note,  in  Williams's  edition.  with  liis  liahility  for  the  mesne  jirofits  to 

(z)  ytauts  V.  Ten  Kyek,  3  Caincs,  114,  the  liohler  of  the  title  jjaramonnt,  that  is, 

115.  he  can,  in  f^cncnil,  recover  interest  for  six 

(«)   Where  the  value  of  the  himl  at  tlie  years  only.     IJcnnet  c.  Jeni^ins,  13  Johns, 

titnc  of  the  conveyance  is  taivcn   into  ac-  50;  Staals  ?'.  Ten   I'lyck,  3  Caincs,  111  ; 

connt  in  assessing;  damat^cs,  tliat  \ahic  is  IJaxtcr  v.  Kycrss,  13  I?arl).  207  ;   Clark  v. 

in  general  iletc-rmined  liy  tla^  amount  of  I'arr,  14  Ohio,  118.     'I'lic  amount  of  the 

the  considcrati(m  paid,  and  interest  is  al-  consideration-money    witli     interest     has 

lowed  on  that  sum;  hut  if  mesne  profits  hecn  held  to  he  the  measure  of  damages, 

have  hecn  ri'ceivcd   hy  the  gr'inti'c,  those  in   New    York  ;  Pitcher  v.    Ijivingston,  4 

will  he  held  c(|uivalent  to  the  interest,  and  Johns.  1;  IJennet  v.  Jenkins,  13  id.  50; 

[02(]] 


CH.  VIII.] 


DAMAGES. 


*501 


States  the  value  of  the  land  at  the  time  of  the  eviction,  is  the 
measure  of  damages,  (b)  There  seem  to  be  intimations  of  a 
*distinction  between  the  increased  worth  by  a  rise  in  the  mar- 
ket value  of  the  land,  which  has  cost  the  grantee  nothing,  and 
that  increase  caused  by  his  expenditure  in  affixing  valuable 
buildings  or  other  improvements  to  the  land.  And  there  are 
some  reasons  in  favor  of  allowing  to  the  grantee,  as  damages, 
the  latter  kind  of  increase,  but  not  the  former,  [c)  It  has  also 
been  held,  that  the  purchase-money,  with  interest,  forms  the 
absolute  measure  of  the  damages,  (d)  If  the  failure  of  title 
extend  only  to  a  part  of  the  land,  the  question  has  been  raised 


Kinney  v.  "Watts,  14  Wend.  38 ;  Kelly  v. 
Dutch  Church  of  Schenectady,  2  Hill,  105, 
115;  Baxter  v.  Ryerss,  13  Barb.  267  ;  — 
in  Pennsylvania;  Brown  v.  Diekerson,  12 
Penn.  St.  372 ;  Bender  v.  Froraberger,  4 
Dall.  436,  441  ;  King  v.  Pyle,  8  S.  &  R. 
166;  —  in  New  Jersey;  Holmes  r.  Sin- 
nickson,  3  Green,  313  ;  Stewart  i:  Drake, 
4  Halst.  139,  142;  —  in  Virginia  ;  Stout 
V.  Jackson,  2  Eand.  132 ;  Threlkcld  v. 
Fitzhugh,  2  Leigh,  431,  463  ;  Jackson  v. 
Turner,  5  id.  119  ;  Hatfey  v.  Birchetts,  11 
id.  83,  88;  contra,  Mills't'.  Bell,  3  Call, 
320  ;  —  in  South  Carolina ;  Furman  v. 
Elmore,  2  Nott  &  McC.  189;  Wallace 
V.  Talbot,  1  McCord,  466,  468 ;  Pearson 
V.  Davis,  1  McMullan,  37  ;  Contra,  Liber 
V.  Parsons,  1  Bay,  19  ;  Witherspoon  v. 
Anderson,  3  Desaus.  245  ;  —  in  North 
Carolina ;  Phillips  v.  Smith,  1  Car.  Law 
Repos.  475;  Wilson  v.  Forbes,  2  Dev. 
30  ;  —  in  Ohio ;  King  v.  Kerr,  5  Ohio, 
154;  Foote  v.  Burnet,  10  id.  317  ;  Clark 
V.  Parr,  14  id.  118;  —  in  Georgia;  Davis 
V.  Smith,  5  Ga.  274;  —  in  Kentucky; 
Cox  r.  Strode,  2  Bibb,  273  ;  Hanson  u. 
Buckner,  4  Dana,  251  ;  Pence  r.  Duvall, 
9  B.  ilon.  48 ;  —  in  Tennessee ;  Shaw  v. 
Wilkins,  8  Humph.  647,  651,  per  McKin- 
neij,  J. 

(6)  This  is  the  rule  adopted  in  Massa- 
chusetts ;  Gore  v.  Brazier,  3  Mass.  523 ; 
Bigelow  V.  Jones,  4  id.  512;  Norton  v. 
Bahcock,  2  Met.  510  ;  White  v.  Whitney, 
3  id.  81,  89;  —  in  Maine;  Cushman  v. 
Blanchard,  2  Greenl.  266,  268 ;  Swctt  v. 
Patrick,  3  Fairf.  9  ;  Hardy  v.  Nelson,  27 
Me.  .525;  Elder  v.  True,  32  id.  109;  — 
in  Connecticut ;  Horsford  v.  Wright, 
Kirby,  3  ;  Stirling  v.  Peet,  14  Conn.  245  ; 
—  in  Vermont;  Drury  v.  Shumway,  1  D. 
Chip.  Ill;  Parke  v.  Bates,  12  Vt.  387. 


The  question,  althougli  raised,  is  unde- 
cided in  New  Hampshire  and  Indiana. 
Loomis  V.  Bedel,  11  N.  H.  74,  87  ;  Black- 
well  V.  Justices  of  Lawrence  Co.  2  Blackf. 
143,  147.  See  Rawle  on  Gov.  for  Title, 
p.  319  e<  seq.  (2d  edition)  ;  4  Kent,  Com. 
474-480  ;  2  Greenl.  Ev.  §  264.  In  Louis- 
iana the  question  has  been  much  discussed 
and  different  rules  have  prevailed,  under 
the  codes  of  1808  and  1825.  See  Bissell 
V.  Erwin,  13  La.  147;  Edwards  v.  Mar- 
tin, 19  id.  294;  Morris  v.  Abat,  9  id. 
552;  13  id.  MB,  note.  The  question  was 
thoroughly  discussed  in  the  late  case  of 
Burrows  r.  Peirce,  6  La.  Ann.  297,  and 
it  was  held,  Rost,  J.,  dissenting,  that  the 
increased  value  at  the  time  of  eviction 
ought  not  to  be  recovered.  The  grantee 
is  also  entitled  to  recover  the  costs  of  the 
suit  by  which  he  has  been  evicted.  Pitch- 
er V.  Livingston,  4  Johns.  1  ;  Baxter  v. 
Ryerss,  13  Barb.  267  ;  Holmes  v.  Sinnick- 
son,  3  Green,  N.  J.  313  ;  Cushman  v. 
Blanchard,  2  Greenl.  266  ;  Swett  v.  Pat- 
rick, 3  Fairf.  9. 

(c)  Staats  V.  Ten  Eyck,  3  Caines,  117  ; 
Pitcher  v.  Livingston,  4  Johns.  13,  per 
Spencer,  J. ;  Bender  v.  Frombcrger,  4 
Dall.  442 ;  Martin  v.  Atkinson,  7  Ga. 
228.  See  ante,  p.  497,  note  (p).  But 
there  seems  to  be  no  adjudication  in  favor 
of  applying  the  distinction  i-efcrred  to  in 
the  text  to  this  class  of  cases. 

(d)  In  most  of  the  cases  cited  supra, 
note  (a),  the  consideration-money  with 
interest  and  the  costs  were  held  to  be  the 
measure  of  damages,  but  in  Threlkeld  v. 
Fitzhugh,  2  Leigh,  451,  it  was  suggested 
that  in  some  cases  it  might  be  shown  that 
the  actual  value  of  the  land  was  greater 
than  the  price  paid.  See  4  Kent,  Com. 
476. 

[527] 


502* 


THE   LAW    OF   CONTRACTS. 


[part  II. 


whether  the  damages  should  be  recovered  for  the  whole  land, 
or  for  part  only,  and  then  whether  the  proportion  which  the 
quantity  of  the  land  lost  by  the,,  failure  bears  to  the  whole, 
should  be  considered,  or  the  proportion  which  its  value  bears; 
but  the  principle  of  compensation  prevails,  and  it  may  be  con- 
sidered as  established,  that  the  part  only  of  the  land  of  which 
the  title  has  failed,  is  to  be  paid  for,  [e)  *and  that  in  proportion 
to  its  value,  and  not  its  mere  quantity.  (/) 

If  the  action  is  brought  upon  the  covenant  that  the  land  is 


(e)  In  Morris  i'.  Phelps,  5  Johns.  49, 
the  title  to  a  part 'of  the  premises  foiled, 
and  it  was  urged  that  the  plaintiff  ought 
to  recover  tlie  whole  consideration-inone}', 
but  tlie  court  laid  down  the  rule  in  the 
text.  Kent,  C.  J.,  said :  "  This  is  an 
old  and  well-settled  rule  of  damages ; 
thus,  in  the  case  of"  Beaucliani])  v.  I)am- 
ory,  Year-Book,  29  Ed.  III.  4,  it  was 
held,  b_v  UiU,  J.,  that  if  one  he  bound  to 
warranty,  he  warrants  the  entirety,  but  he 
shall  not  render  in  value  but  for  that 
which  was  lost.  In  15  Ed.  IV.  3  (and 
which  case  is  cited  in  Bustard's  case,  4 
Co.  121 ),  the  same  princij^lc  was  admitted, 
and  it  was  declared  and  agreed  to  by  the 
court,  that  in  exchange,  where  a  want  of 
title  existed  as  to  part,  the  party  evicted 
might  enter  as  for  a  condition  broken,  if 
he  chose ;  but  if  he  sued  to  recover  in 
value,  he  should  recover  only  according 
to  the  value  of  the  part  lost.  Though 
the  condition  be  entire,  and  extends  to 
all,  yet  it  was  said  that  the  warranty  upon 
the  exchange  might  severally  extend  to 
part.  So  in  the  case  of  Gray  v.  Briscoe, 
Noy,  142,  B.  covenanted  that  he  was 
seised  of  Blackacrc  in  fee,  whereas  in 
truth  it  was  copyhold  land  in  fee,  accord- 
ing to  the  custom  ;  and  the  court  said  that 
the  jury  should  give  damages  according  to 
the  dilfercncc  in  value  between  fee-simple 
land  and  copyhold  land."  See  also,  Guth- 
rie y.  I'ugslcy,  12  .Johns.  126.  In  John- 
son /'.  Ny<'c,  17  Ohio,  GG,  it  was  saiil  that, 
ill  an  aciiijii  on  a  covenant  of  warranty 
broken  liy  tiie  assignment  of  dower,  dam- 
ages would  be  given  to  tlu;  exti'iit  that  tlic 
value  of  the  estate  is  diminished  by  carv- 
ing out  tiic  life-estat(r,  taking  one  third  of 
the  consideration-money  to  be  the  value  of 
Olii^  third  of  iIk;  fee-siiiiph!  interest.  See 
KickcTt  ;,'.  Snyder,  9  Wend.  41(1 ;  Michael 
V.  Mills,  17  ()hio,  (101  ;  (iray  v.  I>iiscoe, 
Moy,  142;  Jiawlu  on  Coven,  for  'I'itle,  2d 
ed.  p.  11. "1,  ';/  xiij. 


(/)  In  Morris  v.  Phelps,  5  Johns.  49, 
.56,  Kent,  C.  J.,  in  delivering  the  opinion 
of  the  court,  said:  "  Another  f|ucstion  in 
this  case  is,  whether  the  defendant  ought 
not  to  have  been  permitted  to  show  that 
the  lands,  in  the  deed  of  1795,  of  which 
there  was  a  failure  of  title,  were  of  inferior 
quality  to  the  other  lands  conveyed  by 
the  same  deed.  This  appears  to  be  rea- 
sonable ;  and  the  rule  would  operate  with 
equal  justice  as  to  all  the  parties  to  a  con- 
veyance. Suppose  a  valuable  stream  of 
water  with  expensive  improvements  upon 
it,  with  ten  acres  of  adjoining  barren  land, 
was  sold  for  10,000  dollars,  and  it  should 
afterwards  appear  that  the  title  to  the 
stream  with  the  improvements  on  it 
failed,  but  remained  good  as  to  the  res- 
idue of  the  land,  would  it  not  be  unjust 
that  the  grantee  should  be  limited  in 
damages,  under  his  covenants,  to  an  ap- 
portionment according  to  the  number  of 
acres  lost,  when  the  sole  inducement  to 
the  purchase  was  defeated ;  and  the 
whole. value  of  the  purchase  had  failed? 
So,  on  the  other  hand,  if  only  the  title  to 
the  nine  barren  acres  failed,  the  vendor 
would  feel  the  weight  of  the  extreme  in- 
justice, if  he  was  obliged  to  refund  nine 
tenths  of  the  consideration-money.  Tiiis 
is  not  the  rule  of  assessment.  The  law 
will  ajiportion  the  damages  to  the  measure 
of  value  between  the  land  lost,  and  the 
land  jjreserved."  See  also,  Cornell  v. 
Jackson,  3  Ciish.  509;  Dickens  r.  Shep- 
]K'rd,  ;5  Mnrph.  526.  In  King  /•.  Pyle,  8 
S.  &  Iv.  16(1,  this  rule  was  applied  where 
the  sale  was  fraudulent,  but  the  court  did 
not  decide  wliat  would  be  the  rule  if  the 
sale  were  fair.  There  are  cases  which 
hold  that  the  average  value  is  to  be  re- 
covered for  the  part  to  which  the  title  has 
failed.  Nelson  v.  Matthews,  2  Hen.  & 
M.  164;  Nelson  v.  Carrington,  4  JNlunf. 
;i.'J2. 


en.  VII  l]  damages.  .  *503 

free  from  incumbrances,  it  will  be  necessary  to  consider  the 
nature  and  effect  of  the  incumbrances.  If  they  consist  of  mort- 
£?ages  or  attachments,  or  other  liens  of  like  kind,  it  seems  to  be 
well  settled  that  the  grantee  may  pay  off  these  incumbrances, 
and  may  then  recover  all  that  he  necessarily  expended  in  this 
way,  from  the  grantor;  (g-)  and  may  even  recover  the  amount  of 
money  paid  by  him  to  remove  these  incumbrances,  after  the  ac- 
tion has  been  commenced,  (h) 

*But,  if  he  does  not  discharge  the  incumbrances,  and  brings 
his  action  before  ouster  or  any  actual  injury  springing  from 
them,  although  the  action  is  sustainable,  because  the  existence 
of  the  incumbrances  works  a  breach  of  the  covenant,  yet  he 
can  recover  only  nominal  damages,  [i)  Still,  if  the  incum- 
brances are  of  a  permanent  nature,  such  as  interfere  with  the 
actual  enjoyment  of  the  estate,  and  such  that  the  grantee  can- 
not remove  them  by  his  own  act,  as  for  instance,  a  lease  of  the 
whole  or  a  part  of  the  premises,  then  it  would  seem  that  actual 
compensation  may  be  recovered,  and  that  there  is  no  rule  which 
should  prevent  this  from  being  full  and  adequate.  {J)      K  the 

{(j)  Delavergne  v.  Norris,  7  Johns.  358  ;  bered  by  a  mortgage,  the  grantee  may  re- 
Hall  V.  Dean,  13  id.  105;  Stanard  v.  deem  ornot  at  his  election,  hut,  if  evicted, 
Eldiidge,  16  id.  254;  Prescott  v.  True-  he  may  recover  the  value  of  the  Land  in- 
man,  4  Mass.  627  ;  Henderson  v.  Hender-  eluding  his  improvements,  even  if  the 
son,  13  Mo.  151.                                   •  value   exceed   the   amount    duo    on    the 

(A)  Lethingwell  v.  Elliott,  10  Pick.  204;  mortgage.     But  see  White  v.  Whitney,  3 

Brooks  r.  Moody,  20  id.  474;   Kelly  v.  Met.  81  ;  Donahoe  v.  Emery,  9  id.  63. 

Low,  18  Me.  244;  Pomeroy  v.  Burnett,  (?)  Prescott  w.  Trueman,  4  Mass.  627; 

8  Blackf.   143;  together  with  reasonable  Wyman  v.  Ballard,  12  id.  304 ;  Tufts  r. 

expenses   incurred   in   extinguishing  the  Adams,  8  Pick.  547 ;  Hcrrick  v.  Moore, 

incumbrance,   exclusive   of  counsel  fees.  19   Me.    313;    Delavergne   i\   Norris,    7 

Lefliingwell  r.  Elliott.     But  the  grantee  Johns.  358  ;    Hall  v.  Dean,  13  id.   105  ; 

cannot  recover  beyond  the  amount  of  the  Stanard  v.  Eldridge,  16  id.  254;  Whisler 

consideration-money  and  interest.     Dim-  w.  Hicks,  5  Blackf.  100;  Davis  r.  Lyman, 

mick  V.  Lockvvood,  10  Wend.  142  ;  Footo  6  Conn.  254.     Payments  for  the  discharge 

r.  Burnet,   10  Ohio,  317;  4  Kent,  Com.  of  incumbrances  cannot  be  recovered  un- 

476.     But  in   those    States  in  which  in  less  specially  alleged.    Dc  Forest  v.  Leete, 

action  for  a  breach   of   the  covenant  of  16  Johns.  122. 

warranty,  the  measure  of  damages  is  held  (  /)  Prescott  v.  Trueman,  4  Mass.  627, 

to  be  the  value  of  the  estate  at  the  time  of  63o';  Harlow  v.  Thomas,  15  Pick.  66,  69  ; 

eviction,  it  seems  that  the   grantee   may  Hubbard  i-.  Norton,  10  Conn.  422,  435. 

recover  what  he  has  paid   to   extinguish  In  Batchclder  v.  Sturgis,   3    Cush.   205, 

incumbrances,  to  the  extent  of  the  value  Fletcher,  J.,  in  giving  the  opinion  of  the 

of  the   estate   at   the   time   of  payment,  court,  said  :  "  In  New  York,  in  the  case 

Norton  v.  Babcock,  2  Met.  510;  "While  of  Rickert  v.  Snyder,  9  Wend.  423,  it  was 

V.  Whitney,  3  id.  81  ;  Eawle  on  Cov.  for  held,  that  when  the  covenant  against  in. 

Title    (2d   edition),    161;     Sedgwick   on  cumbrances  is  broken,  by  reason  of  an  un 

Dam.  180.     In  Elder  v.    True,   32   Me.  expired  term,  which  is  the  present  case, 

104,  it  was  held  that  where  land  is  incum-  the  rule  of  damages  is  the  annual  value 

VOL.  II.  45  [  529  } 


503- 


THE   LAW   OF    CONTRACTS. 


[part  II. 


action  is  brought  on  a  contract  to  sell,  and  against  the  party 
who  had  promised  to  sell  and  had  failed  to  do  so,  many  author- 
ities have  held  that  the  result  may  depend  upon  the  cause  of 
the  failure.  For  if  the  intended  vendor  was  honest,  and  was 
prevented  from  making  the  sale  by  causes  which  he  did  not  fore- 
see, and  could  not  control,  then  the  plaintiff  recovers  only  nom- 
inal damages  ;  or,  if  he  has  paid  the  price,  that  sum  with  inter- 
est, adding  perhaps,  in  both  cases,  his  expenses  in  investigating 
the  title,  or  for  similar  purposes,  (k)     But  if  the  proposed  vendor 


of  the  estate,  or  the  annual  interest  on  the 
purchase-money.  This  rule  may  do  jus- 
tice in  some,  perhaps  in  raanj'  cases,  but 
this  court  is  not  prepared  to  adopt  it  as  a 
general  rule.  .  .  .  The  rule  is,  that  for 
sucli  incumbrances  as  a  covenantee  can- 
not remove,  he  shall  recover  a  just  com- 
pensation for  the  real  injury  resulting  from 
the  incumln-ance.  Though  it  seems  de- 
sirable to  have  as  definite  and  precise 
rules,  upon  the  subject  of  damages,  as  are 
practicable,  it  seems  impossible  to  estab- 
lish any  more  precise  general  rule  in  this 
class  of  cases."  If  the  grantee  is  perma- 
nently kept  out  of  the  estate,  by  reason  of 
the  incumbrances,  the  purchase-money 
and  interest  are  the  measure  of  damages. 
Chapel  r.  Bull,  17  Mass.  213;  Jenkins  v. 
Hopkins,  8  Pick.  346;  so  also,  in  case  of 
eviction,  Waldo  v.  Long,  7  Johns.  173; 
Martin  v.  Atkinson,  7  Ga.  228;  Patter- 
son V.  Stewart,  G  Watts  &  S.  527.  But  see 
Chapel  V.  Bull ;  Jenkins  v.  Hopkins,  and 
supra,  p.  498,  note  [l).  In  an  action  on  a 
covenant  to  pay  off  incumbrances,  the 
amount  of  tlie  incumbrances  is  held  the 
measure  of  damages.  Lethbridge  v.  Myt- 
ton,  2  B.  &  Ad.  772. 

(k)  Flurcau  v.  Thornhill,  2  W.  Bl. 
1078  ;  Walker  i'.  IMoorc,  10  B.  &  C.  41(5 ; 
Wortliington  r.  Warrington,  8  C.  B.  134  ; 
Bahlwin  y.  Munn,  2  Wend.  399;  Peters 
V.  McKcon,  4  Dcnio,  540  ;  Thompson  v. 
Guthrie,  9  Leigh,  101  ;  Conilis  c.  Tarlton, 
2  Dana,  404  ;  Allen  (;.  Anderson,  2  Bilib, 
415;  Stewart  v.  Xobic,  1  (jlreene,  Jowu, 
20.  See  Pletchi'r  v.  Button,  G  Barb.  040. 
This  rule  appears  to  be  established  in 
Kiigland  and  generally  prevails  in  this 
country  ;  but  there  njipears  to  be  some 
divtTsity  in  the  reasoning  upon  which  it  is 
based.  Jii  ICngland  the  rule  a))pears  to  ho 
Hustained  on  tlw!  ground  that  the  parties 
iiiu>t  h.'ivc  c(jnli  iiijilatcd  the  didicuitics  at- 
ti'iirJiiMt  upon  ilic  conveyance,  and  hence 
the  idainlill'  is  allowed  to  recover  the  c.\- 

[WO] 


pcnse  of  investigating  the  title,  but  no 
other  expenses,  on  the  ground  that  he  is 
not  justified  in  taking  any  other  step  until 
he  is  sure  of  a  good  title.  In  Flureau  v. 
Thornhill,  Blackstone,  J.,  said  :  "  These 
contracts  are  merely  upon  condition,  fre- 
quently expressed,  but  always  implied, 
tiiat  the  vendor  has  a  good  title."  In 
Walker  v.  Moore  the  land  was  not  con- 
veyed on  account  of  a  defect  in  the  title. 
The  plaintiff  had  contracted  to  resell,  and 
demanded  damages  for  the  loss  of  i)rofits 
on  his  contracts  of  resale,  for  the  expense 
attending  those  resales,  and  for  the  amount 
for  which  he  was  liable  to  the  subcontrac- 
tors for  examining  the  title,  and  the  ex- 
pense incurred  by  himself  for  the  same 
purpose.  He  was  allowed  to  recover  only 
his  own  expense  in  examining  the  title. 
Parte,  J.,  said  :  "  It  is  usual  and  reason- 
able, before  any  expense  is  incurred,  to 
compare  the  abstract  with  the  deeds  ;  and 
without  giving  any  opinion  as  to  the  right 
of  the  plaintiff  to  resell  before  he  had  ob- 
tained a  conveyance  and  actual  posses- 
sion, I  tliink  he  cannot  recover  those  ex- 
penses which  he  has  sustained  by  reason 
of  his  having  contracted  to  resell  the 
premises  before  he  had  taken  the  trouble 
to  ascertain  whether  the  abstract  was  cor- 
rect or  not."  Baijlcy,  J.,  supposed  he 
might  have  recovered  the  expense  attend- 
ing the  resale,  liad  that  contract  been 
entered  into  after  i)ro])er  investigation. 
He  said  :  "Kit  [tlie  abstract]  had  been 
examined  with  the  deeds  and  found  cor- 
I'cct,  the  plaintiir  might  )icrha]js  have  I)een 
justified  in  acting  upon  the  I'ailli  of  having 
tlie  estate;  and  if  after  that  time  he  had 
made  a  sul)coiitract,  I  think  he  would 
have  been  entitled  to  recover  the  expenses 
attending  it,  if  it  failed  in  conse(|uence  of 
any  defect  in  the  title  of  his  vendor."  The 
jilaintid",  having  faileil  in  a  bill  in  equity 
lirouglit  to  enCorci!  spccilic  performance  of 
a  contract  to  sell  land,  because  the  defend- 


CH.  VIIL] 


DAMAGES. 


*504-*505 


was  in  *fault,  and  either  did  know,  or  should  have  known,  that 
he  could  not  do  what  he  undertook  to  do,  here  substantial  dam- 
ages may  be  given,  including  compensation  for  any  actual  loss, 
as  by  the  increased  value  of  the  land;  (l)  and  this  has  *been  ex- 
tended to  cases  where  the  vendor  acted  in  good  faith,  but  knew 
that  he  had,  at  the  time,  no  title  ;  as  where  the  vendor  offered 
for  sale  at  public  auction,  land  which  he  had  contracted  with  a 
third  person  to  buy  from  him,  and  failed  to  buy,  only  on  ac- 
count of  the  inability  of  that  third  person  to  make  a  conveyance 
to  him.  (w)     In  this  respect  the  rule  would  be  distinguished 


ant  could  not  give  title,  was  not  allowed 
to  recover  his  costs  in  the  equity  suit,  in 
an  action  at  law.  Maiden  v.  Fyson,  11 
Q.  B.  292.  In  this  country,  ahhou^h 
nearly  the  same  rule  is  in  some  of  the 
States  adopted  (diifcring  perhaps  from  the 
English  in  the  fact  that  the  expense  of  in- 
vestigating the  title  is  not  allowed),  it  is 
based  upon  the  analogy  between  this  class 
of  cases  and  actions  upon  covenants  for 
title.  As  we  have  seen,  in  those  cases, 
the  measure  of  damages  where  there  has 
been  an  eviction,  is  in  most  of  the  States, 
the  amount  of  the  consideration-money, 
with  interest ;  so  in  actions  upon  this  class 
of  contracts  the  same  rule  has  been  adopt- 
ed. In  Baldwin  v.  Munn,  SutlwrJand,  J., 
said :  "  In  an  action  on  the  covenant 
against  incumbrances  in  a  deed,  the  plain- 
tiff can  recover  only  the  amount  paid  by 
him  to  extinguish  the  incumbrance  ;  but 
if  he  has  paid  nothing,  no  matter  what  the 
amount  of  the  lien  may  be,  he  can  recover 
nominid  damaqes  only.  Delavergne  y.  Nor- 
ris,  7  Johns.  3.58  ;  4  Mass.  627  ;  13  Johns. 
105.  If  these  principles  are  just,  in  rela- 
tion to  the  covenant  of  general  warranty, 
and  of  quiet  enjoyment,  and  against  in- 
cumbrances, I  do  not  perceive  why  they 
are  not  equally  applicable  to  the  cov- 
enant to  convey,  where  the  covenantor 
has  acted  in  good  faith,  and  refused  to 
convey  because  his  title  has  in  fact  failed. 
The  reasons  which  are  urged  with  so 
much  force,  by  Ch.  J.  Kent,  in  Staats  i\ 
Ten  Eyck  (3  Caines,  111,  11.5),  in  favor 
of  the  rule  of  damages  adopted  in  that 
case,  certainly  apply  with  equal  force  to 
the  case  in  question."  See  the  other 
American  cases  cited  above. 

(/)  See  authorities  cited  in  the  preceding 
note,  and  Bitner  v.  Brough,  11  Penn.  St. 
127  ;  Ilandley  v.  Chambers,  1  Litt.  358  ; 


Blanchard  v.  Ely,  21  Wend.  346,  347,  per 
Cowen,  J.  ;  Nourse  i'.  Barns,  1  T.  Raym. 
77.  So  where  the  party  having  title  re- 
fuses to  convev  it ;  Driggs  v.  Dwiirht,  17 
Wend.  71  ;  Baldwin  v.  Munn,  2  id.  399, 
406  ;  or.  having  title  at  the  time  of  the 
agreement,  afterwards  disables  himself 
from  completing  it,  by  selling  the  land  to 
a  third  party ;  Patrick  v.  ISIarshall,  2 
Bibb,  47  ;  Fisher  v.  Kay,  2  id.  434,  440; 
Wilson  V.  Spencer,  11  Leigh,  261  ;  or  at 
the  time,  of  the  agreement  knew  he  had 
no  title  ;  McConnell  v.  Dunlap,  Hardin, 
41. 

{m)  Hopkins  v.  Grazebrook,  6  B.  &  C. 
31.  See  this  case  cited  in  Walker  v. 
Moore,  10  B.  &  C.  416,  and  in  Fletcher  v. 
Button,  6  Barb.  650.  The  doctrine  of 
Hopkins  v.  Grazebrook,  was  affirmed  in 
Robinson  v.  Harraan,  1  Exch.  850.  Parke, 
B.,  said  :  "  The  rule  of  the  common  law 
is,  that  where  a  party  sustains  a  loss  by 
reason  of  a  breach  of  contract,  he  is,  so 
far  as  money  can  do  it,  to  be  placed  in 
the  same  situation,  with  respect  to  dam- 
ages, as  if  the  contract  had  been  perform- 
ed. The  case  of  Flureau  v.  Thornhill 
qualified  that  rule  of  the  common  law.  It 
was  there  held,  that  contracts  for  the  sale 
of  real  estate  are  merely  on  condition  that 
the  vendor  has  a  good  title  ;  so  that,  when 
a  person  contracts  to  sell  real  property, 
there  is  an  implied  understanding  that,  if 
ho  fail  to  make  a  good  title,  the  only  dam- 
ages recoverable  are  the  expenses  which 
the  vendee  may  be  put  to  in  investigating 
the  title.  The  present  case  comes  within 
the  rule  of  the  common  law,  and  I  am  un- 
able to  distinguish  it  from  Hopkins  v. 
Grazebrook."  So  it  has  been  held  in  this 
country  that,  where  the  agreement  is  that 
a  third  person  shall  convey  land,  the 
measure  of  damages  is  the  value  of  the 

[531] 


506' 


THE   LAW   OP   CONTRACTS. 


[part  II. 


from  that  applicable  to  actions  for  non-sale  of  chattels,  where 
the  plaintiff  recovers  compensation  for  all  actual  damages,  with- 
out any  reference  to  the  good  or  bad  faith  of  the  vendor.  But 
the  Supreme  Court  of  the  United  States  have  refused  to  adopt 
this  distinction,  on  the  ground  that  the  reason  of  the  rule  as  to 
chattels  applies  with  equal  force  to  bargains  respecting  land ; 
this  reason  being,  that  if  a  vendor,  under  such  circumstances, 
could  escape  with  nominal  damages,  there  would  be  danger 
that  he  might  refuse  to  complete  the  sale  for  the  purpose  of  re- 
taining to  himself  the  enhanced  value,  (n) 

If  on  such  a  contract  the  *proposed  vendee  is  sued,  if  he  has 
taken  the  land,  the  measure  of  damages  is,  of  course,  the  price 
with  interest ;  if  he  has  neither  taken  the  land  nor  paid  the 
price,  in  England  the  plaintiff  receives  only  nominal  damages, 
unless  the  land  has  fallen  in  value,  or  he  has  otherwise  suffered 
actual  injury,  on  the  ground  that  if  he  recovered  the  full  price, 
he  would  have  that  and  the  land  too ;  because  the  recovery 
cannot  have  the  effect  of  passing  the  fee  of  the  land,  (o)     In 


land  at  the  time  when  it  should  liave 
been  conveyed.  Dyer  v.  Dorsey,  1  Gill 
&  J.  440 ;  Pinkston*^!;.  Huie,  9  Ala.  252. 
But  see  Tyrert'.  King,  2  Car.  &  K.  149. 

(n)  Hopkins  v.  Lee,  C  Wheat.  109.  See 
also,  Cannell  v.  M'Clean,  6  Harris  &  J. 
297;  Nichols  v.  Freeman,  11  Ired.  99; 
Bryant  v.  Hambruck,  9  Ga.  133;  Wliite- 
f?ide  V.  Jennini^s,  19  Ala.  784  ;  Hill  v.  Ho- 
bart,16Me.  1G4;  Warren  y.  Wheeler,  21  id. 
484.  In  some  of  these  cases  tlic  doctrine 
of  those  American  cases,  cited  supra,  note 
(k),  that  actions  on  a  covenant  to  convey, 
arc  so  far  analo,i,'Ous  to  those  upon  cove- 
nants for  title  that  the  damages  should  he 
measured  Ijy  the  same  rule,  is  rejected. 
In  Is'icliols  r.  Freeman,  the  defendant  was 

E)rc vented  from  giving  a  good  title  hy  a 
evy  of  execution  upon  the  land,  and  there 
appears  to  have  heen  no  fraud  on  his  j)art. 
The  value  of  the  land  at  the  time  of  tlic 
breacii  was  regarded  as  tiic  measure  of 
dumagcB.  I'inrsi/ii,,J.,iiiu(\  :  "Our  atten- 
tion has  heen  called  to  the  fact,  that  in  the 
action  for  a  hreaeli  of  a  covenant  of  (piiet 
enjoyment,  the  measin'c  of  damage  is, 
the  price  paiil  for  the  land,  which  is  taketi, 
as  hetwecn  the  jiarlies,  to  hetlu;  true  value. 

'i'he  an;ilogy  does  not  sustain  the 

position  (or  which  it  was  inv()kc<l;  he- 
cause  the  rule  of  damages  in  that  action  is 

[5^2] 


founded  on  peculiar  reasons.  The  cove- 
nant for  quiet  enjoyment  is  a  substitute  for 
the  old  real  icurrantij,  the  remedy  upon 
which  was  by  voucher,  and  if  the  demand- 
ant recovered,  the  tenant  had  judgment 
against  the  voucher  for  other  lands  of 
equal  value."  See  also,  the  very  able  de- 
cision of  Buchanan,  C.  J.,  in  Cannell  v. 
M'Clean.  And  even  in  New  York  some 
doubt  seems  to  have  been  thrown  upon  the 
rule  laid  down  in  Baldwin  v.  Munti,  cited 
supi-a,  note  (k),  in  the  late  case  of  Fletch- 
er V.  Button,  6  Barb.  646 ;  where,  under 
a  verbal  contract,  land  is  to  be  conveyed 
in  consideration  of  a  specific  sum  payable 
in  work,  the  vendee  who  has  performed 
the  work,  may  consider  the  agreement  as 
a  nullity  and  recover  the  value  of  his 
work,  not  exceeding  the  sum  specified, 
with  interest;  and  he  can  only  resort  to 
evidence  of  the  value  of  the  land  as  a 
measure  of  damages,  when  no  sum  is 
specified.  King  r.  Brown,  2  Hill,  48.'> ; 
IJurlingame  n.  Hiu'linganie,  7  Cowcn,  92  ; 
Bohr  ('.  Kin<lt,  .'t  Watts  &  S.  .')63  ;  Jack  v. 
McKee,  9  I'cim.  St.  2;t:)  ;  Bash  v.  Bash, 
9  id.  260.  See  Boardman  >\  Keeler,  21 
Vt.  84. 

{())  In  Hawkins  r.  Kemp,  3  ICast,  410; 
in  Goodissou  r.  Nuun,  4  T.  U.  761,  and  in 
Glazehrook   v.    VVoodrow,   8   id.  366,  it 


CH.  VIII.] 


DAMAGES. 


'507 


this  country,  some  cases  have  thrown  doubt  on  this  rule,  but 
upon  the  whole  we  think  it  well  established,  (p) 

*If  the  contract  be  to  give  land  for  work  and  labor,  this  may 
be  treated  as  for  so  much  money  in  work  and  labor. 

If  the  action  be  brought  on  the  usual  covenants  in  leases,  the 
ruleis,  as  before,  comjoensation.  Hence  a  tenant  for  life  of  an 
estate  leased  by  him,  can  recover  only  such  damages  for  breach 
of  covenant  by  the  lessee,  as  are  proportionate  to  the  injury 
done  to  the  life-estate.  (7)     And  the  action  may  be  brought  on 


seems  to  have  been  assumed  tUat  tlie 
vendor,  on  tender  of  a  conveyance,  could 
recover  the  amount  of  the  purchase-money. 
But  in  the  hite  case  of  Laird  v.  Pirn,  7  M. 
&  W.  474,  where  the  vendor  had  otTered 
to  execute  a  conveyance,  and  was  "  in  the 
same  situation  for  the  purpose  of  recover- 
ing damages  for  the  non-payment  of  the 
price,  as  if  all  had  been  done  by  him,"  it 
was  said  by  Parke,  B.,  in  delivering  the 
opinion  of  the  court :  "  The  measure  of 
damages,  in  an  action  of  this  nature  is,  the 
injury  sustained  by  the  ])laintiff  by  reason 
of  the  defendants  not  having  performed 
their  contract.  The  question  is,  how 
much  worse  is  the  plaintiff  by  the  diminu- 
tion in  the  value  of  the  land,  or  the  loss  of 
the  purchase-money,  in  consequence  of 
the  non-performance  of  the  contract.  It 
is  clear  that  he  cannot  iiave  the  land  and 
its  value  too.  A  party  cannot  recover  the 
full  value  of  a  chattel,  unless  under  cir- 
cumstances which  import  that  the  prop- 
erty has  passed  to  the  defendant  as  in  the 
case  of  goods  sold  ami  delivered,  wiiere 
they  have  been  absolutely  parted  with, 
and  cannot  be  sold  again." 

(p)  III  Franchot  v.  Leach,  ,5  Cowen, 
506,  the  jury,  under  direction  of  the  judge, 
found  the  consideration-money  and  inter- 
est as  damages  for  the  vendee's  breach  of 
his  contract,  and  no  objection  seems  to 
have  been  made  to  tlie  direction.  In  Alna 
V.  Plummer,  4  Grcenl.  2.58,  the  defendant 
having  bought  a  pew  at  auction,  and  re- 
fused a  deed  when  tendered  to  him,  it  was 
held  that  the  measure  of  damages  was, 
"  the  ])ricc  agreed  to  be  paid  for  the  pew 
by  the  defendant,  who  will  be  entitled  to 
the  deed  wlienever  he  chooses  to  accept 
it."  This  doctrine  Mas  approved  in  Shan- 
non ?•.  Comstock,  21  Wend.  457,  400,  and 
in  Williams  v.  Field,  cited  in  Sedgwick  on 
Damages,  p.  192,  and  appears  to  l)e  now 
well  settled  in  Maine ;  Oatman  v.  AValker, 

45* 


3.3  Me.  67.     But  see  Sawyer  v.  Mclntyre, 
18  Vt.  27. 

('/)  Hence  a  tenant  for  life  of  an  estate 
leased,  can  only  recover  such  damages  for 
breach  of  covenant  by  the  lessee,  as  are 
commensurate  witii  the  injurj'  done  to  the 
life-estate.  Evelyn  v.  liaddish.  Holt, 
543 ;  McKeen  v.  Gammon,  S3  Maine, 
187,  192.  In  New  York  the  same  rule 
of  damages  is  applied  in  actions  on  cove- 
nants for  quiet  enjoyment  in  leases  as  in 
conveyances  of  the  fee-simple.  The  les- 
see is  allowed  costs  incurred  in  defending 
his  title  and  the  rents  he  has  paid  during 
the  time  he  is  liable  for  mesne  profits  to 
the  true  owner,  with  interest  tiiereon  ;  but 
he  can  recover  nothing  for  imjirovements, 
or  the  increased  value  of  the  premises. 
Kinney  v.  Watts,  14  Wend.  38;  Moak  v. 
Johnson,  1  Hill,  99 ;  Kellv  v.  Dutch 
Church  of  Schenectady,  2  Hi'll,  105,  115. 
See  Lewis  v.  Campbell,  8  Taunt.  715; 
3  B.  &  Aid.  392.  If  a  lease  contains  a 
covenant  by  a  tenant  to  keep  the  prem- 
ises in  repair,  and  a  covenant  to  insure 
tliem  for  a  specific  sum  against  fire  ;  if 
they  are  burnt  down,  his  liability  on  the 
former  covenant  is  not  limited  to  the 
amount  of  the  sum  to  be  insured  under 
the  latter.  Digby  v.  Atkinson,  4  Camp. 
275.  In  Dewint  v.  Wilste,  9  Wend.  325, 
"  where  a  party  took  a  lease  of  a  ferry, 
and  covenanted  to  maintain  and  keep  the 
same  in  good  order,  and  instead  of  so 
doing,  diverted  travellers  from  the  usual 
landing  to  another  landing  owned  by 
himself,  by  means  whereof  a  tavern-stand 
belonging  to  the  plaintiff,  situate  on  the 
first  landing,  was  so  reduced  in  business 
as  to  become  tenantless,  it  was  held,  in  an 
action  by  the  landlord  for  breach  of  the 
covenant,  that  he  might  assign,  and  was 
entitled  to  recover  as  damages  the  loss  of 
rent  of  the  tavern-stand." 

[533] 


508' 


THE   LAW   OF   CONTRACTS. 


[part  II. 


the  covenant  to  repair,  before  the  end  of  the  terni,  because, 
although  a  tenant  has,  in  one  sense,  the  whole  term  in  which  to 
repair,  yet  the  covenant  to  repair  is  broken  as  soon  as  repairs 
ought  to  be  made,  and  are  not  made,  (r)  By  parity  of  reason- 
ing the  same  action  might  be  brought  against  a  landlord,  when 
he,  in  the  same  way,  failed  to  discharge  his  obligations. 

A  covenant  to  repair,  or  to  keep  the  premises  in  good  and 
sufficient  repair,  does  not  mean,  only,  that  they  must  be  kept 
in  the  same  repair  in  which  they  were  when  the  tenant  took 
them,  for  this  may  not  be  good  repair;  but,  it  has  been  held 
that  the  jury  might  properly  take  intg  consideration  the  condi- 
tion of  the  premises  at  the  commencement  of  the  lease,  in  order 
to  ascertain  what  was  meant  by  the  words,  repair,  or  good  re- 
pair, as  used  in  that  lease,  {s) 


(r)  Luxmore  r.  Robson,  1  B.  &  Aid. 
584;  Schieffclin  v.  Carpenter,  15  Wend. 
400. 

(s)  Burdett  v.  Withers,  2  Nev.  &  P.  122  ; 
Stanley  v.  Towgood,  3  Bing.  N.  C.  4. 
See  Harris  v.  Jones,  I  Moody  &  R.  173  ; 
Gutteridge  v.  Munyard,  7  C".  &  P.  129. 
In  Thompson  v.  Shattnck,  2  Met.  615, 
the  defendant  had  covenanted  to  keep  one 
half  of  a  mill-dam  in  repair,  but  the  plain- 
tiff's assignor  was  bound  to  repair  the 
other  iialf.  Tlie  defendant  failed  to  make 
seasonable  repairs,  the  plaintiff  repaired 
the  whole,  and  claimed  as  damages  one 
half  the  expense  of  repairs  and  the  loss  of 
profits  in  the  mill  on  account  of  delay. 
He  recovered  the  former,  but  not  the  lat- 
ter. Deioi'//,  J.,  in  delivering  the  opinion 
of  the  court,  tlius  stated  tiie  grounds  of 
the   decision :    "  It   being    the    duty    of 

[534] 


Plumb  [the  plaintiff's  assignor]  to  make 
one  half  of  the  repairs,  and  it  being  a 
right  which  he  might  at  once  exercise,  to 
proceed  to  make  the  whole  repairs,  after 
neglect  and  refusal  of  the  defendant,  upon 
reasonable  notice  to. aid  in  the  repairs; 
if  said  Plumb  delayed  to  exercise  that 
right  and  thereby  sustained  a  loss,  it  is 
one  which  he  alone  must  bear."  See 
Green  v.  Mann,  11  111.  613.  In  Green 
V.  Eales,  2  Q.  B.  225,  it  was  held 
that  a  lessor  who  has  covenanted  to  re- 
pair the  demised  premises,  is  not  liable  to 
the  lessee  for  the  rents  he  was  obliged  to 
pay  for  another  residence,  or  for  expense 
in  fitting  it  up,  wiiile  the  repairs  were  go- 
ing on,  although  the  lessee  was  obliged  to 
move  out  for  repairs  in  consequence  of 
the  lessor's  neglect. 


CH.  IX.]  SPECIFIC   PERFORMANCE.  509 


CHAPTER    IX. 

ON  REMEDY  IN  EQUITY,   OR   SPECIFIC  PERFORMANCE. 

Sect.  1.  —  Of  the  Origin  and  Purpose  of  this  Remedy. 

Courts  of  law  can  give  no  other  remedy  for  breach  of  con- 
tract, than  damages.  The  action  of  detinue  is  disused,  and 
under  the  rules  of  law,  would  not  be  effectual  even  in  the  few 
cases  to  which  it  could  ever  have  applied.  But  courts  of  equity 
give  another  remedy  for  a  breach  of  a  contract;  they  compel  the 
party  in  fault  to  a  specific  performance  of  his  undertaking,  and 
the  remedy  in  equity  is  the  more  natural  of  the  two  and  better 
fulfils  the  great  object  of  law,  which  is  the  maintenance  of  the 
obligation  of  contracts.  For,  as  it  has  been  well  said,  in  con- 
tracts respect  is  first  to  be  had  to  the  things  expressed  in  the 
agreement,  if  they  may  possibly  be  obtained  ;  and  only  for  de- 
fault of  the  things  themselves  is  a  sufficient  equivalent  to  be 
given. [a) 

This  power  was  claimed  and  exercised  by  courts  of  equity, 
as  all  their  powers  were  to  enable  them  to  supply  a  manifest 
insufficiency  of  the  law.  But  as  it  would  be  obviously  and  ex- 
tremely inexpedient  to  have  two  independent  jurisdictions,  one 
antagonistic  to  the  other  in  its  principles  and  its  operation, 
equity  has  always  preferred,  and  professed,  to  "  follow  the  law."  [b) 

[a]  Treatise  of  Equity,  ch.  1,  §  4.     The  prevails  among  the  English  people  in   a 

jurisdiction  to  decree  specific  performance  degree  not  found  in  many  other  countries, 

of  contracts,  unlike  most  other  branches  See  Lumley  v.  Wagner,  1  De  G.,  M.  «&  G. 

of  equity,  is  said  not  to  have  had  its  ori-  604,  619,  13  Eng.  L.  &  Eq.  557.    He  had 

gin  in  the  Roman  law,  but  to  be  purely  made  a  similar   observation   when   Lord 

the  invention  of  the  English  clerical  chan-  Chancellor  of  Ireland.    French  v.  Macale, 

cellors.     1   Spence,  Eq.  Jurisd.  220,  note  2  Drury  &  W.  273. 

(/).     And  to  its  exercise  by  the  court  of  (b)  Equity  in  decreeing  specific  perform- 

chancery  in  England  one  of  her  most  dis-  ance  does,  as   a   learned   writer  has   re- 

tinguished   chancellors.    Lord   St.   Leon-  marked,  but  carry  out  the   principles   of 

ards,  has  attributed  that  good  faith  which  the   common   law  ;    giving   that   remedy 

[535] 


510  THE  LAW  OF  CONTRACTS.  [PART  II. 

Nor  was  this  profession  insincere,  or  disregarded  in  practice ; 
but  the  application  of  it  has  been  attended  with  much  difficulty. 
To  "  follow  the  law "  meaning  thereby  to  go  only  where  that 
went,  and  do  only  what  that  did  would  destroy  the  peculiar 
ability  of  the  court  of  equity.  To  oppose  and  set  aside,  with 
direct  contradiction,  the  rules  and  decisions  of  the  law,  would 
be  open  to  still  graver  objection.  And  to  avoid  these  extremes  ; 
not  to  violate  the  law  but  to  fulfil  its  purposes  and  to  supply 
those  wants  which  render  its  administration  of  its  own  prin- 
ciples, imperfect,  is  the  true  purpose  of  equity  ;  and  it  is  equally 
important  and  difficult. 

To  no  part  of  the  jurisdiction  of  equity  do  these  remarks 
apply  more  directly  than  to  a  decree  for  specific  performance. 
Such  is  the  apparent  inconsistency  between  the  decisions  on 
this  subject  and  so  entire  the  want  of  uniformity  and  harmony 
in  the  reasons  given  for  them,  that  they  have  been  said  to  be 
governed  merely  by  the  caprices  of  the  court,  (c)  But  this  is 
certainly  untrue  and  unjust  in  reference  to  the  general  course  of 
equity  jurisprudence,  [d) 

One  reason  for  the  apparent  conflict  of  authority  is,  that 
specific  performance  is  not  a  matter  of  mere  right,  but  is,  pecul- 
iarly, one  of  discretion,  (e)  It  is  always  the  duty  of  the  court 
to  inquire  into  the  peculiar  facts  and  the  peculiar  merits  of  each 
case,  and  to  decide  it  as  they  may  direct.  (/)      Hence,  there  is 

wliicli  tijo  courts  of  the  rommon  law  would  ciscd  by  a  court  of  equity  when  it  refrains 

give,  if  tlieir  mode  of  administering;  justice  from  executing  a  contract  is  certainly  not 

were  adapted  to  tiic  case.     Mitf.  PL   118.  an  arbitrary,  but  a  judicial  discretion.     If 

And  see  Alley  v.  Deschamps,  13  Ves.  228.  it  is  a  case  proper  for  a  specific  perform- 

Wliat  is  aimed  at  i.s  tiie  exact  accomplish-  ance  the  court  is  not  at  lilicrty  to  refuse  to 

ment  of  ilie  intention  of  the  parties.     2  grant  it.     This  is  wliat  iqipcars  to  have 

Drury  &  W.  272.  been  the  meaning  of  Sir  William  Grant 

(f)  Sic  2  biory,  Eq.  Jur.  ^  724,  n.  1.  when  he  said,  "  supjiosing  the  contract  to 

(</)    Lord    Kldon,    Ch.,   in    Widte    v.  have  been   entered   into   l)y   a  competent 

Damon,  7  Ves.  ."i.'j.    The  conditions  which  l)arty,  and  to  he  in  the  nature  and  circum- 

hhould   lie   fiillllU'd   to  entitle  tlie  plaintiif  stances    of    it    unobjcctionnhlc,   it    is    as 

to  a  sfiecific  per(brmanc(!  are  stated  very  much  of  course  in  this  court  to  decree  a 

conifirchcnsivciy    and    clearly    by     Lord  specific  iicrformance  as  it  is  to  give  dam- 

liedesdale,  Harnett  v.  Ycilding,  2  Sell.  &  ages  at   law."     Hall   r.   Warren,  !)   Ves. 

L.  &.'•).•!-.')").').  G08.     And  see  licnnctt  v.  Smith,  10  Kng. 

(a)   Watson  V.  Marston,  4  I)e  (i.,  M.  &  L.  &   ICq.   271,  IC.   .Iiir.  -4^2,  pn-   Turner, 

G.  2;j(),  ;»!    Lng.  L.  &  Va\.  107  ;  Mortlock  V.  (,'. 

i;.  IJidlcr,   10  Ves.  .'iOS  ;   1    Fonl.l.  Va\.   15.  ( /)  In  Wedgwood  /-.  Adams,  .6  Bcav. 

1,  ^  'J,  hole  (/).      King  V.  Ilamillon,  4  I'tl.  (U).'),  Lord  /.iiii(/i/iilc,  M.  K.,  said  :  "I  con- 

.311  ;  Waters  r.  Howard,  1  Aid.  CU.  Dec.  ccivi;  ilu;  doctrine  of  the  cimrt  to  he  this, 

112,  8  (jlill,  2G2.      Tlic  discretion  cxer-  that    the  court   exercises   a   diseretiou  in 


CH.  IX.] 


SPECIFIC   PERFORMANCE. 


511 


perhaps  hardly  any  requirement  laid  down  as  absolutely  neces- 
sary for  such  a  decree,  the  want  of  which  may  not  be  supplied  ; 
and  it  may  be  even  more  strongly  said  that  no  circumstances, 
and  no  fact  or  claims  would  lead  a  court  of  equity  to  grant 
such  a  decree,  if  upon  the  whole  case  it  would  certainly  work 
injustice,  (g^)  It  does  not  follow,  however,  that  there  are  not 
rules,  which  may  be  distinctly  laid  down,  which  the  courts  gen- 
erally recognize  and  regard,  and  by  which  the  very  great  major- 
ity of  cases  are  decided. 

The  most  general  rule,  which  lies  at  the  foundation  of  an 
equitable  decree  for  specific  performance,  and  to  which  all  other 
rules  are  or  should  be  subordinate  is,  that  this  equity  arises 


cases  of  specific  performance,  and  tlirects 
a  specilic  performance  unless  it  should  be 
what  is  called  higlily  unreasonable  to  do 
so.  What  is  more  or  less  reasonable  is 
not  a  tiling  that  you  can  define ;  it  must 
depend  upon  the  circumstances  of  each 
particular  case.  The  court,  therefore, 
must  always  have  regard  to  the  circum- 
stances of  each  case,  and  see  whether  it  is 
reasonable  that  it  should,  by  its  extraor- 
dinary jurisdiction,  interfere  and  order  a 
specific  performance,  knowing  at  the  time 
that  if  it  abstains  from  so  doing,  a  measure 
of  damages  may  be  found  and  awarded 
in  another  court.  Though  you  cannot  de- 
fine what  may  be  considered  unreasonable 
by  way  of  general  rule,  you  may  very  well 
in  a  particular  case,  come  to  a  balance  of 
inconvenience  and  determine  the  propriety 
of  leaving  the  plaintiff  to  his  legal  remedy 
by  recovery  of  damages."  But  the  court 
will  not  inquire  into  equities  outside  of  the 
case,  as  it  properly  presents  itself  for  judi- 
cial determination.  Thus  if  the  considera- 
tion of  the  defendant's  contract  is  a  cov- 
enant of  indemnity  agreed  to  be  given  by 
the  plaintiff,  and  the  plaintiff  docs  give 
such  covenant,  his  subsequent  breach  of  it 
is  not  a  ground  upon  which  the  defendant 
can  refuse  a  specific  performance  of  his 
own  agreement.  Gibson  r.  Goldsniid,  5 
De  G.,  M.  &  G.,  7.57,  27  Eng.  L.  &  Eq. 
588.  In  that  case  the  maxim  that  he  who 
asks  equity  must  do  equity  was  much  dis- 
cussed and  the  extent  of  its  operations 
defined  by  the  Lords  Justices. 

{())  Webb  v.  Direct  London  and  Ports- 
mouth Ky.  Co.  1  De  G.,  M.  &  G.  .'321  ; 
Stuart  r.  London  and  North-western  Ry. 
Co.  1  De  G.,  M.  &  G.  721  (with  these  two 
cases  compare  Havvkes  v.  Eastern  Coun- 


ties Ey.  Co.  1  De  G.,  M.  &  G.  737)  ; 
Myers  v.  Watson,  7  Eng.  L.  &  Eq.  69,  1 
Sim.  N.  s.  52.3;  Seymour  v.  Delancey, 
6  Johns.  Ch.  223  ;  Clarke  v.  Rochester, 
&c.  Railroad,  1 8  Barb.  350  ;  Wadsworlh  v. 
Manning,  4  Md.  59  ;  Waters  v.  Howard, 
tibi  supra.  Bowles  v.  Woodson,  6  Grat. 
78,  where  the  plaintiff's  conduct  had  been 
such  as  to  induce  the  defendant  to  enter- 
tain and  act  upon  the  belief  that  the  con- 
tract was  rescinded.  See  also.  Porter  v. 
Dougherty,  25  Penn.  State,  405.  If  a 
contract  fair  and  equal  at  the  time  it  was 
entered  into,  afterwards  from  a  change  of 
circumstances  (such  change  not  being 
occasioned  by  the  fault  of  the  defendant), 
is  made  to  operate  with  peculiar  hardship 
upon  him,  a  court  of  equity  may  refuse  to 
enforce  it.  Perkins  v.  Wright,  3  Harris 
&  McH.  324,  where  a  specific  perform- 
ance was  not  granted  of  an  agreement  to 
convey  land  for  a  consideration  payable 
in  continental  money  which  had  since 
greatly  depreciated.  And  see  Lawrence 
V.  Dorsey,  4  Harris  &  Mcll.  205.  Where 
a  change  of  circumstances  has  rendered 
a  specific  performance  according  to  the 
letter  of  the  contract,  inequitable,  the 
court  may  execute  the  contract  with  a 
proper  and  conscientious  modification, 
upon  the  plaintilf's  consenting  to  such 
modification  ;  and,  as  Lord  Redesdale  has 
said,  it  is  the  advantage  of  a  court  of 
equity  that  it  can  modify  the  demands  of 
parties  according  to  justice.  Davis  v. 
Hone,  2  Sch.  &  L.  34i,  348.  The  court 
in  such  a  case  docs  not  impose  the  altera- 
tion npon  the  plaintiff  but  makes  his 
acceptance  of  it  the  condition  of  its  inter- 
ference in  his  behalf. 

[537] 


512 


THE  LAW   OF   CONTRACTS. 


[part  II. 


whenever  a  contract  is  broken  which  was  binding  at  law,  and 
the  remedy  at  law  is  plainly  inadequate.  (A) 

Formerly  it  is  said,  the  court  sent  the  party  to  law,  and  if  he 
recovered  damages,  then  entertained  the  suit,  but  not  other- 
wise, (i)  There  is  no  such  practice  now.  (j)  But  equity  will 
not  give  this  relief,  or  relief  in  the  nature  of  specific  perform- 
ance, in  cases  where  there  can  be  neither  remedy  nor  action  at 
law.  (k) 


(h)  "It  is  only  where  the  legal  remedy 
is  inadequate  or  defective  that  it  becomes 
necessary  for  courts  of  equity  to  interfere. 
....  I  will  not  say  courts  of  equity  liave 
in  every  instance  confined  themselves 
within  this  line ;  but  tliis  being  the  prin- 
ci])le,  I  will  not  deviate  from  it  further 
than  bound  by  precedent  and  authority.  In 
the  present  case,  complete  justice  can  be 
done  at  law."  Sir  Win.  Grant,  M.  R., 
Flint  V.  Brandon,  8  Ves.  163.  That  was 
a  case  wliere  specific  performance  was  re- 
fused to  be  decreed  of  a  covenant  by  a 
lessee  to  fill  up  or  make  good  a  gravel-pit. 
The  general  rule  is,  that  a  recovery  of 
damages  at  law  precludes  a  resort  to  a 
court  of  equity.  Sainter  v.  Ferguson,  1 
Macn.  &  G.  286.  It  was  in  one  case, 
ingeniously  contended  that  a  promise  to 
pay  the  damages  suffered  by  the  breach  of 
a  covenant  in  a  deed,  might  be  considered 
as  involved  in  the  contract  of  the  covenant ; 
so  that  the  damages  having  been  liquidated 
by  the  verdict  of  a  jury,  a  court  of  equity 
had  jurisdiction  to  enforce  payment  of  the 
sum  so  assessed,  if  by  reason  of  special 
circumstances  the  judgment  at  law  on  the 
verdict  could  not  be  perfected  ;  but  the 
attempt  was  unsuccessful.  Jenkins  r. 
Parkinson,  2  Mylne  &  K.  8.  With  re- 
spect to  corporations  and  persons  filling 
public  oflices,  it  is  worthy  of  note  that  they 
may  be  capable  of  suing  and  being  sued 
for  some  f)urposes,  without  being  compe- 
tent parlies  to  a  suit  of  this  nature.  Thus 
it  docs  not  fallow  that  because  certain 
persons  vested  with  special  statutory 
powers,  as  the  Commissioners  of  Woods 
and  Forests,  in  England  (who  have  a 
power  lo  sell  or  demise  certain  crown 
lands,  but  have  no  estate  in  the  lands), 
ai'e  enabled  in  some  cases  to  sue;  and  bo 
sueil,  that  I  hey  have  a  right  to  sue  or  arc 
liable  to  Ik!  sueil  in  respect  of  tin;  specific 
performance  of  agreements  relating  to  the 
demise  or  sale  of  sudi  lands.  Mcrsc.  r. 
Beymour,  l.'J  IJcav.  2.'>4.  As  lo  infants 
and  manicd  wnuuni,  vale jxisl,  Haiuon  7. 

[W8] 


As  to  how  far  the  compulsory  taking  of 
land  by  railway  corporations  in  the  exer- 
cise of  their  statutory  powers,  places  the 
companies  and  the  land-owners  in  the 
relative  situation  of  purchasers  and  ven- 
dors, see  the  judgment  of  Lord  Cottenham, 
C.  J.,  Adams  v.  London  and  Blackwall 
Ry.  Co.  2' Macn.  &  G.  127.  See  also, 
Clarke  v.  Rochester,  &c.  R.  R.  Co.  18 
Barb.  350. 

(0  See  1  Fonbl.  Eq.  B.  1,  eh.  1,  §  5, 
note  (o).  Lord  Chief  Justice  Raymond, 
in  Betesworth  v.  Dean  and  Chapter  of 
St.  Paul's,  Sel.  (:;h.  Ca.  G9,  said:  "I 
take  this  to  be  a  certain  rule  of  equity, 
that  a  specific  performance  shall  never  be 
compelled  for  the  not  doing  of  which  the 
law  would  not  give  damages."  But  the 
decree  in  this  case  was  reversed  in  the 
House  of  Lords. 

(j)  Mitf.  PI.  by  Jerem.  118,  n. ;  1 
Fonbl.  Eq.  B.  1,  cli.  3,  \  2,  note  (c). 

(k)  Cannel  v.  Buckle,  2  P.  AVms.  243. 
Thus,  although  a  covenant  in  gross  or 
collateral  to  the  land,  is  not  at  law  binding 
u])on  an  assignee  of  the  land,  yet  if  he 
take  with  notice  of  the  covenant,  he  may 
be  restrained  from  making  a  use  of  the 
land  which  would  be  in  violation  of  it. 
Therefore  where  A,  in  purchasing  certain 
land  in  fee-simple,  covenanted  to  keep  it 
in  an  open  state,  uncovered  with  any 
buildings  and  in  projier  repair  as  a  pleas- 
ure-ground for  the  benefit  of  the  occu- 
piers of  houses  in  the  neighborhood,  it  was 
held,  that  the  vendor  might  have  an  in- 
junction against  a  purchaser  from  A,  with 
notice  of  the  covenant,  to  prevent  him 
from  building  upon  the  land  ;  and  that 
till!  (|ui'sii()ii  wlu'thcr  the  covenant  ran 
with  the  land,  did  not  aH'cct  the  right  to 
the  remedy  in  equity.  Talk  v.  Moxhay, 
1  Hall  it  T.  10.'),  2  Phillips,  774,  S. 
(!.  before  the  Master  of  the  Rolls,  II 
Beav.  .571.  And  a  court  of  equity  will 
not  always  refuse,  to  grant  this  remedy, 
tliipM;,rh  the  iilaiiiiiirii.is  a  conqjlete  remedy 
at  law  which  he  has  lost  by  his  own  neg- 


en.  IX.] 


SPECIFIC    PERFORMANCE. 


513 


It  is  possible  for  a  plaintiff  to  have  an  interest  capable  of 
supporting  a  bill  praying  specific  performance,  although  he  was 
not  a  party  to  the  contract,  (/)  or  although  he  did  not  disclose 
his  true  character  at  the  time  of  the  contract,  (m)  And  a  spe- 
cific performance  of  an  entire  contract  may  be  granted  at  the 
instance  of  a  party  who  is  not  solely  interested  in  the  fulfilment 
of  it.  (n) 

The  contract  of  which  performance  is  sought  must  be  clearly 
proved,  and  its  terms  should  be  so  specific  and  distinct  as  to 
leave  no  reasonable  doubt  of  their  meaning,  (o)     But  the  court 


lect.  Lord  Redesdale,  Lennon  v.  Nap- 
per,  2  Sch.  &  L.  684.  With  respect  to 
the  enforcement  of  an  agreement  as  against 
creditors  of  one  of  the  parties,  and  the 
consideration  that  is  necessary  in  such 
cases,  see  Alexander  v.  Ghiselin,  5  Gill, 
138. 

(/)  Hook  V.  Kinnear,  3  Swanst.  417,  n. 
See  Hill  v.  Gomme,  5  Mylne  &  C.  250,  1 
Beav.  540 ;  Colj'ear  v.  Countess  of  Mul- 
grave,  2  Keen,  81,  98  ;  Vernon  v.  Vernon, 
2  P.  Wms.  594,  4  Bro.  P.  C.  26.  By  an 
agreement  between  A  and  B,  the  latter 
■was  to  build  a  house  for  the  former  for  a 
stipuhited  price ;  and  A  dying,  his  son 
and  heir  brought  Ins  bill  against  the 
widow  and  administratrix  to  compel  her 
specifically  to  perform  the  agreement,  and 
it  was  decreed  accordingly.  Holt  v.  Holt, 
2  Vern.  322  ;  and  see  Champion  v.  Brown, 
6  Johns.  Ch.  402.  Marriage  contracts 
differ  from  others  in  this,  that  the  issue  of 
the  marriage  are  purchasers  under  both 
father  and  mother ;  and  therefore  a  mar- 
riage settlement  cannot  be  rescinded  even 
by  the  consent  of  all  the  parties  to  it,  if  the 
interests  of  the  children  would  be  thereby 
prejudiced.  Harvey  v.  Ashley,  3  Atk. 
610. 

(w)  Where  an  agreement  for  a  purchase 
of  land  is  made  by  an  agent,  as  if  he  were 
purchasing  for  himself,  the  principal  may 
enforce  specific  performance  of  the  con- 
tract; and  it  is  no  objection  that  his  name 
was  withheld  from  the  vendor  at  the  time 
it  was  entered  into,  unless  some  inequita- 
ble advantage  was  taken  of  the  vendor 
other  than  any  supposed  to  be  inferrible 
from  the  mere  non-disclosure  of  the 
agency,  and  of  the  plaintiff's  name  as  pur- 
chaser. Nelthorpe  v.  Holgate,  1  CoUyer, 
203.  And  if  a  vendor  fiilsely  represented 
that  he  was  agent  in  the  transaction  for  a 
third  party,  that  is  no  objection  to  his  ob- 


taining specific  performance  of  the  con- 
tract, unless  it  be  shown  that  the  deception 
in  some  way  operated  to  the  defendant's 
prejudice.  Fellowes  v.  Lord  Gwydyr,  1 
Russ.  &  M.  83,  1  Sim.  63,  s.  c.  before 
the  V.  C.  If,  however,  the  defendant  was 
unfairly  induced  to  enter  into  a  contract 
wliich  he  would  not  have  made  if  he  had 
known  what  party  he  was  really  dealing 
with,  a  specific  performance  will  not  be 
decreed.  Phillips  v.  The  Duke  of  Bucks, 
1  Vern.  227 ;  Popham  ;;.  Eyre,  Lofft, 
786.  Where  A  and  B  were  the  owners  of 
a  tract  of  land,  and  A  having  authority 
from  B,  contracted  with  C  to  sell  him  the 
land,  by  a  written  agreement  containing 
no  reference  to  B,  and  not  purporting  on 
its  face  to  bind  any  person  as  vendor  but 
A ;  on  a  bill  filed  by  A  and  B,  praying 
a  specific  performance,  McLean,  J.,  held, 
that  the  agreement  could  not  be  executed 
for  want  of  mutuality.  Bronson  v.  Cahill, 
4  McLean,  19.     Sed  qiuere. 

(n)  Thus,  if  A,  for  a  consideration, 
moving  from  B,  contract  to  confer  a 
benefit  on  B,  and  also  another  benefit 
on  C,  B  may  obtain  a  specific  perform- 
ance of  that  contract  as  an  entirety. 
Ford  V.  Stuart,  15  Beav.  493,  11  Eng.  L. 
&Eq.  166,  172. 

(o)  Harnett  v.  Yielding,  2  Sch.  &  L. 
549,  558  ;  Webb  v.  Direct  London  and 
Portsmouth  Railway  Co.  1  De  G.,  M.  &G. 
521 ;  (and  see  the  observations  of  Lord  St. 
Leonards,  upon  this  case,  in  Hawkes  v. 
Eastern  Counties  Railway  Co.  1  De  G.,M. 
&  G.  757.)  Moseley  v.  Virgin,  3  Ves. 
184  ;  Ormond  v.  Anderson,  2  Ball  &B.  363 ; 
Tatham  v.  Piatt,  9  Hare,  660,  1 5  Eng.  L.  & 
Eq.  190 ;  Price  v.  Griffith,  1  De  G.,  M.  & 
G.  80  ;  Morgan  v.  Milman,  3  De  G.,  M.  & 
G.  24;  Jackson  v.  Cocker,  4  Beav.  59; 
Hopcraft  v.  Hickman,  2  Simons  &  S.  130 
(a  case  of  an  uncertain  award) ;  Colson 

[539] 


514 


THE   LAW   OP   CONTRACTS. 


[part  II. 


is  bound  by  no   technical  rules  in   this  respect.     Nor  does  it 
greatly  regard  the  form  of  the  contract,  (p)     Thus,  a  bond  for 


V.  Thompson,  '2  Wheat.  336 ;  Boston  and 
Maine  KaUroad  v.  Babcock,  3  Cush.  228; 
Kino's  Heirs  v.  Thompson,  9  Pet.  204  ; 
Stoddert  v.  Bowie,  5  Md.  18;  Gill  v. 
McAttee,  2  Md.  Ch.  Dec.  25.5;  Dodd  v. 
Seymour,  21  Conn.  476;  Soles  z>.  Hick- 
man, 20  Penn.  St.  180;  Parrish  v. 
Koons,  1  Pars.  Eq.  94.  Lord  Manners 
refused  to  grant  a  reference  or  issue  to 
ascertain  tlie  terms  of  the  contract,  where 
the  case,  as  presented  before  him,  was  not 
one  of  contradictory  evidence,  but  of  no 
evidence  as  to  essential  parts  of  the  con- 
tract. Savage  V.  Carroll,  1  Ball  &  B. 
265.  In  the  following  cases,  the  difficulty 
of  some  want  of  certainty  existed,  but  not 
in  a  sufficient  degree  to  prevent  the  court 
from  undertaking  to  enforce  specific  per- 
formance :  Butler  v.  Powis,  2  Collyer, 
156;  Saundcrson  ;,'.  Cockermouth  & 
Workington  Railway,  11  Beav.  497; 
Fitzgerald  v.  Vicars,  2  Drury  &  W.  298. 
A  contract  made  abroad,  and  referring  to 
a  custom  of  the  foreign  country,  may  be 
construed  as  incorporating  the  terms  of 
the  foreign  custom  into  the  agreement, 
and  with  such  construction  may  be  exe- 
cuted specifically  by  a  domestic  court  of 
equity.  Foubert  v.  Turst,  1  Bro.  P.  C. 
38.  Action  taken  by  the  defendant  to- 
wards a  perforinance  of  the  contract,  may 
remove  tlie  difficulty  of  some  want  of  cx- 
plicitness  in  the  terms  of  the  contract  it- 
self. Price  V.  Corporation  of  Penzance, 
4  Hare,  509.  A  contract  sufficiently  cer- 
tain and  definite  to  enable  the  court  as 


well  to  enforce  its  specific  performance  as 
to  be  assured  that  in  doing  so  effect  is 
given  to  the  entire  agreement  between 
the  parties,  must  be  set  forth  in  the  bill. 
Allen  V.  Burke,  2  Md.  Ch.  Dec.  534.  In 
general,  a  plaintiff  who  abandons  the 
.agreement,  as  set  forth  in  iiis  bill,  and  by 
an  amended  bill  relies  upon  a  differerit 
agreetnent  admitted  by  the  defendant  in 
his  answer,  will  be  granted  a  specific  per- 
formance of  such  latter  agreement;  and 
this  on  the  ground  that  by  iiis  acceptance 
of  the  defendant's  statements  of  the  con- 
tract, he  makes  it  binding  upon  liimself 
also,  so  that  there  is  a  perfect  mutuality. 
Lord  lirch'sciale,  C,  Lindsay  v.  Lynch,  2 
Sch.  &  L.  1 ;  Willis  v.  Evans,  2  Ball  & 
B.  225.  But  it  follows  from  tiiis  ground 
of  the  rule,  that  the  plaintiff'  cannot  have 
relief,  if,  in  his  amended  bill,  he  does  not 
abandon  the  contract  as  originally  set 
forth,  but  as  well  insists  upon  that  as 
asks,  in  the  alternative,  for  the  specific 
execution  of  the  agreement  admitted  in 
the  answer.  Lindsay  v.  Lyncii,  ubi  supra. 
Where  the  evidence  shows  a  contract,  but 
one  differing  materially  from  that  alleged 
in  the  plaintiff's  bill,  the  usual  practice 
has  been  to  dismiss  the  bill  without  preju- 
dice to  a  new  bill.  Legal  r.  Miller,  2 
Ves.  Sen.  299  ;  IMainwaring  v.  Baxter,  5 
Ves.  457  ;  Woolam  r.  Hearn,  7  Ves.  222. 
See  Molloy  i-.  Egan,  7  Irish  Eq.  590. 
But  the  court  will  not  always  dismiss  the 
bill.  Wiiere  the  ])laintitf  has  not  been  in 
fault,  and  especially  if  he  have  done  acts  of 


(/))  A  deed  not  duly  recorded  has  been 
regarded  as  a  contract  to  make  a  valid 
convcj'ance  according  to  its  purport. 
Chase,  C.  J.,  Moncrieff  v.  Goldsl)orough, 
4  Harris  &  Mcll.  283.  And  see  Williams 
V.  Mayor  of  Annapolis,  6  Harris  &  J. 
529.  So  with  a  married  woman's  deed 
concerning  her  separate  property,  inopera- 
tive as  a  conveyance!  for  want  of  a  legal 
acknowlcdgnu'tit.  Ticrnan  r.  Poor,  1 
(lill  &  .).  227  ;  I'rundigc  v.  I'oor,  2  id.  1. 
Tlic  statute  of  frauds  does  not  appear  to 
linve  been  pl'-adcd  iti  th(!se  cases.  It  was 
long  ago  held,  tliat  a  deed  wliich  had  be- 
come void  liy  nnittcr  subsc(|ucni,  inigiit  bo 
ground  ("ir  a  suit  in  cipiity  for  a  specific 
jjcrforniaiM'c  ;  as  where  a  woniaii,  being 
oliligor,  inarrii'd  the;  obligee,  ("aiinci  r. 
Buckle,  2  P.  Wins.  242.     An  award  nniy 

[  .040  ] 


be  enforced  specifically  as  an  agreement, 
wherever  a  direct  agreement  between  the 
parties  would  be  so  enforced.  Hall  v. 
Hardy,  3  P.  Wms.  190;  Wood  v.  Grif- 
fith, i  Swanst.  54  ;  McNeil  r.  Magee,  5 
Mason,  244.  An  award  wluch  in  itself 
was  not  binding  upon  cither  party,  was 
specifically  ])erformed  at  the  instance  of 
one  of  the  parties,  who  had  doni!  acts  of 
part  perforinance.  Norton  %•.  JMastiall,  2 
Vern.  24,  1  Eip  Cas.  Ab.  51.  But  an 
agreement  to  refer  to  arbitration  will  not 
bo  executed  in  ciiuity.  Mitf.  PI.  264, 
265;  (ionrlay  v.  Somerset,  19  Ves.  431, 
Sec  further  upon  the  siil)ject  of  award, 
fioxl,  i)  4,  where  awards  ascertaining  the 
price  of  land  ;n-e  treated  of,  and  also  §  5, 
under  the  head  of  Part  Perfornnmcc. 


CII.  IX.] 


SPECIFIC   PERFORMANCE. 


515 


money,  with  a  penalty  for  not  doing  a  certain  thing,  will  be 
held  to  be  a  contract  to  do  that  thing,  (q)  Nor  is  a  seal  re- 
garded as  necessarily  making  a  contract  valid,  if  it  would  be 
void  without  one.  (r) 

If  the  nature  of  any  particular  contract  be  such  that  a  court 
of  equity,  upon  the  established  rules  governing  the  enforcement 
of  specific  performance  ought  to  listen  to  one  of  the  parties  if 
he  should  ask  its  aid,  it  will  be  willing,  upon  a  principle  of 
even-handed  dealing,  to  grant  a  specific  performance  of  the 
contract  at  the  instance  of  the  other  party  also,  although  his 
case  per  se  would  not  be  strictly  within  the  reason  of  this  juris- 
diction of  equity ;  and  the  circumstance  that  the  former  party 
could  not  in  point  of  fact  have  made  out  his  case  by  reason  of 
some  rule  of  evidence,  e.  g.  the  provisions  of  the  statute  of 
frauds,  will  not  of  itself  affect  the  equity  of  the  plaintiff,  nor 
prevent  the  court  from  granting  him  relief,  his  case  being  sup- 
ported by  the  requisite  evidence,  (s) 


part  performance,  he  may  have  leave  to 
amend  his  bill  in  conformity  with  the 
proof,  and  then  take  a  decree  for  a  spe- 
cific performance.  Harris  v.  Knicker- 
bocker, 5  Wend.  638 ;  Tilton  v.  Tilton,  9 
N.  H.  385.  Sec  Beard  v.  Linthicum,  1 
Md.  Ch.  Dec.  348.  Sometimes  a  decree 
will  be  granted  him  upon  the  bill  as  it 
stands,  without  amendment.  Mortimer 
V.  Orchard,  2  Ves.  Jr.  243  ;  Bass  v.  Cliv- 
ley,  Tamlyn,  80.  In  Drury  v.  Conner,  6 
Harris  &  J.  288,  the  plaintiff's  having  failed 
to  establish  the  contract  as  alleged  in  the 
bill,  which  was  an  agreement  for  the  sale 
of  a  certain  tract  of  land,  a  decree  was 
nevertheless  granted  by  the  Court  of  Ap- 
peals (reversing  the  decision  of  the  Chan- 
cellor, who  had  dismissed  the  bill),  for  a 
conveyance  of  one  fourth  of  the  tract,  the 
evidence  showing  an  agreement  for  the 
sale  of  so  much.  Martin,  J.,  in  giving 
the  opinion  of  the  court,  distinguished 
the  case  where  the  contract  proved  is  of 
an  entirely  different  character  from  that 
alleged  in  the  bill,  from  the  case  where 
the  plaintiff  only  fails  to  make  out  his 
claim  1o  the  extent  in  which  he  set  it  up. 
In  this  case  the  statute  of  frauds  was 
pleaded,  and  the  defendants  resisted  the 
contract  in  toto.  Compare  Small  i\  Ow- 
ings,  1  Md.  Ch.  Dec.  363,  where  Drury 
r'.  Conner  does  not  appear  to  have  been 
brought  to  the  attention  of  the  learned 

VOL.  II.  46 


Chancellor.  If  the  plaintiff  state  in  his 
bill,  as  part  of  the  agreement,  something 
which  he  does  not  prove,  but  which  would 
operate  altogether  against  himself,  the 
failure  of  proof  in  this  respect  will  not 
defeat  his  prayer  for  a  specific  perform- 
ance. Mundy  v.  Jolliffe,  5  Mylne  &  C. 
176;  Gregory  v.  Mighell,  18  Ves.  328. 
See  Beard  v.  Linthicum,  1  Md.  Ch.  Dec. 
349. 

((/)  Cannel  v.  Buckle,  2  P.  Wms.  242 ; 
Hopson  V.  Trevor,  1  Stra.  533  ;  Logan  v. 
Wienholt,  1  Clark  &  F.  611  ;  Dewey  v. 
Watson,  1  Gray,  414  ;  Plunkett  r.  Meth- 
odist Episcopal  Society,  3  Cush.  561. 
For  a  court  of  equity  does  not  regard  a 
provision  for  the  payment  of  a  penalty  as 
giving  the  party  an  election  to  break  his 
contract  upon  paying  for  his  violation  of 
it,  and  will  therefore  compel  a  specific 
fulfilment  of  the  agreement ;  and  this  ap- 
plies as  well  where  the  appropriate  remedy 
is  injunction,  as  where  it  is  specific  per- 
formance.    Drury  v.  Macale,  2  Drury  & 

^y.  275. 

{r)  Howard  v.  Hopkyns,  2  Atk.  371. 
A  seal  does  not  in  equity  establish  a  i)re- 
sumption  of  a  consideration,  so  as  to  take 
the  case  out  of  the  operation  of  the  rule 
that  a  voluntary  agreement  cannot  be 
executed.  Black  v.  Cord,  2  Harris  &  G. 
100. 

(s)  Where  the  plaintiff  had  assigned  a 

[541] 


516 


THE   LAW    OF   CONTRACTS. 


[part  II. 


In  general  all  the  rules  of  construction  and  of  evidence  are 
the  same  as  at  law,  although  they  may  be  applied  with  greater 
freedom  to  the  especial  merits  of  each  case,  (t) 

A  rule  of  frequent  occurrence  in  equity  applies  to  many 
cases  in  which  specific  performance  is  sought ;  it  is  that  equity 
will  consider  that  as  done  which  ought  to  have  been  done,  (w) 
Thus,  one  who  has  entered  into  a  valid  contract  for  the  pur- 
chase of  land,  is  considered  by  the  court  as  already  an  equi- 
table owner.  He  may  devise  it ;  and  it  will  pass  by  descent  to 
his  heir,  (v) 

Another  rule  not  only  binds  the  legal  representatives  of  all 
parties  to  contracts  (which  the  law  does  to  a  great  extent)  and 
requires  specific  performance  by  executors,  administrators,  or 
heirs,  of  contracts  which  would  have  been  enforced  against  the 
deceased  had  he  been  living ;  (iv)  but  it  extends  this  doctrine 
to  all  persons  who  have  a  certain  privity  of  estate  and  inter- 
est, (x)     Thus,  if  an  owner  of  land  makes  a  valid  contract  to 


lease  to  the  defendant  on  the  fiiith  of  his 
agreement  to  pay  the  phiintifF  an  annuity, 
and  furnisli  liim  a  house  worth  £10  a  year 
to  live  in,  and  the  objection  was  made 
that  tlie  plaintiff's  demand,  being  merely 
pecuniary,  lie  had  no  equity.  Knight  Bruce, 
V.  C,  said  :  "  I  am  satisfied  that  this  is  a 
case  in  which  the  court  ought  not  to  de- 
cline jurisdiction.  A  case  is  stated  in 
which,  setting  the  statute  of  frauds  out  of 
the  question,  a  bill  might  have  been  main- 
tained by  the  defendant  against  the  plain- 
tiff, to  compel  him  to  execute  the  assign- 
ment. That,  tlierefore,  is  a  reason  to 
compel  the  performance  of  the  terms  upon 
which  the  plaintiff  agreed  to  execute  the 
assignment."  Clifford  (;.Turrcll,  1  Younge 
&  C,  Ch.  1.-58,  l.'JO.  And  sec  Withy  v. 
Cottle,  1  Simons  &  S.  174,  cited  infra. 

(I)  Smjden,  L.  C,  Croker  v.  Orpen,  3 
Jones  &  La  T.  .')99.  And  sec  Croomc  v. 
Lcdiard,  2  Mylne  &  K,  2.51  ;  Union  Bank 
V.  Kdwards,  1  (iill  &  J.  304  ;  Parkin  v. 
Thorold,  2  Simons,  N.  S.  7,  11  Eng.  L. 
&  Ki|.  27.'>.  Compare  ojiinion  of  Sir 
Win.  Grant,  M.  ]{.,  Kenneys  v.  Troctor, 
3  Vcs.  &  IJ.  58.  An  omission  in  ii  writ- 
ten agreement,  whether  it  happened  hv 
niistake  or  frau<l,  uniy  i)e  proved  by  parol, 
and  will  be  grontid  for  refusing  a  specKic, 
performani'i!  of  the  contract  as  it  stands. 
JoyncH  V.  Statham,3  Atk.  .'iHH  ;  IJamsliot- 
tom  V.  Gosdcn,  1  Ves.  &  15.  1G8;  Winch  c. 

[512] 


Winchester,  1  Ves.  &  B.  378  ;  Wilde,  J., 
Brooks  V.  Wheelock,  11  Pick.  440;  Best 
V.  Stow,  2  Sandf.  Ch.  298.  See  Eich  v. 
Jackson,  4  Bro.  Ch.  by  Belt,  514,  n.  (1). 

(m)  Equity  looks  upon  things  agreed  to 
be  done  as  actually  performed.  Treat,  of 
Eq.  B.  1,  ch.  6,  \  9.  But  nothing  is  look- 
ed upon  in  equity  as  done,  but  what  ought 
to  have  been  done,  not  what  might  have 
been  done ;  nor  will  equity  consider 
things  in  that  light  in  favor  of  everybody, 
but  only  for  those  who  had  a  right  to 
pray  tiiat  it  miglit  be  done.  Sir  Thomas 
Clarke,  M.  R.,  Burgess  v.  Wheate,  1  W. 
Bl.  129;   1  Fonb.  Eq.  5th  cd.  419. 

(/■)  Lord  Eldon,  C,  Seton  v.  Slade, 
7  Ves.  274. 

(?r)  The  rule  is,  said  Sir  Thomas  Clarice, 
Burgess  v.  Wheate,  1  W.  Bl.  129,  that 
the  remedy  in  equity  sliall  cither  bo  be- 
tween the  parties  who  sti])uhite  what  is  to 
be  done,  or  those  who  stand  in  their 
place.  The  rule  applies  between  succes- 
sive personal  reiirescntalivcs  ;  thus  the 
contract  of  an  administrator,  made  in  a 
due  course  of  administration,  may  be  en- 
forced against  an  administrator  de  hum's 
non.  Ilnckctt  v.  M'Namara,  l>loyd  &  G., 
tnnp.  Plunket,  283. 

(.r)  A,  one  of  two  coparceners,  without 
autiiority  from  B,  the  other  cojiarcener, 
executed  a  deed  purporting  to  convey  a 
portion  of  the  land  by  metes  and  bounds 


CH.  IX.]  SPECIFIC   PERFORMANCE.  517 

sell  it  to  another  purchaser  who  takes  possession,  equity  will 
inquire  whether  this  second  purchaser  had  notice  or  knowledge 
of  the  first  bargain ;  and  if  he  had,  will  decree  specific  per- 
formance, or  a  conveyance  of  the  land  to  the  first  purchaser, 
against  him  as  it  would  against  the  original  owner.  {//)  So  if 
a  landlord  demise  certain  premises  by  a  lease,  and  a  third  party 
enter  upon  the  premises  with  the  consent  and  permission  of  the 
lessee,  this  third  party  will  be  considered,  as  to  all  the  land- 
lord's rights,  as  in  under  the  lease,  although  he  disclaim  all 
privity  with  the  tenant,  (z) 


SECTION    II. 

OF   CONSIDERATION. 

Equity  fully  adopts  the  rule,  that  no  contract  shall  be  en- 
forced which  does  not  rest  upon  a  valuable  consideration,  but 
construes  and  applies  it  somewhat  more  rationally  and  less  tech- 
nically. Thus  equity  will  not  enforce  a  mere  voluntary  con- 
tract ;  for  it  permits  one  to  withhold  what  he  has,  of  his  own 
accord,  and  not  from  any  benefit  to  himself  or  expectation  of 

to  C.  Afterwards  A  and  B  jointly  convey-  Thus  a  purchaser  having  given  his  note 
ed  the  whole  land  to  D,  who  had  notice  for  the  purchase-money  to  the  vendor,  who 
of  the  previous  transaction  ;  in  the  deed  assigned  it  for  value  to  the  plaintiff,  it 
from  A  to  C,  B's.  name  was  inserted  as  was  held  that  the  latter  might  maintain  a 
one  of  the  grantors,  though  he  had  neitlicr  bill  for  a  specific  execution  of  the  contract 
consented  thereto  nor  did  he  in  point  of  of  sale  making  both  the  vendor  and  the 
fact,  execute  the  instrument ;  C  filed  a  bill  purchaser  defendants  ;  in  which  proceeding 
against  D,  setting  up  such  deed  as  an  the  vendee  might  be  required  to  pay  the 
agreement  for  the  conveyance  of  the  par-  money  to  the  plaintiff  and  the  vendor 
eel  of  land  therein  mentioned,  and  prayed  thereupon  to  deliver  a  deed  of  conveyance 
a  specific  performance  which  was  granted,  to  the  vendee.  Ilanna  v.  Wilson,  3  Graft. 
McKee  v.  Barley,  11  Gratt.  340.  Sed  243,  which  see  for  a  form  of  decree  in  such 
quaere.  This  case  is  certainly  an  extreme  case,  giving  also  to  the  plaintiff  the  secu- 
one.  rity  of  the  vendor's  lien.  A  mortgagee 
(?/)  Taylor  v.  Stibbert,  2  Ves.  Jr.  437.  who  purchases  the  equity  of  redemption 
See  Buttrick  v.  Ilolden,  13  Met.  355.  may  be  compelled  to  execute  an  agree- 
So  also,  in  the  case  of  a  chattel.  Clark  ment  for  a  lease  entered  into  by  the  mort- 
i'.  Flint,  22  Pick.  231.  In  like  manner  gagor,  of  which  agreement  the  mortgagee 
the  vendor  may  enforce  the  contract  had  notice  when  he  purchased.  Smith  v. 
ag.ainst  an  assignee  of  the  vendee,  or  Phillips,  1  Keen,  694.  As  to  the  perform- 
rather  against  the  land  in  his  hands,  ance  of  a  contract  of  an  ancestor  in  tail,  by 
Champion  v.  Brown,  6  Johns.  Ch.  402.  the  heir,  sec  Partridge  v.  Dorsey,  3  Harris 
And  the  assignee  of  the  vendor  may  have  &  J.  302. 
an     equity    to     a    specific    performance.  (z)  Howard  v.  Ellis,  4  Sandf.  369. 

[543  J 


518 


THE   LAW   OF   CONTRACTS. 


[part  II. 


any  benefit  volunteered  to  promise,  (a)  And  yet  if  the  prom- 
isee on  the  faith  of  the  promise,  does  some  act  or  enters  into 
some  engagement  or  arrangement,  which  the  promise  justified 
and  which  a  breach  of  the  promise  would  make  very  injuri- 
ous to  him,  this,  equity  might  regard  as  confirming  and  estab- 
lishing the  promise  in  much  the  same  way  as  a  consideration 
for  it  would,  (b)  Equity,  moreover,  adopts  the  legal  rule,  that 
a  benefit  conferred,  received,  or  held,  is  a  valuable  considera- 
tion, and  gives  to  this  rule  an  enlarged  and  liberal  construction 
and  application,  (c) 

So  too,  equity  adopts  the  legal  principle,  which,  for  most 
purposes,  confines  the  necessity  for  valuable  consideration,  to 
promises  which  are  executory.  If  they  are  executed  wholly, 
or  if  not  wholly,  yet  in  a  substantial  degree,  and  there  remains 
something  to  be  done,  to  complete  the  title,  or  otherwise  render 
the  enjoyment  of  the  thing  more  beneficial  to  the  plaintiff, 
equity  will  require  that  thing  to  be  done,  although  the  promise 
was  wholly  voluntary,  (f/)  This  is  often  done  by  considering 
the  donor  or  other  party  defendant,  as  a  trustee  for  the  plaintiff, 
if  the  donor  has  done  enough  to  vest  an  equitable  title  in  the 


(a)  Callaghan  v.  Callaghan,  8  Clark  & 
F.  374;  Osgood  v.  Strode,  2  P.  Wms. 
245;  compare  Vernon  v.  Vernon,  id.  594, 
600;  Cox  i;.  Sprigg,  G  Md.  274;  Black 
V.  Cord,  2  Harris  &  G.  100.  An  agree- 
ment in  writing  by  a  landlord  to  reduce 
the  rent,  followed  by  his  acceptance  of  the 
reduced  rent,  during  seven  years,  being 
without  consideration,  cannot  be  enfoi'ccd. 
Fitzgerald  v.  Lord  Portarlington,  1  Jones, 
4.31.  Nor  can  a  creditor's  separate  agree- 
ment to  accept  a  part  of  his  debt  in  satis- 
faction of  the  wliole.  Acker  r.  Phccnix, 
4  Paige,  .'305  ;  Gurley  v.  Iliteshuc,  5  Gill, 
222. 

(h)  Crosbie  v.  M'Doual,  13  Ves.  148; 
King's  Ik'irs  r.  Thompson,  9  Pet.  204. 
Gihson,  C.  J.,  llcrick  v.  Kern,  14  S.  & 
R.  271  ;  Shcppcrd  r.  15evin,  9  Gill,  :V2, 
where  it  was  held  that  nioTicy  expciidcil 
in  improvement  (jf  hmd  by  a  son  on  the 
faith  of  iin  agreement  of  ids  parent  to  con- 
vey the  hind  to  him,  constituted  a  consid- 
cnition  for  whicii  spccili(;  performance 
might  be  dccrecfl  acainst  heirs  of  the  ])ar- 
cnt.  Upon  a  bill  (ilcd  for  a  partition  and 
an  answer,  settin;,'  up  a  contract  of  ilic  an- 
cestor to  convcv  the  lanil  to  the  defendant. 


and  showing  long  possession  held,  and 
expensive  improvements  made  on  the 
faith  of  the  contract,  a  court  of  equity  re- 
quires a  less  strong  case  to  be  made  out 
by  tiie  defendant  than  if  he  were  seeking 
specific  performance  of  the  contract,  and 
may  therefore  refuse  to  interfere  in  behalf 
of  tiie  plaintiff,  although  the  defendant 
could  not  prove  the  terms  of  tlie  contract 
with  that  precision  which  would  be  neces- 
sary in  an  application  for  specific  per- 
formance. See  Haines  v.  Haines,  4  Md. 
Ch.  IJcc.  133,  137.  And  see  Hill  v. 
Gomme,  5  Mvinc  &  C.  250,  255;  Morgan 
V.  Rainsford,'8  Irish  Eq.  299.  But  see 
McClure  r.  McCluie,  1  Barr,  374. 

{(■)  Edwards  v.  Grand  Junction  Railway 
Co.  1  Mylne  &  C.  050. 

((/)  Ellison  V.  Ellison,  0  Ves.  G56 ; 
Kckcwich  r.  Manning,  1  ])e  G.,  M.  &  G. 
170,  12  Eng.  Ji.  &  E(|.  120;  Uunn  v. 
Winthrop,  I  Johns.  Cli.  .329.  But  a  mere 
delivery  of  possession  of  land  under  a 
parol  gift,  though  the  donor  be  father  to 
the  donee,  is  not  a  ground  ti])on  which  a 
conveyance  can  be  decreed.  Sec  Stewart 
V.  Stewart,  3  Watts,  253. 


CH.  IX.] 


SPECIFIC    PERFORMANCE. 


519 


plaintiff  (e)  Thus  if  an  instrument  of  gift  has  been  fully  ex- 
ecuted, but  not  delivered,  and  the  circumstances  leave  the 
donor  no  moral  right  to  withhold  the  delivery,  equity  will  re- 
gard him  as  holding  it  for  the  donee.  (/)  So  it  would  be  if 
the  donor  had  formally,  by  his  declaration  of  trust,  assumed  the 
character  of  trustee,  (g-)  Or  if  a  legal  right  which  could  be 
enforced  by  law  were  vested  in  a  trustee  for  the  plaintiff.  (/«) 
Or  if  a  chose  in  action  had  been  transferred,  equitably,  to  the 
plaintiff,  and  it  was  necessary  that  his  title  or  interest  should 
be  confirmed,  (i) 

The  consideration  need  not  be  adequate  in  equity,  any  more 
than  at  law ;  (j)  but  if  it  be  grossly  inadequate,  it  would  be 
disregarded  and  the  contract  considered  void,  although  the  con- 
sideration were  technically  valuable  and  sufficient  at  law.  (k) 


(e)  See  the  judgment  of  Sir  William 
Grant,  M.  II.,  Antrobus  v.  Smith,  12  Ves. 
45;  tlic  judgments  of  Sir  James  WIgram, 
V.  C,  Huglics  V.  Stuhbs,  1  Hare,  479  ; 
Meek  i'.  Kettlcwell,  id.  409  ;  and  Fletch- 
er V.  Fletcher,  4  id.  73 ;  the  judgment  of 
Sir  John  Leach,  M.  R.,  Fortescue  v.  Bar- 
nett,  3  Mylne  &  K.  42  ;  and  the  judgment 
of  Lord  Li/nclhiirst,  V.  C,  Meek  v.  Kettle- 
well,  1  Phillips,  347.  See  Coiiingliam  v. 
Plunkett,  2  Younge  &  C,  Ch.  245. 

(/)  Exton  V.  Scott,  6  Sim.  31  ;  Fletch- 
er V.  Fletcher,  4  Hare,  67 ;  Bunn  v.  Win- 
throp,  1  Johns.  Ch.  329.  But  compare 
Dillon  V.  Coppin,  4  Mylne  &  C.  647 ; 
Antrobus  v.  Smith,  12  Ves.  39. 

(fj)  Wheatley  v.  Purr,  1  Keen,  551. 

(h)  Fletcher  v.  Fletcher,  4  Hare,  67; 
Sloane  v.  Cadogan,  3  Sugden  on  Vendors 
&  Purchasers,  App.  No.  xxvii. 

(/)  Ex  parte  Pye,  18  Ves.  140; 
M'Fadden  v.  Jenkyns,  1  Phillips,  153,  1 
Hare,  458.  But  see  Kennedy  v.  Ware, 
1  Barr,  445.  A,  without  consideration, 
appointed  the  plaintiff  his  attorney,  with 
power  to  procure  to  the  plaintiff's  own 
use  whatever  lands  A  was  entitled  to  for 
military  service  ;  a  warrant  afterwards  is- 
sued in  the  name  of  A,  and  after  his 
death  a  patent  was  granted  upon  the  war- 
rant to  his  heirs ;  it  was  held  that  they 
held  the  land  as  trustees  for  the  {)laintiff. 
Read  v.  Long,  4  Yerg.  68.  The  doctrine 
that  a  consideration  is  not  necessary  to 
the  creation  or  assignment  of  a  trust  has 
been  placed  upon  an  enlarged  and  stable 
foundation  by  the  recent  decision  of  the 

46* 


Lords  Justices  in  Kekewich  v.  Manning,  1 
De  G.,  M.  &  G.  176,  12  Eng.  L.  &  Eq, 
1 20.  And  this  case,  with  Vovle  v.  Hughes, 
2  Smale  &  G.  18,  23  Eng.  L.  &  Eq. 
271,  18  Jur.  341,  is  of  the  first  impor- 
tance to  an  understanding  of  the  existing 
state  of  the  law  upon  the  wliole  subject 
of  the  voluntary  alienation  of  chattels. 

ij)  MacGhee  v.  Morgan,  2  Sch.  &  L. 
395,  n. ;  Lord  Eldon,  Coles  v.  Trecothick, 
9  Ves.  246.  See  Western  v.  Russell,  3 
Ves.  «&  B.  193.  Between  parent  and 
child  and  especially  after  the  death  of  the 
former,  in  a  contest  with  his  other  heirs,  a 
slight  consideration  will  be  sufficient  to 
support  an  application  by  the  child  for  a 
specific  performance.  Shepherd  v.  Bevin, 
9  Gill,  32.  And  see  Haines  v.  Haines, 
6  Md.  440,  per  Le  Grand,  C.  J.  And 
the  doctrine  that  where  there  is  a  near  re- 
lationship between  the  parties,  a  smaller 
consideration  will  suffice,  than  would  be 
requisite  between  strangers,  was  main- 
tained by  Sir  Edward  Swjden,  C.  J.  ; 
Moore  i'.  Crofton,  3  Jones  &  La  T.  443. 
A  compromise  of  a  doubtful  claim  is  a  suf- 
ficient consideration.     Attwood  v. ,  1 

Russ.  353,  5  id.  149. 

{k)  Esjjecially  if  there  are  other  circum- 
stances tending  to  render  it  probable  that 
a  fraudulent  advantage  may  have  been 
taken,  as  where  the  vendor  was  illiterate, 
and  does  not  appear  to  have  had  the  writ- 
ings explained  to  him.  Robinson  v.  Rob- 
inson, 4  Md.  Ch.  Dec.  176.  And  a  de- 
gree of  inadequacy  which  would  not  be 
regarded  in  ordinary  cases   will   prevent 

[545] 


520 


THE   LAW    OF   CONTRACTS. 


[part  II. 


And  if  the  inadequacy  be  not  so  great  as  to  avoid  the  contract, 
still,  if  it  be  sufficient  to  give  to  the  contract  the  character  of 
hardship  or  oppression,  equity  will  leave  the  plaintiff  to  his 
remedy  at  law.  (/) 

If  there  is  a  contract,  with  valuable  consideration,  and  this 
contract  benefits  a  third  party  who  is  only  collaterally  interested, 
and  from  whom  no  part  of  the  consideration  comes,  the  con- 
tract will  not  be  enforced  in  equity,  on  the  application  of  this 
collateral  party,  (m)  But  if  it  be  enforced  on  the  application 
of  other  parties,  it  will  be  enforced  altogether  and  through- 
out, (n) 

Equity  makes  the  same  distinction  which  exists  at  law,  be- 
tween a  promise  made  before  a  consideration  and  therefore 
resting  upon  it,  and  a  promise  made  after  the  consideration  is 


the  enforcement  of  a  contract  for  the  sale 
of  an  lieir's  expectancy  or  of  a  reversion- 
er's reversionary  interest.  Peacocii  v. 
Evans,  16  Ves.  512;  Ryle  v.  Brown,  18 
Price,  758. 

(/)  Day  V.  Newman,  2  Cox,  77  ;  Pow- 
ers V.  Hale,  5  Foster,  145  ;  Seymour  v. 
Delancey,  6  Johns.  Ch.  222,  3  Cowen,  445, 
where  a  price,  only  half  of  the  value  of 
the  property,  was  considered  inadequate. 
The  opinions  of  Chancellor  Kent  and 
Ciiief  Justice  Savage,  in  this  case,  contain 
an  olahorate  review  of  the  prior  decisions. 
And  sec  Howard  v.  Edsell,  1 7  Vt.  9,  28. 
It  seems  that  a  price  only  one  fourth  of 
the  actual  value,  is  certainfy  such  a  pross 
inadequacy  as  to  forhid  the  inter])0!-ition 
of  e([uitv.  Johnson,  C,  Ilobinson  v.  Rob- 
inson, 4  Md.  Ch.  Dec.  182,  18.3.  But 
sec  Erwin  v.  Parham,  12  How.  197.  If 
tlic  iMa(le(]uacy  he  so  great  as  to  prove 
fraud,  or  tliat  "tiie  parties  could  not  have 
intended  a  contract  of  sale,  in  either  of 
these  cases,  a  conveyance  will  not  be 
compelled.  Callaghan  v.  Callaghan,  8 
Clark  &  F.  .374.  Sec  Coles  v.  Treco- 
thick,  9  Ves.  240. 

(m)  Wallwyn  v.  Coutts,  .3  Mcriv.  707  ; 
Colyear  i-.  Countess  of  Mulgrave,  2  Keen, 
81  ;  Sutton  v.  Chctwynd,  .3  Mcriv.  249; 
SCO  s.  <■.  Turiicr  &  K.  29i> ;  Owing's  cusc, 
1  Bland,  401.  "  I  apprehend,"  said  Lord 
L<in<iiitl<',  .M.  R.,  2  lieen,  98,  "  th:it  when 
two  jicrsons  for  valiiabli;  consideration 
between  iheinselvcs  covenant  to  do  some 
act  for  llie  bcnelit  of  a  mere  stranger,  that 
Btrangcr  hius    not  u  right  to   enforce  the 

[.yiG] 


covenant  against  the  two,  although  each 
one  might  as  against  the  otlier." 

(n)  Ford  v.  Stuart,  15  Beav.  49.3,  11 
Eng.  L.  &  Eq.  172;  Davenport  v.  Bish- 
opp,  2  Younge  &  C,  Ch.  451,  1  Phil- 
lips, 698.  In  this  case.  Knight  Bruce,  V. 
C,  said  :  "  I  apprehend  that  if  two  par- 
ties in  contemplation  of  a  marriage  in- 
tended and  afterwards  had  between  them, 
or  for  any  other  consideration  between 
themselves  coming  under  the  description 
of  '  valuable,'  have  entered  into  a  contract 
together,  in  which  one  of  the  stipulations 
made  by  them  is  a  stipulation  solely  and 
merely  for  the  benefit  of  a  third  person, 
that  third  person  being  even  a  stranger  in 
blood  to  each,  a  stranger  to  the  contract, 
and  a  person  from  whom  not  any  valu- 
able or  meritorious  consideration  moves, 
has  moved,  or  is  to  move,  it  cannot,  gen- 
erally speaking,  be  competent  to  one  party 
to  the  contract  or  to  those  representing 
that  jiarty  in  estate,  to  say  to  the  other 
party  to  the  contract,  '  Whatever  may  be 
your  wishes,  whether  you  assent  or  dis- 
sent, that  stipulation  shall  go  for  nothing, 
or  shall  not  have  ell'cet  given  to  it.'  The 
two  parties  to  the  coiuract  having  made 
the  stipulation  with  eacii  other,  mutual 
assent  must  generally  be  re(]uisitc  to  dis- 
solve that,  which,  by  mutual  assent,  was 
created.  W'ilh  tlu- tpiestion  iictwecn  them, 
the  gratuitousness  of  the  ])rovisiou  to- 
wards the  stranger,  so  far  as  the  stranger 
is  coneerneil,  seems  generally  to  have  lit- 
tle or  noihing  to  do."  2  Younge  &  C, 
Ch.  460,  461. 


CH.  IX.]  SPECIFIC   PERFORMANCE.  521 

exhausted  and  therefore  not  supported  by  it.  (o)  Thus  specific 
performance  will  be  decreed  of  a  promise  made  before  a  mar- 
riage and  in  contemplation  of  it;  but  not  generally  of  a  promise 
made  after  a  marriage  has  taken  place  although  made  in  refer- 
ence to  it  and  in  consequence  of  it.  (p) 

And  this  brings  us  to  a  question  which  has  been  more  dis- 
cussed than  any  other  perhaps,  under  the  head  of  consideration. 
It  is  whether  merely  meritorious  considerations,  so  called  in 
law  to  distinguish  them  from  valuable  considerations,  are  suf- 
ficient in  equity,  to  sustain  an  application  for  specific  enforce- 
ment, (q) 

Natural  affection,  as  for  a  wife,  child,  or  parent,  or  other  rela- 
tion, is  a  moral  and  meritorious  consideration,  for  a  promise  to 
make  provision  for  the  object  of  this  love.  But  it  is  not  a  valu- 
able consideration,  and  will  not  sustain  a  promise  at  law. 
Whether  equity  differs  from  law  in  this  respect,  cannot  be  posi- 
tively determined  from  the  authorities,  for  on  this  question  they 
are  wholly  irreconcilable.  It  is  obvious  that  to  regard  these 
considerations  always  sufficient  in  equity,  would  be  to  set  en- 
tirely aside  the  principle,  that  "equity  follows  law"  and  will 
enforce  only  a  legal  contract ;  or  would  introduce  an  exception 
which  leaves  but  little  of  the  rule  untouched.  But  on  the  other 
hand,  it  may  be  said,  that  equity  cannot  refuse  on  that  ground 
to  enforce  a  contract  which  is  entitled  in  every  respect  to  its 
assistance,  without  forgetting  that  its  general  purpose  is  to  mod- 
erate the  rigor  of  law,  and  supply  its  deficiencies  and  bring  it 
into  harmony  with  conscience  and  moral  justice.  So  far  as  the 
authorities  go,  it  might  possibly  be  inferred  from  an  analysis  of 
them,  that  the  weight  of  authority  in  England  is  against  the 
sufficiency  of  these  considerations  in  equity ;  and  perhaps  in 
this  country  also.  (/*) 


(o)  Morgan  v.  Rainsforth,  8  Irish  Eq,  to  make  satisfaction  to  his  client  for  a 

299,  311.  loss  occasioned  by  his  own  imperfect  ex- 

(;))   Pulvcrtoft  v.  Pulvertoft,  18  Vcs.  amination  of  a  title. 

84  ;  Metcalfe  v.  Pulvcrtoft,   1    Vcs.  &  B.  (r)  Sir  Edward  Sugden,   C,  Moore  v. 

180,  2  Vcs.  &  B.  200  ;  Buckle  v.  Mitchell,  Crofton,  3  Jones  &  La  T.  442,  443,  and 

18  Vcs.  112.  note   his  remarks  upon  Ellis  v.  Nimnio, 

(q)  See  King  V.  Withers,  Prec.  Ch.  19,  Lloyd  &  G.   temp.    Sugd.   3.33;  Dillon  v. 

where  a  specific  performance  was  granted  Coppen,  4  Mylne  &  C.  647  ;  Jcflcrys  v. 

of  a  voluntary  agreement  by  a  scrivener  Jefferys,  Craig  &  Ph.  138;  Pennington  u. 

[547] 


522  THE  LAW  OP  CONTRACTS.  [PART  II. 

We  are  inclined  to  think  a  principle  may  be  found  which 
would  harmonize  many  cases  that  are  now  irreconcilable,  and 
perhaps  come  as  near  supplying  a  general  rule,  as  any  other 
that  could  be  devised.  It  is,  that  the  court  would  decree  spe- 
cific performance  of  a  promise  made  on  merely  meritorious  con- 
siderations, when  the  promise  itself  was  plainly  a  duty,  either 
because  the  promisor  had  been  empowered  by  others  to  do  this 
very  thing ;  or  could  be  regarded  on  any  ground  as  a  quasi 
trustee  for  this  purpose  ;  or  made  the  promise  under  such  cir- 
cumstances, that  the  court  would  listen  favorably  to  an  applica- 
tion for  the  provision  even  if  there  had  been  no  promise.  And 
in  other  cases,  the  court  would  consider  the  promise  as  merely 
voluntary  and  therefore  to  be  left  to  the  discretion  or  pleasure 
of  the  promisor. 


SECTION   III. 


OF  CONTRACTS  RELATING  TO  PERSONALTY. 

There  is  a  distinction  taken  in  equity  in  regard  to  specific 
performance,  which  may  now  be  considered  as  well  established, 
and  perhaps  capable  of  sufficient  explanation  and  defence ;  but 
which  is  nevertheless  open  to. some  objection.  This  is  the  dis- 
tinction made  between  contracts  which  relate  to  land  and  those 
which  relate  only  to  personal  chattels ;  the  general  rule  being 
that  equity  will  give  this  relief  in  contracts  of  the  first  kind,  but 
not  in  those  of  the  latter  kind,  (s) 

Gittings,  2  Gill  &  J.  217;    Shepherd  v.  formed;  the  vendor  is  trustee  of  the  estate 

Bevin,  9  Gill,  ."59,  40  ;  Ilaycs  v.  Kershaw,  for  the  vendee,  the  vendee  trustee  of  the 

1  Sandf.   Gil.  258 ;  Kennedy  v.   Ware,  1  purthase-inoney  for  the  vendor.     With  rc- 

IJarr,  450.     JJut  see  Ar},'cnhright  v.  Camp-  spect  to  a  personal  chattel,  ecpiity  will  cn- 

beil,   .')   Jlen.  &   M.   144;  IJunn  v.   Win-  force  a /n(.si  concerniTig  it,  but  not  (except 

tlirop,  1  Jolms.  Ch.  .'i.'!?.  under  special   circumstances)  a  contract, 

(s)   JJrough    V.    Oddy,    1    IJiiss.    &    M.  Jlcnce  in   iminiring  in  any   case  whether 

.')5.     A  coiitriKt  to  si'll  land  creates  jitr  so  there  is  ;i  trust  of  ;i  chattel,  it  is  to  he  rc- 

thc  relation  of  trustee  and  nslui  tjin-  tnisl ;  nu'ndicrcd  tliat  the  mere  contract  of  sale 

for,  being  eid'oneahle  in c<inity, the  |)artics,  and   delivery  cannot  (as  it  would   in  the 

on  the  principle  that  what  they  are  lioun(i  case  of  laiul)  create  a  trust;  tiie  contract 

to  do  they  rmiy    be  considered  as  having  nuist    here  be    completed    by   the    parties 

done,  occupy  towanis  each  other  in  c(iuily  themselves  before  the  trust  can  arise  which 

the  same  posiiioii  whicji  they  would  occu-  e(|uity   will    exercise    jurisdiction    over. 

py  at  law,  were  the  contruct  in  fact  i)er-  This  course  of  reasoning  is  very  clearly 


en.  IX.]  SPECIFIC   PERFOKMANCE.  523 

The  general  reason  assigned  for  this,  is,  that  equity  interferes 
only  where  the  law  gives  no  adequate  remedy ;  and  in  nearly 
all  contracts  for  chattels,  the  question  is  only  one  of  price  or 
pecuniary  value ;  and  payment  of  money  or  damages,  will  dis- 
pose fairly  of  the  whole  question.  And  it  may  be  stated  as  one 
of  the  rules  on  this  subject,  that  equity  will  not  decree  specific 
performance  unless  something  more  is  to  be  done  by  it  than 
mere  payment  of  money  or  any  thing  which  ends  in  the  mere 
payment,  because  the  law  is  adequate  to  this.  (/) 

But  where  the  plaintiff  has  purchased  land  and  seeks  the  aid 
of  the  court  to  obtain  it,  it  may  be  supposed  that  he  bought  it 
for  some  reason  besides  its  mere  pecuniary  value.  He  wanted 
it  as  a  home ;  and  whether  for  residence  or  cultivation,  it  is 
worth  more  to  him  than  the  mere  price  it  would  bring  in  the 
market,  and  therefore  he  had  paid  this  price.  But  the  pecun- 
iary value  would  be  the  measure  of  damages  in  law,  and  there- 
fore he  would  suffer  if  equity  did  not  interfere. 

One  answer  to  this  would  be  that  a  jury  might  include  most 
of  these  grounds  of  value  in  their  verdict.  Another,  and  a 
better  one  perhaps,  is,  that  land  has  now  become  so  much  a 
subject  of  purchase  and  sale,  like  merchandise,  that  the  reason 
for  this  distinction  has  lost  much  of  its  weight.  Still  another 
might  be,  that  one  ground  of  the  inadequacy  of  legal  remedy, 

presented  in  the  opinion  of  Sir  John  Rom-  tain  no  doubt  but  that  the  company  would 

illy,  in  Pooley  v.  Budd,   14  Beav.  44,  7  then  and  thereby  become  mere  trustees  of 

Eng.  L.  &  Eq.  229  :  "  It  is  therefore  im-  the  iron  sold,  for  the  benefit  of  the  real 

poitant,"    continued   the   Master  of  the  purchaser  or  the  person  entitled  to  claim 

EoUs  (14  Beav.  45),  "to  bear  in  mind  in  it  under  him." 

this  case  that  as  equity  would  not  enforce         (t)   Sir  William  Grant,  M.  E.,  Flint  v. 

the  specific  performance  of  the  contract  Brandon,    8    Ves.   16.3;  McCoun,  V.  C, 

for  the  sale  and  delivery  of  the  iron,  the  Phyfe  v.  Wardell,  2  Edw.  Ch.51.     But  if 

relation  of  trustee  and  cestui  que  trust  can-  the  circumstances  of  the  case  are  such  that 

not  spring  merely  from  the  contract,  and  peculiar  difficulties  exist  in  tiie  way  of  the 

that  if  it  exist  at  all  it  must  be  shown  to  recovery  of  the  price  of  personal  chattels 

exist  from   something  beyond   tlie  mere  which  have  been  sold  and  delivered,  the 

contract  entered  into  between  the  com-  vendor  may  have  a  specific  performance 

Tpany  sxnd  Scale  for  the  sale  and  delivery  of  the  contract  in  equity.    See  Fellowes  i;. 

of  iron.     At  the  same  time,  if  the  contract  Lord  Gwydyr,  1   Euss.  &  M.  83,  1  Sim. 

were  complete  so  far  as  the  company  were  63.     And   if  tlie  purchaser  of  a  chattel 

concerned,  that  is  to  say,  if  they  had  been  would  be  entitled  to  claim  a  specific  per- 

paid  every  penny  they  were  entitled  to,  formance  of  the  agreement,  the  vendor,  on 

and  if  they  liad  no  claim  upon  or  interest  his  part,  may  also  obtain  a   specific  per- 

in  the  iron  arising  from  the  contract,  and  formance,  for  the   court  will   extend   the 

the  contract  only  remained  unperformed  same  remedy  to  both  parties.     Withy  v. 

to  this  extent,  that  the  iron  had  not  been  Cottle,   1    Simons   &  S.  174;  Phillips  v. 

delivered  to  the  purchaser,  I  should  enter-  Berger,  8  Barb.  527. 

[549] 


524  THE  LAW  OF  CONTRACTS.  [PART  II. 

is  equally  common  to  all  contracts  for  the  breach  of  which 
damages  are  recoverable ;  and  this  is  the  entire  dependence  on 
the  personal  responsibility  of  the  defendant  for  the  value  of  the 
judgment.  This  last  view,  seldom,  however,  seems  to  enter 
into  the  consideration  of  courts  of  equity ;  as  they  take  it  for 
granted  that  what  a  party  is  bound  by  law  to  do,  he  can  do, 
and  will  do.  But  where  one  surety  has  claims  for  contribution 
against  many  co-sureties,  some  of  whom  are  insolvent,  equity 
will  omit  them  in  determining  how  much  each  of  the  solvent 
co-sureties  shall  pay,  thus  casting  upon  the  surety  who  is  plain- 
tiff only  his  share  of  the  loss  arising  from  their  insolvency  ; 
while  the  law,  in  most  of  our  States,  would  give  a  plaintiff  in 
such  a  case,  only  the  aliquot  share  from  each,  which  each  would 
pay  if  all  were  able  to  pay.  (w)  Nor  is  this  consideration  al- 
ways disregarded  in  proceedings  in  equity  in  a  bill  for  specific 
performance.  Thus,  in  a  suit  for  the  transfer  of  stock,  accord- 
ing to  a  contract  of  sale.  Sir  John  Leach,  Vice- Chancellor,  de- 
creed performance,  giving  as  his  final  reason,  that  "  a  court  of 
law  could  not  give  the  property,  but  could  only  give  a  remedy 
in  damages,  the  beneficial  effect  of  which  must  depend  upon  the 
personal  responsibility  of  the  party."  (v) 

After  all  that  may  be  said,  the  reasons  for  this  distinction  re- 
tain so  much  of  their  force,  that  the  rule  founded  upon  it,  with 
modifications  and  exceptions  introduced  in  the  practice  of 
equity,  must  be  regarded  as  established  and  as  useful,  (w) 
Thus,  agreements  to  form  a  partnership,  although  they  relate 
altogether  to  chattel  interests,  might   be  enforced ;  (.x)    and  so 

(u)  Ante,  vol.  1,  p.  34.  and  a  cliattcl  may,  perhaps,  be  stated  thus  ; 

{v)  Doloret  v.  Kothseliihl,  1  Simons  &  that  in  the  case  of  tlic  former  tliere  is  a 
S.  598.  Wiierc  a  factor  had  made  advances  conclusive  presumption  that  the  purchaser 
on  an  a<;reement  that  the  ])rincipal  would  cannot  be  adequately  com|)ensated  by  tiie 
consif^n  to  him  the  crops  of  the  year  and  recovery  of  dama<i;cs  at  law;  while  in  the 
the  principal  died,  Icaviiiij  a  ])ersonal  es-  case  of  the  latter,  there  is  no  such  pre- 
late insulli<iciit  to  ])ay  his  debts,  it  was  sumption,  and  in  order  to  induce  the  in- 
held  that  the  f.ictor  had  a  j^ood  (ground  to  tcrpositioii  of  the  extraordinary  jurisdic- 
scck  a  spiteific  perforinaiu-e  of  the  a;^ree-  lion  of  cijuity,  it  must  apjjcar  allirmatively 
mcnt  at  the  hands  of  the  executor,  so  from  the  circumstances  of  the  p.irticular 
that  liiH  liiMi  niiylit  attach  upon  the  crops  case,  that  the  remedy  at  law  is  inadeipiatc. 
and  the  [)ror'cci|s  of  the  sale  of  them,  and  When  the  case  is  thus  made  out  allirma- 
thc  necessity  of  a  resort  to  the  testator's  tively,  —  when  that  is  j>n>ri)i  which,  when 
real  CHtate  for  th(q»aym<:!it  of  his  advances,  real  estate  is  in  (picstion  is  prcsiinird, — 
be  prevented.  Sullivan  i'.  'J'uck,  1  JNld.  c(piity  interferes  as  reailily  to  enforce  a. 
Ch.  Dec.  ."iO.  sal(!  of  a  chattel  as  a  sale  of  land. 

(w)  And  the  disiinclioii  between  laud         {x)  Lord    llardwicke,    C.,    Buxton   v. 

[550] 


CH.  IX.]  SPECIFIC    PERFORMANCE.  525 

will  most  agreements  in  relation  to  a  partnership,  (y)  Indeed, 
the  inadequacy  of  legal  process  and  remedy  is  so  obvious  upon 
many  important  questions  relating  to  partnership,  that  the 
whole  subject  may  be  considered  as  peculiarly  within  the  ac- 
tion of  equity.  Still,  no  agreement  for  a  partnership  will  be 
enforced,  unless  it  be  an  agreement  for  a  specific  time  ;  (z)  for 
a  partnership  without  limit  is  dissolvable  at  the  pleasure  of  any 
partner;  and  to  decree  such  a  partnership  would  of  course  be 
useless.  And  now,  when  there  are  so  many  ways  of  dissolving 
or  rendering  nugatory  a  partnership  for  a  time  certain,  it  may 
be  supposed  that  equity  would  require  a  plain  and  strong  case 
for  compelling  the  formation  of  one.  For  some  collateral  pur- 
pose it  may,  however,  be  requisite  that  an  agreement  for  a  part- 
nership terminable  at  pleasure,  should  have  been  made,  and 
then  equity  will  decree  that  it  be  considered  as  having  been 
made  at  a  time  and  in  a  manner  necessary  for  this  equitable 
result,  (a) 

So  too,  if  a  partner  contracts  that  he  will  labor  assiduously 
for  the  benefit  of  the  partnership,  or  comes  under  any  similar 
obligation,  the  courts  of  equity  will  not  decree  a  specific  per- 
formance, because  the  bargain  is  not  itself  specific  enough,  and 
it  would  be  difficult  to  say  what  was  a  specific  performance  of 
it.  But  if  a  partner  agree  that  while  the  partnership  continues 
he  will  not  enter  into  any  other  firm,  or  if  he  agrees  not  to  carry 

Lister,  3  Atk.  385.     Lord  Langdale,  M.  court  cannot   do  otherwise  than   at  the 

R.,  in  reference  to  the  impossibility  of  ac-  common  expense.   But  if  the  parties  insist 

complishiiig  by  means  of  a  reluctant  and  on  having  a  declaration  of  their  rights,  the 

compelled  partnership,  the  full  beneficial  court  has  over  and  over  again  entertained 

results  of  a  voluntary  concert  of  action,  the  jurisdiction,  and   must  entertain  the 

said:   "  This  is   a  difficulty  that  always  jurisdiction,  unless  some  one  or  two  or  sev- 

arises  when  partnership   contracts    come  eral  partners  are  to  be  permitted  to  do  just 

under  the  consideration  of  this  court.     It  what  they  like  with  the  partnership  rights 

is   impossible  to  make  persons   who  will  and   interests."      England  v.  Curling,  8 

not  concur,  canyon  a  business,  jointly,  for  Beav.  137,  138. 

their  own  common  advantage.     It  is  that  (y)  BirchettiJ.  Boiling,  5  Munf.  42.   Re- 
which  makes  every  thing  of  this  kind  ex-  specting  the  specific  execution  of  a  cove- 
ceedingly  uncertain.      It    is   that   which  nant  of  a  partner  that  his  personal  repre- 
makes  this  court  on  all   such  occasions,  sentatives  after  his  death  sliall  continue 
exceedingly  anxious    (an   anxiety,  I  be-  the  partnership,  see  Downs  v.  Collins,  6 
lieve,   that  has  been  felt  by  every  judge  Hare,  418,  437. 
who  has  ever  sat  in  a  court  of  equity),  (c)  Hercy  v.  Birch,  9  Ves.  357. 
that  when  these   disputes  do    arise,   the  (a)  Mr.  Swanston,  in  his  note  to  Craw- 
parties  should,  if  possible,  come  to  some  shay  v.  Maule,  1  Svvanst.  513.     And  see 
arrangement  between  themselves,   to   do  Ncsbitt  v.  Meyer,  1  Swanst.  226. 
that  for  their  common  benefit  which  the 

[551]    , 


526 


THE   LAW   OF   CONTRACTS. 


[part  II. 


on  any  other  mercantile  business  whatever,  equity  will  restrain 
him  from  the  violation  of  such  an  agreement,  (b)  And  it  is  a 
general  rule  (subject,  however,  to  qualification  in  certain  par- 
ticular cases),  (c)  that  a  contract  for  personal  services  cannot  be 
specifically  enforced  by  either  party,  {d) 

Equity  will  decree  specific  performance  of  a  bargain  for  the 
sale  of  a  good-will  of  a  trade,  provided  it  be  connected  with 
any  specific  stock  in  trade,  or  with  some  valuable  secret  of 
trade,  (e)  or  with  a  well-established  stand  for  business ;  (/)  but 
not,  it  is  said,  a  naked  bargain  for  good-will,  because  equity 
could  not  direct  the  way  in  which  the  defendant  should  proceed 
to  turn  the  custom  of  those  who  had  dealt  with  him,  to  the 
plaintiff,  (g) 


(b)  ShadwcU,  V.  C,  Kemble  v.  Kean, 
6  Sim. 335. 

(c)  See  post,  p.  533,  note  (n),  and  sec- 
tion 7. 

(J)  It  is  obvious  that  almost  cveiy  eon- 
tract  for  personal  services  of  whatever 
grade  or  kind,  admits  of  a  full  compensa- 
tion being  made  in  money  to  the  agent  or 
servant  for  the  breach  of  it  by  the  em- 
ployer. The  relation  created  "by  such  a 
contract  is  one  frequently  requiring  a  high 
degree  of  confidence  on  the  part  of  the 
master  or  principal ;  and  therefore  in  ad- 
dition to  the  adequacy  of  tlie  remedy  in 
damages,  as  a  reason  for  withholding  en- 
forcement of  the  contract  specifically,  there 
is  a  want  of  equality  in  the  position  of  the 
two  parties  whicli  is  also  considered  as 
rendering  the  interference  of  a  court  of 
equity  improper.  Though  the  servant 
pcribini  the  required  work  never  so  well, 
yet  if  the  master  want  confidence  in  liim, 
he  does  not  derive  from  his  services  that 
sense  of  satisfaction  which  is  an  essential 
clement  of  their  value ;  while  on  the 
otlier  hand,  the  utmost  that  the  servant 
seeks  is  money,  and  that  he  can  recover  at 
law.  "A  man,"  said  tlie  Lord  Justice 
Kuiifhl  iJiiirr,  ill  Johiisuii  r.  Shrcwsltury  & 
IJirmingliam  !{y.  Co.  3  J)c  G.,  M.  &  G. 
1)20,  "  muv  liave  one  of  the  best  domestic 
servants,  lie  may  liavc  ii  valet  wiiose  nr- 
rungemcnt  of  ch)tlies  is  faultless,  a  coacli- 
man  wliosi?  driving  is  excellent,  a  cook 
whose  pcrfi)rmance»  an;  perfect,  and  yet 
lie  may  not  have  confidence  in  him  ;  and 
while  on  the  other  hand  all  lliat  the  .scr- 
vunt  requires  or  wishes  (and  tiiut  rcuson- 

[552] 


ably  enough),  is  money,  you  are  on  the 
other  hand  to  destroy  the  comfort  of  a 
man's  existence  for  a  period  of  years  by 
compelling  him  to  have  constantly  about 
him,  in  a  confidential  situation,  one  to 
whom  he  olijects.  If  that  be  so  in  private 
life,  how  important  do  these  considerations 
become  when  connected  with  the  perform- 
ance of  such  duties  —  duties  to  society  — 
as  are  incumbent  upon  the  directors  of  a 
company  like  this."  The  case  which  gave 
rise  to  these  remarks  was  one  where  par- 
ties who  had  contracted  with  tlie  directors 
of  a  railway  company  to  run,  work,  and 
man  their  trains,  and  perform  other  very 
considerable  duties  for  them,  attempted  to 
compel  the  company  to  permit  them  to 
continue  to  perform  the  services  they  had 
engaged  for,  and  the  remedy  prayed  was 
not  granted.  The  circumstance  that  the 
plaintiff's  reputation  might  suffer  from  tlic 
dismissal  from  the  service  of  the  defend- 
ants was  said  to  be  no  ground  for  inter- 
ference, since  such  injury  also  might  bo 
compensated  in  damages.  See  also, 
Pickering  v.  The  Bishop  of  EIv,  2  Younge 
&  C,  Ch.  249,  267;  llolfo  v.  Rolfe,  15 
Sim.  89. 

(c)  Brvson  v.  Whitehead,  1  Simons  «Sb 
S.  74. 

(/)  Sec  Coslako  v.  Till,  1  Jlusa.  378. 

{(/)  Baxter  v.  Connolly,  1  Jacob  &  W. 
570  ;  Coslake  v.  Till,  1  Kuss.  370,  378. 
For  a  like  reason  an  agreement  for  the 
sale  of  the  business  of  an  attoriic}'  cannot 
be  enforced.  Jjozoii  v.  I'arlow,  1  ]\leriv. 
459. 


CU.  IX.]  SPECIFIC   PERFORMANCE.  527 

So  a  lease  will  be  decreed,  or  the  renewal  of  one,  if  it  has 
been  asfreed  for,  and  there  remains  a  valuable  portion  of  the  time 
for  which  the  lease  was  to  run ;  (h)  or  even  if  the  time  have  all 
expired,  and  there  is  sufficient  reason  that  the  lease  should  be 
made  and  treated  by  the  defendant  as  of  the  day  when  by  the 
bargain  it  should  have  been  made,  the  court  will  decree  that  it 
be  now  made  as  of  that  day  and  so  held  by  the  parties,  (i) 

Among  instances  in  which  equity  has.  decreed  specific  per- 
formance of  contracts  relating  only  to  chattels,  may  be  mentioned 
one  for  the  purchase  of  an  annuity,  payable  out  of  the  dividends 
of  certain  stocks  (j)  a  contract  for  the  purchase  of  debts  which 
had  been  proved  under  a  commission  of  bankruptcy  ;  (k)  and  in 
the  case  of  a  contract  that  all  the  property  of  a  grantor  of  an 
annuity  which  he  should  obtain  by  will  or  otherwise,  at  the 
death  of  a  third  person,  during  the  life  of  an  annuitant,  should 
be  charged  with  the  payment  of  the  annuity,  and  the  grantor 
becoming  bankrupt  and  the  third  party  having  died  and  left  an 
annuity  of  larger  value  in  trust  for  him,  this  annuity  was 
charged  with  the  payment  of  the  annuity  he  had  granted.  (/) 


(A)  Furnival?'.  Crew,  3  Atk.  83  ;  Ifrgul-  bankrupt.     "Damages  at  law,"  he  said, 

den  V.  May,  9  Ves.  325 ;  Tritton  v.  Foote,  "  cannot  accurately  represent  the  value  of 

2  Bro.  Ch.  636.     In  re  Doolan,  3  Drury  the  future  dividends ;  and  to  compel  this 

&  W.  442.     See  Whitlock   v.   Duffield,  purchaser  to  take  such  damages  would  be 

Hoffm.  Ch.llO.    A  license  to  be  exercised  to  compel  him  to  sell  these  dividends  at 

upon  land  may  be  specifically  enforced,  a  conjectural  price.     It  is  true  that  the 

Nelson   v.   Bridges,  1   Jur.    753.     As  to  present  bill  is  not  filed  by  the  purchaser 

covenants  for  perpetual  renewal,  see  City  but  by  the  vendor,  who  seeks  not  the  un- 

of  London  i\  Mitford,  14  Ves.  41  ;  Bay-  certain  dividends,  but  the  certain  sum  to 

ley  V.  Leominster,  3  Bro.  Ch.  529  ;  Evaiis  be  paid  for  them.     It  has  however  been 

V.  Walshe,  2  Sch.  &  L.  519;  Hackett  v.  settled  by  repeated  decision  that  the  rem- 

M'Namara,  Lloyd  &    G.  temp.  Plunkct,  edy  in  equity  must  be  mutual ;  and  that 

283 ;  Sheppard  v.  Doolan,  3  Drury  &  W.  where  a  bill  will  lie  for  the  purchaser,  it 

1  ;  Moore  v.  Foley,  6  Ves.  237  ;  Brown  will  .ilso  lie  for  the  vendor."     1   Simons 

V.  Tighe,  8  Bligh,  n.  s.  272  ;  Carr  i'.  El-  &  S.  612. 

lison,  20  Wend.  178.  (/)  Lyde  v.  Mynn,  1  Mylne  &  K.  683. 

(i)  Wilkinson  v.  Torkington,  2  Younge  "  That  the   claim  to  the   annuity,"   said 

&  C,  Ex.  726,  an  instructive  case.  Lord  Brougham,   Ch.,   "  is  barred  by  the 

[j)   Withy  V.   Cottle,   1    Simons  &  S.  bankrupt  act  cannot  be  denied  ;  for  the 

174.     And  see  Pritchard  v.  Ovey,  1  Ja-  annuity  was  an  interest  of  which  the  value 

cob  &  W.  396,  where  specific  performance  was  capable  of  calculation,  and  for  which 

was  decreed  of  an  agreement  for  the  sale  proof  might  have  been  made  under  the 

of  an  annuity  to  be  charged  on   certain  commission.     But  the  covenant  to  secure 

lands  of  the  defendant.  that  annuity  gave  the  annuitant  a  right 

(A)  Addcrley  v.  Dixon,  1   Simons  &  S.  which  could  not  in  any  way  be  made  the 

607.     The  Vice-Chancellor's  decree  seems  subject  either  of  calculation  or  proof ;  and 

to  have  proceeded  on  the  ground  of  the  it   seems  impossible  to   understand   how 

uncertainty  of  the  dividends  which  might  such  a  right  could  be  barred."     1   Mylne 

become   payable  from  the  estate  of  the  &  K.  692. 

VOL.  II.                                47  [  553  ] 


528  THE   LAW   OF   CONTRACTS.  [PART  11. 

Equity  lias  also  enforced  a  contract  to  keep  the  banks  of  a  river 
in  repair,  (vi)  a  contract  to  pay  the  plaintiff  a  certain  annual 
sum,  and  another  sum  for  every  hundred  weight  of  wire  which 
the  defendant  should  make  in  the  lifetime  of  the  plaintilf ;  (ti)  a 
contract  for  the  sale  of  a  life  annuity,  (o)  and  for  the  sale  of 
shares  in  a  public  company,  (p) 

In  regard  to  the  sale  of  stock,  as  it  is  called,  meaning  very 
generally  in  the  English  cases  only  government  stocks,  but  with 
us  covering  shares  in  companies  generally,  there  is  some  un- 
certainty. It  has  been  understood  to  be  the  prevailing  rule  in 
England,  that  such  bargains  are  not  to  be  enforced  by  specific 
performance ;  on  the  ground  that  a  certain  quantity  of  stock  is 
worth  as  much  and  no  more,  as  any  other  equal  quantity  of 
stock,  and  if  the  defendant  be  sued  at  law  and  the  plaintiff 
recover  damages,  the  value  of  the  stock  will  be  the  measure  of 
the  damages,  and  the  plaintiftmay  use  the  money  so  recovered 
in  buying  the  stock,  (q)  There  are  nevertheless  many  cases  in 
England  in  which  bargains  for  the  sale  and  transfer  of  stock  have 
been  enforced,  (r)  The  question  has  not  arisen  in  this  country 
so  frequently  or  so  directly  as  to  enable  us  to  lay  down  what 
may  be  called  an  American  rule  of  law  in  relation  to  it.  Per- 
haps, however,  from  the  wider  meaning  of  the  word  stock 
among  us,  and  the  greater  complexity  of  the  questions  which 
occur  in  relation  to  the  sale  of  it,  we  might  expect  a  wider 

(m)  Kilmorey  v.  Thackeray,  cited  Er-  icell,  V.  C.,  distinguished  between  three 

rington  v.  Aynesiy,  2  Bro.  Ch.  343 ;  and  per  cents,   or  otlier   stock   of  that  kind 

sec  2  Bro.  Cli.  65.  (which  could  always  be  had  by  any  pcr- 

(«)  Ball  V.  Coggs,  1  Bro.  P.  C.  296.  sons  clioosing  to  apply  for  it  in  the  market) 

(o)  I'ritchard  !'.   Ovey,    1   Jacob   &   W.  and  rnilway  shares  of  a  particular  dcscrij)- 

396.     And  see  Wellesley  v.  Wellesley,  4  tion  wliicli  are  limited  in  imuibcr,  and  not 

Mylne  &  C.  .'J54.  alway.s  to  be  found  in   the   market.      A 

(/))  Duncuft  r.  Albrecht,  12  Sim.  189.  vendor  of  railway  sluires  who   has   been 

Et  vide  infra.  ])aid    tlic   ])urcha.se-money,   may   enforce 

{{/)  Cud    V.    Butter,    1    P.    Wnis.  .570.  specilie    performance    of  the   contract   in 

Lord  Hdrdwickc,  CM.,  15uxton  r.  Lister,  3  order  tliat  the  ])urcliascr,  by  accci)ting  a 

Atk.  ."583,384.  Lord  KUloii,  Cii.,  Nutl)rown  legal  transfer,  may  lie  lixcd  with  the  liabil- 

V.  Tliornton,  10  Vcs.  161.     Ltn-d  ErsLinc,  ity  for  calls,  and  he  himself  be  exonei-ated. 

Cli.,  .Ma.son  v.  Armitage,  13  Ves.  37.  Shawt'.  Fisher,  2  l)e  G.  &  S.310;  Wynne 

(>•)  An  agreement  for  sale  of  govern-  v.  Price,  id.  310.  Agreement  between  part- 
mcnt  stock  and  transfer  of  certificates,  ncrs,  upon  a  dissolution  of  the  firm,  that 
was  executed  in  e((uity.  Doh^ret  r.  Uoths-  one  of  thcni  should  have  the  exclusive 
ciiiid,  I  Sitn.  &  S.  .590.  And  it  has  been  property  of  certain  partnorshii)  books,  was 
held  that  .'in  agnnrment  for  the  transfer  of  lield  jiropcr  for  si)ecilic  ])erformanee.  Liu- 
railway  shares  may  be  cnf(jreeil.  Duncuft  gen  v.  Simpson,  1  biin.  &  S.  600. 
V.  Albreclil,  12  Sim.  189,199,  where  IShad- 


en.  IX.]  SPECIFIC   PERFORMANCE.  529 

relaxation  of  the  rule  than  in  England,  even  if  the  rule  itself  be 
adopted,  (s) 

We  are  quite  satisfied  that  the  rule  of  England,  in  relation 
to  the  sale  of  stocks,  does  not  rest,  even  there,  on  the  difference 
between  contracts  about  land  and  those  about  personalty,  al- 
though this  is  sometimes  referred  to  in  their  cases.  The  true 
reason  is  that  above  mentioned.  And  the  exceptions  to  the 
rule  do,  for  the  most  part,  illustrate  this  reason,  because  where  a 
contract  for  the  sale  of  stock  is  .enforced,  there  is  always  some 
peculiar  fact  or  agreement  tending  to  show  that  it  is  not  a  mere 
matter  of  price. 

We  apprehend  that  the  true  rule  that  governs,  or  should 
govern  these  cases,  is  one  which  has  a  much  wider  application 
in  the  law  of  specific  performance.  We  suppose  it  may 
be  thus  expressed.  If  the  bargain  be  such  that  when  the  de- 
fendant has  paid  his  legal  damages  (which  equity,  generally,  at 
least,  supposes  that  he  will  pay),  the  plaintiff  is  fully  compen- 
sated, and  by  using  the  money  he  gets,  may  secure  to  himself 
all  the  benefit  he  had  a  right  to  expect  from  the  bargain,  the 
court  will  leave  him  to  these  damages ;  but  if  it  appears  to  the 
court,  that  after  the  plaintiff  should  recover  and  receive  these 
damages,  and  use  them  as  well  as  he  could  to  supply  the  breach 
of  the  contract,  he  would  remain  uncompensated,  because  a 
substantial  part  of  the  advantage  he  hoped  to  receive  from  the 
bargain  would  be  lost  to  him,  here  equity  will  interfere  and  en- 
force a  specific  performance.  For  example,  if  we  suppose  a 
person  to  own  ninety  shares  of  a  certain  stock,  and  if  he  can 
own  one  hundred  he  will  possess  some  valuable  privilege  which 
he  now  does  not  possess,  and  for  this  purpose  contracts  to  buy 
ten  with  the  only  person  who  has  them  for  sale,  and  the  other 
party  discovering  his  need  refuses  to  sell  as  he  agreed  to,  and  de- 
mands an  extravagant  price,  we  should  confidently  expect  — 
providing  of  course  that  the  conduct  and  purpose  of  the  plain- 
tiff were  unexceptionable  —  that  a  court  of  equity  would  decree 
specific  performance.  It  is  quite  common  for  owners  of  stock 
to  need  more  in  order  to  obtain  a  majority  of  votes.     In  most 

(s)  See  Mechanics  Bank  of  Alexandria  v.  Seton,  1  Pet.  305. 

[555] 


530  THE  LAW  OF  CONTRACTS.  [PART  II. 

cases,  of  this  kind,  a  very  strong  objection  against  the  prayer, 
would  arise  from  the  obvious  impolicy  of  permitting  or  rather 
requiring  sales  for  such  purposes ;  but  if  this  objection  were 
removed  by  the  circumstances  and  the  objects  of  the  plaintiff, 
we  might  put  this  among  the  cases  for  a  decree  for  specific 
performance. 

Another  very  nice  distinction  has  been  taken  between  a  con- 
tract to  build  a  house,  and  one  to  repair  a  house.  Thus  it  is 
said  that  one  man  can  repair  a  house  as  well  as  another ;  and 
the  plaintiff  may  be  supposed  to  insist  that  the  defendant  and 
he  alone  should  make  the  repairs,  only  because  he  has  bargained 
to  do  it  for  less  than  another  man  would  do  it  and  less  than  it 
should  be  done  for.  But  a  contract  to  build  a  house  is  quite 
a  different  thing.  Here  a  man  selects  a  builder  for  special  and 
personal  reasons,  and  has  a  right  to  insist  that  this  very  man 
shall  build  him  a  house,  in  order  that  it  may  have  the  qualities 
he  expects,  (t)  But  it  is  quite  obvious  that  while  there  may  be 
a  general  foundation  for  such  a  distinction  as  this,  it  must  often 
be  unreal  or  inapplicable.  If  repairs  are  extensive  it  is  about 
as  important  that  they  be  done  well  as  that  a  house  be  built  in 
a  certain  way.  And  on  the  other  hand,  very  many  houses  are 
built  precisely  as  merchandise  is  bought,  and  for  the  same  pur- 

(t)  1  Fonbl.  Eq.  (5th  ed.)  355,  note  (r).  2  Eden,  128.  Compare  Sanders  v.  Pope, 
Sir  William  Grant,  Flint  r.  Brandon,  8  12  Vcs.  282,  and  Davis  i'.  West,  12  id. 
Ves.  164  ;  Lucas  v.  Comerford,  1  Vcs.  Jr.  475,  per  Lord  Erskine,  CIi.  Sec  an  instance 
235,  where  Lord  J7u»7oz«  refused  to  compel  of  the  enforcement  of  a  covenant  to  re- 
specific  performance  of  a  covenant  to  re-  pair,  in  Kempe  v.  Fitchie,  7  &  8  Eiiz.  340. 
build  in  a  lease.  Pembroke  v.  Thorpe,  3  Even  admitting  the  principle  that  ordi- 
Swanst.  437,  n. ;  where  an  agreement  to  narily,  an  agreement  to  repair  ought  not 
build  a  house  was  enforced  in  a  case  of  itself  to  be  specifically  executed,  the  Court 
partial  pcrfurmancc.  Eirchett  v.  Boiling,  of  Chancery  will  decree  specific  i)erform- 
5  Munf  442.  In  Mosely  y.  Virgin,  3  ancc  of  agreements  for  the  execution  of 
Ves.  184,  Ivord  Lou'jidiowitf/h  took  the  leases  containing  covenants  to  repair, 
reasonable  distinction,  that  if  the  contract  Paxton  i\  Newton,  2  Smale  &  G.  437. 
expressed  distinctly  what  sort  of  house  Yet  where  the  defendants  contr.acted  to 
was  agreed  to  be  built,  so  that  the  court  perform  certain  work,  and  as  a  part  of  the 
could  descriiicit  as  a  subject  for  the  report  same  agreement,  promised  to  give;  a  bond 
of  the  Master,  specific  jicrfijrinance  might  conditioned  fur  the  ])erfbrniancc  of  their 
be  decreed,  imt  if  the  descri|)tion  in  tiic  undertaking,  inasmuch  as  the  main  agrec- 
contrnct  was  loose  ntul  undefined,  the  mcnt  was  not  of  such  a  character  that  a 
court  would  not  a.ssume  to  reduce  it  to  court  of  cipiity  would  compel  its  specific 
certainty,  and  the  jiurly  must  lie  left  to  perfornumci!,  the  court  also  refused  to 
hJH  remedy  in  damages.  'J'bat  contracts  J-ompcl  the  execution  of  the  bond.  South 
to  repair  will  not,  in  gcnend  at  least,  bi-  Wales  Kailway  Co.  v.  Wythes,  1  Kay  & 
enforced  sjieeifieidly,  appears  from  Hill  e.  .1.  isd,  .'il  ICng.  L.  &  Eq.  226,  by  the 
Barclay,  Kl  Vcs.  402;  Jiayncr  v.  Stone,  Lords  Justices, 

[5oG] 


en.  IX.]  SPECIFIC   PERFORMANCE.  531 

pose.  Upon  the  whole,  therefore,  we  should  say  that  if  the  con- 
tract were  for  building  a  house,  there  might  be  some  presump- 
tion in  favor  of  the  applicant  for  specific  performance,  and  if  it 
were  only  for  repairs,  there  would  be  a  much  less  presumption 
for  him  or  none  at  all.  Still,  the  controlling  question  in  both 
cases  would  be,  can  the  court  see  any  peculiar  circumstances 
giving  a  peculiar  reason  for  considering  that  the  applicant 
would  not  be  adequately  compensated  by  the  damages  he 
would  recover  at  law.  It  is  undoubtedly  competent  for  a  court 
of  equity  to  enforce  the  specific  performance  of  a  contract  by  a 
defendant  to  do  defined  work  upon  his  soil,  in  the  performance 
of  which  the  plalntifl'  has  a  material  interest,  and  which  is  not 
capable  of  adequate  compensation  in  damages,  (u) 

A  contract  in  relation  to  land  may  not  be  enforceable  in 
equity,  for  the  same  reason  which  prevents  most  contracts  about 
chattels  from  enforcement.  If  an  agreement  to  give  to  certain 
fields  a  peculiar  cultivation,  would,  when  broken,  give  rise  to  a 
claim  for  damages  which  might  be  expended  in  producing  the 
same  result,  then  equity  would  not  interfere. 

It  is  common  for  equity  to  enforce  by  injunction,  the  usual 
covenants  of  leases  ;  (y)  as  that  manure  or  crops  shall  be  left  on 

(m)  Storer  v.  Great  Western  Railway  to  prevent  by  injunction,  the  breach  of  a 
Co.  2  Younge  &  C,  Ch.  53.  That  was  ner/otive  covenant.  "  Beyond  all  doubt," 
where  a  railway  company  had  jiurchascd  said  Lord  5Y.  Leo?!arc/s,Ch.,  "where  a  lease 
land  running  through  a  gentleman's  pleas-  is  executed  containing  affirmative  and 
ure-grounds,  under  a  contract,  one  of  the  negative  covenants,  this  court  will  not 
terms  of  wliich  was  the  construction  by  attempt  to  enforce  the  execution  of  the 
the  company  of  an  archway  under  their  affirmative  covenants  either  on  the  part 
road  and  connecting  one  side  of  the  pleas-  of  the  landlord  or  the  tenant,  but  will 
ure-grounds  with  the  other ;  and  the  con-  leave  it  entirely  to  a  court  of  law  to 
struction  of  the  archway  was  compelled,  measure  the  damages ;  though  witii  re- 
See  also,  Stuy  vcsant  v.  Mayor  of  New  spect  to  the  negative  covenants,  if  the  ten- 
York,  11  Paige,  414.  Where  B  consent-  ant,  for  example,  has  stipulated  not  to 
ed  to  A's  making  a  watercourse  through  cut  or  lop  timber,  or  any  other  given  act 
his  land,  upon  being  paid  a  reasonable  of  forbearance,  the  court  does  not  ask  how 
compensation,  and  no  sum  was  agreed  many  of  the  affirmative  covenants  on 
upon,  but  A  made  the  watercourse  and  either  side  remain  to  be  performed  under 
enjoyed  nine  years'  use  of  it,  B  was  en-  the  lease,  but  acts  at  once  by  giving  ett'ect 
joined  from  obstructing  it,  and  a  reference  to  the  negative  covenant,  specifically  ex- 
was  made  to  the  Master  to  settle  a  proper  ecuting  it  by  prohibiting  the  commission 
compensation.  Devonshire  v.  Eglin,  14  of  acts  which  have  been  stipulated  not  to 
Beav.  530.  And  see  Sanderson  v.  Cock-  be  done."  Lumley  v.  Wagner,  1  De  G., 
ermouthandWorkingtonBailwayCo.il  M.  &  G.  617,  618.  But  from  this  re- 
id.  497.  mark  one  class  of  affirmative  covenants  is, 

(r)  Not  indeed  by  virtue  of  the  doctrine  it  seems,  to  be  excepted;  for  agreements 

of  specific  performance,  but  in  the  exer-  by  tenants  to   surrender  their  estates  to 

else  of  the  special  jurisdiction  of  the  court  their  landlords  upon  a  certain  event  may 

47  *  [  557  ] 


532  THE  LAW  OF  CONTRACTS.  [PART  II. 

the  land,  (iv)  or  that  a  meadow  shall  not  be  ploughed,  (x)  or 
gravel  or  any  minerals  dug.  (//)  And  a  contract  to  leave  a  cer- 
tain amount  of  stock  upon  premises  leased  as  alum  works,  was 
specifically  enforced.  (2:)  And  generally  it  may  be  said,  that 
where  a  lessee  covenants  that  the  demised  premises  shall  be 
used  in  a  particular  way  or  for  a  particular  purpose,  equity  will 
restrain  him  to  that  use  or  purpose,  (a) 

Equity  also  enforces  contracts  in  relation  to  personalty,  when 
the  effect  of  the  breach  cannot  be  known  or  estimated  with 
any  .exactness,  either  because  the  effect  will  show  itself  only 
after  a  long  time  or  for  any  other  reason,  (b)  As  where  a  con- 
tract was  made  for  the  sale  of  many  tons  of  iron,  to  be  paid  for 
by  instalments,  running  through  many  years,  and  it  was  im- 
possible to  say  what  the  profit  of  the  purchase  would  be.  (c) 
So,  if  a  ship-carpenter  should  bargain  for  the  sale  to  him  of 
ship  timber,  situated  with  peculiar  convenience  to  his  pur- 
poses, (d) 

In  much  the  larger  number  of  cases  in  which  this  relief  is 
sought  in  equity,  the  sale,  conveyance,  or  transfer  of  something 
has  been  promised.  But  equity  will  also  enforce  promises  for 
mere  personal  acts,  especially  if  they  are  connected  with  a 
transfer  or  change  of  property ;  as  a  promise  to  indorse  a  note 
which  has  been  transferred  ;  (e)  or  to  renew  a  lease ;  (/)  or  to 


not  only  be  enforced,  but  liave  a  particu-  (c)  Ward  v.  Buckingham,  cited  Nut- 
lar  claim  upon  a  court  of  equity.  And  brown  v.  Thornton,  10  Ves.  161. 
Lord  ^7.  Leonards  himself  (when  Lord  (a)  Steward  v.  Winters,  4  Sandf.  Ch. 
Chancellor  of  Ireland),  with  respect  to  a  587.  So  with  one  wlio  came  in  under,  or 
case  of  this  nature  said  :  "  It  requires  a  with  the  consent  of  the  lessee.  Howard 
very  strong  case  to  justify  the  court  in  re-  v.  Ellis,  4  Sandf.  309.  And  see  Ivimp- 
fusing  to  grant  the  relief  sought  in  this  ton  v.  Y,vo,  2  Ves.  &  B.  349.  The  breach 
case ;  for  if  there  be  one  case  iu  which  of  a  covenant  not  to  burn  the  demised 
spceilie  performance  ought  to  be  decreed  land  was  enjoined;  notwithstanding  there 
more  liian  in  another,  it  is  wlierc  a  party  was  a  penalty  of  .CIO  i)er  acre,  ])rovided 
agrees  to  .surrender  a  given  estate  to  his  in  tlic  lease,  wliich  tlie  defendant  was  will- 
landlord."  Crocker  v.  Orpen,  3  Jones  &  ing  to  ])ay.  French  v.  Macale,  2  Drury 
LaT.  601.  &  W.  209. 

(w)    rultcncy  v.  Shelton,  5  Ves.  147,  {l>)  Buxton  v.  Lister,  3  Atk.  383;  Ad- 

201,  n.  ;  Onslow  v. ,  16  id.  173.  derley  r.  Dixon,  1  Sim.  &  S.  007. 

(x)  I'liltcneyi;.  Shelton,  »W.s»;»vf ;  Lord  (r)  Taylor  r.  Neville,  cited  3  Atk.  384. 

Gray  I)e  Wilton  v.  Saxon,  6    Ves.   100.  ((/)  Lord   lldnhrickc,    Ch.,   Buxton  v. 

So  of  ])asture-laud.     IJrury  v.  Molins,  id.  Lister,  3  Atk.  385. 

328.  ('')  See  Watkins  v.  JMaule,  2  Jacob  & 

(//)  City  of  London  7-.  Tugh,  3  I5rn.  V.  W-  242. 

C.  374  ;  Thomas  y.  Jones,  1  Youiige  &C.,  (/)   Vide  ante,  \^.  ^2(>. 
Ch.  510. 

[558] 


CH.  IX.] 


SPECIFIC   PERFORMANCE. 


533 


charge  an  annuity  on  a  certain  estate  ;  (g-)  or  to  invest  money 
in  lands  for  the  purpose  of  a  particular  settlement;  (h)  or  con- 
tracts made  with  a  third  party  for  the  benefit  of  slaves,  or  an  as- 
signment of  them,  (ha)  An  agreement  to  insure  may  be  spe- 
cifically executed  in  equity ;  and  the  bill  may  be  filed  after  a 
loss  has  occurred,  (i) 

It  may  be  added  that  equity  gives  relief  when  a  contract  re- 
fers only  to  chattels,  if  circumstances  give  to  them  a  value  alto- 
gether beyond  their  price  or  money  worth  —  a  pretium  affec- 
tionis,  —  which  the  plaintiff  may  rationally  ascribe  to  them  so 
far  as  he  is  concerned.  (/)  Or  where  personal  property  is  de- 
tained in  breach  of  trust,  (k)  And  where  a  dispute  relates  to 
many  articles,  and  for  some  the  plaintiff  may  be  compensated 
in  damages,  and  for  others  not,  equity  will  enforce  specific  per- 
formance as  to  all.  (/)  Nor  is  it  a  ground  of  demurrer  to  a  bill, 
that  it  seeks  specific  performance  of  a  contract  which  relates  to 
personalty.  (y») 

It  makes  but  little  difference  in  the  jurisdiction  which  equity 
takes,  or  in  the  relief  it  gives,  whether  the  promise  be  positive  or 
negative.     But  technically  speaking,  equity  decrees  specific  per- 


(g)  Vklp  ante,  p.  527 ;  Pritchard  v.  Ovey, 
1  Jacob  &  W.  396. 

(h)  Kettleby  v.  Atwoocl,  1  Vern.  298, 
471;  Fotherglll  v.  Fothergill,  1  Eq.  Cas. 
Ab.  222. 

(ha)  With  respect  to  contracts  for  the 
assignment  of  slaves,  see  Williams  v. 
Howard,  .3  Murpli.  74 ;  per  Taylor,  C.  J., 
and  Henderson,  J.,  Alexander  v.  Ghiselin, 
5  Gill,  138  (which  however  was  an  agree- 
ment for  an  assignment  of  negroes  by  way 
of  security  for  a  debt).  Bryan  v.  Robert, 
1  Strohh.  Eq.  334 ;  Sarter  t-.  Gordon,  2 
Hill,  S.  C.  121.  (Compare  Young  v.  Bur- 
ton, 1  McMullan,  Eq.  255);  Savery  v. 
Spence,  13  Ala.  561  ;  Caldwell  o.  Myers, 
Hardin,  551.  See  also,  Murphvt'.  Clark, 
1  Smedes  &  M.  221 ;  Butler  v.  "Hicks,  U 
id.  78 ;  Dudley  v.  Mallery,  4  Ga.  52.  If  a 
master  for  consideration  received,  agree 
with  a  third  person  to  manumit  his  slave, 
the  agreement  may  be  specifically  exe- 
cuted in  equity  npon  the  application  of 
such  tliird  person.  Thompson  v.  Wilmot, 
1  Bibb,  422 ;  though  not  upon  a  bill  fded 
by  the  slave  himself.  GatlitF  v.  Hose,  8  B. 
Mon.  629.     See  Tom  v.  Daily,  4  Hamm. 


Ohio,  368;  Peters  ;;.  Van  Lear,  4  Gill, 
249. 

(i)  Perkins  v.  Washington  Ins.  Co.  4 
Cowen,  645 ;  Lord  Dmman,  C.  J.,  Mead 
V.  Davidson,  3  A.  &  E.  308;  Carpenter  v. 
Mutual  Ins.  Co.  4  Sandf.  Ch.  408.  And 
after  a  loss,  a  court  of  equity,  taking 
jurisdiction  for  the  purpose  of  giving  a 
specific  performance  of  the  agreement  to 
insure  is  not  bound  to  stop  by  decreeing 
the  execution  of  a  jiolicy,  but  without  turn- 
ing the  plaintiff  over  to  an  action  at  law 
upon  it,  may  give  liim  full  relief.  Tayloe 
V.  Merchants  Fire  Ins.  Co.  9  How.  405. 

(j)  Pusey  V.  Pusey,  1  Vern.  273; 
Fells  V.  Read,  3  Ves.  70  ;  Macclesfield  v. 
Davis,  3  Ves.  &  B.  16  ;  Lowther  i'.  Low- 
ther,  13  Ves.  95. 

(^•)  Poolcy  V.  Budd,  14  Beav.  34 ;  IMc- 
Gowin  V.  Remington,  12  Penn.  State,  56; 
Cowles  V.  Whitman,  10  Conn.  121  ;  Me- 
chanics Bank  of  Alexandria  v.  Setou,  1 
Pet.  299,  305. 

(/)  McGowin  v.  Remington,  12  Penn. 
State,  56. 

(m)  Carpenter  u.  Mutual  Safety  Ins.  Co. 
4  Sandf.  Ch.  408. 

[559] 


534 


THE  LAW   OF   CONTRACTS. 


[part  II. 


formance  when  the  promise  is  positive,  and  injunction  when  it 
is  negative.  (/?)  It  is  obvious  that  many  promises  may  be  in 
either  form  equally  valid  and  effective.  Thus  a  promise  already 
referred  to,  to  leave  manure  on  a  farm,  may  just  as  well  be  a 
promise  not  to  take  it  away ;  and  equity  would  relieve  in  one 
case  as  well  as  in  the  other.  A  covenant  in  restraint  of  trade, 
so  called,  that  is,  not  to  carry  on  a  certain  business  for  a  certain 
time  in  a  certain  place,  will,  if  in  itself  just  and  reasonable,  be 
enforced  by  injunction,  (o)  so  will  a  covenant  not  to  build  on 
land  contiguous  to  the  plaintiff,  and  to  his  detriment,  {p)  or  not 
to  erect  or  use  dangerous  or  annoying  buildings  or  machinery 
near  him,  (q)  or  that  buildings  on  certain  land  shall  conform  in 


{n)  There  are  cases  where  a  contract  to 
do  something  and  the  correlative  contract 
to  refrain  from  doing  some  inconsistent 
thing,  are  not  the  converse  of  one  another, 
and  where,  in  other  words,  the  perform- 
ance of  the  negative  part  of  the  agreement 
is  not  of  itself  the  performance  of  tiie 
positive  i>art.  In  such  a  case,  although 
the  nature  of  the  act  to  be  done  is  such 
that  a  specific  performance  of  it  cannot  be 
compelled,  the  court  may  still  do  wliat  it 
can  towards  compelling  men  to  the  fulfil- 
ment of  their  engagements,  by  enjoining 
the  party  from  violation  of  the  negative 
part  of  the  contract.  Ilolfe  v.  Rolfe,  15 
Sim.  88.  The  court  will  not  indeed  use 
the  power  of  injunction  for  the  purpose  of 
indirectly  accomplishing  that  whicii  it  is 
unable  to  etlect  ity  the  direct  exercise  of 
its  jurisdiction  to  decree  specific  perform- 
ance ;  yet  where  there  is  contained  in  the 
contract  a  jironiise  to  refrain  from  doing 
some  j)articular  thing,  affording  therefore 
of  itself  a  proper  case  for  an  injunction, 
an  injunction  will  be  granted  ;  and  all  the 
more  willingly  if  the  final  consequence 
will  |)robabiy  be  tiie  ])erformance  of  the 
wliole  agreement,  including  as  well  tiiose 
adirmative  parts  wiiicii  from  their  nature 
cannot  ite  directly  enforced  as  tiiat  nega- 
tive promise  wiiicli  is  tlie  legitimate  ground 
for  the  injunction.  A  very  recent  and  in- 
structive case  of  this  kind  is  Lumlev  v. 
Wiigncr,  1  ])o  (;.,  M.  v<^  (I.  OO-f,  l.'t  Kiig. 
I>.  &  Iv|.  ii.'i'J,  where  iMadetiioiselle  Wag- 
ner liad  agreed  witii  Mr.  IvUinley  to  sing 
juhis  theatre  for  three  moiuhs,  and  during 
that  time  not  to  sing  elsewhere  ;  Lord  ,SV. 
Leonards,  (Ih.  (allirming  the  decision   of 

[  .000  ] 


Parker,  Y.  C),  enjoined  her  from  violating 
the  negative  stipulation  not  to  sing  at  any 
other  theatre,  though  he  could  not  compel 
her  to  sing  at  the  plaintiflf's  theatre.  The 
opinion  of  the  Lord  Chancellor  contains 
an  elaborate  review  of  the  conflicting 
cases  upon  this  important  subject,  and  is 
worthy  of  particular  attention.  Lumley 
V.  Wagner  was  recognized  in  Johnson  v. 
Shrewsbury  &  Birmingham  R.  Co.  3  De 
G.,  M.  &  G.  927,  932.  Hamblin  v.  Dinne- 
ford,  2  Edw.  529  is  contra,  but  was  de- 
cided when  the  course  of  English  decision 
was  different  from  what  it  now  is.  Where 
the  injunction  prayed  is  only  ancillary  to 
the  enforcement  of  the  contract,  the  court 
will  not  grant  it  if  the  contract  is  not  one 
whicii  is  capable  of  specific  execution. 
Baldwin  v.  Society  for  diffusing  Useful 
Knowledge,  9  Sim.  393  ;  Gurley  r.  Hites- 
hue,  5  Gill,  217.  And  see  South  Wales 
Railway  Co.  i:  Wythcs,  1  Kav  &  J.  186, 
31  Eng.  L.  &  Eq.  226. 

(o)  Rolfe  r.  Rolfe,  15  Sim.  88;  Sliad- 
nrll,  V.  C,  Kemblc  r.  Kean,  6  Sim.  335; 
Lord  6V.  Leonards,  Cli.,  1  De  G.,  U.  & 
G.  631. 

{]))  Rankin  v.  Huskisson,  4  Sim.  13. 
See  S(piirc  v.  Campbell,  1  Mylnc  &  C. 
459  ;  Roper  v.  Williams,  Turner  &  R.  18. 

((/)  Harrow  v.  IMciiard,  8  Raige,  351. 
An  iiijuiu'tion  was  granted  to  restrain 
cliurch-wardcns  from  ringing  a  bi'il  at  an 
early  hour  in  the  nmrning,  wliich  they  had 
agreed  with  the  plaiiUili',  for  a  valuable 
consideration  to  refrain  from  doing.  Mar- 
tin 1'.  IS'utkin,  2  I'.  Wins.  266.  See  Sol- 
tmi  r.  De  Held,  2  Sim.  n.  s.  183,  9  Eng. 
L.  &  E(i.  104. 


CH.  IX.]  SPECIFIC   PERFORMANCE.  535 

reasonable  particulars  with  those  on  the  land  of  the  promisee  ;  (r) 
or  that  trees  which  are  peculiarly  ornamental  or  convenient  to 
the  plaintiff,  shall  not  be  cut  down  by  the  defendant  on  whose 
land  they  grow,  (s)  And  a  court  of  equity  has  jurisdiction  to 
grant  a  specific  performance  of  an  agreement  for  the  purchase 
of  a  copyright.  (/) 

Before  leaving  contracts  for  personal  acts,  or  relating  to  chat- 
tels, it  may  not  be  useless  to  remark  that  the  Supreme  Court  of 
the  United  States  appears  to  be  less  disposed  than  the  courts 
of  England  to  regard  the  distinction  between  contracts  which 
relate  to  realty  and  those  which  refer  only  to  personalty,  (u) 
Indeed,  throughout  this  country  there  seems  to  be  a  strong 
tendency  to  subordinate  this  distinction  and  all  the  more  tech- 
nical rules  which  have  been  enunciated  in  reference  to  this  sub- 
ject to  the  general  question,  whether  the  plaintiff  is  in  justice 
and  equity  entitled  to  other  and  better  relief  than  the  law  can 
give  him.  (y)  In  those  of  our  States  in  which  an  equity  juris- 
diction was  slowly  and  reluctantly  admitted,  among  the  earliest 
instances  of  equity  power  given  to  the  courts  after  that  of  re- 
lieving in  mortgages,  was  that  of  specific  performance.  And 
frequently,  if  not  always,  it  is  "the  specific  performance  of  any 
written  contract,"  without  reference  to  its  subject-matter. 

(r)  Franklyn  i\  Tuton,  5  MacUl.  469,  subject-matter  in  respect  of  which  relief 

where  a  lessee,  who  had  not  complied  with  was  sought,  a  court  of  equity  had  juris- 

his  covenant  that  houses  erectetl  b}'  him  diction  even  though  other  matters  might 

on  the  demised  land  should 'correspond  in  be  mixed  up  with  it.     And  see  Sims  v. 

elevation  with  the  adjoining  houses,  was  Marryat,  17  Q.  B.  281,  7  Eng.  L.  &  Eq. 

required  to  alter  the  elevation  and  perform  330. 
the  covenant.  (u)  Barr  v.   Lapsley,   1  Wheat.    151  ; 

(s)  And  see  Briggs  y.  Earl  of  Oxford,  Mechanics  Bank  of  Alexandria  y.  Seton, 

5  De  G.  &  S.  156,  8  Eng.  L.  &  Eq.  194,  1    Pet.  299;    2    Story,   Eq.  Jur.    §    724. 

and  s.  c.  on  anpeal,  1  De  G.,  M.  &  G.  See    Clarke   v.  Flint',  22  Pick.  238,   per 

363,  11  Eng.  L.'&  Eq.  265.  Wilde,  J. 

{t)  Thombleson  v.   Black,  1  Jur.  198.         {v)  Among  other  cases  see  Phillips  v. 

Lord    Lanr/dale,   M.  R.,  there  said,  that  Berger,  2  Barb.  608,  8  id.  527. 
wherever  a  copyright  formed  a  part  of  the 

[561] 


536 


THE   LAW   OF   CONTRACTS. 


[part  II. 


SECTION    IV. 


OF  CONTRACTS  RELATING  TO  THE  CONVEYANCE  OF  LAND. 

It  is  ill  relation  to  contracts  for  the  scLle  and  conveyance  of 
land  (ir)  that  the  equity  relief  of  sjjecifie  performance  is  most 
freely  admitted,  most  frequently  practised,  and  most  distinctly 
defined,  (x)     Nor  does  equity  refuse  to  decree  respecting  land 


(w)  Lord  Redesdale  gave  an  admirable 
and  very  authoritative  exposition  of  the 
general  principles  governing  the  interpo- 
sition of  a  court  of  equity  to  enforce  con- 
tracts for  the  conveyance  of  land,  in  his 
judgment  in  Lennon  r.  Xappcr,  2  Sch.  & 
L.  684.  It  seems  to  have  been  licld  in 
a  recent  case,  that  a  contract  for  the  pur- 
chase of  land  ought  not  to  be  executed  in 
equity,  where  the  agreement  contemplates 
another  remedy,  by  providing  that  upon 
default  of  tlic  inirchaser,  the  land  may  be 
resold  at  his  risk  and  expense.  Bodine  v. 
Glading,  21  Pcnn.  State,  50.  Sccl  qucure. 
And  it  has  been  said  that  equity  will 
generally  interfere  less  readily  in  behalf  of 
a  vendor  tlian  of  a  vendee ;  because  the 
former  can  get  a  more  complete  remedy 
at  law  than  the  other.  Lord  Cramcorth, 
L.  J.,  Webb  V.  Direct  London  and  Ports- 
mouth Ky.  Co.  1  l)e  G.,  M.  &  G.  52S, 
529.  But  compare  the  opinion  of  Knight 
Bruce,  L.  J.,  in  the  same  case.  For  cer- 
tain contracts  concerning  the  use  of  land, 
but  not  going  to  the  creation  or  transfer 
of  an  estate  therein,  see  tlie  next  preceding 
section. 

(x)  And  a  court  of  equity  will  some- 
times entertain  a  bill  the  object  of  which 
is  to  reinore  tin  ohstacle  lying  in  the  way  of 
a  present  application  for  a  specific  per- 
formance of  a  contract  for  tlie  sale  of  land. 
Thus,  wlicre  it  was  part  of  the  agreement 
that  the  pric'e  sliouhl  be  ascertained  by  the 
valuation  of  certain  referees,  and  tlie  ven- 
dor refused  to  permit  them  to  come  upon 
the  land,  it  was  held,  that  the  vendor 
Rliould  be  coni|)clled  to  permit  tlie  valua- 
tion, and  that  when  the  valuation  was 
made,  the  vendee  miglit  file  a  supple- 
mental liill  for  a  spccilic  performance. 
Morse  r.  iMcn-st,  0  Madd.  20,  a  case  wliieh 
has  been  often  apjiroved  ;  though  the  iu- 

[502] 


clination  of  Lord  Eldon's  mind  was,  that 
a  vendor  should  not  be  compelled  to  exe- 
cute an  arbitration  bond  in  order  that  an 
award  might  be  made  according  to  agree- 
ment, fixing  the  price  of  land  purchased 
by  the  plaintiff,  inasmuch  as  it  was  uncer- 
tain whether,  after  all,  any  award  would 
ever  be  made.  Wilks  v.  Davis,  3  Meriv. 
507.  But  the  court  will  not  undertake  to 
see  to  the  doing  of  a  preliminary  act,  the 
due  and  exact  performance  of  which  it  has 
not  the  power  to  control.  Therefore  it 
will  not  decree  specific  performance  of  an 
agreement  to  name  arbitrators  to  fix  the 
amount  of  the  purchase-money  of  land 
agreed  to  be  sold.  Agar  v.  Macklew,  2 
Sim.  &  S.  418;  INIilnes  v.  Gerv,  14  Ves. 
400;  Blundell  v.  Brettargh,  17*  Ves.  232. 
See  Cheslyn  v.  Dalby,  2  Younge  &  C,  Ex. 
170.  Yet  where  an  award  declaring  the 
price  has  been  actually  given,  a  court  of 
equity  will  enforce  compliance  with  it. 
"  That  a  bill,"  said  Lord  Eldon,  "Wood  v. 
Griffith,  1  Swanst.  54,  "will  lie  for  the 
specific  performance  of  an  award  is  clear, 
because  the  award  supposes  an  agreement 
between  the  parties,  and  contains  no  more 
than  the  terms  of  that  agreement,  ascer- 
tained by  a  third  person  ;  and  then  tiie  bill 
calls  only  for  a  specific  jierformance  of  an 
agreement  in  anotlier  shape."  See  also, 
Bouek  r.  Will)er,  4  Johns.  Ch.  405  ;  Pcn- 
Jiinian  v.  Kodman,  1.3  Met.  382;  Jones  v. 
Bo.stou  Mill  Corjioration,  4  I'iek.  507. 
And  after  an  agreement  to  sell  at  a  price 
to  be  fixed  by  arbitration,  lias  been  exe- 
cuted to  the  extent  of  ajipointing  the  arbi- 
trators, it  is  not  competent  to  eitlier  party 
at  iiis  pU'asure  entirely  to  undo  what  has 
iiecn  done  ;  for  a  revocation  of  the  author- 
ity of  the  ajqiraisers  or  arbitrators,  though 
gooil  at  law,  may  be  bad  in  equity,  in 
which  case  the  arbitrators  mav  s'O  on  in 


CH.  IX.] 


SPECIFIC   PERFORMANCE. 


537 


in  a  foreign  country,  provided  the  parties  are  resident  within 
their  jurisdiction,  and  there  is  nothing  which  must  prevent  the 
court  from  compelling  them  to  execute  their  agreement.  (//) 

The  first  question  which  presents  itself  in  reference  to  con- 
tracts for  the  conveyance  of  land,  is  in  relation  to  the  title ;  for 
defect  of  title  is  a  very  common  defence.  It  is  a  general  rule, 
that  any  party  who  objects  to  title,  and  asks  to  have  inquiry 
made  as  to  its  sufficiency,  may  have  that  inquiry,  (c)  unless  the 
court  can  see  that  the  objections  are  clearly  frivolous,  or  are 
intended  only  to  delay  and  embarrass  the  plaintiff,  (a)     Certain- 


disregard  of  such  revocation,  and  a  court 
of  equity  will  respect  their  award,  and 
perhaps  enforce  it.  Lord  Ekion,  Cli.,  Har- 
court  I'.  Ramsbottom,  1  Jacob  &  W.  505, 
508;  Cooth  v.  Jackson,  6  Ves.  12,  41  ; 
Belchier  v.  Reynolds,  2  Kenyon,  Ft.  2, 
87,  where  a  specific  performance  was  de- 
creed according  to  a  valuation  made  after 
the  death  of  the  vendor.  See  also,  Pope 
V.  Duncannon,  9  Sim.  177;  Cheslyn  v. 
Dalby,  2  Younge  &  C,  Ex.  197 ;  Dimsdale 
V.  Robertson,  7  Irish  Eq.  554,  2  Jones  & 
La  T.  58.  If  an  award  appear  to  have 
been  made  upon  a  ground  which  is  not 
sustainable,  or  if  the  arbitrators  have  mis- 
conducted themselves  in  making  it,  spe- 
ciHc  performance  will  not  be  decreed. 
Chichester  v.  M'Intire,  4  Bligh,  n.  s.  78. 
See  Sugd.  Law  of  Prop.  74  (in  Law  Lib. 
Vol.  65). 

(y)  Penn  v.  Lord  Baltimore,  1  Ves. 
Sen.  444;  Lord  Cran^own  v.  Johnston, 
3  Ves.  182.  Marshall,  C.  J.,  Massie  v. 
Watts,  6  Cranch,  158-61 ;  Watts  v.  Wad- 
dle, 6  Pet.  .389  ;  Watkins  v.  Holman,  16 
Pet.  25  ;  White  v.  White,  7  Gill  &  J.  208; 
Stansbury  y.  Fringer,  11  id.  149.  Where 
the  defendant  was  the  infant  daughter  and 
heir  of  the  vendor,  domiciled  within  the 
jurisdiction  of  the  court,  though  tlie  land 
was  situated  in  another  State,  Walworth, 
Ch.,  granted  a  decree  which  directed  a  con- 
veyance by  the  infant  when  she  arrived  at 
proper  age  to  enable  her  to  transfer  the 
legal  title  according  to  the  law  of  the 
State  where  the  land  was  ;  and  authorized 
the  plaintiff  meanwhile  to  take  and  retain 
possession  of  the  land,  if  he  could  obtain 
possession  thereof  without  suit;  and  a 
perpetual  injunction  was  granted,  restrain- 
ing the  defendant  from  disturbing  the 
complainant  in  such  possession,  or  from 
doing  any  act  whereby  the  title  should  be 
transferred  to  any  other  person,  or  in  any 


way  impaired  or  incumbered.  Sutphcn 
V.  Fowler,  9  Paige,  280. 

(2)  As  to  the  distinction  between  the 
case  where  the  apparent  defect  in  the  ven- 
dor's title  is  such  an  one  as  may  be  ex- 
pected to  be  removed  upon  a  reference 
consistently  with  the  equity  practice  ;  and 
that  where  the  court  will  not  allow  the 
plaintiff  to  make  up  a  case  in  this  way, 
but  will  only  dismiss  his  bill  without  prej- 
udice to  a  new  bill,  see  Clay  v.  Ruflbrd, 
5  De  G.  &  S.  768,  19  Eng.  L.  &  Eq. 
350. 

(a)  The  right  of  the  purchaser,  in  a  suit 
against  him  for  specific  performance,  to 
have  the  vendor's  title  proved,  may  be 
waived  by  acts  in  pais.  As  to  what  acts 
will  be  sufficient  evidence  of  a  waiver,  see 
Simpson  v.  Sadd,  4  De  G.,  IM.  &  G.  665, 
31  Eng.  L.  &  Eq.  385;  Fleetwood  v. 
Green,  15  Ves.  594.  But  it  has  been  held 
that  a  vendor  cannot  have  the  benefit  of 
such  waiver,  unless  the  fact  of  waiver  is 
expressly  put  in  issue  in  the  bill ;  it  is  not 
sufficient  that  facts  are  stated  upon  the 
bill  amounting  to  evidence  of  waiver,  but 
the  fact  of  waiver  must  be  directly  alleged. 
Clive  V.  Beaumont,  1  De  G.  &  S.  397 ; 
Gaston  v.  Frankum,  2  id.  561.  If  a  pur- 
chaser apply  for  specific  performance,  and 
in  his  bill  insist  that  the  defendant  cannot 
make  a  good  title,  the  court  cannot  pass 
upon  the  title ;  for  the  plaintiff,  by  his  own 
allegation  of  the  defendant's  want  of  title, 
shows  that  there  cannot  be  that  decree  of 
specific  performance  which  he  seeks. 
Nicloson  V.  Wordsworth,  2  Swanst.  365. 
"  When  on  a  bill  by  a  vendee  for  specific 
performance,  it  appears  that  the  defendant 
cannot  make  a  good  title,  there  is  no  fur- 
ther question  in  the  cause  than  who  is  to 
pay  tiie  costs."  Lord  Eldon,  2  Swanst. 
369.  As  to  the  costs  of  an  issue  ordered 
at  the  instance  of  the    purclftser,    and 

[563] 


538 


THE   LAAV   OF   CONTRACTS. 


[*PART  II. 


ly  no  court  would  compel  a  party  to  take  and  pay  for  an  estate 
of  which  only  a  substantially  imperfect  title  could  be  given,  (b) 
It  is,  however,  quite  impossible  to  say,  by  a  definite  rule  or 
standard,  hoiv  good  a  title  must  be  to  satisfy  a  court  of 
equity,  (c) 

On  the  one  hand,  no  reasonable  court  would  require  that  a 
title  should  be  so  technically  perfect  that  no  acute  conveyancer 
could  find  a  recondite  and  merely  formal  objection  upon  which 
the  possibility  of  a  doubt  might  rest,  (d)  In  one  sense,  this 
would  be  an  imperfection.  But  it  would  not  be  such  an  im- 
perfection as  should  induce  a  court  to  refuse  a  decree  for  per- 
formance. On  the  other  hand,  if  the  character  of  the  title  were 
doubtful,  although  the  court  were  able  to  come  to  the  conclusion 
that,  on  the  whole,  a  title  could  be  made  that  would  not  proba- 
bly be  overthrown,  this  would  not  be  good  title  enough  ;  for  the 
court  would  have  no  right  to  say  that  their  conclusion,  or  their 
opinion,  would  bind  the  whole  world,  and  prevent  all  assault 
upon  the  title,  (e) 

We  know  not  what  better  we  can  say,  than  that  every  pur- 
chaser of  land  has  a  right  to  demand  a  title  which  shall  put 
him  in  all  reasonable  security,  and  which  shall  protect  him  from 


finally  decided  in  favor  of  the  vendor, 
see  Grove  v.  Bastard,  1  De  G.,  M.  «Sb 
G.  69. 

(b)  Blatchford  v.  Kirkpatrick,  6  Bcav. 
232.  Even  after  the  defendant  has  waived 
an  in(]uii-y  into  the  title,  if  it  come  out 
collaterally  that  it  is  imperfect,  the  court 
will  not  compel  him  to  accept  it.  Warren 
V.  Kichardson,  Youiige,  1.  And  see  Dev- 
erell  v.  Bolton,  18  Vcs.  .514,  where  Lord 
Eldon  held,  that  an  approval  of  the  title 
by  counsel  of  the  vendee,  upon  an  abstract 
being  laid  before  him,  could  not  1)C  taken 
as  a  conclusive  waiver  of  reasonable  ob- 
jections to  the  title.  But  if  the  vendor 
stipulate  expressly  to  convey  only  such 
title  as  he  has,  the  vendee  cannot  take  the 
ol)jection  that  it  is  defe(;tive.  Fremc  v. 
"\Vrit,'ht,  4  Madd.  ;!04.  And  sec  Ten 
IJroeck  V.  Livingston,  1  Johns.  Ch.  357; 
Winne  v.  Ucynohls,  (i  I'aige,  407  ;  McKay 
V.  Carritjgton,  1  McLean,  50. 

('•)  IJiit  the  vendor  must  shf>w  a  lillr, 
nol  a  11,11  iKiiil  fur  th\r;  and  this  whclhcr 
the  intcrcNl  ruiitracti'd  for  Ik;  freehold  or 
leasehold.  <<"ihh.'s  i\  Hooker,  2  Meriv.  424 ; 

•      [5G4] 


Purvis  V.  Rayer,  9  Price,  488,  where  the 
point  was  first  settled,  that  the  vendor  of  a 
leasehold  estate  must  show  the  title  of  his 
lessor.  And  see  Deverell  r.  Bolton,  18 
Ves.  505. 

(f/)  That  the  land  is  subject  to  a  reser- 
vation of  mines  and  minerals  and  water 
privileges,  none  of  which,  in  point  of  fact, 
the  land  contains,  has  been  held  to  consti- 
tute no  valid  ground  of  objection  to  the 
title.     Winne  r.  Reynolds,  6  Paige,  407. 

{e)  And  that  may  be  a  good  title  at 
law,  which  a  court  of  cciuity  will  not  ex- 
ercise its  discretionary  power  to  force  upon 
a  reluctant  purchaser.  Lord  Truro,  C, 
Grove  v.  Bastard,  1  ])c  G.,  M.  &  G.  75. 
And  Lord  Cottoi/idiii,  when  tiie  same  case 
was  before  him,  made  some  observations 
upon  the  delicate  and  rcs|ionsible  duty 
thrown  upon  tlu!  court,  when  it  is  required 
to  <lccide,  as  between  vendor  and  pur- 
(Jniscr,  a  ipiestion  of  title  which  it  cannot 
conclude  as  against  the  party  from  whom 
tlie  adverse  claim  may  be  ex))ectcd.  2 
IMiiliijis,  f.'Jl.  Compare  Vancouver  v. 
Bliss,  11  Vcs.  465. 


CII.  IX.]  SPECIFIC   PERFORMANCE.  539 

anxiety,  lest  annoying,  if  not  successful  suits  be  brought  against 
him,  and  possibly  take  from  him  or  his  representatives  land 
upon  which  money  was  invested.  He  should  have  a  title 
which  shall  enable  him  not  only  to  hold  his  land,  but  to  hold 
it  in  peace  ;  and  if  he  wishes  to  sell  it,  to  be  reasonably  sure 
that  no  flaw  or  doubt  will  come  up  to  disturb  its  marketable 
value.  (/) 

In  a  late  case  it  is  intimated  that  the  adverse  opinions  of 
conveyancers  and  lawyers  will  not  alone  suffice  to  make  a 
title  deficient  in  the  view  of  the  court,  (g-)  And  this  must  cer- 
tainly be  true  to  the  letter.  For  there  can  be  nothing  to  pre- 
vent the  court  from  going  behind  such  opinions  and  examining 
into  the  grounds  of  them.  And  of  course  if  they  are  found  to 
be  dishonest  or  merely  frivolous,  the  court  would  disregard 
them.  But  this,  although  a  possible,  is  hardly  a  supposable 
case.  And  it  must  be  true  always,  that  the  deliberate,  adverse 
opinion  of  one  or  more  persons  known  to  be  largely  employed 
in  the  investigation  of  titles,  and  believed  to  have  competent 
skill  and  knowledge,  must  be  regarded  as  going  very  far  indeed 
against  a  title,  because  if  it  did  nothing  else,  it  could  hardly  fail 
to  lessen  the  marketable  value  of  the  land.  (A) 

Sometimes  an  objection  to  title,  may  be  a  valid  one,  but 
capable  of  ready  and  entire  removal ;  as  a  charge  or  incum- 
brance which  can  be  paid  off  and  which  the  plaintiff  is  ready  to 
pay  off;  or  releases  or  grants  are  wanted  from  persons  who 


(f)  The  principles  upon  which  a  court  vorable    decision    in    the   inferior   court, 

of  equity  determines  whether  a  title  is  does  not  render  the  title  doubtful ;  and, 

such  as  a  purchaser  must  be  required  to  on   appeal,    the    judge   of   the    Superior 

take,  were  much  considered  in  Pyrke  v.  Court  is  still  bound  to  exercise  his  own 

Waddingham,  10  Hare,  i,  17  Eng.  L.  &  discretion,  and   decide   according  to   his 

Eq.   534.      See  also.  Freer  v.   Hesse,  4  own  judgment.     Sheppard  v.  Doolan,  3 

De  G.,  M.  &  G.  495,  21  Eng.  L.  &  Eq.  Drury  &  W.  8. 

82 ;  Collard  v.  Sampson,  4  De  G.,  M.  &         (^r)  Dalzell   v.  Crawford,   1  Pars.  Eq. 

G.   224,  21    Eng.  L.   &  Eq.  352.     And  57. 

upon  this  subject  (which  is  much  too  ex-         (h)  We  say  this,  although  Lord  Eldon, 

tensive  to  be  here  treated  of  in  detail),  the  in  Boehm  v.  Wood,  1  Jacob  &  W.  422, 

3d  section   [on  Doubtful   Titles],  and  the  declared  that  the  doubts  of  conveyancers, 

4th  section  [containing  Examples  of  Bad,  whether  the  title  was  good  or  not,  amount- 

Good,  and  Doubtful  Titles  in  Equity],  of  1  ed  to  nothing  unless  the  court  by  its  own 

Sngd.  Vend.  &  Purch.   c.    10,  Am.  cd.  observation  perceived  in  the  abstract    of 

1851,  may  be  consulted  with  advantage,  the  title  a  reasonable  ground  for  refusing 

See  also,  Owings  v.  Baldwin,  8  Gill,  337 ;  to  compel  a  purchaser  to  take  it.     Vide 

Vancouver  v.  Bliss,    11    Ves.  458;  Gar-  supra,  note  {f ) . 
nett  V.  Macon,  2  Brock.  244.     An  unfa- 

VOL.  II.  48  [5G5] 


540 


THE   LAW    OF   CONTRACTS. 


[part  II. 


are  ready  to  give  them  if  required  to  complete  a  title.  In  such 
cases  it  would  seem  inconsistent  with  the  purpose  and  character 
of  a  court  of  equity  to  refuse  a  decree  of  performance,  if  the 
vendor  is  able  to  make  a  good  title  at  any  time  before  the  de- 
cree is  pronounced,  (t)  We  do  not  say  that  it  should  be  enough 
if  the  plaintiff  can  make  it  certain  before  a  decree  is  made  that 
the  title  will  be  made  good  afterwards  ;  for  although  he  might 
in  such  a  case  ask  for  reasonable  delay  of  the  decree  that  he 
may  have  the  desired  opportunity  to  complete  the  title,  this  is 
as  much  as  he  should  have,  (j) 

It  is  for  the  buyer  to  object  to  the  sufficiency  of  title.  The 
seller  cannot  object  unless  the  buyer  demands  warranty  ;  for  if 
the  buyer  is  willing  to  take  the  land  with  the  best  title  he  can 


(i)  Upon  a  bill  filed  by  a  vendor  it  is 
generally  sufficient  if  he  can  show  a  good 
title  at  the  hearing,  although  he  had  not 
a  good  title  at  the  time  of  the  contract ; 
for  if  the  defendant  wished  to  take  ad- 
vantage of  the  want  of  title,  he  should 
have  received  the  contract  on  that  ground 
while  the  defect  existed.  Hotigart  v. 
Scott,  1  Russ.  &  M.  293  ;  2  Dan.  Ch. 
Pr.  (Boston,  1846),  1195;  Salisbury  v. 
Hatcher,  2  Younge  &  C,  Ch.  .54.  The 
plaintiff  may  make  a  good  title  if  he  can, 
when  tlie  cause  comes  on  upon  further  di- 
rections, though  he  could  not  do  so  when 
the  title  was  examined  previously  by  the 
master ;  in  such  case,  however,  the  de- 
fendant may  be  relieved  from  costs.  Pa- 
ton  V.  Rogers,  G  Madd.  256.  See  2  Dan. 
Ch.  Pr.  1196  (Boston,  1846).  But  Lord 
Eldon,  in  Leclimere  i\  Brasier,  2  Jacob  & 
AV.  289,  said  that  he  would  not  extend 
the  rule  whicli  the  court  had  adopted,  of 
compelling  a  ])urchaser  to  take  the  estate 
where  a  title  was  not  made  till  after  the 
contract  to  any  ease  to  wiiich  it  had  not 
already  been  a])plicd ;  and  that  the  rule 
had  in  many  cases  been  i)roductive  of 
great  hardship.  And  in  that  case  the 
j)urchascr  of  real  estate  sold  under  a  de- 
cree was  (liscliarged  from  his  jmrciiase  for 
an  error  in  the  decree,  allliougli  the  j)ar- 
tics  were  i)rocccding  to  rectify  it.  Sco 
ftlso.  Coster  v.  Tumor,  1  Russ.  &  M. 
311  ;  "Wright  v.  Howard,  1  Sim.  &  S. 
190,  205.  And  wlictlicr  it  is  suniciciit 
that  lli<!  phiiiiliir  can  ])i'iforin  his  jiart  at 
the  time  of  th('  tlccree,  depends  upon  the 
circumhtan<'CH  of  the  particular  case,  and 

[  ^<^<5  ] 


especially  upon  the  question  whether  if  he 
could  not  have  performed  the  contract 
originally,  there  has  since  been  such  a 
change  of  circumstances  as  renders  it 
inequitable  for  him  to  insist  now  upon  a 
specific  performance.  MarsliaU,  C.  J., 
Garnett  v.  Macon,  2  Brock.  212.  While 
it  is  competent  to  the  plaintiff  to  jjcrfcct 
his  title  in  the  progress  of  the  cause,  his 
rigiit  to  force  upon  the  defendant  a  new 
title  acquired  since  the  filing  of  the  bill 
only  exists  under  certain  limitations ; 
with  respect  to  which  it  is  held  he  may 
rely  upon  a  title  acquired  in  point  of 
form  after  the  bill  is  filed,  provided  that 
title  is  consistent  with  his  original  rights 
and  is  one  which  can  operate  by  relation 
back.  Doyle  v.  Callow,  12  Irish  Eq. 
241,  244. 

(  /)  If  the  vendor  was  in  the  first  in- 
stance guilty  of  an  unfair  concealment  of 
the  defect,  a  subsequent  removal  of  it  will 
not  entitle  him  to  relief.  Dalby  r.  Pullcn, 
1  Russ.  &  M.  296.  It  has  been  held  that 
after  an  agreement  for  the  sale  of  land 
has  been  j)erformed  by  the  execution  of 
a  conveyance  by  tlie  vendor,  who  at  the 
time  had  no  title  or  right  to  convey,  such 
vendor  cainiot,  u])on  afterwards  oI)taining 
the  title,  insist  on  the  vendee's  acceptance 
of  a  new  conveyance  ;  nor  will  the  court 
enjoin  the  vendee  from  i)rosecuting  an  ac- 
tion upon  the  covenants  in  the  original 
(Iced  iiisiitulcd  before  the  vendor's  ac(]ui- 
silion  and  lender  of  a  good  title.  Tucker 
r.  Clarke,  2  Sandf.  C-'h.  96.  And  see  Da- 
vis V,  Symonds,  I  Cox,  C.  C.  403. 


CH.  IX.] 


SPECIFIC   PERFORMANCE. 


541 


get,  and  with  it  the  risk  of  ouster,  he  should  have  it.  (k)  So  if 
the  seller  can  make  good  title  to  a  part  of  the  land,  and  to  that 
only,  the  buyer  may  insist  upon  having  that  part,  unless  the 
seller  is  in  no  fault  whatever,  and  would  be  materially  injured 
by  a  severance  of  the  land.  (/) 

A  somewhat  different  question  arises,  or  if  it  be  the  same  it 
has  a  different  aspect,  when  the  parties  have  themselves  agreed 
upon  a  time  at  which  the  title  must  be  good,  and  shown  to  be 
so,  and  have  made  this  time  a  part  of  the  contract,  (m)  If  that 
time  has  elapsed,  there  can  be  no  specific  performance  of  the 
contract;  [n)  and  if  the  plaintiff  asks  for  further  time,  and  also 
for  a  purchase  after  this  further  time,  he  may  be  said  to  ask 
that  the  court  should  make  a  new  bargain  and  not  to  seek  the 


(Jc)  Milligan  v.  Cooke,  16  Ves.  1  ;  Mes- 
taer  v.  Gillespie,  11  id.  640;  Jones  v. 
Belt,  2  Gill,  106.  Where  a  vendor  being 
defendant  in  the  suit,  exeepted  to  a  report 
of  the  master  finding  in  favor  of  his  title, 
the  exception  was  overruled  by  Sir  John 
Romilhj,  M.  R.,  who  declared  it  to  be 
without  precedent,  and  wrong  in  substance 
as  well  as  form.  Bradley  v.  Munton,  15 
Beav.  460,  21  Eng.  L.  &  Eq.  b^b. 

(I)  Western  v.  Russell,  3  Ves.  &  B. 
192;  Hill  V.  Buckley,  17  Ves.  394;  Ja- 
cobs V.  Locke,  2  Ired.  Eq.  286.  In  a 
case  where  jt  was  contended  that  an  in- 
tended lessee  could  not  liave  a  specific 
performance  of  the  agreement  to  lease,  on 
the  ground  that  the  intended  lessor  had 
not  such  an  interest  in  the  whole  property 
as  would  have  enabled  him  on  his  part  to 
have  obtained  a  specific  execution  of  the 
contract,  and  that  therefore  there  was  a 
want  oi mutuality,  it  was  answered:  "The 
doctrine  of  this  court,  which  is  commonly 
expressed  by  saying,  'contracts  must  be 
mutual,'  has  no  application  to  a  case  like 
this.  A  vendor  cannot  make  a  purchaser 
take  ah  estate  with  a  bad  title ;  but  the 
purchaser  ma}^  compel  the  vendor  to  give 
him  the  estate  with  such  title  as  he  has." 
Sutherland  v.  Briggs,  1  Hare,  34,  per 
Wigram,  V.  C.  Where  one  of  two  ten- 
ants \n  common  in  fee  of  a  colliery,  con- 
tracted with  the  plaintiff  for  a  lease  of  the 
entirety,  the  court  refused  to  compel  him 
to  execute  a  lease  of  his  moictv  onlv. 
Price  r.  Griffith,  1  De  G.,  M.  &"  G.  80, 
8  Eng.  L.  &  Eq.  72.  "  Cases  may  be 
conceived,"  said  Knight  Bruce,  L.  J.,  in 
that  case  (Id.  84),  "where  a  person  who 


has  contracted  to  convey  more  than  it  is 
in  his  power  to  convey,  ought  to  be  decreed 
to  convc}'  what  he  can,  either  with  or 
without  compensation  to  the  vendee  for 
such  part  of  the  subject-matter  of  the  con- 
tract as  the  vendor  is  unable  to  convey. 
But  a  lease  of  an  undivided  moiety  of  a 
colliery  is  a  very  different  thing  from  a 
lease  of  a  whole  colliery ;  and  in  this  case 
there  is  no  evidence  of  improper  conduct 
or  misrepresentation  or  of  the  defendant 
Griffith  having  held  himself  out  as  capa- 
ble of  contracting  for  the  whole,  or,  in 
fiict,  any  other  circumstance  constituting 
a  ground  for  a  decree  as  to  one  undivided 
share  alone." 

(m)  Time  has  been  held  to  be  of  the 
essence  of  the  contract,  upon  the  construc- 
tion of  the  agreement,  in  Seaton  v.  Mapp, 
2  Collyer,  556  (see  Drysdale  v.  Mace,  5 
De  G.,  M.  &  G.  103,  27  Eng.  L.  &  Eq. 
195);  Payne  v.  Banner,  7  Jur.  1051; 
Wells  V.  Smith,  7  Paige,  22. 

(n)  Lord  Eldon,  Ch.,  Bochm  v.  Wood,  I 
Jacob  &  W.  420 ;  Alley  v.  Deschamps, 
13  Ves.  225.  But  even  where  time  is  of 
the  essence  of  the  contract,  the  defendant 
cannot  take  advantage  of  a  delay  of  which 
his  own  misconduct  was  the  cause.  IMorse 
V.  Merest,  6  Madd.  26  ;  Taylor  v.  Long- 
worth,  14  Pet.  172  ;  Pritchard  v.  Ovey, 
1  Jacob  &  W.  396.  And  a  stipulation 
making  a  failure  to  pay  purchase-money 
at  the  time  agreed,  a  breach  of  the  con- 
tract and  a  ground  for  its  rescission,  may 
be  waived  by  an  acceptance  of  the  money 
subsequently.  Hunter  v.  Daniel,  4  Hare, 
420.  Or  by  other  acts  of  waiver.  Reed 
V.  Chambers,  6  Gill  &  J.  490. 

[567] 


542 


THE   LAW   OF   CONTRACTS. 


[part  II. 


enforcement  of  the  bargain  he  had  made  for  himself  There 
may  be  given  in  answer  to  this  the  rule  in  equity  that  "  time  is 
not  of  the  essence  of  a  contract;  "  (o)  but  we  think  it  would  be 
wiser  and  safer  to  express  what  is  really  meant  by  this  rule,  by 
saying  that  time  is  not  necessarily  of  the  essence  of  a  contract. 
It  certainly  may  be  made  so  by  the  parties  themselves,  or  by 
the  circumstances  of  the  case,  although  the  parties  say  nothing 
about  it.  [p)  Thus  if  a  delay  is  asked  by  either  party  and  the 
court  give  it,  they  never  give  an  unlimited  period,  but  name  a 
day  of  reasonable  distance  and  refuse  to  go  further,  {q)  This 
rule  is  invoked  in  a  great  variety  of  cases,  and  is  applied  in 
many  of  them.  And  language  is  sometimes  used  in  respect  to 
it,  possibly  a  use  is  sometimes  made  of  it,  which  is  not  easily 
reconciled  with  the  just  duties  and  powers  of  equity.     We  can- 


(o)  But  the  party  who  seeks  to  avail 
himself  of  this  maxim,  must  have  an 
equity  which  warrants  his  invoking  it.  A 
purcliaser  whose  default  lias  not  been  bond 
Jide,  has  no  equity  to  support  an  applica- 
tion for  specific  performance;  and  if  it 
appear  tliat  he  houolit  specuhitively,  witli- 
out  knowing  and  without  having  probable 
grounds  for  believing  tliat  he  should  be 
prepared  with  money  to  pay  the  price  at 
the  stipulated  time,  even  a  comparatively 
short  delay  may  deprive  him  of  the  assist- 
ance of  a  court  of  equity.  Gee  v.  Pearse, 
2  De  G.  &  S.  325.  And  see  Alley  v. 
Deschamps,  13  Vcs.  228. 

(/))  A  change  of  circumstances  subse- 
quent to  the  making  of  the  contract,  may 
render  a  prompt  fulfilment  of  it  on  tlic 
plaintifFs  part  a  necessary  condition  to 
his  right  to  relief.  The  doctrine  of  ccpiity 
is  tlius  stated  by  Ciiicf  Justice  Marshall: 
"  Tiie  rule  that  time  is  not  of  the  essence 
of  a  contract  lias  certainly  been  recognized 
in  courts  of  cfjuity;  and  tiiere  can  i)e  no 
doubt  tliat  a  faikirc  on  the  part  of  a  pur- 
cha.scr  or  vendor  to  perform  his  contract 
on  tlic  stipulated  day,  docs  not  of  itself 
deprive  him  of  his  I'ight  to  demand  a 
specific  performance  at  a  sul)-ic(iticiir  day, 
wiicn  lie  shall  i)e  able  to  comply  with  his 
part  of  the  engagement.  It  may  be  in  the 
power  of  tlie  court  to  direct  conqicnsiition 
for  the  breacli  of  contract  in  point  of  time, 
and  in  such  case  llic  oliject  of  the  parlies 
ia  effccluatcd  by  carrying  it  into  execu- 
tion.    IJut  the  rule  is  not  univcrsul.     Cir- 


cumstances  may  be  so  changed,  that  the 
object  of  the  parties  can  be  no  longer  ac- 
complished, that  he  who  is  injured  by  the 
failure  of  the  other  contracting  party  can- 
not be  placed  in  the  situation  in  which  he 
would  have  stood  had  the  contract  been 
performed.  Under  such  circumstances  it 
would  be  iniquitous  to  decree  a  specific 
performance,  and  a  court  of  equity  will 
leave  the  parties  to  their  remedy  at  law." 
Brasbier  v.  Gratz,  6  Wheat.  533. 

(7)  Although  time  was  not  originally  of 
the  essence  of  the  contract,  yet  after  con- 
siderable and  improper  delay  on  one  side, 
the  other  party  has  a  right  to  fix  a  reason- 
able time  within  which  the  contract  is  to 
be  completed ;  that  time  will  then  be  con- 
sidered as  having  become  of  the  essence 
of  the  contract;  and  in  case  the  jiarty  to 
whom  notice  has  so  been  given,  fails  to  do 
what  is  proper  on  liis  ]iart,  within  the 
time  so  fixecl,  a  court  of  c(piity  will  not 
afterwards  interfere  in  his  favor  to  compel 
tlie  execution  of  the  contract.  Lord 
Laiujdalc,  M.  R.,  King  v.  AVilson,  G  Beav. 
126  ;  Turner,  L.  J.,  Roberts  v.  Bcrrv,  3 
De  G.,  M.  &  G.  292 ;  AValker  ;.-.  JcllVeys, 
1  Ilarc,  .'US  ;  Lord  .S7.  /joiKirds,  1  Sugd. 
V.  &  I",  eh.  5,  §  3,  ])!.  34,  states  the  ride 
more  mirrowly.  As  to  what  is  rrasoiiable 
notice,  see  Parkin  v.  Tliorold,  lO  Beav. 
59,  13  Kug.  L.  &  Eq.  419,  per  Homl/li/, 
M.  U.  lu  Dominick  i:  Mic]mel,4  Sandf. 
420,  a  riglit  is  asserted  for  either  party  to 
make  tlie  time  essential  by  a  mere  demand 
of  perfornuincc  at  tlic  stii)ulatcd  day. 


en.  IX.]  SPECIFIC   PERFORMANCE.  543 

not  doubt  that  the  rule  must  needs  be  substantially  this.  The 
court  will  always  inquire  into  the  time  when  a  thing  is  to  be 
done,  as  they  will  into  any  other  part  of  the  contract.  If  the 
thing  to  be  done  —  whether  a  conveyance  of  land  or  any  thing 
else  —  can  be  as  well  done  at  a  later  time  as  an  earlier,  or  the 
reverse,  and  certainly  without  detriment  to  the  party  called 
upon  to  do  the  thing,  then  time  is  not  in  fact  of  the  essence  of 
the  contract,  and  will  be  regarded  by  the  court,  or  rather  disre- 
garded, accordingly,  provided  the  parties  have  not  themselves 
expressly  agreed  that  the  time  shall  be  treated  as  essential,  or 
made  it  so  by  their  conduct.  But  if  it  seems  that  the  whole 
value,  or  a  material  part  of  the  value  of  the  transaction  to  the 
defendant,  depends  upon  its  being  done  at  a  certain  time  and 
no  other,  or  that  the  substitution  of  any  other  will  subject  him 
in  any  way  to  loss  or  material  inconvenience,  then  time  is  cer- 
tainly of  the  essence  of  the  contract  so  far  as  he  is  concerned, 
and  the  court  will  so  regard  it.  (r)  And  in  deciding  the  ques- 
tion whether  time  be  of  the  essence  of  the  contract  or  not,  a 
court  of  equity  could  hardly  fail  to  consider  that  the  express 
agreement  of  the  parties  themselves  upon  a  certain  time,  is 
strong  though  not  conclusive  evidence  that  it  belonged  to  the 
essence  of  the  contract,  (s) 


(r)   Brashier  v.  Gratz,  6  Wheat.  528,  be  of  the  essence  of  the  contract.     Mitch- 

533;  Garnett  v.  ISIacon,  2  Brock.  246,  6  ell  v.  Wilson,  4  p:d\v.  Ch.  697. 
Call,  308.     Where  the  subject-matter  was         (s)  Where  a  vendor  who  had  neglected 

the  possession,  trade,  and  good-will  of  a  to  furnish  an  abstract  of  title  at  the  day 

public-house,  and  the  furniture  and  stock  stipulated,  sought  to  enforce  the  specific 

of  liijuors  therein,  time  was  held  to  be  of  performance  of  the  contract,  contending 

the  essence  of  the  contract.     Coslake  v.  that  time  was  not  of  the  essence  of  the 

Till,  1  Russ.  376.     And  such  is  the  gen-  contract,  Lord  Cranivorth,  V.  C.,  before 

eral  rule  where  the  property  which  is  the  whom  the  bill  was  filed,  denied  that  the 

subject  of  the  contract  is  connected  with  words  of  a  contract  could  have  any  difier- 

trade.     Walker  v.  Jeffreys,  1   Hare,  348.  ent  meaning   in  a  court  of  equity  from 

It  seems  where  land  is  purchased  as  an  that  which  they  bore  in  a  court  of  law  ;  or 

article  of  commerce,  with  a  view  to  be  that  a  court  of  equity  will  ever,  if  there 

sold  again,  the  purchaser  has  a  right  to  are  no  other  circumstances  in  the  case, 

insist  that  a  conveyance,  at  the  stijjulated  disregard  the  plain  letter  of  the  contract, 

time,  is  essential.     McKay  v.  Carrington,  and  coifipcl  the  vendee  to  take  a  title  on 

1  McLean,  59.     In  the  sale  of  a  reversion,  a  day  different  from  that  on  which  he  has 

time  is  of  the  essence  of  the   contract,  contracted  to  take  it.     "  When,  therefore," 

Newman  !;.  Rogers,  4  Bro.  Ch. 391  ;  Spur-  said  his   lordship,  "a  contract  has   been 

rier  v.  Hancock,  4  Ves.  667.     Where  an  entered  into,  by  which  a  court  of  law  dc- 

incoming  tenant  agreed  to  procure  a  cer-  cides  that  the  purchaser  is  not  bound  un- 

taia  person  to  be  his  surety  for  the  rent  less  a  title  be  made  before  a  given  day,  if 

by  a  stipulated  day,  the  time  was  held  to  a  court  of  equity  gives  relief,  it  must  be, 

48  *  [ 569  ] 


544 


THE   LAW    OF   CONTRACTS. 


[part  II. 


We  said  that  time  was  not  nccessarilt/  of  the  essence  of  the 
contract.     But  at  this  period  and  in  this  country,  it  usually  is 


not  on  the  ground  that  it  puts,  on  the 
words  of  the  contract,  a  construction  dif- 
ferent from  that  put  on  it  at  hiw,  hut  be- 
cause there  are  grounds,  collateral  to  the 
contract,  on  which  it  can  found  a  jurisdic- 
tion warranting  its  interference.  What 
then  are  those  grounds  ?  I  answer,  the  con- 
duct of  the  contracting  parties.  Though 
the  terms  of  the  agreement  stipulate  for 
the  completion  of  the  purchase  on  a  given 
day  ;  yet,  if  tiie  parties  have  dealt  together 
on  the  footing  that  the  contract  should  be 
construed  as  a  contract  to  complete  in  a 
reasonal)le  time,  this  court  acts  on  (hat  as 
the  real  contract  to  be  enforced.  There 
is,  no  doul)t,  some  ditiiculty  in  reconciling 
this,  which  is  certainl}'  the  doctrine  of  the 
court,  with  the  statute  of  frauds.  A 
contract  to  purchase  if  a  title  is  made  on 
a  given  day,  is  not  the  same  contract  as  a 
contract  to  purchase  if  a  title  is  made  in  a 
reasonalde  time ;  and  so,  to  admit  par- 
ties, by  agreement,  not  in  writing  (and 
conduct  is  but  evidence  of  agreement),  to 
substitute  the  latter  for  the  former  con- 
tract, is,  in  truth,  to  give  effect  to  a  con- 
tract relating  to  lands  not  reduced  into 
writing  and  signed  by  the  party  to  be 
charged  ;  and  this  cannot  be  done  consist- 
ently with  tiie  statute  of  frauds,  as  was 
decided  by  the  Court  of  Common  Pleas, 
in  Stowell  v.  Robinson,  3  Bing.  N.  C. 
928.  Perhaps  this  court  has  acted  on  the 
ground  that  it  would  be  a  fraud  in  a  pur- 
chaser, after  dealing  with  a  vendor  on  the 
footing  that  lie  did  not  consider  the  time 
fixed  as  material,  to  turn  round  and  insist 
on  the  stiict  terms  of  the  written  contract ; 
or  it  may  i)e  tiiat  the  court  has,  from  the  con- 
duct C)f  the  ])arties,  felt  itself  warranted  in 
inferring  that  the  day  name^l  was  intended 
only  as  a  security  for  performance  in  a  rea- 
sonable time;  and  so,  lias  dealt  with  it  as  in 
the  nature  of  a  jjcnalty.  Be  this,  liowevcr, 
as  it  may,  whatever  l)e  tiie  foundation  of  the 
doctrine  of  tiie  court,  there  is  no  douljt  of 
its  cxisKMicc  ;  tliat  is,  thougli  the  contract, 
according  to  its  terms,  is  tiiattlie  piirciiasc, 
sliall  be  com|ilrt('d  on  a  j.'iv('ii  day,  and  is 
80  fraiin'(i  tliat,  if  not  com|)leted  on  that 
day,  tlie  pnrchaHcr  is,  at  law,  entitled  to 
recover  back  his  deposit ;  yet,  if  tiii^  par- 
ties deal  togetlieron  the  footing  of  iiaviiig 
disregarded  tiie  ap|)oiiitc(i  day,  as  liaving, 
accoriliiig  to  the  ordinary  laii;_Mi:ig('  used, 
agreed  to  treat  time  as  not  being  of  liie 
CBScncc  (jf  the  contract,  then  tiiis  court  will 

[570] 


give  relief,  although  the  day  for  comple- 
tion may  have  passed.  But  this  relief  is, 
as  I  have  already  stated,  given  solely  on 
the  ground  of  such  dealing  of  the  parties." 
Parkin  u.  Thorold,  2  Sim.  n.  s.  7,  8;  11 
Eng.  L.  &  Eq.  275.  "  Whether  the  facts 
have  in  all  cases,"  added  Lord  Cranworth, 
in  the  same  opinion,  "  been  such  as  fairly 
to  warrant  the  inference  relied  on ;  whether 
this  court  has  not  sometimes  made  a  new 
contract  for  the  parties,  and  so  enforced 
on  the  purchaser,  the  performance  of  what 
he  never  undertook  to  do,  is  not  the  point 
for  decision.  It  is  sutheient  to  say  that 
the  ground  on  which  the  court  has  jn'o- 
fessed  to  proceed  has  always  been  that  the 
parties  have  so  acted  as  to  enable  it  either 
to  give  to  the  original  contract  a  meaning 
different  from  its  prima  facie  obvious  im- 
port, or  else  to  say  that  the  original  con- 
tract, so  far  as  relates  to  the  time  fixed  for 
its  completion  has  been  abandoned,  and  a 
new  and  more  extended  one  has  been  by 
implication  entered  into."  Applying  those 
principles  to  the  case  before  him,  which 
came  up  on  a  motion  to  dissolve  an  in- 
junction restraining  an  action  at  law  for 
the  recovery  of  the  deposit,  he  held,  that 
nothing  appeared  to  warrant  him  in  say- 
ing that  the  defendant  ever  abandoned  his 
right  to  insist  on  the  completion  of  the 
purchase  at  the  specified  day,  and  he  de- 
cided in  favor  of  the  defendant  according- 
ly. But  the  same  case  afterwards  coming 
on  for  hearing  before  Sir  Jolm  Roniilli/,  M. 
R.,  that  judge  overruled  the  decision  of 
Lord  CraiHcortb,  and  affirmed  the  doctrine 
that  prima  facie,  in  equity,  time  is  not  es- 
sential. Parkin  v.  Thorold,  16  Beav.  59, 
13  Eng.  L.  &  Eq.  416.  And  in  a  subse- 
(luent  case  of  Roberts  v.  Berry,  3  I)e  G., 
M.  &  G.  284,  17  Eng.  L.  &  Ecj.  400 ;  pre- 
senting a  similar  state  of  facts,  Kiiic/ht 
Bruce,  and  Turner,  Lords  Justices,  adhered 
to  the  doctrine  as  laid  down  by  the  Master 
of  the  IkoUs  in  opposition  to  the  opinion 
of  Lord  Criniirorl/i,  in  I'arkin  r.  Thorold. 
While,  therefore,  the  weighty  oliservations 
of  Lord  ( 'nnni-iirl/i,  in  the  aiiovc-eited  case, 
command  att(Mitioii  as  an  argument  for  a 
reduction  of  tlie  doctrine  of  ecpiiiy  n|)on  this 
subject,  to  mere  conformity  to  tlie  common 
law,  and  in  the  same  degree  to  a  moro 
reasonable  and  safe  respect  to  the  words 
of  men's  contracts,  it  must  be  conceded 
that  the  e(pnli-ary  \iew  seems  as  yet  to  ob- 
tain ill  England.     The  doctrine  of  ei^uity 


CH.  IX.] 


SPECIFIC   PERFORMANCE. 


545 


SO  in  fact.  Very  few  transactions  in  business  are  isolated  and 
independent.  It  is  not  often  that  one  buys  without  making 
arrangements  elsewhere  for  the  purpose,  or  sells  without  hav- 
ing other  things  in  view  and  connected  with  this  by  distinct 
bargain,  or  at  least  by  a  definite  plan  and  expectation.  In 
other  words,  it  must  be  true  here  in  point  of  fact,  that  it  is  gen- 
erally almost  as  material  ivhen  a.  contract  is  carried  into  full 
effect,  as  hoiv  it  is.  It  may  not  have  been  so  formerly,  and 
time  may  have  had  less  value,  and  punctuality  less  merit.  But 
we  think  that  both  the  moral  and  judicial  equity  applicable  to 
existing  usages,  will,  for  the  most  part,  find  time  to  be  entitled 
to  especial  regard,  {t) 


as  collected  from  the  prevailing  authorities, 
may  perhaps  be  stated  with  tolerable  ac- 
curacy, in  the  following  propositions,  viz. : 
that  time  may  appear  to  be  of  the  essence 
of  the  contract  by  implication  from  the  cir- 
cumstances specially  surrounding  the  case, 
e.  g.  from  the  character  of  the  property, 
—  as  where  it  is  perishable, — or  is  want- 
ed for  some  immediate  purpose  of  trade 
or  manufacture,  —  or  where  the  vendor 
has  a  determinable  interest  only;  that  it 
may  be  made  of  the  essence  of  the  contract 
by  express  stipulation  ;  but  that  in  the  ab- 
sence of  such  special  circumstances  or  ex- 
press stipulation  time  is  not  essential ;  and 
that  a  provision  in  the  contract  that  it  is 
to  be  completed  at  a  specitied  day  is  not 
of  itself  such  an  express  stipulation  as  in 
equity  renders  the  time  material.  Kniqlit 
Bruce,  L.  J.,  3  De  G.,  M.  &  G.  290 ;  Turiier, 
L.  J.,  id.  291,  292  ;  Romilh/,  M.  R.,  13  Eng. 
L.  &  Eq.  418 ;  Boehm  i'.  Wood,  1  Jacob  & 
W.  422  ;  Walker  v.  Jeffreys,  1  Hare,  348. 
And  see  Molloy  r.  Egan,  7  Irish  Eq. 
590  ;  Kevnolds  v.  Nelson,  6  Madd.  20 ; 
Popham  V.  Eyre,  Lofft,  786,  814;  Smed- 
berg  V.  More,  26  Wend.  238  ;  Hatch  v. 
Cobb,  4  Johns.  Ch.  .559  ;  Decamp  v.  Eeay, 
5  S.  &  R.  326.  And  the  express  stipu- 
lation making  time  essential  need  not  be 
contained  in  the  written  contract.  Nokes 
V.  Kilmorey,  1  De  G.  &  S.  444,  an  in- 
structive  case   upon  this  subject,  which, 


however,  cannot  be  conveniently  abridg- 
ed. 

{t)  And  Sir  James  Knirjht  Bruce,  one 
of  those  judges  who  adhere  to  the  maxim, 
that  in  equity  time  is  not  of  the  essence  of 
the  contract,  in  one  case  had  so  sensibly 
before  him  the  serious  consequences  of  a 
disappointment  in  the  receipt  of  the  piir- 
chase-moneij  at  the  appointed  day  as  to  be 
reported  as  saying,  "  that  a  purchaser  not 
ready  with  the  price,  according  to  his 
contract,  ought,  I  think,  to  show  a  very 
special  case  for  the  interference  of  this 
court  against  the  vendor."  Gee  r.  Pearse, 
2  De  G.  &  S.  346.  Now  the  injury  re- 
sulting from  a  neglect  on  the  part  of  the 
vendor  to  convey  the  title  at  the  appointed 
day,  though  not  perhaps  so  common,  may 
be  as  real  and  as  ruinous  a  consequence 
as  that  which  is  occasioned  when  the  pur- 
chaser on  his  part  fails  to  pay  tlie  money 
at  the  day.  On  the  whole,  liowever 
averse  the  court  of  equity  may  be  to 
adojit  the  strictness  of  the  common  law, 
the  general  tendency  of  the  modern  decis- 
ions is  certainly  to  confine  the  equitable 
remedy  to  cases  where  the  parties  apply- 
ing for  it  have  displayed  a  becoming 
promptness  on  their  own  part.  Walker 
V.  Jeffreys,  1  Hare,  348 ;  Southcomb  v. 
Bishop  of  Exeter,  6  Hare,  213.  See 
Rogers  v.  Saunders,  16  Me.  92;  Benedict 
V.  Lynch,  1  Johns.  Ch.  370. 

[571] 


546 


THE   LAW   OF   CONTRACTS. 


[part  II. 


SECTION    V 


OF   THE   STATUTE   OF   FRAUDS. 


A  question  has  been  much  agitated  and  variously  decided 
in  cases  where  specific  performance  was  sought  of  contracts 
for  the  transfer  of  land,  and  indeed,  of  other  contracts,  as  to 
the  effect  in  equity,  of  the  Statute  of  Frauds,  upon  such  con- 
tracts, (m)  It  will  be  seen  in  our  chapter  on  that  statute,  that 
it  declares  that  no  action  shall  be  brought  to  enforce  a  large 
number  of  contracts  specifically  enumerated,  unless  the  same  be 
in  writing,  (v)   signed  by  the   party  sought  to  be  charged,  (iv) 


(u)  To  comply  with  the  statute,  the 
whole  contract  must  either  be  embodied 
in  some  writing  signed  by  the  party  or  in 
some  paper  referred  to  in  a  signed  docu- 
ment, and  capable  of  being  identified  by 
means  of  the  description  of  it  contained 
in  the  signed  paper.  Subject  to  the  rule 
just  stated,  oral  evidence  may  be  intro- 
duced to  connect  the  two  papers,  but  not 
to  supply  any  part  of  the  contract  itself. 
Ridgway  v.  Wharton,  3  De  G.,  M.  &  G. 
677 ;  Sq\iire  v.  Campbell,  1  Mylne  &  C. 
480 ;  Clinan  v.  Cooke,  1  Sch.  &  L.  22. 
(Compare  Forster  v.  Hale,  3  Ves.  696, 
713  and  note  (2),  by  Ilovenden) ;  Hodges 
V.  Ilorsfall,  1  Kuss.  &  M.  116;  Martin  v. 
Tycroft,  before  I'arker,  V.  C,  1 1  Eng.  L. 
&  Eq.  110;  Moale  v.  Buchanan,  11  Gill 
&  J.  322  ;  Dorsey  i'.  Wayman,  6  Gill,  .'39  ; 
Parrish  v.  Koons,  1  Pars.  Yai  79;  Park- 
hurst  t-.  Van  (^orthuidt,  1  Johns.  Ch.  273; 
Madeira  ;'.  Ilojikins,  12  B.  Mon.  604. 
See  Marl  in  v.  Pvcroft,  on  appeal,  2  l)e 
G.,  M.  &  G.  78.5,  "l.')  Eng.  L.  &  Er].  376. 
Though  the  case  is  of  a  nature  capable  of 
adequate  remedy  at  law,  yet  if  the  Statute 
of  Frauds  stand'in  the  way  of  relief  at  law 
while  there  has  i)een  such  a  part  perforin- 
nnec  as  to  exempt  the  case  from  the  ojier- 
ation  of  liie  statute  in  i'(piity,  this  is  a  mo- 
tive fur  a  court  of  c(piiiy  to  entertain  a 
hill  for  speeilic  performance.  Peinhrokc 
V.  'J'liorpe,  ;»  Swanst.  44-3,  note.  But  the 
aliBcnco  of  a  writing  cannot  lie  (i  f/roiuid  of 
jurimlkliou,  thouj;li  it  may  lie  a  m()tiy<;  to 
cxerci.se  it ;  th(!  court  of  equity  only  inter- 

[572] 


feres  where  it  has  jurisdiction  of  the  origi- 
nal subject-matter,  namely,  the  contract ; 
in  which  case  the  want  of  writing  will 
sometimes  not  take  away  the  jurisdiction. 
Lord  Cottenham,  C. ;  Ivirk  v.  Bromley 
Union,  2  Phillips,  648.  As  to  evidence 
of  a  contract  in  consideration  of  marriage, 
see  1  Fonb.  Eq.  ch.  3,  §  10,  note  (k). 

(v)  An  undelivered  deed  cannot  avail 
as  a  memorandum  of  the  agreement ;  al- 
though it  was  read  and  assented  to  by 
both  parties,  and  delivery  postponed  only 
for  a  collateral  object,  as  to  obtain  a  re- 
lease of  dower  by  the  vendor's  wife. 
I'arker  v.  Parker,  1  Gray,  409.  But  the 
contrary  has  been  held  in  Virginia. 
Bowles  V.  Woodson,  6  Gratt.  78;  Par- 
rill  V.  McKinlcy,  9  Gratt.  1  ;  in  neither 
of  wiiich  cases,  liowcver,  was  the  point 
necessarily  involved  in  the  decision.  A 
will  drawn  in  pursuance  of  an  agreement 
to  devise  certain  lands  to  the  plaintiff  was 
executed,  but  having  been  lost,  so  that  it 
could  not  be  established  as  a  testamenlary 
instrument,  it  was  held  it  might  be  treated 
nevertheless  as  a  memorandum  of  the  con- 
tract, and  as  such  memdrandum  its  con- 
tents, the  writing  itself  being  desli-oyed  or 
lost,  might  be  jiroved  by  jiarol.  Brinker 
V.  Brinker,  7  Barr,  b\i. 

(w)  As  to  writings  signed  by  an  agent, 
flT  the  agent  of  an  agent,  such  as  an  auc- 
tioneer, see  Kemeys  i'.  Proctor,  3  Vcs.  & 
B.  57,  and  the  same  case  before  Jjord 
EUlon,  L.  C,  1  Jac.  &  W.  S.'iO. 


CH.  IX.]  SPECIFIC   PERFORMANCE.  547 

It  also  provides,  that  all  interests  in  lands,  tenements,  and 
hereditaments,  except  leases  for  three  years,  not  put  in  writing 
and  signed  by  the  parties  or  their  agents  authorized  by  writing, 
shall  not  have,  nor  be  deemed  in  law  or  equity  to  have,  any 
greater  force  or  effect  than  leases  or  entails  at  will.  This  stat- 
ute, or  important  parts  of  it,  as  has  been  previously  said,  have 
been  very  generally  enacted  in  the  States  of  this  country,  with 
various  qualifications. 

The  reasons  for  requiring  written  evidence  of  important  con- 
tracts are  so  strong  that  it  is  not  surprising  to  find  that  rules 
founded  upon  these  reasons  have  always  existed,  in  one  form  or 
another,  in  almost  all  civilized  countries,  and  in  many  that  are 
not  called  so.  (x)  Courts  of  equity,  before  the  statute,  seldom 
gave  relief  unless  the  contract  was  in  writing;  (y)  by  the  statutes 
of  some  of  our  States,  conferring  equity  powers,  it  is  expressly 
required  ;  and  it  may  be  said  to  be  a  principle  of  equity  juris- 
prudence at  this  day,  to  give  far  greater  weight  to  a  written 
contract,  and,  practically,  to  require  in  almost  every  case  that  it 
should  be  written,  (z) 

It  is  a  principle  of  equity  jurisprudence,  that  parol  evidence 
is  admissible  to  rebut,  but  not  to  raise  an  equity ;  and  this  prin- 
ciple or  rule  gives  rise  here  to  an  important  distinction.  Al- 
though to  resist  a  specific  performance,  a  defendant  may  show 
by  parol  that  the  written  document  does  not  fully  represent  the 
contract  between  the  parties,  (a)  and  thus  defeat  the  bill,  or 
compel  the  plaintiff  to  accept  a  performance  with  a  varia- 
tion ;  (6)  yet  a  plaintiff  cannot  have  a  decree  for  a  specific  per- 

(x)  See  1  Greenl.  Ev.  §  262.  agreement,    see    Clifford    v.    Turrell,    1 

(y)  See  Lofft,  809.  Younge  &  C,  Ch.  148.     x\  writing  signed 

(z)  1  Siigd.  V.  &  P.  ch.  3,  sect.  8,  pi.  39.  by  tlic  defendant  as  a  proposal  must  be 

Rankin  y.  Simpson,  19  Penn.  St.  471.    See  accepted  without  variation   by  the   other 

Robson  V.  Collins,  7  Ves.  133;  Davis  v.  party  before  it^s  capable  of  being  enforced 

Symonds,  1   Cox,  C.  C.  404;  RatclifFe  v.  as  an  agreement;  and  at  any  time  before 

Allison,  3  Rand.  537.     But   there  is  no  acceptance  the  defendant  may  withdraw 

rule  of  equity  requiring  contracts  to  be  in  from  it.     Thornbury  v.  Bcvill,  1  Younge 

writing ;   although  there  is  necessarily  a  &  C,  Ch.  554  ;  Kennedy  v.  Lee,  3  Meriv. 

greater  burden  upon  the  party  seeking  the  451. 

specific  execution  of  an  unwritten  agree-         («)  Townshend  v.  Stangroom,  6  Ves. 

ment  to  establish  its  existence  and  terms  328 ;  Garrard  v.  Grinling,  2  Swanst.  244 ; 

clearly  and  satisfactorily.     Alexander  v.  Clowes  v.  Higginson,  1  Ves.  &  B.  524. 
Ghiselin,  5  Gill,  183.     There  may  be  proof        (/>)  When  parties  enter  into  a  written 

of  a  comideration  additional  but  not  in  con-  agreement,  whether  about  a  subject-matter 

tradietion  to  that  expressed  in  a  written  within  the  statute  of  frauds  or  not,  and  at 

[573] 


548 


THE   LAW   OF   CONTRACTS. 


[part  II. 


formance  of  a  written  contract  with  a  variation  npbn  parol 
evidence,  (c)  And  it  is  as  a  departure  from  this  fundamental 
principle,  that  the  doctrine  that  the  court  may  at  once  reform  a 
written  contract  and  proceed  to  enforce  it  as  altered,  has  been 
resisted,  (d)  Even  when  offered  by  the  defendant,  the  proof 
that  a  written  agreement  does  not  contain  all  the  terms  of  the 
contract  should  be  very  clear,  (e) 

But  the  principal  exception  from  the  operation  of  the  statute 
of  frauds,  is  where  the  answer  of  the  defendant  states  or  admits 
all  the  facts  on  which  the  plaintiff's  case  depends,  and  does  not 
interpose  the  defence  of  the  statute  of  frauds,  or  the  want  of 
writing.  (/)    Whether  this  exception  rests  in  any  degree,  as  has 


the  time  an  additional  provision  is  agreed 
upon,  which  by  mutual  consent  and  with- 
out fraud  is  not  inserted  in  the  writing,  it 
is  competent  to  either  party  to  resist  a 
specilic  execution  of  tlie  mere  written 
agreement,  by  setting  up  the  parol  stipu- 
lation ;  hut  in  such  case  the  plaintiff  may 
have  a  decree  upon  consenting  to  incor- 
porate in  the  contract  the  unwritten  agree- 
ment tluis  set  up  by  the  defendant.  In 
other  words,  the  written  agreement  in  a 
case  of  this  i-iind  binds  botli  at  law  and  in 
equit}',  suliject  to  the  right  of  either  party 
when  sued  in  equity  to  ask  the  court  to 
refuse  its  aid  unless  the  plaintiff  will  con- 
sent to  the  performance  of  tiie  omitted 
term.  Martin  v.  Pycroft,  2  Dc  G.,  M.  & 
S.  785,  15  Eng.  L.  &  Eq.  376,  reversing 
s.  c.  before  Parker,  V.  C;  11  Eng.  L.  & 
Eq.  110.  In  Warren  v.  Thunder,  9  Irish 
Eq.  375,  tlie  Lord  Chancellor,  consider- 
ing that  the  plaintiff  in  originally  setting 
forth  the  contract  had  not  acted  fairly,  was 
indisposed  to  give  him  any  relief  at  all ; 
but  inasmucli  as  there  was  no  objection 
by  the  defendant,  he  granted  a  specific 
performance   of    tlio    agreement    as    ex- 

Elained  by  the  parol  evidence  introduced 
y  the  defendant. 

(r)  Woolhiin  V.  Ilearnf  7  Ves.  211  ; 
Lord  (Jiilliiiliiiin,  C,  Sipiire  v.  Cainpliell, 
1  MvIik;  &  (!.480;  London  and  Hiiining- 
ham  Railway  Co.  r.  Winter,  (-'raig  &  I'll. 
61.  Lord  Si.  /joinirds,  W'arren  c.  'i'ium- 
der,  8  Irish  Eq.  375. 

{<!)   Villi'  post. 

(li)  \V;>/nim,  V.  C,  Clay  r.  KufTord,  8 
Hare,  2S'.I  ;  and  kcc  H.  C.  before  Sliiaii, 
V.  ('.,  r.t  Kng.  L.  &,  Eq.355;  iJackhonsi! 
V.  Mohnn,  ■'!  Swaii-^t.  4.')4,  7i.  It  has  been 
held  that  |iarii!  evidence  in  nut  adniissiide 

[  -^74  ] 


even  for  the  defendant,  to  alter  the  written 
agreement,  although  it  may  be  received  to 
show  an  equity  dehors  tlie  agreement. 
Davis  V.  Symonds,  1  Cox,  C.  C.  404. 
And  Lord  Bwuf/ham,  C,  in  a  case  before 
him,  said :  "  It  has  been  agued  that,  al- 
though evidence  of  matter  dehors  was  not 
admissible  for  the  purpose  of  raising  an 
equity,  it  might  be  given  for  the  purpose 
of  rebutting  an  equit}',  and  that  therefore 
it  was  competent  for  the  defendant  in  a 
suit  for  specific  performance  to  avail  him- 
self of  such  evidence,  though  it  was  not 
competent  to  the  plaintiff  to  do  so.  The 
distinction  was  sound  within  certain  limits, 
and  within  those  limits  might  be  safely 
adopted.  Parol  evidence  of  matter  col- 
lateral to  the  agreement  might  be  received  ; 
but  no  evidence  of  matter  dehors  was  ad- 
missible to  alter  the  terms  and  substajice  of 
the  contract."  Croome  i\  Lediard,  2 
Mylne  &  K.  260,  261  ;  and  in  that  case 
both  tlie  Master  of  the  Kolls,  and  the 
Lord  Chancellor  refused  to  admit  ])aroI 
evidence  to  show  that  two  separate  con- 
tracts for  tlie  sale  and  jiurchase  of  distinct 
parcels  of  land  were  not  inde[)endent,  but 
a  single  agreement  for  an  exchange.  But 
see  the  criticism  upon  this  case  in  1  Sudg. 
Vend.  &  P.  ch.  3,  s^  8,  pi.  27.  See  How- 
ard r.  Hogcrs,  4  Harris  &  J.  278. 

( /")  Skinner  in  McDouall,  2  Dc  G.  &  S. 
205,  is  an  instance  of  a  somewhat  strict 
api)lication  of  the  rule,  that  a  defendant, 
in  order  to  obtain  the  benefit  of  the  statute 
of  frauds,  must  jdead  the  statute,  or  else 
explicitly  claim  its  ))rotection  by  his 
answer.  As  to  what  does  or  does  not 
eonslitute  a  snflicient  i)leading  of  the 
statute,  see  also,  2  Dan.  Ch.  Pr.  (Boston, 
1840),  747-52;  Cooth  v.  Jackson,  6  Ves. 


en.  IX.] 


SPECIFIC    PERFORMANCE. 


549 


been  suggested,  on  the  idea  that  the  requirement  of  the  statute 
is  in  fact  satisfied  when  the  answer  sujjplies  a  written  mem- 
orandum of  the  contract ;  (g-)  or  on  the  ground  that  it  is  Com- 
petent to  the  defendant  to  waive  a  rule  of  law  enacted  for  his 
benefit ;  (h)  or  on  the  broad  ground  that  a  statute  for  the  preven- 
tion of  frauds  and  perjuries  has  no  proper  application  to  a  case 
where  the  defendant  does  not  say  there  is  any  fraud,  and  where 
there  can  be  no  danger  of  perjury,  because  he  himself  has  taken 
away  a]l  necessity  of  proving  the  contract  by  his  own  admission 
of  it;(?')  it  is  clear  that  the  exception  itself  is  well  estab- 
lished, (j) 

But  the  reasons,  excepting  only  that  of  waiver,  would  apply 
as  well  where  the  answer  does  in  fact  state  or  confess  all  the 
facts  of  the  plaintifT's  case,  but  denies  that  there  was  a  contract 
in  writing,  and  rests  this  defence  on  the  Statute  of  Frauds.  And 
there  was  a  time  when  the  courts  of  equity  would  disregard  the 
statute  in  such  cases  and  grant  relief,  (k)  But  this  brings  up 
the  frequently  occurring,  exceedingly  important,  and  equally 
difficult  question,  what  are  the  limits  of  the  obligation  imposed 


17.  But  the  defendant  is  not  in  all  cases 
excluded  from  the  defence  of  the  statute 
of  frauds  by  omitting  to  plead  it.  "  Where 
a  defendant  admits  the  agreement,  if  he 
means  to  rely  on  the  fact  of  its  not  being 
in  writing  and  signed,  and  so  being  invalid 
by  reason  of  the  statute,  he  must  say  so  ; 
otherwise  he  is  taken  to  mean  that  the 
admitted  agreement  was  a  written  agree- 
ment, good  under  the  statute,  or  else  that 
on  some  other  ground  it  is  binding  on  him; 
but  where  he  denies  or  does  not  admit  the 
agreement,  the  burden  of  proof  is  alto- 
gether on  the  plaintiff,  who  must  then 
prove  a  valid  agreement  capable  of  being 
enforced."  Lord  Cranworth,  C,  Ridg- 
way  V.  Wharton,  3  Ue  G.,  M.  &  G.  689. 
And  in  a  subsequent  part  of  his  lordship's 
judgment  he  distinguished  the  case  of  a 
defence  taken  under  the  statute  of  frauds 
from  the  defence  of  the  statute  of  limita- 
tions, and  observed  that  the  two  cases 
were  entirely  dissimilar,  and  that  the  one 
statute  affords  no  illustration  towards  the 
interpretation  of  the  other.  3  De  G.,  M. 
&  G.  691,  692.  See  also,  Ontario  Bank 
V.  Boot,  3  Paige,  478 ;  Small  v.  Owings, 
I  Md.  Ch.  Dec.  366 ;  Givens  v.  Calder,  2 
Desaus.  187. 


(g)  2  Story,  Eq.  Jur.  §  755.  This  view 
of  judge  Story  is  criticized  by  Chancellor 
Johnson,  Winn  v.  Albert,  2  Md.  Ch.  Dec. 
173,  174.  (See  the  opinion  of  the  Court 
of  Appeals  in  the  same  case,  5  Md.  72), 
vide  per  Lord  Bathurst,  C,  Popham  v. 
Eyre,  Lofft,  814. 

(h)  1  Fonbl.  Eq.  B.  1,  ch.  3,  §  8,  note 
{d).  Opinion  of  Johnson,  C,  in  Winn  v. 
Albert,  iibi  supra,  where  it  is  said  that  in 
these  cases  equity  is  able  to  grant  relief 
upon  the  ground  of  waiver,  and  upon  that 
only. 

(i)  Treatise  of  Equity,  B.  1,  ch.  3,  §  8. 
See  Attorney-General  v.  Day,  1  Ves. 
Sen.  221.  The  jurisdiction  of  equity  may 
be  perhaps  best  supported  upon  this  last- 
mentioned  gi'ound  and  that  of  waiver 
jointly ;  neither  one,  it  is  conceived, 
would  have  been  sufficient  without  the 
other.  And  such  would  appear  to  be  the 
view  taken  by  Mr.  Fonhlanque  in  his  note 
above  cited. 

(  /)  Lord  Thurlow,  C,  Whitchurch  v. 
Bevis,  2  Bro.  Ch.  566,  567. 

(k)  Child  V.  Godolphin,  cited  2  Bro. 
Ch.  506,  568. 


[575] 


550  THE  LAW  OF  CONTRACTS.  [PART  II. 

upon  equity  by  its  own  rnle,  of  following  the  law  ?  (/)  For  it 
is  perfectly  obvious  that  there  can  be  here  nothing  else  than 
obedience  to  the  law,  or  direct  violation  of  it.  The  law  says, 
in  perfectly  explicit  terms,  that  a  certain  contract  shall  have  no 
force  in  law  or  in  equity.  A  party  sued  in  equity  comes  into 
court  and  says  the  plaintiff  is  right  in  asserting  that  this  contract 
was  made ;  but  the  court  see  that  it  is  precisely  such  as  the 
statute  says  shall  have  no  force  in  this  court,  and  the  defendant 
rests  on  the  statute.  The  court  reply  that,  because  the  defend- 
ant admits  such  a  contract  as  the  law  declares  to  be  nowhere 
enforceable,  they  will  enforce  it.  The  absurdity  of  such  ruling 
struck  the  English  courts  quite  early,  and  they  were  inclined  to 
overrule  the  earlier  decisions,  and  refuse  relief  in  such  cases,  (w) 
Now^  it  may  be  considered  perhaps  established  in  England  [n 
and  more  certainly  in  this  country,  (o)  that  relief  would  be  re- 
fused in  all  cases  of  this  kind. 

Much  of  this  reasoning  would  apply  to  another  question 
which  has  arisen  under  the  Statute  of  Frauds,  namely,  whether  a 
part  performance  of  an  oral  contract  takes  it  out  of  the  operation 
of  the  statute.  It  is  certainly  the  prevailing  rale  in  this  country, 
that  it  has  this  effect,  (q)  In  Maine,  Massachusetts,  Tennessee, 
North  Carolina,  and  South  Carolina,  it  seems  to  be  other- 
wise ;  (r)  and  the  rule  is  not  very  distinctly  adopted  in  some 
other   States.     But  generally  it  prevails,  (.s-)     In  some  of  the 

(/)  A  court  of  equity  is  bound  to  follow  Eaton  zj.  Whitaker,  18  Conn.  222;  Phil- 

the  law  where  tiie  pu!)lic  interest  is  con-  lips   i'.    Thompson,    1    Johns.   Ch.    131  ; 

corned;  and  therefore,  if  a  statute  contain  Caldwell     r.     Carrington,    9    Pet.     86; 

a  general  enactment  regulating  the  mode  Dugan  i\  Gittings,  3  Gill,  138  ;  Hall  v. 

by  which  certain  property  shall  he  trans-  Hall,  1  Gill,  383. 

ferred,  •■(jtijty   for  th(!  most   cannot,   any         (/•)  Brooks  r.  Wheelock,  11  Pick.  439 ; 

more  than  a  court  of  law,  give  ctfect  to  Wilton  r.  llarwood,  23  Me.  131  ;  Allen 

a   transfer   whicli    is   not  in    compliance  v.  Chambers,  4  Ired.  Eq.  125  ;  Ridley  v. 

with   the   statute.     Knif/lit   linire,   L.  J.,  McNairy,    2    Humph.    174;    Patton    v. 

Hughes   V.    Morris,  2  i)c  G.,  M.   &   G.  M'Chire,   Mart.   &    Ycrg.   333;    Givcns 

356.  r.  Caldcr,  2   Dcsans.    171.     As  respects 

(m)   See  Whitchurcli  r.  Bcvis,  2  Pro.  I\rnssachiisctts  and  Maine,  the  explanation 

C.  C.  ').'>9  ;   Moore  v.  JCdwards,  4  Ves.  24.  of  tiiis   ])('culiarily  seems  to   he  that  the 

(u)  Mitf  PI.   207;  1    Fonh.  lv|.   B.  1,  courts  in  those    States   have  no  general 

ch.  !^,  ^  8,  note  (il)  ;  Blngden  v.  Bradhcar,  C(iuity  jurisdiction,   but  only  sucli   as  is 

12  VcH.  471.     Lord  Kldon,  C,  Itowe  r.  coidVrrcd  by  special  enactments. 
Teed,  15  id.  375.  (.s)    Caldwell    v.    Carrington,   9    Pet, 

(it)  A rgi'idiritiht  w.  Campbell,  3  Hen.  &  103.      It   is    incumbent  on   the  plaintiff 

M.  144,  lt',();  'riiomj)Son  v.  Tod,  I'et.  C.  to   make  out,   by   dear   and    satisfactory 

C.  388.  proof,  a   pai-t    ])crf()rmanc(!    of  that   very 

(y)  Newton    i\    Swar.cy,   8   N.   H.    9;  contract;  it  is  not  enough  that   the  act 

[570] 


CH.  IX.] 


SPECIFIC   PERFORMANCE. 


551 


States  it  is,  however,  confined  within  very  narrow  limits.  Thus, 
in  Pennsylvania,  it  is  said  that  the  land  must  be  clearly  desig- 
nated, and  notorious  and  exclusive  possession  taken  in  pursu- 
ance of  the  contract  and  maintained;  and  improvements  which 
constituted  the  consideration,  made  on  the  faith  of  the  promised 
conveyance,  and  generally,  that  part  performance  is  not  enough 
to  take  the  case  from  the  statute,  if  it  can  reasonably  be  com- 
pensated in  damages,  and  that  usually  it  does  admit  of  compen- 
sation, (t)  But  if  such  strictness  prevails  there,  the  doors  are 
thrown  open  far  more  widely  in  other  States. 

So  it  has  been  held,  that  a  mere  possession,  without  any 
improvement  or  expenditure,  except  for  temporary  purposes, 
and  costing  less  than  the  received  rents  and  profits  of  the  land, 
is  not  sufficient,  (u)  Nor  is  a  delivery  and  possession  of  a  part 
enough  ;  (v)  nor  is  a  possession  without  delivery,  or  without  the 


relied  on  is  evidence  of  so7ne  ap^reement ; 
but  it  must  be  unequivocal  and  satisfac- 
tory evidence  of  the  particular  agreement 
charged  in  the  bill.  Philips  v.  Thompson, 
1  Johns.  Ch.  131  ;  Beard  v.  Linthicum,  1 
Md.  Ch.  Dec.  34.5;  Mundorff  w.  Kilbourn, 
4  Md.  459.  As  to  what  acts  of  part  per- 
formance point  sufficiently,  unequivocally 
to  the  alleged  contract,  see  Sutherland  v. 
Briggs,  1  Hare,  26.  Where  the  statute 
of  frauds  is  pleaded,  and  the  plaintiff  re- 
lies upon  acts  of  part  performance,  he 
must  allege  the  part  performance  in  his 
bill  or  replication.  Small  v.  Owings,  1 
Md.  Ch.  Dec.  303.  Where  a  written  con- 
tract upon  a  matter  within  the  statute  of 
frauds  is  attempted  to  be  enforced  with  a 
parol  variation,  on  the  ground  of  a  part 
performance  of  it  as  varied,  such  part 
performance  must  have  a  distinct  refer- 
ence to  the  variation.  Heth  v.  Wool- 
dridge,  6  Rand.  605,  where  Carr,  J.,  ar- 
gues strongly  against  the  specific  execu- 
tion, in  any  case,  of  a  contract  (within  the 
statute  of  frauds)  contained  partly  in  a 
writing  which  originally  embraced  the 
entire  agreement  between  the  parties,  and 
partly  in  subsequent  parol  modifications 
of  the  written  agreement.  It  was  agreed 
between  two  brothers  that  one  of  them, 
who  was  subject  to  epileptic  attacks,  should 
be  supported  during  his  life  by  the  other, 
to  whom,  in  consideration  thereof,  he  was 
to  give  all  his  property ;  he  having  been 
supported  accordingly,  after  his  death,  a 

VOL.  II.  49 


conveyance  of  his  property  was  decreed 
to  the  other  brother,  llhodes  v.  Rhodes, 
3  Sandf.  Ch.  279.  But  see  Peifer  v. 
Landis,  1  Watts,  392. 

(t)  See  Moore  v.  Small,  19  Penn.  St. 
461;  Haslet  v.  Haslet,  6  Watts,  464; 
Frye  v.  Shepler,  9  Barr,  91 ;  Woods  v. 
Farmare,  10  Watts,  195;  Pugh  v.  Good, 
3  Watts  &  S.  56.  It  has  been  held  in 
Pennsylvania,  that  unless  possession  be 
delivered  in  the  vendor's  lifetime,  the  con- 
tract, if  not  in  writing,  cannot  be  enforced 
against  his  heirs.  Sage  v.  M'Guire,  4 
Watts  &  S.  228. 

(n)  Wack  v.  Sorber,  2  Whart.  387, 
which,  however,  was  a  case  of  parol  gift 
from  parent  to  child.  See  Morphett  v. 
Jones,  1  Swanst.  181  ;  Frame  v.  Dawson, 
14  Ves.  386;  Hatcher  v.  Hatcher,  1  Mc- 
Mullan,  Eq.  311.  "  Whether  the  posses- 
sion be  an  unequivocal  act  amounting  to 
part  performance,  must  depend  upon  the 
transaction  itself,  whether  it  be  so  circum- 
stanced that  it  can  refer  only  to  a  con- 
tract of  sale ;  if  it  be  so,  the  party  may  go 
into  evidence  of  the  terms."  Lord  Man- 
ners, C,  Savage  v.  Carroll,  1  Ball  &  B.  282. 

(v)  Allen's  Estate,  1  Watts  &  S.  383. 
It  is  to  be  observed  that  this  was  the  case 
of  a  parol  sale  of  two  distinct  parcels  of 
land  for  a  sum  in  gross  ;  and  therefore  it 
decides  no  more  than  that  the  delivery  of 
possession  of  one  of  two  distinct  and  sep- 
arate parcels,  in  pursuance  of  an  entire 
contract  for  the  sale  of  both,  is  not.  a  suf- 

[577] 


552 


THE   LAAV   OF   CONTRACTS. 


[part  II. 


intention  or  consent  of  the  owner,  (iv)  still  less  if  the  possession 
has  been  obtained  by  fraud  or  indirection,  [x)  So  a  mere  con- 
tinued possession  by  the  plaintiff,  he  having  been  in  possession 
before  the  contract,  is  not  enough,  unless  there  be  declarations 
or  circumstances  distinctly  showing  that  this  continuity  of  pos- 
session is  in  pursuance  and  execution  of  the  contract,  and  so 
regarded  by  the  parties.  (//)  This  may  be  made  apparent  by 
paying  more  rent,  or  making  improvements,  or  expending  money, 
or  doing  other  things  required  by  the  contract. 

Whether  a  mere  payment  is  a  part  performance  sufficient  to 
sustain  the  application  in  equity,  was  more  uncertain.  At  first, 
the  court  seemed  to  think  that  if  but  little  money  was  paid,  it 
was  not  a  sufficient  part  performance ;  but  if  much,  it  was.  (z) 
This  distinction  has  not  been  made  in  modern  times,  and  cer- 
tainly would  be  of  difficult  application,  if  not  in  itself  unrea- 
sonable. And  now  it  seems  to  be  quite  well  settled,  that  no 
mere  payment  of  money  will  take  the  case  out  of  the  statute,  (a) 
The  reason  is,  that  for  any  loss  sustainable  by  such  payment, 
damages  recoverable  at  law  are  an   adequate   remedy.      The 


ficient  part  performance  to  take  the  case 
out  of  the  statute.  Vide  per  Kennedy,  J., 
id.  389.  And  see  contra.  Smith  v.  Under- 
dunck,  1  Sandf.  Ch.  581.  Where  two 
lots  are  put  up  and  sold  separately  to  the 
same  buyer,  a  possession  of  one  cannot  be 
considered  as  a  part  performance  of  the 
contract  for  the  sale  of  the  other.  Buck- 
master  V.  Harrop,  7  Ves.  346.  As  to  the 
general  question,  whether  a  certain  con- 
tract for  tlie  sale  of  things  liuving  a  dis- 
tinct existence  and  value  is  or  is  not  en- 
tire, see  Crosse  v.  Lawrence,  9  Hare,  4G2, 
10  Eng.  L.  &  Eq.  7. 

[w)  But  if  the  plaintiff  be  not  sliown  to 
have  otiierwise  some  rij^ht  to  the  occupa- 
tion of  the  land,  his  ])OSscssion  is  prima, 
facie  to  bo  referred  to  the  agreement. 
Gregory  r.  Migheil,  18  Ves.  3.3.'3.  If  tiie 
tctiant  in  occupiuion  attorn  to  tiic  vendee, 
with  the  kn<)wledg()  and  consent  of  the 
vendor,  tliiit  is  a  sullicient  delivery  of  jjos- 
session.     Williams  v.  Lanchnan,  8  Watts 

6  S.  &.').     Compare  Brawdv  v.  Braw<ly, 

7  Burr,  l.-)?. 

(x)  Cole  V.  White,  cited  1  Bro.  C  C. 
409. 

((/)  Wills  V.  Stradling,  3  Ves.  378; 
Frame  v.  Dawson,  14  Yes.  388  ;  Johnston 

[578] 


V.  Glancy,  4  Blackf.  99  ;  Christy  v.  Barn- 
hart,  14  Penn.  St.  260.  See  Kine  v.  Balfe, 
2  Ball  &  B.  343  ;  Gregory  v.  Mighell,  18 
Ves.  328;  Drury  v.  Conner,  6  Harris  & 
J.  292.  And  a  possession  which  can  be 
referred  to  another,  though  subsequent, 
parol  agreement  is  not  sufficient.  Owings 
V.  Baldwin,  1  Md.  Ch.  Dec.  120.  But  it 
has  been  held  that  a  continuance  of  pos- 
session by  the  plaintiff,  may  be  a  part 
performance  where  he  would  otherwise 
be  a  trespasser.  Smith  v.  Smith,  1  Kich. 
Etp  130.  As  to  possession  in  the  case 
of  a  contract  of  sale  between  tenants  in 
common,  sec  Galbrcath  v.  Galbreath,  5 
Watts,  146. 

{z)  Main  v.  Melbourne,  4  Ves.  720.  See 
ex  parte  Hooper,  19  id.  479.  In  Lacon  v. 
ISIcrtins,  3  Atk.  4,  Lord  llardwicke  said : 
"  I'aying  of  money  has  been  always  held 
in  this  court  as  a  ])art  perfornnincc." 

(a)  Clinan  v.  Cooke,  1  Sell.  &  L.  40, 
42  ;  1  Sugd.  V.  &  V.  ch.  3,  §  7  ;  2  Story, 
]Cq.  Jiir.  §  760;  Townsend  v.  Houston, 
1  llarring.  Del.  .')32.  The  rule  that  pay- 
mctit  of  the  consideration  is  not  part 
performance,  of  course  has  no  applica- 
tion unless  the  consideration  be  money. 
Khodes  v.  llhodcs,  3  Saudf.  Ch.  279. 


CH.  IX.]  SPECIFIC   PERFORMANCE.  553 

same  reason,  perhaps,  applies  to  all  those  acts  of  quasi  owner- 
ship which  are  less  than  taking  possession  :  such  as  surveying 
the  estate ;  making  out  abstracts  of  title,  and  delivering  them ; 
negotiating  for  the  sale  of  it;  valuing  stock  or  land,  or  the 
like,  {b)  In  a  late  case,  however,  in  New  York,  which  seems  to 
have  been  well  considered,  it  was  held  that  a  mere  payment  of 
money  was  enough  to  take  the  case  out  of  the  statute,  if  it  was 
made  under  such  circumstances  as  would  prevent  the  repayment 
of  the  money  from  restoring  the  plaintiff  to  his  former  posi- 
tion, (c) 

It  would,  indeed,  seem  that  the  courts  of  equity  in  this 
country  are  tending  to  this  test  of  the  question,  whether  there 
has  been  a  part  performance  of  the  contract ;  namely,  has  the 
plaintiff,  on  the  faith  of  the  contract,  entered  upon  the  fair  and 
honest  execution  of  it,  and  so  conducted  himself  that  he  can- 
not be  replaced  in  his  original  position  and  indemnified  by  any 
reasonable  recovery  of  mere  damages  ?  This  would  seem  to 
be  an  equitable  and  reasonable  rule,  of  itself;  but  it  would  seem 
almost  as  clearly  to  be  an  evasion,  if  not  a  violation  of  the  law, 
when  the  contract  related  to  any  "  interest  in  lands,"  and  was 
not  in  writing. 

The  reason  frequently  given  for  the  rule,  that  part  perform- 
ance takes  a  case  from  the  statute  —  that  where  there  is  some 
performance,  permission  to  the  defendant  to  stop  there  would 
operate  as  a  fraud  on  the  plaintiff  (c?)  —  resolves  itself  into  this  ; 
that  a  court  of  equity  will  set  aside  the  Statute  of  Frauds, 
when,  if  applied,  it  would  work  or  protect  a  fraud ;  or  do  the 

(6)  Pembroke  v.   Thorpe,   3    Swanst.  ference  of  equity,  and  considered  it  to  be 

437,  n. ;  Frame  v.  Dawson,  14  Ves.  386;  extremely  doubtful  whether  the  principle 

Cooth  V.  Jackson,  6  id.  12;  Whitbread  v.  was  applicable  to  the  case  where  a  parol 

Brockhurst,  1  Bro.  Ch.  412  ;  Whitchurch  contract    is    attempted    to    be    enforced 

V.  Bcvis,  2  id.  559  ;  Redding  v.  Wilkes,  3  against  a  remainder-man ;  with  respect  to 

id.   400.      But  in   Child   i>.    Comber,   3  which,   see   also,   Lowry   v.   Dufferin,    1 

Swanst.  423,  n.,  payment  of  fees  to  coun-  Irish  Eq.   281.      Sir   William   Grant,  in 

sel,  drawing  drafts  and  engrossing  them.  Frame  v.  Dawson,  14  Ves.  386,  gave  the 

and  providing  the  purchase-money  by  the  following    definition  :    "  It   is   necessary 

plaintiff,  were  held  a  sufficient  part  per-  therefore   to   show   a  part   performance; 

formance.  that  is,  an  act  unequivocally  referring  to, 

(c)  Malins  v.  Brown,  4  Comst.  403.  and  resulting  from,  the  agreement ;   and 

{d)  Mitf.  PI.  265;  2  Story,  Eq.  Jur.  ^  such  that  the  party  would  suffer  an  injury 

759.     And  Lord   Crammrth,  C,  in  Mor-  amounting  to  fraud,  by  the  refusal  to  ex- 

gan  V.  Milman,  3  De  G.,   M.  &  G.  33,  ecute  that  agreement." 
assigned  this  as  the  ground  of  the  inter- 

[579] 


554  THE  LAW   OF   CONTRACTS.  [PART  II. 

plaintiff  the  great  wrong  of  leaving  him  as  the  mere  trespasser 
without  any  legal  excuse  whatever  for  his  entry  upon  land 
under  a  bargain  with  the  owner,  and  perhaps  an  expenditure 
on  it  which  would  be  for  the  owner's  profit.  But  this  seems 
to  be  somewhat  inconclusive.  If  carried  out,  it  might  undoubt- 
edly prevent  much  mischief  and  detriment  which  occasionally 
results  from  this  law.  But  there  is  no  rule  of  law,  no  statutory 
provision,  of  which  a  similar  thing  may  not  be  said.  The  bet- 
ter reason  seems  to  be  this ;  that  a  part  performance  is  in  fact 
an  execution  of  the  contract,  but  an  imperfect  one,  and  needs 
the  interposition  of  the  court  to  compel  those  acts  which  are 
required  to  make  the  execution  complete  and  as  beneficial  to 
the  plaintiff  as  it  should  be.  The  plaintiff  actually  asks,  not 
for  an  execution  of  the  contract,  but  stating  that  it  has  been 
executed  in  a  wrong  and  imperfect  manner,  asks  that  those 
things  should  be  done  which  this  imperfect  execution  requires 
in  order  to  make  it  that  which  the  parties  contemplated,  and 
the  justice  of  the  cause  requires,  (e) 

This  reason  would  perhaps  cover  a  great  number  of  cases  in 
which  specific  performance  of  contracts  avoided  by  the  Statute 
of  Frauds  has  been  decreed  on  the  ground  of  a  part  perform- 
ance ;  as  where  a  defendant  receives  the  land  delivered  to  him 
under  a  contract  and  builds  upon  it;  sells  his  own  homestead 


(e)  See  Treat,  of  Eq.  Book  I.  eh.  3,  §  the  tenant.  Sir  William  Grant,  M.  R., 
9;  and  also,  Stockley  v.  Stockley,  1  Ves.  licld  that,  as  the  contract  was  in  part  per- 
&  B.  23,  a  case  of  a  family  compromise  formed,  the  court  must  find  some  means  of 
acquiesced  in  for  a  considerable  period,  completing  the  execution,  and  it  was  re- 
in a  case  where  the  plaintiff  has  laid  out  ferred  to  the  Master  to  ascertain  what 
money,  or  otiierwise  makes  out  a  case  of  rent  should  be  paid.  Gregory  v.  IMighell, 
part  ijerfunnauce,  the  court  will  endeavor  18  Ves.  ,'}28.  See  Boardman  r.  Mostyn, 
with  especial  earnestness  to  collect  if  it  G  Ves.  470,  471  ;  Attorney-General  v. 
can,  what  the  terms  of  the  agreement  Day,  1  Ves.  Sen.  221  ;  Jackson  v.  Jack- 
were,  although  the  plaintiff  has  failed  to  son,  1  Smalc  &.  G.  184,  19  Kng.  L.  &  Eq. 
establish  tiieni  with  perfect  precision.  546;  Mayneil  r.  Surtees,  31,  id.  47.'),  492, 
Lorrl  Colldilidin,  L.  C,  Mundy  i'.  Jollide,  by  the  Lord  Chancellor  ;  Devonshire  v. 
5  Mylne  &  C.  177;  Butler  ;;.  I'owis,  2  Eglin,  14  Beav.  .')3() ;  Rol)ins()n  v.  Kettlo- 
Collyer,  101.  Thus,  where  an  agreement  tas,  4  Edw.  Ch.  07.  Aiul  in  I'arkhurst 
for  a  lease  jtrovided  that  the  rent  should  r.  Van  ("ortland,  14  Johns,  l.*),  a  majority 
be  afipoinlcd  by  arbitrators,  and  they  iu  of  the  Court  of  Errors  of  New  York,  re- 
C0n8C(pnMic('  of  the  landlord's  refusal  to  versing  the  decision  of  Ciianeellor  Kent 
enter  into  bonds  to  abide  by  the  award,  (1  Johns.  Ch.  27.'{),  allowed  their  inclina- 
failcd  to  lix  the  rent,  but  the  tenant,  lion  lo  liiid  the  terms  of  a  contract  in  a 
though  be  |iaid  no  rent,  went  into  posses-  case  of  partial  perforinaiice  to  carry  them 
sion  and  made  expenditures  upon  the  very  far. 
faith   of  the    agreement,  on   a   bill   filed 

[580  1 


CH.  IX.]  SPECIFIC   PERFORMANCE.  555 

to  pay  for  the  new  one,  and  removes  his  family  to  it;  or  by 
some  sacrifice  raises  money  to  pay  off  a  charge  upon  the  estate 
which  he  occupies  by  delivery  from  the  seller.  If  equity  goes 
further  than  this,  it  may  do  justice  between  any  two  parties  in 
any  particular  case ;  but  it  is  in  danger  of  doing  for  them  ille- 
gal justice,  and  therefore  of  doing  injustice  to  the  whole  com- 
munity. 

Under  the  clause  in  the  4th  section  of  the  statute  prohibiting 
any  action  to  be  brought  charging  any  person  upon  any  agree- 
ment made  in  consideration  of  marriage,  unless  the  agreement 
or  some  note  or  memorandum  thereof  be  in  writing  and  signed 
by  the  party  to  be  charged,  the  marriage  itself  is  not  a  part  per- 
formance of  the  contract,  to  take  it  out  of  the  statute,  (ea) 

It  may  be  added  that  there  are  in  the  books  many  instances 
in  which  equity  has  satisfied  the  justice  of  the  case  before  it,  in 
apparent  disregard  of  other  provisions  of  the  Statute  of  Frauds. 
Thus,  an  executor  having  promised  a  testator  to  pay  a  legacy, 
and  told  him  that  he  need  not  put  it  in  his  will,  was  held  to 
pay  it  himself.  (/)  But  even  law,  in  an  analogous  case,  has 
sustained  the  somewhat  equitable  action  of  assumpsit.  For 
when  a  testator  intended  to  provide  by  will  for  felling  timber 
to  raise  money  for  his  younger  children,  and  his  eldest  son 
desired  him  not  to  disfigure  the  estate,  and  promised  to  pro- 
vide the  money ;  after  the  death  of  the  father,  the  younger  child 
brought  an  action  of  assumpsit  against  the  heir,  and  it  was 


'  (ea)  Montacute  v.  Maxwell,  1  P.  Wms.  into   possession  by  the  husband),  it  was 

618.     See   Argcnbright   v.    Campbell,   3  held  by  the  Court  of  Appeals,  reversing 

Hen.  &  M.  144.     But  where  by  a  parol  the   decision   of  tlie   Chancellor  (3    Md. 

antenuptial    contract    it  was   agreed,   in  Ch.    Dec.    119),   that  the  bill  should  be 

consideration  of  the  marriage,  that  the  in-  dismissed.     Crane  i'.  Gough,  4  Md.  316. 

tended  husband  should  have  certain  bonds  The  contract  was  there  treated   as   one 

and  other  securities,  the  property  of  the  which  had  been  executed ;  and  the  court 

lady;  and  should  allow  her   during   her  refused  to  use  the  Statute  of  Frauds  as  an 

life   the   interest   thereon   as  pin-money ;  engine  to  oust  the  defendant  from  the  po- 

and  after  the  marriage  of  the  parties,  and  sition  which  he  was  considered  as  holding 

the  death,  first  of  the  wife  and  then  of  the  by  virtue  of  such  executed  contract.     An 

husband,  upon  a  bill  filed  by  the  adminis-  agreement   in   consideration  of  marriage 

trator  of  the  wife  against  the   husband's  was  held  to  be  taken  out  of  the  statute  by 

executor,    praying   that  the   bonds,   etc.  part  performance  in  Surcome  v.  Pinniger, 

should   be   defivered   up  to   the  plaintiff  3  De  G.,  M.  &  G.  571,  17  Eng.  L.  &  Eq. 

(who,  apart  from  the  contract  in  question,  212. 

was  entitled  to  them  under  the  laws  of  the  {/)  Oldham  r.  Litchford,  2  Vern.  506  ; 

State  as   choses   in   action   not   reduced  Reech  v.  Kennigate,  Ambl.  67. 

49  *  [  581  ] 


556  THE  LAW  OF  CONTRACTS.  [PART  II. 

held  that  it  could  be  maintained,  (g-)  But  most  of  these 
cases  would  come  under  equity  jurisdiction  as  grounded  on 
fraud.  (//) 

Still  another  class  of  questions  arises  under  the  equity  juris- 
diction as  grounded  on  mistake.  Undoubtedly  equity  will  cor- 
rect a  mistake  of  either  party,  if  it  be  material,  and  would  if 
known,  have  prevented  or  materially  varied  the  contract.  It 
"will,  as  is  said,  "reform"  the  contract  and  enforce  it  as  re- 
formed. But  the  question  has  often  come  before  our  courts, 
whether  oral  evidence  can  be  received  to  show  the  mistake,  and 
thereby  make  it  in  fact  a  new  contract,  when  an  oral  contract 
would  be  void  or  not  enforceable  by  the  Statute  of  Frauds. 
The  course  of  adjudication  is  not  uniform  on  this  point.  But 
while  it  cannot  be  denied  that  numerous  authorities  support  a 
disregard  of  the  statute  in  such  cases,  (i)  others  maintain  its 
authority,  (j)  We  should  say,  on  principle,  that  if  a  material 
part  of  a  contract  is  not  written,  that  contract  is  not  written; 
and  if  it  be  one  which  the  statute  declares  of  no  force  unless 
written,  courts  of  equity  have  no  rightful  power  to  give  it 
force. 

Law  gives  no  relief  where  the  mistake  is  one  of  law,  or  one 
arising  from  ignorance  of  law.     This  is  well  settled.     It  was 

(g)  Dutton   v.  Poole,   2   Lev.   210,  1  Hall  v.    Clagett,   2  Md.    Ch.  Dec.  151. 

Vent.  318.  And  the  court  will  not  interfere  to  reform 

(A)  Keech   v.   Kenncgal,    1  Ves.   Sen.  and  enforce  a  contract,  where  the  mistake 

125.  is  the  result  of  the  plaintiff's  own  oniis- 

(i)  Gillespie  i-.    Moon,   2   Johns.    Ch.  sion  of  reasonable  vigilance,  and  fraud  is 

585;    1    Story,   Eq.    ^    161  and  note;    1  not  proved  upon  the  other  party.      AVood 

Greenl.  Ev.  ^  290,  a. ;  Johmon,  C,  Phil-  r.  Patterson,  4  ]Md.  Ch.  Dec.  335.     If  the 

pott  J'.    Elliott,   4   Md.    Ch.    Dec.    273  ;  contract  be  altogether  oral,  equity  cannot, 

Moale  V.  Euchanan,  11  Gill  &  J.  314,  325,  on  the  ground  of  a  supposed  jurisdiction 

which,  iiowever,  was  a  case  where  there  to  reform  it  proceed  lirst  to  rectify  it,  and 

was  a  part  performance  of  the  contract;  then    to    enforce    specific    performance; 

and  this  is  a  distinction  to  which  impor-  there  must  be  some  written  expression  of 

tancc  has  been  attached.    Coles  v.  Bownc,  the  contract  to  satisfy  tlie  statute.  Johnson, 

10  Paige,  535.     Sec    15cl!ows    r.    Stone,  C,  Gongh  r.  Crane,  .'!  Rfd.  Ch.  Dec.  135. 

14  N.  11.  201,  per  y'(o7.vr,  C.  J.     But  in  (./)  Woolbim    >:    Ilearn,    7    Ves.  219; 

jurisdiiiions  where  this  doctrine  is  enter-  Winch  r.  Winchester,  1   Ves.  &  B.  378 ; 

tained,  it  is  held  that  there  must  be  clear  Clarke  v.  Grant,  14  Ves.  519;  Iligginson 

nrofjf  uot  only  of  the  fact  that  a  mistake  v.  Clowes,  15  Ves.  51G.     (The  foregoing 

na»   been    committed,   and   that  the  con-  arc  judgments   of    Sir    William    (j'rant.) 

tract    as    written,    docs    not   express    the  Pich   v.   Jackson,  G  Ves.    334,    note  per 

intention   of   the  jiarlies,  but  also  of  the  J^ord  f,'iii(/lilioroii(/li,  C.  ;   Clinan  r.  Cooke, 

precise  siipnlation  proj)osed  to  be  inserte<l,  1  Sch.  &  Jj.  39.     Aklerson,  B.,  Attorney- 

or  other  corrfftion  proposed  to  be  made,  (ieneral  r.   Sitwell,  1   Younge  &  C,  Ex. 

rhilpott  I'.  Elliott,  4  Md.  Ch.  Doc.  273;  583. 

[  582  ] 


CII.  IX.]  SPECIFIC    PERFORMANCE.  557 

once  intimated  that  the  maxim,  "  ig-norantia  legis  neminem  ex- 
cusat"  applied  only  to  crimes  and  public  offences  ;  (ja)  but  it  is 
now  universally  agreed  that  it  is  of  equal  force  in  civil  cases 
at  law.  (jb)  Whether  this  rule  has  equal  force  in  equity  may 
not  be  quite  so  certain,  (jc)  In  England,  at  least,  there  is 
some  conflict,  (jd)  But  even  there  the  courts  of  equity  appear 
now  to  adopt  this  rule,  (je)  and  in  this  country,  the  high  au- 
thority of  the  Supreme  Court  of  the  United  States,  as  well  as 
the  State  courts  generally,  may  be  regarded  as  having  conclu 
sively  established  the  rule,  (jf)  subject,  perhaps,  to  some  qualifi 
cation  in  particular  cases. 

A  contract  cannot,  in  general,  be  rescinded  for  an  innocent 
mistake,  if  the  rescission  will  work  an  injustice  to  either  party, 
or,  in  other  words,  if  both  parties  cannot  be  replaced  substan- 
tially in  their  former  condition.  (Jg) 

Mistake  as  to  foreign  laws,  or  those  of  another  State,  is  a 
mistake  of  fact,  {jh)  The  mistake  of  law  of  an  agent,  in  pay- 
ing out  money  without  the  special  ditection  of  his  principal, 
has  been  held  to  be  no  bar  to  a  recovery  by  the  principal,  (ji) 

Some  disposition  has  been  manifested  to  give  relief  for  mis- 
take of  law,  which  would  be  withheld  if  there  were  only  an 
ignorance  of  it.  (jj)  We  doubt  whether  this  distinction  will 
be  found  of  much  use. 

Courts  of  law,  as  well  as  of  equity,  give  relief  where  there  is 
a  mistake  both  of  law  and  of  fact;  that  is,  one  who  is  injured 
by  his  mistake  of  fact,  does  not  lose  his  remedy  by  having  mis- 
taken tlie  law  also,  (jk) 

(ja)  Lansdowne  v.  Lansdowne,  Mose-  Wheat.  179,  195;  Shotvvell  v.  Murray,  1 

ly,  364,  2  Jacob  &  W.  205.  Johns.  Ch.  512,  515  ;  Lyon  v.  Richmond, 

(jb)    See    Lord     CoUenham's    remarks  2   Johns.   Ch.    51  ;    Storrs   v.  Barker,  6 

upon  the  case  quoted   in   the  preceding  Johns.  Ch.  169. 

note,  in  Stewart  w.  Stewart,  6  Clark  &  F.  (j^)  Martin  v.  McCormick,  4    Sandf. 

968.  366. 

(jc)  See  Northrop  v.  Graves,  1?  Conn.  (jh)  Bank  of  Chillicothe  v.  Dodge,  8 

548 ;  CuUireath  v.  Culhreath,  7  Ga.  64.  Barb.  233  ;  Merchants  Bank  v.  Spalding, 

(jd)  See  cases  before  cited,  and  Bing-  12  Barb.  302 ;  Leslie  i\  Baillie,  2  Younge 

ham  v.  Bingham,  1  Ves.  Sen.  126.  &  C,  Ch.  91. 

(je)  Stewart  v.  Stewart,  6  Clark  &  F.  (ji)  United  States  r.Bartlett,Daveis,  9. 

968;  Cholniondeley  v.  Clinton,  2  Meriv.  (//)  Champlin  w.  Lavtin,  18  Wend.407; 

171,  233,  328;  Denys  v.  Shuckburgh,  4  Hail  v.  Reed,  2  Barb.  Cli.  500. 

Younge  &  C,  Ex.  42.  (  jk)  Williams  v.  Bartholomew,    1    B. 

(  //■)  Hunt  V.  Rousmaniere,  1  Pet.  15,  &  P.  326. 
8  Wheat.  211;  Hepburn  v.  Dunlop,  10 

[583] 


558  THE  LAW  OP  CONTRACTS.  [PART  II. 


SECTION    VI. 

OF  COMPENSATION. 

The  doctrine  of  compensation  often  comes  before  com'ts  of 
equity ;  and  the  various  questions  to  which  it  gives  rise  have 
been  very  variously  decided.  Much  uncertainty  hangs  over 
many  of  them  at  this  moment.  The  most  usual  form  in  which 
this  subject  is  presented  is  where  there  is  a  contract  for  the  sale 
of  an  estate,  and  it  cannot  be  carried  into  exact  execution  by 
reason  of  some  change  or  mistake  about  it,  and  specific  perform- 
ance is  decreed  with  compensation  to  the  party  who  would 
otherwise  lose  by  the  change  or  mistake,  (k)  At  law  it  is  diffi- 
cult to  adjust  the  damages  to  such  circumstances,  or  indeed,  in 
many  of  these  cases  to  maintain  the  action,  {ka)  So  at  least,  it 
is  said,  and  undoubtedly  is  at  common  law;  but  in  some  States 
a  jury  may  find  conditional  damages  to  be  released  on  specific 
performance  of  a  contract,  (l)  nor  are  we  aware  of  any  inherent 
difficulty  in  this.  In  equity,  at  this  time,  the  amount  of  this 
compensation  is  often  ascertained  by  a  jury  on  an  issue  framed 
for  that  purpose,  and  formerly  it  is  said  this  was  almost  always 
done,  (m)  instead  of  referring  the  case,  as  is  more  usual  now,  to 
a  master,  (n) 

It  is  now  generally  admitted,  that  if  the  defect  or  diminution 
or  incapacity  is  large  and  substantial,  compensation  cannot  be 


(k)  Hill  V.  Buckley,  17  Ves.  401.    For        (/)  At  least,  such  has  hcen  the  practice 

the  circumstam'cs  which  may  entitle  a  de-  in  Pennsylvania,  Gilison,  C.  J.,  Decamp 

fentlant  to  romiieiisation,  tIiou;,Mi  not  siif-  v.  Feay,  5  S.  &  11.  .'!28  ;   Coulter,  J.,  Hau- 

(icient  to  enahle  him  to  rofiise  a  specilic  herder  v.  lioot,  5  Barr,   112;    Kribbs  v. 

perforinan'c,    see    tlie    jud^'nicnt   of    Sir  Downiiifr,  25  Benn.  State,  .'i'J'J. 
William  (.'idtil,  M.  ]{.,  i)yer  w.  llar;;nive,         (/«)  I  Fonh.  Eq.  ch.  3,  ^  8,  note  (/)). 
10  Ves.  rjOC),  where  it  was  held  that  a  ven-         (»)  And  if  the  parties  have  themselves 

dec  cannot  olitain  compensation  for  a  de-  stipulated    that   the  compensation  for  er- 

fcct  which  he  knew,  or  from  its  evident  rors    in    the    (Icscription  (if    the  property 

character    must    he    jiresumi'd    to    have  sliali    lie    estimated    by  arbitration,  upon 

known  to  exist;    notwitbstaMilnij;  it  was  their  failure  to  ^jct  it  scttU'd  in  tliat  man- 

rcjiresenti'd  liy  the  vendor  not  to  exist.  ner,  the  court  will  settle  it  by  reference  to 

{hi)  LonI  Alranlfi/,  C  .J.,  John.son  v.  the  master.     Leslie  v.  Tomjison,  9  Hare, 

Johnson,  .'I  B.  &  1'.  109,  170.  2G8,  5  Eng.  L.  &  Eq.  171.  • 


CH.  IX.] 


SPECIFIC   PERFORMANCE. 


559 


made  for  it,  and  it  is  good  ground  for  withholding  a  decree  for 
performance,  (o)  It  should  seem,  therefore,  that  only  when  the 
substance  of  the  agreement  can  be  fully  executed  and  only 
when  a  comparatively  trifling  adjustment  is  needed  to  satisfy 
the  equities  of  the  case,  that  compensation  can  be  made,  {p) 

But  this  rule,  if  it  be  a  rule,  is  very  liberally  construed. 

So  also,  it  is  said  that  compensation  is  not  damages,  but 
must  be  carefully  discriminated  from  them,  (q)  But  it  is  not 
easy  to  understand  this  rule  very  clearly.  If  it  is  meant  that 
compensation  is  made  only  where  it  can  be  exactly  ascertained 
and  proportioned  and  not  estimated  in  general  as  damages  often 
are,  numerous  cases  contradict  this.  Formerly  a  purchaser  has 
been  compelled  to  take  an  estate  which  was  liable  to  an  uncer- 
tain and  nearly  contingent  diminution  or  charge,  with  a  com- 
pensation for  this  possibility,  but  it  seems  now  to  be  admitted 
that  these  cases  were  erroneous,  (r) 

It  is  settled  also  that  no  purchaser  is  bound  to  take  another 
thing  —  one  different  in  nature  —  from  that  he  bargained  for ;  {s) 


(o)  Peers  V.  Lambert,  7  Beav.  54G.  A 
,  want  of  title  to  209  acres,  out  of  698,  was 
held  to  be  too  great  a  deficiency  to  be  sup- 
plied by  compensation,  although  the  par- 
cel of  209  acres  was  separated  by  a  public 
road  from  the  residue,  and  all  the  build- 
ings were  on  the  latter.  Jackson  v. 
Ligon,  3  Leigh,  16L 

(p)  Shackleton  v.  Sutcliffe,  1  De  G.  & 
S.  609. 

(q)  See  White  v.  Cuddon,  8  Clark  & 
F.  792.  Lord  Brooke  v.  Rounthwaite,  5 
Hare,  298. 

(r)  A  purchaser  will  not  be  compelled 
to  accept  an  indemnity  as  compensation. 
Balmanno  i\  Lumlev,  1  Ves.  &  B.  224 ; 
Tildes  V.  Hooker,  3  Madd.  193.  In  the 
latter  case  the  Vice-Chanccllor  noticed  a 
distinction  between  a  risk  going  to  the 
very  estate  in  the  land,  and  therefore  put- 
ting in  jeopardy  the  specific  subject  of  the 
contract ;  in  which  case  he  held  it  to  be 
clear  that  the  acceptance  of  an  indemnity 
would  not  be  required  ;  and  the  case  where 
a  good  title  can  be  made,  but  it  is  subject 
to  a  pecuniary  charge  ;  and  he  stated  that 
in  cases  of  tlie  latter  kind  a  court  of  equity 
had  compelled  a  specific  performance  of 
the  contract  upon  security  against  the 
charge.  Though  even  that  course,  he 
said,  might  have  been  questionable  as  im- 


posing, at  all  events,  a  considerable  degree 
of  trouble  upon  a  purchaser,  to  which  he 
had  not  subjected  himself  by  the  terms 
of  his  contract.  Neither  can  a  vendor  as 
it  seems  be  compelled  to  c/ive  an  indemnity. 
In  Balmanno  v.  Lumley,  1  Ves.  «&  B. 
225  (which  was  an  application  by  a  ven- 
dor). Lord  Eldon,  C,  said  "he  did  not 
apprehend  the  court  could  compel  the 
purchaser  to  take  an  indemnity,  or  the 
vendor  to  give  it."  And  in  Aylett  v.  Ash- 
ton,  1  Mylne  &  C.  1 14,  it  was  held  that  an 
indemnity  could  not  be  required.  And 
see  Baton  v.  Brebner,  1  Bligh,  66,  67. 
But  Lord  Eldon  himself  had  decreed  an 
indemnity  in  Milligan  v.  Cooke,  16  Ves. 
13,  and  whether  the  explanation  of  that 
case  suggested  in  the  note  in  1  Bligh,  67, 
be  supported  by  the  facts,  quare.  Lord 
St.  Leonards,  whose  opinion  appears  to 
be  that  an  indemnity  cannot  be  required 
in  any  case,  has  questioned  the  propriety 
of  the  decree  in  Milligan  v.  Cooke,  1  Sugd. 
V.  &  P.  ch.  7,  §  1,  p.  35. 

(s)  Drewe  v.  Corp,  9  Ves.  368;  Halsey 
V.  Grant,  13  Ves.  77,  79 ;  Binks  v.  Lord 
Eokeby,  2  Swanst.  222.  An  agreement 
to  convey  ten  lots  is  not  satisfied  by  a 
tender  of  eight  lots  and  the  undivided 
half  of  four  other  lots.  Roy  v.  Willink, 
4  Sandf.  Ch.  525. 

[585] 


560  THE  LAW  OF  CONTRACTS.  [PART  n. 

as  not  a  lease  for  an  underlease,  or  vice  versa,  (t)  nor.  a  life- 
estate  instead  of  a  fee  ;  (u)  nor  an  estate  in  reversion  instead  of 
one  in  possession,  (v) 

If  a  purchaser  find  that  he  cannot  have  the  estate  he  bar- 
gained for  without  a  considerable  deduction  from  it,  he  may 
insist  on  this,  and  on  being  allowed  adequate  compensation,  {w) 
But  a  seller  could  not  insist  that  a  purchaser  should  take  an 
estate,  with  an  equally  large  diminution,  although  he  offered  an 
adequate  deduction  from  the  price,  {x)  The  reason  is  obvious. 
In  the  first  case  the  plaintiff  stands  ready  to  perform  his  part  of 
the  contract.  In  the  other,  the  plaintiff  says  he  cannot  perform 
his  part,  but  demands  performance  from  the  defendant.  In 
most  cases  the  defendant  stands  in  a  more  favorable  position 
before  the  court  than  a  plaintiff  who  seeks  for  specific  perform- 
ance. That  is,  it  requires  a  less  weight  of  objection  to  induce 
a  court  to  withhold  this  relief,  than  of  favorable  circumstance 
or  reason  to  persuade  them  to  grant  it. 

As  there  is  a  rule  at  law  for  the  construction  of  a  contract, 
that  it  should  be  established  rather  than  defeated,  so  equity, 
it  is  said,  desires  not  forfeiture,  but  compensation,  (y)  And, 
therefore,  specific  performance  will  be  decreed  either  with  a 
modification  of  the  bargain,  or  with  compensation,  provided 
neither  be  carried  so  far  as  to  substitute  a  new  contract  for  that 
which  the  parties  made,  (z) 

{<)  A  purchaser  who  has  contracted  for  v.  Gillespie,  11  Ves.  640  ;  Paton  v.  Rog- 

an  assignment  of  a  term  of  ninet3'-nine  ers,  1  Ves.  &  B.  352 ;  Nelthorpe  i'.  Hol- 

ycars,  will  not  be  compelled  to  accept  an  gate,  1   Collyer,  203 ;  Milligan  r.  Cooke, 

underlease  for  a  term  of  the  same  length,  16  Ves.  1  ;  Seaman  v.  Vawdrey,  16  Ves. 

wanting  three  days,  although  the  contract  390  ;  Painter  v.  Newby,  11  Hare,  26,  nom. 

of  sale  contains  a  provision^that  any  error  Newby  v.  Paynter,  19  Eng.  L.  &  Eq.  68, 

or  misstatement  of  tlic  property  or  term  of  before  UW/,  V.   C,  affirmed  22  Law  J. 

years  shall  not  vitiate  the  sale  but  shall  be  N.  s.  Ch.  85.     Sec  also,  Waters  v.  Tra- 

the  subject  of  compensation,  and  although  vis,  9  Johns.  450  ;  sec  Kctchum  v.  Stout, 

compensation  1)0  tendered ;  for  no  under-  20  Ohio,  453.     But  the  court  may  refuse 

lease  is  substantially  tiie  same  thing  as  an  a  ci/  pres  execution  of  an  agreement  to  sell 

assignment  of  the  original  term.     Made-  land  in  which  the  vendor  lias  a   limited 

levj;.  Booth,  2  l)c  G.  &  S.  718  ;  1  Sugil.  estate  only,  if  the  third  jjarties  interested 

V.  &  P.  cii.  7,  sect.  1,  p.  10.  in  the  property,  would  be  ])rcjudiccd  there- 

(n)  A  party  who  has  agreed  to  purchase  by.     Thomas  v.  Dering,  1  Keen,  729. 
afrecthold  estate,  cannot  be  compelled  to       '  (r)  See  the  cases  in  the  preceding  noto. 
take  a  leasehold,  no  matter  how  long  the         (y)  Page  r.  Broom,  4  lluss.  6,  2  Russ. 

term.     Drewei.'.  Corp,  9  Ves.  ;168.     And  &  M.  214. 

see  Wright  i'.  Howard,  1  Sim.  &  S.  190.  (c)   Halsey  v.  Grant,    13  Ves.   77,  79  ; 

(r)   Collier  V.  Jenkins,  Younf,'e,  295.  Kin-;  v.  IJardeau,  G  Johns.  Ch.  38  ;  Morss 

(»;)   Wood    V.   (Jritluh,   1    Swanst.  54;  i;.  Elmendorf,  11  Paige,  277. 
Mortloek  V.  IJullcr,  10  Ves.  315  ;  Mestacr 

[  rm  ] 


en.  IX.]  SPECIFIC   PERFORMANCE.  561 

Upon  still  another  question  the  authorities  as  yet,  are  much 
divided.  It  is,  whether  a  court  of  equity  will  hold  jurisdiction 
of  a  case,  merely  to  make  compensation  to  an  injured  party, 
where  it  cannot  give  specific  performance.  In  other  words  is 
compensation  within  the  power  of  equity  only  as  an  incident  of, 
or  as  collateral  to,  a  specific  performance  which- would  otherwise 
be  inequitable,  or  can  it  decree  compensation  by  itself,  without 
reference  to  specific  performance  ?  It  is  not  to  be  denied^ that 
high  authorities,  including  the  Supreme  Court  of  the  United 
States,  appear  to  hold  that  a  court  of  equity  has  this  distinct 
and  independent  power  of  compensation,  (a)  But  it  seems  to 
us  rather  a  departure  from  the  best-established  principles  of 
equity  jurisprudence ;  and,  indeed,  to  tend  to  the  confusion  of 
the  distinction  between  equity  and  law,  by  taking  away  all 
limit  to  equity.  We  are  unable  to  see  how  compensation  in 
such  a  case  is  any  thing  else  than  damages,  (b)  Judge  Story, 
who  admits  that  the  cases  of  this  kind  have  been  pushed  quite 
too  far,  supposes  one,  in  illustration  of  a  class,  in  which,  as  he 
says,  "there  seems  to  be  a  just  foundation  for  the  exercise 
of  equity  jurisdiction."  (c)  It  is  where  one  who  has  orally  bar- 
gained away  an  estate,  conveyed  a  part  and  sold  the  rest  for 
value  to  a  buyer  ignorant  of  the  first  sale,  and  innocent  of  the 
fraud,  and  the  first  buyer  cannot  have  specific  conveyance,  but 
prays  for  compensation.  Here,  however,  if  the  circumstances 
of  the  case  permitted  an  action  for  the  fraud,  damages  would 
be  recoverable  at  law,  and  would  be  measured  there  as  in 
equity.  And  if  the  action  could  not  be  sustained,  or  damages 
could  not  be  recovered,  it  would  present  the  simple  case  of  a 
party,  who  has  wholly  neglected  the  wise  and  plain  and  well- 
known  rules  of  law  for  the  prevention  of  fraud,  and  finds  that 
the  law  gives  him  no  indemnification  for  the  loss  he  has  brought 


(a)  Pratt  v.  Law,  9  Cranch,  494  ;  Phil-  (b)  And  see  Todd  v.  Gee,  17  Vcs.  278  ; 

lips.  V.  Thompson,  1  Johns.  Ch.  131  (com-  Gwillim  v.  Stone,  14  Ves.  128  ;  Clinan  v. 

pare  Woodcock  v.  Bennet,  1  Cowen,  711,  Cooke,  1  Sch.  &  L.  25  ;  Newhara  v.  May, 

756);   Payne  v.   Graves,   5   Leigh,  561;  13  Price,  749  ;  Clarke  v.  Rochester,  &c. 

Johnston  v.  Glancy,  4  Blackf.  94  ;  Rock-  Railroad  Co.  18  Barb.  356. 

well  V.  Lawrence,  2  Halst.  Ch.  190.  Aday  (c)  2  Storv,Eq.  Jur.§  798.     See  Morss 

V.  Echols,  18  Ala.  353  ;  2  Story,  Eq.  Jur.  v.  Elmendorf,  11  Paige,  277,  288. 
§  798,  and  note  1.   But  compare  id.  §  799. 
See  Bowie  v.  Stonestreet,  6  Md.  418. 

[587] 


562 


THE   LAW   OF   CONTRACTS. 


[part  II. 


upon  himself.  Nor  do  we  see  any  distinct  principle  which 
would  justify  equity  relief  in  such  a  case,  which  would  not  give 
it  as  well  in  every  case  where  the  buyer  of  a  house  was  cheat- 
ed ;  cases  in  which,  says  Lord  Chief  Baron  Alexander,  "  no  one, 
I  apprehend,  ever  thought  of  filing  a  bill  in  equity."  (d) 


SECTION  VII. 

OF   IMPOSSIBILITY   AND    OTHER   DEFENCES. 

Impossibility  of  either  of  three  kinds  may  prevent  a  decree 
for  specific  performance.  If  the  court  cannot  enforce  their  own 
decree,  this  is  a  reason  for  not  issuing  one.  (e)     For  example, 


(d)  Newham  v.  May,  13  Price,  752. 
But  it  seems  compensation  may  be  given 
where  there  would  have  been  a  case  proper 
for  a  specific  performance,  but  for  the  con- 
duct of  the  defendant  in  wilfully  disabling 
himself  from  performing  his  contract. 
Denton  v.  Stewart,  1  Cox,  258  ;  Sir  Wil- 
liam Grant,  M.  K.,  Blore  v.  Sutton,  3 
Meriv.  248  ;  Grecnaway  v.  Adams,  12 
Ves.  401,  402;  Todd  v.  Gee,  17  Ves. 
278  ;  Woodcock  v.  Bennet,  1  Cowen,  711. 
(But  see  Clinan  ?-.  Cooke,  1  Sch.  &  L. 
25  ;  Sainsbury  v.  Jones,  5  Mylne  &  C.  3, 
2  Beav.  465.)  And  it  has  been  held  to 
make  no  difference  whether  the  disabling 
act  of  the  defendant  be  done  before  or 
after  the  commencement  of  the  suit.  An- 
drews r.  Brown,  3  Cush.  130.  Whether 
the  plaintiffs  claim  to  compensation  in 
sucli  case  is  affected,  if  lie  had  knowledge 
wlien  he  filed  his  bill,  that  a  specific  per- 
formance was  impossible,  qnoire.  See 
Hatch  V.  Cobb,  4  Johns.  Ch.  560.  Wilde, 
J.,  3  Cush.  135.  Sec  Sainsbury  v.  Jones, 
ubi  sup. 

(c)  Baldwin  r.  Society  for  Diffusing 
Uscf^ul  Knowledge,  0  Sim.  393;  Clarke  c. 
rricc,  2  Willson,  Ch.  157.  Gcrvaisr.  Ed- 
wards, 2  Drury  &  W.  80,  1  Con.  &  L. 
242,  was  an  a])jilicati()n  for  the  specific 
performance  of  an  agreement  between  the 
plaiiililf  and  defendant  for  the  straighten- 
ing <jf  a  wimling  river  which  divided  their 
lands;  which  agreement  besides  providing 
for  a  mutual  compensation  for  soil  takfii 
from  one  or  the  other  by  the  new  cut, 

[588] 


stipulated  for  the  adjustment  and  compen- 
sation of  certain  contingent  damages 
which  might  be  thereafter  occasioned. 
The  plaintiff  in  his  bill  waived  his  own 
right  to  compensation  for  the  future  and 
contingent  damage,  but  it  was  held  that 
the  other  provision  for  the  benefit  of  the 
defendant  (which  it  was  not  possible  for 
the  plaintiff  so  to  get  rid  of),  was  an  in- 
vincible olistacle  to  the  specific  enforce- 
ment of  the  contract.  The  observations 
of  the  Chancellor  Sugden  are  verj'  instruc- 
tive :  "  As  far  as  the  merits  of  the  case  go, 
I  would  decree  the  specific  execution  of 
this  contract ;  but  I  do  not  see  how  it  is 
possible.  If  I  execute  it  at  all,  I  must 
execute  it  in  toto ;  and  how  can  I  execute 
it  prospectively  ?  The  court  acts  only  on 
the  principle  of  executing  it  in  specie,  and 
in  the  very  terras  in  which  it  has  been 
made  ;  therefore,  when  you  come  to  the 
specific  execution  of  a  contract  containing 
many  particulars,  you  must  sec  that  it  is 
possible  to  execute  it  effectually.  The 
court  cannot  say  that,  when  an  event 
arises  hereafter,  it  will  then  execute  it. 
In  the  case  of  a  decree  for  the  execution 
of  a  contract  for  the  sale  of  timber,  it  is  no 
objection  that  it  is  to  be  cut  at  intervals  ; 
that  is  certain,  and  the  mere  delay  will  not 
jirevciit  the  court  from  executing  it;  there 
the  agreement  is  executed  in  specie  ;  the 
court  decrees  to  one,  the  very  timber  con- 
tracted for,  to  the  other,  the  very  price. 
If  I  am  called  on  now  to  execute  this 
agreement,  I  can  only  specifically  cxc- 


en.  IX.] 


SPECIFIC   PERFORMANCE. 


563 


if  the  manager  of  a  theatre  asks  a  court  to  compel  an  actor  to 
execute  his  agreement  to  play  for  him,  the  court  cannot  then 
tell  in  what  manner  he  is  to  play  the  part,  and  this  is  of  the 
essence  of  the  bargain.  (/) 

But  the  impossibility  may  be  on  the  part  of  the  defendant,  [g] 


cute  a  portion,  wliereas  I  am  bound  to 
execute  it  all."  After  distinguishing  the 
case  of  an  agreement  for  a  covenant  for  a 
thing  to  be  done  thereafter,  which  can  be 
specifically  executed  by  the  making  of  the 
covenant,  from  a  case  like  the  present,  of 
an  agreement  to  do  the  thing  itself  when 
the  contingency  shall  give  occasion  for  it, 
his  lordship  added  :  "  No  precedent  has 
been  cited  :  but,  indeed,  none  is  necessary. 
It  is  a  question  of  principle ;  and  I  am 
clearly  of  opinion,  that  if  I  gave  a  decree 
now,  it  would  not  be  a  specific  execution 
of  the  contract,  but  only  a  declaration  that 
there  ought  to  be  a  specific  execution  of  it 
hereafter.  I  must  therefore  leave  the 
plaintiff  to  his  remedy  at  law."  1  Con. 
&  L.  244,  245. 

(/)  ])e  llivafinoli  v.  Corsetti,  4  Paige, 
264.     But  see  ante,  p.  353,  note  (n). 

(g)  As  where  the  defendant  has  con- 
tracted that  a  third  party  shall  do  some 
act  which  such  third  party  refuses  to  do. 
See  Thornbury  i\  Bevill,  1  Younge  &  C, 
Ch.  564.  If  the  contract  particularly 
provide  that  some  act  of  the  other  party, 
the  parties  jointly  or  a  third  party,  or 
some  other  event,  shall  be  the  foundation 
for  what  the  defendant  is  to  do,  then  if 
such  act  or  event  have  not  occurred  or 
been  done,  the  defendant  (not  having  been 
in  fault  in  the  matter)  will  not  in  general 
be  compelled  to  perform  the  contract. 
Thus  if  vendor  and  vendee  have  stipulated 
that  the  price  shall  be  ascertained  by  arbi- 
tration, whether  by  a  particular  arbitrator 
or  by  arbitration  generally,  in  such  case  if 
the  arbitration  do  not  proceed  as  agreed, 
a,nd  the  price  is  not  ascertained  according 
to  the  mode  in  which  the  parties  have 
stipulated,  equity  has  no  right  to  make  a 
different  contract  from  that  which  the 
parties  have  entered  into,  and  ascertain  it 
for  them  in  some  different  mode.  Lord 
Cranworth,  C,  Morgan  v.  Milman,  3  De 
G.,  M.  &  G.  34,  35 ;  South  Wales  Kail- 
wav  Co.  V.  Wythes,  1  Kav  &  J.  186,  31 
Eng.  L.  &  Eq.  226,  5  De  G.,  M.  &  G.  880. 
And  see  Milncs  v.  Gery,  14  Ves.  400; 
Blundell  v.  Brettargh,  17'Ves.  232  ;  Gour- 
lay  I'.  The  Duke  of  Somerset,  19  id.  429. 

VOL.  II.  50 


Compare  Gregory  v.  Mighell,  18  id.  328; 
and  other  cases  of  the  same  class  cited 
ante,  p.  553,  n.  (e).  In  Morgan  v.  Mil- 
man  there  was  an  agreement  between  A 
and  B,  that  B  should  pay  A  for  certain 
land  undertaken  to  be  sold  under  a  power, 
a  compensation  to  bo  settled  by  arbitra- 
tion, or  in  another  specified  mode  as  A 
should  determine ;  and  A  having  died 
without  appointing  an  arbitrator,  his  ex- 
ecutor filed  a  bill  against  the  remainder- 
man and  B,  for  a  conveyance  of  the  land 
to  B,  and  completion  of  the  contract ;  and 
upon  this  state  of  facts  making  a  some- 
what different  case  from  the  simple  one  of 
vendor  and  vendee,  the  Lord  Chancellor 
said  :  "  It  is  quite  clear  that  the  only  point 
remaining  in  doubt,  namely,  the  amount 
of  the  purchase-money,  never  was  ascer- 
tained by  either  of  the  modes  which  were 
pointed  out.  It  has  been  suggested  that 
that  was  immaterial ;  that  the  court  may 
ascertain  it,  or  that  some  other  step  may 
be  taken  difterent  from  that  which  the  par- 
ties stipulated  as  the  mode  of  ascertaining 
what  the  amount  of  the  purchase-money 
should  be.  I  confess  that  upon  principle 
as  well  as  upon  authority,  the  court  can- 
not here,  as  it  seems  to  me,  take  upon  it- 
self to  do  that ;  if  indeed  there  had  been 
an  agreement  that  the  price  should  be  that 
which  was  to  be  ascertained  by  a  fair  val- 
uation, then  the  court  might  interfere." 
See  the  judgment  of  Wigmm,  V.  C, 
Downs  V.  Collins,  6  Hare,  433,  437  ;  Fred- 
erick V.  Cox  well,  3  Younge  &  J.  514. 
Where  a  literal  performance  is  impossible 
or  would  not,  owing  to  a  change  of  cir- 
cumstances, accomplish  the  oliject  of  the 
agreement,  equity  will  sometimes  give  re- 
lief in  some  other  manner  as  near  as  pos- 
sible to  that  originally  stipulated  for. 
Thomas  v.  Vonkapff,  6  Gill  &  J.  372.  It 
seems  that  in  the  absence  of  special  cir- 
cumstances a  party  cannot  be  let  off  from 
his  contract  to  purchase  one  estate  be- 
cause of  bis  inability  to  com]jkte  a  con- 
tract he  had  entered  into  with  the  vendor 
at  the  same  time  for  the  sale  of  another 
estate.  Croome  i'.  Lediard,  2  Mylne  & 
K.  260. 

[589] 


564  THE  LAW  OF  CONTRACTS.  [PART  II. 

We  have  considered  elsewhere  when  an  impossibility  of  this 
kind  is  a  sufficient  defence  to  an  action  at  law  for  damages,  (h) 
But  it  is  obvious  that  an  impossibility  which  is  wholly  the  fault 
of  the  defendant  and  would  not  operate  as  any  defence  at  law, 
might  still  suffice  to  prevent  a  decree  for  specific  performance. 
For  if  such  a  decree  issued  it  could  only  end  in  money  com- 
pensation, or  in  a  mere  punishment  of  the  defendant  which 
would  be  useless  to  the  plaintiff;  but  costs  would  probably  be 
given  to  a  plaintiff  in  such  a  case  if  specific  performance  were 
denied.  Neither  would  specific  performance  be  decreed  when 
the  defendant  can  do  the  thing  but  only  by  a  violation  of 
law ;  (j)  hence  a  vendor  will  not  be  ordered  to  make  sale  of  a 
thing  or  give  a  deed  of  land  when  he  has  no  legal  title,  (k)  But 
if  there  be  the  strictest  impossibility  that  the  party  himself 
should  do  the  thing,  —  as  if  he  be  dead,  —  but  there  are  those 
who  could  do  it  and  should  as  his  representatives,  there  are 
many  cases  in  which  they  are  required  to  do  it. 

It  is  obvious  that  an  agreement  to  make  a  certain  disposition 
of  property  by  last  will,  is  one  which,  strictly  speaking,  is  not 
capable  of  a  specific  execution  —  not  in  the  party's  lifetime, 
because  any  testamentary  instrument  is  by  its  nature  revocable  ; 
and  after  his  death  it  is  no  longer  possible  to  make  his  last  will. 
Yet  it  has  been  held  to  be  within  the  jurisdiction  of  equity  to 
do  what  is  equivalent  to  a  specific  performance  of  such  an 
agreement,  by  requiring  those  upon  whom  the  legal  title  has 
descended  to  convey  the  property  in  accordance  with  its 
terms.  (/)     And  the  court  will  not  allow  this  post  mortem  rem- 

(//)  Ante,  cli.  iii.  sect.  2.  otiicr  p;u'ty  may  have  been.     Onl  v.  Noel, 

( /)  In  tlie  lanj^uage  of  Lord  liedesdaJe,  !)  IMaiid.  438.     Unless  under  special  cir- 

to  entitle   tlie  jiiaintifl"  to  a  specific  per-  cumstances  a  party  will  not  lie  compelled 

formance  he  must  show  that  in   seckinp;  to  do  an  act  which  would  cxjiose  him  to 

the  performance  he  docs  not  call  upon  the  a    forfeiture,      rcacock    v.    I'enson,    11 

other  party  to  do  an  act  which  lie  is  not  Beav.  .3.^)5. 

lawfully  competent  to  do.  Harnett  v.  (k)  Maiden  v.  Fyson,  9  Eeav.  347.  In 
Yeildiiif^,  2  Sch.  &  L.  .5.'J4 ;  Wood  r.  such  eases  the  rule  is  to  dismiss  the  bill, 
fJriHith,  1  Swanst.  .5.');  Scars  /•.  Cily  of  hut  without  costs.  Id. 
Boston,  10  I'ick.  3.57.  A  trustee  wilfiiot  (/)  Hriuker  v.  Brinker,  7  Barr,  53;  Gib- 
he  compelled  to  commit  a  hreach  of  trust,  son,  (!.  J.,  McCIure  v.  McClure,  1  id.  378; 
Bridf,'cr  v.  Kicc,  1  Jacob  &  W.  74;  ViV/rrs-,  J.,  Bofjan  !•.  IMc(Jiiuiis,  12  Pcnn. 
White  J'.  Ciiddon,  8  Clark  &  F.  706;  St."  32  ;  Mundorfl' i-.  Kill)ourn,  4  Md.  459, 
Mortlock  }'.  Bnller,  10  Vcs.  292;  Bell-  403.  And  uee  the  eases  in  the  next  note, 
ringer  7).  IJ!a<;rav(!,  1  Do  fi.  &  S.  03.  and  Kcully  v.  Scully,  Sngdcn,  Law  of 
No   matter  how   fair  the  conduct  of  the  rro])erty  in  House  of  Lords,  104.    Aeon- 

[  590  ] 


CH.  IX.]  SPECIFIC   PERFOKMANCE.  565 

edy  to  be  defeated  by  any  devise,  or  conveyance  in  the  lifetime 
inconsistent  with  the  agreement,  unless  indeed  rights  of  pur- 
chasers deserving  of  protection  should  intervene,  (m)  But  if 
one  contracts  to  devise,  and  during  his  life  conveys  the  land 
away,  equity  sometimes  requires  his  representatives  to  make 
full  compensation.  As  a  general  rule,  it  may  be  said  that 
where  a  specific  performance  would  be  decreed  as  between  the 
original  parties  to  a  contract,  it  will  be  decreed  as  between  all 
who  claim  under  them,  unless  new  and  intervening  equities 
would  make  the  decree  operate  injustice  towards  these  par- 
ties. («)  In  some  of  the  United  States  the  specific  performance 
of  a  contract  of  a  deceased  party  is  provided  for  by  statute. 
But  we  suppose  that  every  court  having  equity  powers  must  be 
able  to  do  this. 

An  impossibility  of  performing  the  contract  is  to  be  distin- 
guished from  an  impossibility  of  making  that  use  of  the  consid- 
eration which  was  contemplated  at  the  time  the  contract  was 
made.  For  this  latter  impossibility  is  not  necessarily  a  good 
defence  against  a  prayer  for  specific  performance,  (na) 

The  third  kind  of  impossibility  is  that  which  operates  through 
the  necessary  requirement  in  equity  of   a  fair  and  equal  mu- 

trary  doctrine  was  declared   in    Stafford  or  any  act  which  though  not  testamentary 

V.  Bartholomew,  2  Cart.  Ind.  153.     See  in  form,  is  so  in  effect ;  if  therefore  he  make 

Harder  v.  Harder,  2  Sandf.  Ch.  17  ;  Car-  a  conveyance  in  which  he  retains  a  right 

lisle  V.  Fleming,  1  Harring.  Del.  421.     It  of  control  over  the  property,  or  reserves 

has  been  held  that  a  will  made  in  pursu-  to  himself  a  life-estate  (or  perhaps  even  a 

ance  of  the  agreement,  may,  in  the  event  less   interest)    such   conveyance,   being  a 

of  its  failing  to  operate  as  a  will,  serve  as  fraud   upon   his   agreement,    may  be  set 

a  m,emorandnm  of  tlie  agreement  within  aside,  and  the  estate  being  then  subject  to 

the  statute  of  frauds  ;   and  that  if  it  be  the  covenant  will  be  decreed  to  pass  as  if 

lost,  its  contents,  as  such  memorandum,  the   covenant  were  specifically  executed, 

may   be   proved   by   parol.      Brinker  v.  Fortescue  w.  Hannah,  19  Ves.  67;  Logan 

Brinker,  7  Barr,  55.     See  Rowan's  Ap-  v  Wienholt,  7  Bligh,  n.   s.    1 ;    Sugden, 

peai,  25  Penn.  St.  294.  Law  of  Property  in  House  of  Lords,  106  ; 

(m)  In  the  case  of  a  covenant  (such  as  Randall  v.  Willis,  5  Ves.  262. 
appears  to  be  quite  usual  in  English  fam-         (n)  Ante,  sect.  1,  p.  517. 
ily  settlements),  that  the  covenantee  shall,         (nn)  Thus  a  railway  company  who  had 

at  the  death  of  the  covenantor,  receive  by  c6ntracted  to  purchase  certain  land  for  the 

his  will  a  certain  proportion  of  the  real  or  purposes  of  the  construction  of  a  branch 

personal   estate  (as  the  case  may  be)  of  road,  were  held  not  to  be  excused  from 

which  he  shall  die  seised  or  possessed  ;  it  paying  the  agreed  price  by  reason  that 

is  held  that  while  it  is  in  the  power  of  the  they  had  allowed  their  powers  to  take  and 

covenantor   by  conveyance   operating  in  use  the  land  to  lapse  and  expire  by  par- 

his  lifetime  to  dispose  of  his  whole  interest  liamentary  limitation.     Havvkes  v.  East- 

in  the  property  or  any  part  of  it,  he  can-  ern  Ry.  Co.,  1   De  G.,  M.  &  G.  7.37,  per 

not   convey  it   away  in    violation  of  the  Lord  5^  Leonards,  C,  affirming  decision 

agreement,  either  by  any  testamentary  act,  of  Knight  Bruce,  V.  C,  3  De  G.  &  S.  743. 

[591] 


566 


THE   LAW   OF   CONTRACTS. 


[part  II. 


tuality.  (o)  If,  therefore,  the  plaintifT  ought  himself  to  do  some- 
thing as  his  part  of  the  bargain  which  he  seeks  to  enforce,  which 
thing  he  cannot  do,  {p)  or  even  if  it  be  something  which  he  is 
bound  to  do,  but  has  not  done,  {(j)  and  the  court  cannot  com- 
pel him  to  do  it,  equity  will  not  decree  specific  performance 
against  the  other  party,  {r)  Thus  if  an  infant  bring  a  suit  for 
specific  performance,  it  may  be  a  sufficient  reason  for  denying 
it  that  there  is  something  for  him  to  do  which  he  does  not  offer, 
and  which  the  court  cannot  compel  him  to  do.  {s)  But  if  the 
infant  after  coming  of  age  files  a  bill  to  obtain  performance  of 
the  contract,  he  thereby  becomes  bound  by  the  contract,  and 
the  want  of  mutuality  is  cured,  (sa)  So,  if  he  in  any  other 
manner  affirm  the  contract  at  majority,  it  becomes  mutual,  (sb) 
In  one  case  the  court  refused  to  restrain  a  defendant  from  pur- 
chasing a  certain  commodity  where  he  would,  although  he  had 


(o)  It  is  a  corollary  of  the  principle  of 
mutuality,  that  what  was  agreed  to  be 
done  on  the  part  of  the  plaintitf  should 
distinctlij  appear.  Wingate  v.  Dail,  2 
Harris  &  J.  76  ;  Morgan  v.  Rainsford,  8 
Irish  Eq.  299. 

(p)  "It  would  be  quite  new,"  said  Sir 
William  (Jranf,  "  for  a  court  of  equity  to 
enforce  performance  on  one  side  without 
examining  whether  there  be  a  capacity  to 
perform  on  the  other."  Fildes  v.  Hooker, 
2  Meriv.  428.  But  the  fact  that  when  the 
agreement  was  made  it  was  subject  to  a 
contingency  which  might  have  rendered 
performance  by  the  defendant  impossible, 
constitutes  no  objection  to  the  execution 
of  the  contract  if  the  contingency  did  not 
happen.  Dowell  v.  Dew,  1  Younge  &  C, 
Ch.  .345,  .356. 

(ly)  Thus  where  the  plaintiff  prayed  the 
specific  execution  of  an  agreement  for  a 
lease  entered  into  a  long  time  before, 
under  whicii  agreement  ho  had  entered 
•into  possession,  and  made  expensive  im- 
provenienls,  Sir  (Jeorije  'J'urncr,  V.  C,  re- 
fused to  decree  a  lease,  on  the  ground  tiuit 
some  of  the  covenants  which  it  would 
contaiti  liad  ulrcady  been  l)roken  liy  the 
plaintiir,  so  that  liad  tiic  lease  i)een  in  ex- 
istence acconling  to  tiie  agreement  tiic 
lessor  would  have  had  a  right  to  reenter. 
Gregory  '•.  Wilson,  9  Hare,  OH.'l,  10  ICng. 
L.  &  iv|.  l.'l.'}.  The  court  in  re<piinng 
Bomcthing  to  be  ilone  on  the  part  (if  llic 
plaintiff  as  a  condition  procidcni  to  bi^ 
obtaining  the  relief  prayed,  will  sometimes 


go  beyond  the  letter  of  the  contract,  and 
impose  something  which  the  defendant 
could  not  have  demanded  had  he  been  the 
party  applying  for  the  interposition  of  the 
court.  See  Moxhay  i'.  Inderwiek,  1  De 
G.  &  S.  708.  An  understanding  of  the 
parties  collateral  to  a  written  contract  be- 
tween them  and  not  intended  to  form  a 
part  of  it,  cannot  occasion  a  denial  of  a 
specific  performance  of  the  contract ;  but 
it  may  have  the  effect  to  induce  the  court 
not  to  decree  a  specific  performance  with- 
out taking  care  that  the  defendant  should 
have  the  benefit  of  such  understanding. 
London  and  Birmingham  Railway  Co.  v. 
Winter,  Craig  &  Fh.  57,  61.  And  see 
ante,  sect.  5,  p.  545. 

(?)  Hut  if  the  thing  to  be  done  by,  the 
I)laiutitf  did  not  enter  very  materially  into 
the  consideration  of  the  agreement,  and 
the  defendant  at  the  time  contemplated 
the  possibility  of  a  failure  on  the  jilaintitf 's 
j)art  in  that  respect,  and  made  provision 
for  the  case  in  the  contract  itself,  it  will  bo 
no  ol)staclc  to  the  granting  of  a  decree  of 
specific  performance.  Lord  ?-.  Stephens, 
1  Younge  &  C;.,  Kx.  222;  1  Fonbl.  Eq.  B. 
i.  ell.  V.  s^  a,  note  (<i). 

(,s)  Flight  r.  Holland,  4  Russ.  298; 
Ilargrave  v.  llargravc,  12  Beav.  411. 

(sa)  IMilliken  v.  Milliken,  8  Irish  Eq. 
16.  And  see  Flight  i>.  Bolland,  4  Russ. 
298. 

(si,)  See  Milliken  v.  Milliken,  8  Irish 
K(i.  27,  28. 


CH.  IX.]  SPECIFIC   PERFORMANCE.  567 

agreed  to  purchase  it  only  of  the  plaintiff  who  sought  to  com- 
pel him  to  do  so ;  and  the  ground  of  the  refusal  was  that  the 
court  could  not  compel  the  plaintiff  to  supply  the  defendant 
with  as  much  of  that  commodity  as  he  might  want,  (t) 

A  prgbable  disability  of  the  plaintiff,  although  he  is  not  yet 
chargeable  with  any  default,  may  be  ground  for  a  court  of 
equity  to  refuse  to  interpose.  Thus,  if  the  terms  of  the  con- 
tract require  the  plaintiff  to  pay  money  at  a  future  time,  his 
insolvency  may  deprive  him  of  the  right  to  compel  the  other 
party  to  perform  his  agreement,  (u)  And  it  has  been  held  that 
the  insolvency  of  an  intended  lessee  is  a  weighty  objection  to 
•granting  him  a  decree  for  a  lease,  (v) 

If  the  nature  of  the  duties  of  a  servant  is  such  that  it  is  im- 
possible for  a  court  to  enforce  by  its  decree  his  faithful  and 
proper  discharge  of  them,  it  is  not  competent  to  him  on  his 
part,  to  compel  the  employer  to  permit  him  to  perform  those 
services,  (lu)  There  are  many  other  cases  where  the  principle 
that  equity  requires  mutuality,  has  received  illustration  ;  and  it 
seems  to  have  been  invoked  sometimes,  when  a  more  legitimate 
ground  of  decision  might  have  been  found  in  some  of  those 
more  general  doctrines  determining  the  specific  enforcement  of 
contracts  which  have  been  treated  of  in  previous  portions  of 
this  chapter.  We  have  placed  in  the  note  below  a  full  exami- 
nation of  the  cases  on  this  difficult  subject,  (x) 

(t)  Hills  V.  Croll,  2  Phillips,  60.    There  an  earlier  stage,  before  Lord  Lynrlhurst,  C. 

is  a  more  full  report  of  the  judgment  of  B.,  1  Younge  &  C.,Ex.  91,  93.  While  it  is 

the    Lord    Chancellor   {Lipulhurst)    in   a  not  necessary  that  the  party  should  have 

note  in  1  De  G.,  M.  &  G.  627.     This  case  taken  the  benefit  of  the  Insolvent  Laws, 

which  had  had   a   great   deal  of  doubt  or  that  he   should  havp  given  up  all  his 

thrown  upon  it  previously,  was  recently  property  to  his  creditors ;  there  must  yet 

referred   to   with   approval   by  Lord   St.  be  satisfactory  proof  of  general  insolvency, 

Leonards,  C,  Lumley  v.  Wagner,  1  De  and   a  previous   default  in   a  particular 

G.,  M.  &  G.  627.  instance  is  not  enough.    Neale  v.  Mac- 

(u)  Franklin   v.   Lord    Brownlow,    14  kenzie,  1  Keen,  474. 

Ves.  5.56  ;  Lord  Lamjdale,  M.  K.,  Neale  (w)  Pickering  v.  The  Bishop  of  Ely,  2' 

V.  Mackenzie,  1  Keen,  474.     And  see  Bra-  Younge  &  C,  Ch.  267. 

shier  v.  Gratz,  6  Wheat.  .5.39.  (x)  The  meaning  of  the  rule  of  equity 

(r)  Buckland  v.  Hall,  8  Ves.  92.     The  requiring  that  contracts  must  be  mutual, 

insolvency  of  the  plaintiff  has  been  held  to  is  not  very  clear  ;  nor  is  it  easy  to  make 

be  a  ground  for  refusing  a  decree  for  a  a  satisfactory  classification  of  the  cases  in 

lease,  although  his  discharge  was  granted  which  it  has  been  announced  as  the  ground 

as  long  before  as  six  or  seven  years,  but  of  decision.     By  mutuality  seems  some- 

subsoquently  to  the  agreement.     Price  v.  times  to  be  intended  mutuality  o^  remedy  ; 

Asshcton,  1  Younge  &  C.,  Ex.  444,  per  in  other    cases,  mutuality  of  agreement; 

Alderson,  B.     Compare  the  same  case  at  but  in -neither  sense  is  the  rule  of  univer- 

50*  [593] 


568 


THE   LAW   OF   CONTRACTS. 


[part  II. 


It  may  happen  that  the  plaintiff  has  performed  a  material 
part  of  what  he  was  bound  by  the  agreement  to  do,  and  is  pre- 


sal  application.     1.  A  difference   in   the 
remedy,  or  power  of  enforcing  the  con- 
tract, may  exist  in  several  cases.     One 
party's  conduct  may  be  such  as  to  de- 
prive him  of  the  right  which  the  other 
possesses  of  applying  for  the  interposition 
of    the   court.      South-Eastern    Railway 
Co.  I'.  Knott,  10  Hare,  122,  17  Eng.  L.  & 
Eq.  555.     And  though  no  moral  imputa- 
tion rest  on  him,  the  defendant  cannot  set 
up  the  existence  of  an  impediment  of  his 
own  creation  to  his  enforcement  or  enjoy- 
ment of  the  part  of  the  contract  beneficial 
to  himself;  in  such  a  case,  it  is  a.sufficient 
reply  to  him  that  the  contract  was  mutual 
when  it  was  made,  and  if  it  has  since  be- 
come otherwise,  it  is  his  own  fault.    Lord 
St.  Leonards,  C,  1   De  G.,  M.  &  G.  755. 
So  a  subsequent  inequality  of  obligation 
occasioned   by  the  act  of  God,  is  not  of 
itself  a  valid  ground  of  objection.     Sta- 
pilton  V.  Stapilton,  1  Atk.  10.     Another 
instance  appears  in  the  doctrine,  denied  it 
seems   by   Lord   Rtdesdale,  Lawenson  v. 
Butler,  1  Sch.  «Sb  L.  13,  but  now  perfectly 
established,  that  a  purchaser  may  compel 
a  conveyance,  although  the  vendor  could 
not   have   enforced    specific   performance 
because   of  some   infirmity   in   the  title. 
Sutherland  v.  Briggs,  1  Hare,  34.     Ante, 
ij  6,  p.   556.     And   in   cases   within   the 
statute  of  frauds,  it  is  now  clear  (although 
a  contrary  opinion  upon  this  point  also 
was  expressed  by  Lord  Redesdale,  1  Sch. 
&  L.  20),  that  the  circumstance  that  the 
defendant  only  signed  the  agreement,  so 
that   he   could   not   have   compelled   the 
plaintiifto  perform  it,  constitutes  no  good 
ground  of  objection  to  the  plaintiff's  suit. 
Backhouse  v.  Mohun,  3  Swanst.  434,  n.; 
Seton  ?'.  Shide,  7   Ves.  275  ;  Western  v. 
Ilussell,  3   Ves.   So    B.    192;  Ormond   v. 
Andur^oii,  2  Ball  &  B.  370;  Field  ?'.  Bo- 
land,  1  J)rury  &  W.49;  Clason  v.  Bailey, 
14  Johns.  489.     From  an  absolute  agree- 
ment signed  by  tiic  i)arty  to  be  charged, 
must  be  distinguished    a   writing   which, 
though  signed  by  one  jiarty  and  bearing 
the   form    of  an    agreement,    is    really    a 
mere  proposal ;  sucii  a  writing  is  turned 
into  an  agreement,  and  can   lie  enforced 
in   e(|uily  by  the   other   party    upon   his 
acceptance  of  it  by  writing.     Talmer  v. 
Scott,    1    Uus8.   &  M.   394  ;  or  such   ac- 
ceptance   may    be   evidenced    and    made 
cdectUMl    by    lh(!    plaintiff's    acts    of   i)art 
pcrforinanc<\     J)owell  v.  Dew,  1  Youngo 

[5U4] 


&  C,  Ch.  345.  See  Norton  v.  Mascall, 
2  Vern.  24,  1  Eq.  Cas.  Ab.  51.  Whether 
the  plaintiff's  filing  a  bill  for  a  specific 
performance  is  a  sufficient  ass'ent  to  re- 
move the  objection  of  a  want  of  mutuality 
when  it  would  otherwise  exist,  is  not  per- 
fectly free  from  doubt.  A  trader  exe- 
cuted an  assignment  to  trustees  in  trust  to 
sell,  and  the  trustees  made  a  sale  to  the 
defendant ;  the  assignment  being  an  act 
of  bankruptcy,  the  assignees  of  the  bank- 
rupt might  have  avoided  the  subsequent 
sale  ;  but  it  was  held  that  by  filing  a  bill 
against  the  defendant  to  enforce  specific 
performance,  they  made  the  contract  their' 
own,  and  were  entitled  to  have  it  specifi- 
cally executed.  Goodwin  v.  Lightbody, 
Daniel,  153.  So  if  a  contract  be  modified 
by  the  defendant,  and  the  plaintifi'  bring  a 
suit  to  obtain  specific  performance  of  it 
with  the  modification,  the  filing  of  the  bill 
is,  it  seems,  a  sufficient  assent  by  the 
plaintiff  to  the  modified  contract.  Lord 
Plunket,  C.,  Field  v.  Borland,  1  Drury 
&  W.  46.  See  also,  Milliken  v.  Milliken, 
8  Irish  Eq.  16,  cited  infra;  Martin  v. 
Mitchell,  2  Jacob  &  W.  426.  Agar  v. 
Biden,  2  Law  J.,  N.  s.  ch.  3.  But  see 
Gaskarth  v.  Lowtlier,  12  Ves.  114.  It 
has  been  intimated  that  if  husband  and 
wife  seised  in  fee  in  the  wife's  right  con- 
tract to  sell,  they  may  by  bill  in  equity 
enforce  a  performance  of  the  contract 
against  the  purchaser,  although  he  could 
not  in  like  manner  have  compelled  a  con- 
veyance of  the  land.  Kniyht  Bruce,  V. 
C,  Salisbury  v.  Hatcher,  2  Youngc  &  C, 
Ch.  62.  The  principal  instances  of  the 
denial  at  this  day  of  relief  in  eciuity  to  one 
])arty  because  a  corresponding  remedy 
would  not  lie  open  to  the  other,  are  those 
mciitioncd  in  the  text;  namely,  where  the 
plainlilf  is  insolvent,  or  an  infant,  or  a 
servant  employed  to  perform  services  of 
trust ;  to  winch  is  to  be  added,  according 
to  a  doctrine  recently  established,  the 
case  where  the  contract  contains  an  agree- 
ment on  the  jilaintilf's  jiart  to  give  at  a 
time  future,  witii  respect  to  the  suit  in 
court,  some  yet  unascertained  thing,  or  to 
])crform  a  series  of  acts  that  must  neces- 
sarily extend  over  a  future  period  ;  tho 
execution  (if  which  agreement  therefore 
the  court  camiot  by  a  present  decree  in- 
sure to  iIk!  defendant.  Gervais  ?'.  Ed- 
wards, 2  J)rury  &  W.  80;  Hills  r.  Croll, 
1  Coop.  Cas.  lvmi>,  Cott.  85.     Lord  St. 


CH.  IX.] 


SPECIFIC   PERPOPtMANCE. 


569 


vented  from  doing  the  whole  by  an  impossibility  in  no  way  his 
fault.      If  he  now  seeks  specific    performance  from  the  other 


Leonards,  Ch.,  1  De  G.,  M.  &  G.  627. 
But  see  Ball  v.  Coggs,  1  Bro.  T.  C.  296. 
2.  From  the  class  of  cases  presenting  tlie 
question  of  a  want  of  mutuality  in  the 
aijretmcnt  itself,  it  is  difficult  to  extract  any- 
clear  principle.  It  would  be  convenient 
if  it  could  be  laid  down  that  where  an  un- 
dertaking on  the  plaintiff's  part  is  requi- 
site to  constitute  a  consideration  for  the 
defendant's  agreement,  such  undertaking 
must  exist  as  a  component  part  of  the 
contract;  and  that  where  on  the  other 
hand  there  is  a  sufficient  equitable  con- 
sideration for  the  defendant's  agreement, 
independent  of  something  which  the  plain- 
tiff by  the  terms  of  the  contract  may  at 
his  election  do,  but  is  not  bound  to  do, 
there  the  defendant  may  be  compelled  to 
perform  notwithstanding  the  plaintiff's 
freedom  with  respect  to  such  further  acts 
on  his  side.  And  this  distinction  finds 
considerable  support  in  authority.  It 
resolves  the  question  of  mutuality  into 
the  broader  one  of  consideration,  and 
hence  brings  up  the  difficulty,  that  the 
courts  have  so  frequently  treated  the  ob- 
jection of  want  of  mutuality  as  distinct 
from  that  of  want  of  consideration.  This 
difficulty  is,  however,  in  some  measure 
removed  by  noticing  that  there  may  be  a 
defect  in  the  consideration,  either  because 
there  is  no  valid  promise  on  the  plaintiff's 
part,  or  because  that  which  is  promised 
is  a  thing  of  no  value ;  now  the  latter 
form  of  defect  is  what  is  called  in  the 
cases  alluded  to,  a  want  of  consideration, 
while  the  former,  though  to  say  the  least, 
quite  as  much  a  want  of  consideration  is 
described  by  the  phrase,  "  want  of  mutu- 
ality." It  will  be  useful  to  observe  the 
circumstances  which  have  been  held  to 
constitute  a  want  of  mutuality.  An  agree- 
ment that  the  plaintiff  should  have  a  cer- 
tain estate  for  il,500  less  than  any  other 
purchaser  would  give  for  it,  was  held  ob- 
jectionable on  this  ground  ;  inasmuch  as 
the  plaintiff  was  not  bound  to  take  it  at 
any  price.  Bromley  v.  Jefferies,  2  Vern. 
415.  The  plaintiff,  an  attorney,  had 
promised  to  give  up  his  business  to  the 
defendant,  who  agreed  to  pay  him  a  sum 
of  money  therefor ;  and  Sir  William 
Grant,  M.  R.,  refused  a  decree  for  the 
payment  of  the  money,  on  the  ground 
that  the  court  had  no  means  of  compel- 
ling the  plaintiff  to  perform  his  part  of  the 
agreement,  or  of  putting  the  defendant  in 


possession  of  the  business.  Bozon  v. 
Farlow,  1  Meriv.  459.  An  agreement  hav- 
ing been  entered  into  between  A,  and 
another  for  the  purchase  by  the  latter  of 
certain  land  of  which  A  was  only  tenant 
for  life,  A's  son,  in  wliom  the  title  was, 
filed  a  bill  against  the  purchaser  to  com- 
pel a  completion  of  the  purchase  ;  it  was 
objected  that  the  bill  would  not  lie,  be- 
cause, the  plaintiff,  not  being  bound  by  his 
father's  agreement,  the  remedy  was  not 
mutual,  and  it  was  so  held.  Armiger  v. 
Clarke,  Bunb.  111.  But  there  was  there 
no  contract  at  all  between  the  plaintiff 
and  defendant.  The  defendant,  liy  an 
agreement  under  seal  demised  land  to  the 
plaintiff  without  rent  or  other  expressed 
consideration,  and  covenanted  to  make 
a  conveyance  to  the  plaintiff  in  fee 
upon  payment  by  him  of  a  certain  sum 
per  acre;  a  decree  for  a  specific  perform- 
ance of  the  agreement  to  convey  was  re- 
fused. Boucher  v.  Vanbuskirk,  2  A.  K. 
Marsh.  34.5.  Geiger  v.  Green,  4  Gill, 
472,  was  the  case  of  an  agreement  be- 
tween the  owner  of  certain  land  and  the 
])laintiff,  by  which  the  latter  was  granted 
the  privilege  of  getting  ore  from  the  land, 
paying  therefor  25  cents  per  ton ;  after 
some  ore  had  been  dug  under  the  agree- 
ment, the  plaintiff  being  interrupted  by 
the  defendant,  prayed  an  injunction  and 
a  decree  for  a  specific  performance  ;  but  it 
was  refused.  Tyson  v.  Watts,  1  Md.  Ch. 
Dec.  1.3,  was  also  a  mining  contract,  simi- 
lar in  its  general  features,  but  diftering  in 
reciting  a  consideration  of  one  dollar  paid 
by  the  plaintiff,  and  obliging  him  to  com- 
mence proper  explorations  on  or  before  a 
certain  day  ;  it  was  held  to  want  mutual- 
ity. On  the  other  hand,  Stansbury  ;;. 
Fringer,  11  Gill  &  J.  14a,  strongly  sup- 
ports the  distinction  which  has  been  sug- 
gested. There  it  was  agreed  between  A 
and  B,  that  A  should  hold  certain  land 
of  B  for  a  term  of  years,  paying  taxes, 
and  making  certain  improvements  ;  and 
it  was  further  agreed  that  A  might  at  any 
time  during  the  term  at  his  pleasure  be- 
come the  purchaser  of  the  land  at  a  stipu- 
lated price ;  and  A  having  tendered  the 
price,  filed  a  bill  to  compel  B  to  make  a 
conveyance  ;  it  was  objected  that  the  con- 
tract was  not  mutual,  because  there  was 
no  obligation  to  purchase  upon  the  plain- 
tiff; but  the  court  held  tkat  by  occuiiying 
the  land,  paying  taxes,  and  making  the 
[595] 


570 


THE   LAW   OF   CONTRACTS. 


[part  II. 


party,  it  is  plain  that  he  is  not  entitled  to  the  whole  on  that 
side  in  return  for  the  part  which  he  has  done.  But  if  we  sup- 
pose that  what  the  defendant  has  to  do  is  equally  divisible,  and 
that  a  part  of  his  obligation  may  be  set  off  justly  and  accurately, 
as  in  proportion  to  the  part  done  by  the  plaintiff,  will  the 
court  decree  so  much  ?  Here  a  question  comes  up  somewhat 
similar  to  that  of  entirety  of  contract  at  law.  A  distinction  of 
this  kind  has  been  taken,  and  seems  to  rest  on  sufficient  foun- 
dation ;  if  the  plaintiff  is  none  the  worse  for  what  he  has  done 
—  or  to  use  a  phrase  w"hich  has  been  applied  to  such  a  case,  is 
in  statu  quo,  and  will  not  therefore  be  damaged  if  nothing  be 
done  by  the  defendant,  he  can  claim  nothing  of  the  defendant, 
because  he,  the  plaintiff,  has  not  done  all  he  was  bound  to  do. 


stipulated  improvements,  he  had  given 
the  consideration  for  his  privilege  of  pur- 
chasing the  land,  and  a  specific  perform- 
ance was  decreed.  And  see  Hackett  v. 
]\IcNamara,  Lloyd  &  G.  temp.  Plunket, 
283;  Ball  v.  Coggs,  1  Bro.  P.  C.  296. 
Compare  Boucher  v.  Vanbuskirk,  supra. 
The  owner  of  a  certain  parcel  of  land  en- 
tered into  an  agreement  under  seal  with  a 
Railroad  Company  by  which  he  granted 
them  the  privilege  of  running  their  road 
through  his  lands  upon  payment  of  a 
certain  compensation  for  the  soil  appropri- 
ated and  the  damages  occasioned  ;  on  a  bill 
filed  by  the  company  for  a  specific  per- 
formance, it  was  contended  that  the  con- 
tract wanted  mutuality  inasmuch  as  the 
plaintiffs  were  under  no  obligation  on  their 
part  to  take  the  land  or  pay  the  price ; 
but  the  objection  was  not  sustained. 
"Western  Railroad  v.  Babcock,  C  Met. 
346.  (And  see  Boston  and  Maine  Kail- 
road  V.  Babcock,  3  Cash.  228;  Boston 
and  Maine  ]{ailroad  v.  Bartlctt,  id.  224.) 
Fi'om  a  jiortion  of  the  oj)inion  of  Sham, 
C.  J.  (6  Met.  3.')3,  &c.),  it  might  be  in- 
ferred that  it  was  held  that  a  positive 
agreement  on  the  plaintiff's  part  to  act 
under  the  contract  is  not  necessary,  where 
in  the  event  of  his  acting  under  it,  there 
•will  lie  a  certain  obligation  upon  him  to 
pay  a  consideration  ;  in  other  words,  that 
the  license  to  act  is  sufliciently  supported 
by  tiie  i)romise  to  pay  for  using  the  li- 
cense, in  case  he  does  use  it ;  but  nmch 
consideration  was  placed  upon  the  cliar- 
uf;t(T  of  tlie  plaintiffs  as  a  ])ublic  com- 
pany iiistilutfil  to    make   a  great  public 

[51)0] 


work,  and  upon  the  fact  that  acting  on 
the  agreement  with  the  defendant,  they 
had  gone  to  fix  a  particular  location  for 
their  road,  and  consequently  were  now 
compelled  to  take  the  defendant's  land, 
Avhatever  price  should  be  exacted.  The 
circumstance  that  a  substantial  consider- 
ation did  not  need  to  be  shown  at  law, 
the  contract  being  under  seal,  was  also 
adverted  to.  The  doctrine  of  the  com- 
mon law,  that  mutuality  is  only  necessary 
in  a  contract  where  the  want  of  mutuality 
would  leave  one  party  without  a  valid  or 
available  consideration  for  his  promise, 
(Tindal,  C.  J.,  Arnold  v.  Mayor  of  Poole, 
4  Man.  &  G.  896),  seems  to  express  all  the 
mutuality  in  the  agreement  of  the  parties  — 
as  distinguished  from  reciprocity  of  ?'eme(/y 
—  that  equity  requires  as  a  necessary 
condition  to  a  specific  performance.  At 
the  same  time,  it  must  be  borne  in  mind 
that  although  no  lei,'al  invalidity  infects 
the  contract,  the  enforcement  of  it  in  equity 
is  a  matter  of  judicial  discretion  ;  and 
notwithstanding  there  is  no  want  of  mu- 
tuality, the  court  will  not  act,  if  upon  all 
the  circumstances  of  the  case,  there  is 
danger  that  its  interposition  would  not  be 
e(|uitab]c.  See  judgment  of  7v'/iA//(<  Bruce, 
V.  C,  2  Yoimge  &  C,  Ch.  64.  "  There  is 
a  class  of  injunction  cases  Avliich  are  not 
to  be  used  as  authorities  for  a  specific 
jjcrformance  under  like  circumstances, — 
such  as  Dietrichsen  i\  Cabburn,  2  Phillips, 
t)'2.  See  the  observation  of  Lord  Gotten- 
liaiii,  (;.,  in  the  re])()rt  in  10  Jur.  601.  See 
also,  Lumley  v.  Wagner,  1  Do  G.,  M.  & 
G.  604. 


CH.  IX.]  SPECIFIC   PERFORMANCE.  571 

But  if  the  plaintiff  has  in  good  faith  done  all  that  he  could  do, 
and  if  the  defendant  do  nothing  of  what  he  undertook,  or  make 
no  compensation  or  repay  no  money,  and  something  of  this 
kind  can  be  decreed  and  done,  and  the  defendant  will  gain,  and 
the  plaintiff  sustain  damage  if  it  be  not  done,  in  such  case  the 
plaintiff  would  have  a  decree.  (?/)  The  question  of  compensa- 
tion we  have  already  considered,  (z) 

It  sometimes  happens  that  a  thing  is  prayed  for  which  is 
impossible  now,  but  will  be  possible  at  a  future  time;  as  if 
there  be  an  incapacity  from  age,  which  time  will  remove  ;  or 
from  incompleteness  of  interest  or  estate  which  certain  or  even 
probable  events  will  cure  ;  in  such  cases  equity  may  not  refuse 
absolutely  to  do  what  is  requested,  but  may  delay  the  decree 
until  the  obstacles  to  the  performance  are  removed,  and  in  the 
mean  time,  make  any  necessary  provisions  by  a  temporary  de- 
cree, (a) 

A  court  of  chancery  has  no  power  to  enforce  specific  perform- 
ance against  a  feme  covert,  in  personam;  yet,  if  she  has  sepa- 
rate property  within  its  jurisdiction,  that  may  be  made  to  an- 
swer for  her  contract;  but  in  all  cases,  the  court  must  proceed 
in  rem,  against  the  property,  {b)  For  a  feme  covert  is  not  com- 
petent to  enter  into  contracts,  so  as  to  give  a  personal  remedy 
against  her ;  and  although  she  may  become  entitled  to  property 
for  her  separate  use,  she  is  no  more  capable  of  contracting  than 
before  ;  a  personal  contract  would  be  within  the  incapacity 
under  which  a  feme  covert  labors,  though  she  may  pledge  her 
separate  property,  and  make  it  answerable  for  her  engage- 
ments, (c) 

(y)  But  the  court  will  not  grant   spe-  tin  v.  Mitchell,  2  Jacob  &  W.  424;  Berry 

cific  performance  of  the  agreement  with  a  v.  Cox,  8  Gill,  4G6. 

variation.     In  the  language  of  Lord  Loh^;-         (c)  Lord    Cottenham    (when   Master  of 

dale,  M.  R.,  Nurse  v.  Seymour,  13  Beav.  the  Rolls),  1  Mylne  &  C.  Ill,  112  ;  Fran- 

2G9 :    "You    may    have    an    agreement  cis  y.  Wigzell,M6«s«/«Yi.    Where  a  married 

specifically  performed,    but    you    cannot  woman,    having    separate   property,   and 

have   it  (juasi  specifically  performed,   or  living  apart  from  her  husband,  entered  into 

specifically  performed  with  a  variation."  an  agreement  to  take  a  lease,  it  was  held 

(z)  Section  6,  p.  556,  et  seq.  that  she  was  bound  by  the  contract  to  the 

(a)  See  Clay  v.  Ruflford,  5  De  G.  &  S.  extent  of  her  separate  property,  and  might 

768,  19  Eng.  L.  &  Eq.  360.  be  compelled  to  pay  the  rent.     Gaston  v. 

(6)  Aylett  y.  Ashton,  1  Mylne&C.  105;  Frankum,  2  De  G.  &  S.  561.     And  see 

Francis  v.  Wigzell,  1  Madd.  258;  Mar-  Stead  v.  Nelson,  2  Beav.  245.     As  to  the 

tin   t'.  Dwelly,  6   Wend.  9;  Knowles  v.  enforcement  of  a  contract  with  a  married 

McCamly,  10  Paige,  342.     And  see  Mar-  woman,  for  the  purchase  of  her  separate 

[597] 


572 


THE   LAW   OF   CONTRACTS. 


[part  II. 


There  has  been  much  diversity  of  opinion  in  England  whether 
specific  performance  should  be  decreed  when  a  husband  cove- 
nants that  his  wife  shall  do  or  permit  some  act  which  will  con- 
vey away  her  estate  or  bar  her  right.  A  Master  of  the  Rolls  (d) 
said,  in  1733,  "  there  are  a  hundred  precedents  for  it."  But  the 
course  of  adjudication  was  certainly  not  uniform.  Lord  Coiv- 
per  strongly  objected  to  it,  {e)  and  Lord  Eldon,  whose  conserva- 
tism led  him  to  obey  the  precedents,  declared  that  if  it  were 
a  " res  integra"  he  should  hesitate,  and  stated  the  objections  to 
the  doctrine,  or  rather  practice,  clearly  and  forcibly.  (/)  We 
believe  that  the  question  has  seldom  come  before  the  equity 
courts  of  this  country.  But  we  should  think  the  objections  to 
a  decree  of  specific  performance  in  such  a  case  are  so  obvious 
and  powerful,  that  no  court  would  grant  it  unless  very  peculiar 
circumstances  lessened  the  force  of  these  objections.  A  decree 
may  issue  in  such  a  case  against  the  husband,  perhaps  requiring 
him  to  do  what  he  can,  with  an  allowance  indemnity  or  security 
for  what  he  cannot  do  ;  and  this  has  been  done,  (g-) 

It  is  hardly  necessary  to  say  that  equity  will  not  enforce  a 
contract  tainted  with  fraud  on  the  part  of  the  party  applicant,  {h) 


property,  see  Harris  v.  Mott,  14  Beav. 
169. 

Id)  Sir  Joseph  JekyU,  in  Ilall  v.  Hardy, 
3  P.  Wms.  189. 

(e)  Otreacl  v.  Round,  4  Vin.  Ab.  Baron 
&Feme  (II.  b.),  pi.  4. 

(/)  Emery  v.  Wase,  8  Ves.  514  ;  Mar- 
tin V.  Mitchell,  2  Jac.  &  W.  425,  426. 
See  opinion  of  Alexander,  C.  B.,  Fred- 
crick  V.  Coxwell,  .3  Younj^e  &  J.  517. 
But  sec  tlic  judgment  of  Wi'/rain,  V.  C, 
Downs  r.  Collins,  6  Hare,  4.37. 

{(f)  Wlicie  a  vendor's  wife  refused  to 
release  her  dower,  he  was  decreed  to  con- 
vey liis  own  interest,  with  an  indemnity 
against  the  claim  of  dower.  Williamson, 
C.,  I'aul  V.  Younj^,  New  Jersey,  1855,  4 
Amer.  Law  lie;,'.  412,  2  Stockt"  Ch.  401, 
aflirmed  \>y  the  Court  of  Errors  and  Ap- 
peals, uoiit.  Voun}^  r.  I'aul,  2  Stockt.  Cli. 
414. 

(A)  If  a  vendor  before  the  sale  make  a 
rcprcHentiition  calculated  to  induce  the 
purchaser  to  overvalue  the  property,  which 
rcprescnlMliuii  is  untrue  and  known  liy  him 
to  he  UMtrin',  h(^  caiMiot  enforce  s|)C(i(ic 
performance  of  that  cyntract  of  sale  al- 

[  5'J8  J 


thoupih  he  had  no  fraudulent  intent  in  the 
representation ;  for  he  who  seeks  specific 
performance  ought  to  be  optiinae  Jidei. 
Price  r.  IMacaulay,  2  De  G.,  M.  &  G.  339, 
19  Eng.  L.  &  Eq.  162.  But  it  seems  that 
the  fact  of  the  plaintiff's  having  during  the 
treaty  which  led  to  the  contract  made  false 
representations  concerning  the  subject- 
matter  will  not  preclude  him  from  a 
specific  performance,  if  it  appear  tiiat  the 
defendant  was  not  at  all  misled  by  such 
niisrciirescntations.  Chipiiam  v.  Shillito, 
7  Beav.  146  ;  Vigcrs  v.  Pike,  8  Clark  & 
E.  562.  And  see  Jennings  v.  Broughton, 
5  De  G.,  M.  &  G.  126.  Yet  in  order  to 
enable  a  vendor  to  avail  himself  of  that 
reply,  he  must  show  clearly  that  the  pur- 
chaser knew  that  to  be  untrue  which  was 
represented  to  him  as  true  ;  for  no  man 
can  lie  heard  to  say  that  he  is  to  be  as- 
sumed not  to  have  spoken  the  truth. 
Kni<ihl  Ihncr.,  L.  J.,  2  Do  G.,  M.  &  G. 
.346.  Where  the  vendor  enii)ioye(l  a  puf- 
fer to  bid  at  a  sale  advertised  to  be  "  with- 
out reserve,"  a  specific  jicrfonnancc  was 
refused  him.  Nleadows  c.  'I'anner,  5 
Madd.  .34.      See  Tliornett  v.  Haines,  15 


CH.  IX.] 


SPECIFIC   PERFORMANCE. 


573 


Here  equity  can  hardly  be  said  to  follow  the  law,  because  it 
goes  further.  For  it  requires  perfect  good  faith,  and  will  refuse 
specific  performance  of  a  contract  if  it  were  obtained  by  means 
of  misrepresentation  or  indirection  which  would  not  be  suffi- 
cient to  avoid  the  contract  at  law.  (i)  As  if  the  plaintiff  had 
induced  the  defendant  to  enter  into  a  written  contract,  by  his 
promise  to  alter  it  materially  afterwards,  or  substantially  qualify 
its  operation.  (J)     So  if  he  had  orally  waived  a  written  con- 


M.  &  W.  372,  per  Parke,  B.  An  indus- 
trious concealment  of  a  circumstance  af- 
■fecting  the  value  of  the  property  was 
held  to  be  a  ground  for  refusing  a  specific 
performance.  Shirley  v.  Stratton,  1  Bro. 
Ch.  440.  To  defeat  an  application  for 
a  specific  performance,  it  is  not  necessary 
that  the  plaintiff  should  have  known  the 
representation  to  be  untrue,  when  he  made 
it,  if  it  is  false  in  point  of  fact.  Best  v. 
Stow,  2  Sandf.  Ch.  298.  As  to  the  mis- 
conduct of  an  agent  of  one  of  the  parties, 
see  Alvanlcy  v.  Kinnaird,  2  Macn.  &  G.  6. 
(/)  A  misrepresentation,  wliether  wilful 
or  not,  deprives  the  party  of  all  title  to  a 
specific  performance  in  equity;  the  con- 
tract is  vitiated  in  toto,  and  it  is  not  com- 
petent to  the  plaintiff,  after  exonerating 
the  defendant  from  that  part  which  is  af- 
fected by  the  misrepresentation  to  obtain 
the  specific  execution  of  the  residue. 
Clermont  v.  Tasburgh,  1  Jac.  &  W.  112; 
Cadman  v.  Horner,  18  Ves.  10.  See 
also,  Drvsdale  v.  Mace,  .5  De  G.,  M.  &  G. 
103;  Gurley  v.  Hiteshue,  5  Gill,  223; 
Best  V.  Stow,  2  Sandf.  Ch.  298  ;  Powers 
V.  Hale,  5  Foster,  145.  And  although 
thei'c  be  no  want  of  good  faith  on  the  plain- 
tiff's part,  yet  if  the  defendant  placed  a  dif- 
ferent and  erroneous  construction  upon  the 
contract,  and  in  doing  so  committed  a  mis- 
take which  a  fair  and  reasonable  man  in 
the  circumstances  might  without  supine 
ignorance  or  gross  negligence  have  fallen 
into,  that  may  be  a  reason  why  a  court 
of  equity  should  not  enforce  specific  per- 
formance against  him.  Kniqlit  Bruce,  V. 
C,  Ilicketts  V.  Bell,  1  De  G.  &  S.  346  ; 
Higginson  v.  Clowes,  15  Ves.  524.  And 
see  Alvanley  v.  Kinnaird,  2  Macn.  &  G. 
1.  This  rule  was  verj"-  clearly  stated,  and 
the  manner  of  applying  it  carefully  defined 
by  Jiliaw,  C.  J.,  Western  R.  11.  Co.  v. 
Babcock,  6  Met.  352.  See  also,  Malins 
V.  Freeman,  2  Keen,  25  ;  Graham  i'.  Hen- 
dren,  5  Munf.  185.  Young  v.  Frost,  5 
Gill,  287,  may  be  considered  perhaps  to 


conflict  in  some  degree  with  this  principle, 
and  with  that  requiring  the  plaintiff 
to  prove  tlie  contract  with  certainty, 
and  also  with  the  doctrine  that  parol 
evidence  is  admissible  to  rebut,  though  not 
to  establish,  an  equity.  In  proportion  to 
the  severity  of  the  terms  imposed  by  one 
party  on  the  other,  it  is  incumbent  on  the 
former  to  see  to  it  that  those  terms  are  ex- 
plicitly stated.  Thus  when  a  vendor  sells 
property  under  stipulations  which  are 
against  common  right,  and  j)lace  the  pur- 
chaser in  a  position  less  advantageous 
than  that  in  which  he  otherwise  would  be, 
it  is  incumbent  on  the  vendor  to  express 
himself  with  reasonable  clearness;  if  he 
uses  expressions  which  are  ambiguous  and 
reasonably  capable  of  misconstruction,  the 
purchaser  may  generally  construe  them  in 
the  manner  most  advantageous  to  himself. 
Rhodes  v.  Ibbetson,  4  De  G.,  M.  &  G.  787, 
23  Eng.  L.  &  Eq.  393.  And  see  Drysdale 
V.  Mace,  5  De  G.,  M.  &  G.  103,  27  Eng. 
L.  &  Eq.  195.  A  much  stronger  case  is 
necessary  to  set  aside  an  executed  con- 
tract on  the  ground  of  misrepresentation 
or  concealment,  than  is  sufficient  to  induce 
a  court  of  equity  to  refuse  a  specific  per- 
formance of  one  that  is  executory.  See 
Wilde  V.  Gibson,  1  H.  L.  Cas.  605,  and 
the  judgment  of  Lord  Campbell,  id.  632. 
See  also,  Edwards  v.  M'Lcay,  Coop.  308, 
2  Swanst.  287  ;  Legge  v.  Croker,  1  Ball  & 
B.  506. 

{j)  Clarke  v.  Grant,  14  Ves.  519.^  And 
see  Cathcart  v.  Robinson,  5  Pet*.  264. 
An  agreement  for  the  purchase  of  certain 
land  was  not  enforced  because  it  was 
made  on  the  faith  of  representations  of  tho 
vendor's  agent  that  the  vendor  would  do 
certain  acts  upon  his  adjoining  property, 
in  consequence  of  the  non-fultilmcnt  of 
which  representations  the  land  purchased 
was  less  valuable  than  it  would  otherwise 
have  been.  Myers  v.  Watson,  1  Sim. 
N.  s.  523,  7  Eng.  L.  &  Eq.  66.  In  the 
judgment  of  Lord  Cranworlh,  V.  C,  in 

[599] 


574 


THE   LAW   OF   CONTRACTS. 


[part  II. 


tract  under  circumstances  which  would  not  amount  to  a  legal 
waiver.  (A-) 

And  whatever  his  merits  originally,  a  plaintiff  may  disentitle 
himself  to  relief  by  a  want  of  proper  candor  in  setting  the  facts 
of  the  case  before  the  court,  (l)  or  even  by  an  unreasonable  and 
injurious  delay  in  fiUng  his  bill,  (m) 

Indeed  as  equity  is  never  bound  to  give  this  relief,  (/^)  so  it 
never  will,  unless  the  justice  of  the  case,  as  drawn  from  all  its 
facts  demands  it.  (o)  Hence  there  must  not  only  be  an  entire 
absence  of  fraud,  but  an  equal  absence  of  oppressiveness  ;  [p) 


that  case,  is  a  good  statement  of  the  nature 
and  extent  of  this  equitable  defence  to  an 
application  for  a  specific  execution  of  a 
contract.  In  a  case  where  a  plaintiff 
set  fortii  an  agreement  in  writing  for  the 
sale  to  him  by  the  defendant  of  certain 
land,  and  also  offered  in  case  the  defend- 
ant should  so  elect,  to  accept  certain  parol 
variations  of  the  contract  which  had  been 
subsequently  agreed  upon,  the  court  left 
it  to  the  defendant  to  accept  the  modified 
agreement  if  he  would,  and  upon  his  de- 
clining to  exercise  the  privilege  of  election, 
decreed  a  specific  performance  of  the  con- 
tract as  it  stood,  llobinson  v.  Page,  3 
Euss.  114. 

(k)  Contracts  in  writing  relating  to 
land  may  be  waived  by  parol ;  but  this 
defence  is  to  be  received  by  a  court  of 
equity  with  caution  ;  for  the  agreement  to 
waive  is  as  much  an  agreement  relating  to 
lands  as  the  original  agreement.  Lord 
Uardwicke,  C,  Backhouse  v.  Mohun,  3 
Swanst.  435,  ?;.  For  what  is  requisite  to 
constitute  a  waiver,  see  llobinson  v.  Page, 
3  Russ.  114;  Price  v.  Dyer,  17  Vcs.  356. 
"Variations,  so  acted  upon,  that  the  original 
agreement  could  no  longer  be  enforced 
witliout  injury  to  one  party,  would  i)e  a 
bar  to  a  si)e<itir  i)('iform:mce  of  that  orig- 
inal agi-eement.  Sir  Wm.  O'rant,  M.  11., 
17  Ves.  304.  l?ut  variations  orally  agreed 
upon  arc  not  suflicient  to  prevent  the  exe- 
cution of  a  written  agreement,  the  situa- 
tion of  the  jiariji's  in  all  other  respects 
remaining  unahcnd.      Id. 

{/)  A  pliiiniiff  who  makes  a  wilfully  un- 
true representation  of  the  contract,  upon 
faiiiirg  to  cstaiilisli  it  in  that  form,  will  not 
be  permitted  to  insist  upon  the  contract  as 
it  is  sliown  to  !)(;  iiy  the  j)roof.  "  1  never 
will,"  said  Sir  J'!ihrura  >Siiijtl<ii,  L.  ('., 
"e.xei'Ute  a  eoiitraet  (or  a  iilaintilV  one 
way,  when  witii  bis  eyes  open  he  insLsts 

[  '^'^0  ] 


in  his  bill  on  a  different  construction 
against  good  faith.  If  he  undertakes  to 
perpetrate  a  fraud  and  fails,  I  shall  take 
care  that  he  fails  altogether  and  does  not 
obtain  the  aid  of  the  court  at  all."  Mol- 
loy  V.  Egan,  7  Irish  Eq.  590,  593.  And  see 
Warren  v.  Thunder,  9  Irish  Eq.  371,  376. 

(m)  Watson  v.  Reid,  1  Russ.  &  M.  236  ; 
Ilqpphy  V.  Hill,  2  Sim.  &  S.  29.  So  if 
the  plaintiff  after  filing  his  bill  is  guilty  of 
laches  in  neglecting  to  prosecute  it  for  a 
long  space  of  time.  Moore  r.  Blake,  1 
Ball  &  B.  62.  As  to  the  defence  of  the 
statute  of  limitations,  see  Dugan  v.  Git- 
tings,  3  Gill,  138. 

(/()  Vide  ante,  sect.  1. 

(o)  "  I'take  it  to  be  an  established  prin- 
ciple of  this  court  not  to  decree  a  specific 
performance  of  an  agreement  unless  it 
ajqiears  that  the  party  who  calls  for  this 
peculiar  aid  of  the  court  has  acted  not 
only  fairly,  but  in  a  manner  clear  of  all 
suspicion.  If  there  be  a  reasonable  doubt 
upon  the  transaction,  the  court  will  leave 
the  party  to  his  legal  remedy  for  the  non- 
performance of  the  contract."  Lord  il/«?!- 
Tiers,  L.  C.,  O'Rourke  v.  Pcrcival,  2  Ball 
&  B.  02.  And  see  ]\Iason  v.  Armitage, 
13  Ves.  37.  But  that  the  defendant  being 
vendee  will  be  tlie  loser  by  the  bargain,  by 
reason  of  a  circumstance  seriously  affect- 
ing the  property  of  which  he  was  unaware, 
c.  g.  the  existence  of  a  nuisance  in  the 
neighborhood  is  not,  it  seems,  a  ground  for 
refusing  the  vendor  a  specific  ])crf()rmance. 
1  Sugd.  V.  &  P.  ch.  7,  s^  4;  Lucas  v. 
■James,  7  Hare,  410.  "Otherwise,  per- 
haps, if  the  defect  be  known  to  the  vendor 
and  be  one  which  a  jirovident  jiurchaser 
could  not  discover."  \\'i(/raiii,  V.  C,  7 
Hare,  418. 

(/.)  Brogden  i:  Walker.  2  Ihu-ris  &  J. 
285.  ^\'bero  the  del'eiulanl  is  a  mail  in 
an   inferior  jwsition  and  without  i)rofcs- 


CH.  IX.] 


SPECIFIC   PERFORMANCE. 


575 


for  if  a  decree  would  operate  more  hardly  than  it  should  on  the 
defendant,  this  would  be  a  sufficient  reason  for  withholding 
it.  (q)  It  is  sometimes  said,  but  not  uniformly,  that  the  intoxi- 
cation of  the  defendant  at  the  time  of  entering  into  the  contract, 
is  no  sufficient  defence,  unless  the  plaintiff  purposely  procured 
or  caused  that  intoxication  and  took  advantage  of  it.  (r) 

Although  a  specific  performance  is  not  always  denied  beeause 
the  plaintiff  has  lost  an  adequate  remedy  at  law  by  his  own 
neglect ;  (s)  yet  where  he  has  permitted  the  rights  of  the  parties 
under  the  contract  to  be  passed  upon  in  an  action  at  law  at  a 
time  when  Re  might  have  sought  the  interposition  of  equity,  a 
strong  case  will  be  required  to  induce  a  court  of  equity  to  as- 
sume jurisdiction  of  the  matter,  (t) 


sional  assistance  and  is  induced  to  make 
a  bargain  wliicli  a  better  knowledge  of  the 
circumstances  would  have  prevented  his 
making,  the  court  may  refuse  to  compel  a 
specific  performance.  Stanley  v.  Robin- 
son, 1  Euss.  &  M.  527. 

(q)  See  Wood  v.  Griffith,  1  Swanst.  54, 
55.  An  agreement  containing  a  stipula- 
tion inadvertently  inserted  was  not  en- 
forced. Watson  V.  Marston,  4  De  G.,  M. 
&  G.  230,  31  Eng.  L.  &  Eq.  167.  But 
a  court  of  equity  will  not  refuse  a  specific 
performance  because  the  contract  was 
an  improvident  one  on  the  part  of  the  de- 
fendant. Sullivan  v.  Jacob,  1  MoUoy,  472. 
And  on  an  application  for  a  specific  per- 
formance resisted  on  the  ground  that  it 
was  a  case  of  hardship.  Lord  Eldon  held 
that  unless  hardship  arises  to  a  degree  of 
inconvenience  so  great  that  the  court  can 
judicially  say  such  could  not  be  the  mean- 
ing of  the  parties,  it  cannot  influence  the 
decision.  Prebble  v.  Boghurst,  1  Swanst. 
329.  Compare  Kimberley  v.  Jennings,  6 
Sim.  349,  352. 

(r)  Shaw  V.  Thackray,  1  Smale  &  G. 
537,  23  Eng.  L.  &  Eq.  18;  Lightfoot  v. 
Heron,  3  Younge  &  C,  Ex.  586 ;  Reinicker 
V.  Smith,  2  Harris  &  J.  423.  But  total 
drunkenness,  or  a  degree  of  intoxication 
depriving  the  party  of  the  use  of  his  rea- 
son, avoids  any  express  contract  both  at 
law  and  in  equity.  Gore  v.  Gibson,  13 
M.  &  W.  623.  Sir  William  Grant,  M.  R., 
Cooke  V.  Clay  worth,  18  Ves.  16;  Sir  ^fZ- 
ward  Siigdcn,  L.  C,  Nagle  v.  Baylor,  3 
Drury  &  W.  65;  Stuart,  V.  C,  1 
Smale  &  G.  539  ;  Barrett  v.  Buxton,  2 
Aikens,  167  ;  Prentice  v.  Achorn,  2  Paige, 

VOL.  II.  51 


30  ;  Wigglesworth  v.  Steers,  1  Hen.  & 
M.  70.  See  Clark  v.  Caldwell,  6  Watts, 
139,  a  decision  under  a  statute.  Duncan 
V.  M'CulIough,  4  S.  &  R.  483.  And 
wherever  a  party  has  entered  into  a  con- 
tract in  a  state  of  intoxication,  a  court  of 
equity  is  averse  to  enforcing  it,  although 
the  plaintiff  did  not  make  him  drunk  and 
took  no  unfair  advantage  of  his  situation ; 
in  such  cases  the  court,  generally  speak- 
ing, does  not  act  on  either  side  —  it  will 
not  require  the  sober  party  to  give  up  his 
contract,  as  it  would  do  if  he  had  been 
guilty  of  unfair  practice,  nor  will  it  assist 
the  other  to  get  rid  of  the  legal  obligation 
of  his  agreement  merely  because  he  was 
intoxicated  when  he  assumed  it.  Cooke 
V.  Clay  worth,  18  Ves.  15;  Nagle  i\  Bay- 
lor, 3  Drury  &  W.  64,  1  Sugd.  V.  &  P. 
ch.  4,  §  3,  pi.  34.  Lord  Lamjdale,  M.  R., 
Malins  v.  Fi-eeman,  2  Keen,  34.  It  seems 
that  a  family  compromise,  reasonable  ia 
its  terms  (being  one  of  a  class  of  agree- 
ments particularly  favored  in  equity),  may 
be  enforced  against  a  party  who  was 
drunk  at  the  time  he  entered  into  it.  Lord 
Eldon,  Ch.,  Stockley  v.  Stockley,  1  Ves. 
&  B.  31.  Upon  the  subject  of  intoxica- 
tion, see  also.  Say  v.  Barwick,  1  Ves.  & 
B.  195  ;  Rutherford  v.  Ruff,  4  Desaus. 
350.     And  see  ante,  vol.  1,  p.  311. 

(s)  Davis  V.  Hone,  2  Seh.  &  L.  347  ; 
Lennon  v.  Napper,  2  Sch.  &  L.  684. 

{t)  After  a  vendee  had  brought  an  ac- 
tion, and  recovered  judgment  against  the 
administi'ator  of  the  vendor  for  the  breach 
of  the  contract  in  not  making  the  convey- 
ance at  the  day  stipulated,  which  fell  after 
the  death  of  the  vendor,  it  was  held  that  it 

[601] 


576 


THE   LAW   OF   CONTRACTS. 


[part  ir. 


A  court  of  equity  will  never  enforce  performance  of  a  contract 
which  is  illegal  or  against  the  policy  of  the  law.  (u)  But  this 
rule  is  construed  with  liberality,  and  if  the  plaintiff  have  real 
equities,  the  court  will  not  be  indisposed  to  seize  hold  of  special 
circumstances  to  exempt  the  case  from  its  operation,  (v) 


was  no  longer  competent  to  the  adminis- 
trator to  maintain  a  bill  against  the  pur- 
chaser and  the  heirs  for  the  specific  per- 
formance of  the  contract.  Moore  v.  Ran- 
dolph, 6  Leigh,  175. 

(u)  Strange  v.  Brennan,  15  Sim.  346 ; 
Abbott  r.  Stratten,  3  Jones  &  La  T.  616. 
St.  Jolm  V.  Benedict,  6  Johns.  Ch.  Ill, 
an  agreement  for  the  purpose  of  defraud- 
ing creditors.  See  Webb  v.  Direct  Lon- 
don and  Portsmouth  Eaihvay  Co.,  1  De 
G.,  M.  &  G.  525 ;  with  which,  however, 
compare  Hawkes  i\  Eastern  Counties 
Railway  Co.,  1  De  G.,  M.  &  G.  757-760. 
See  Daly  v.  Duggan,  1  Irish  Eq.  311.  See 
Johnson  r.  Shrewsbury  and  Birmingham 
Railway  Co.,  3  De  G.,  M.  &  G.  914,  a 
case  of  a  contract  between  a  railway  com- 
pany and  private  persons,  by  which  the 
latter  were  to  run  the  trains  and  perform 
the  operations  of  the  railway  generally  for 
a  term  of  years.  Among  the  features 
which  were  questioned  by  Knight  Bruce, 
L.  J.,  was  a  stipulation  that  the  contrac- 
tor should  not  be  liable  for  injuries  to  pas- 
sengers beyond  a  specified  sum  for  each 
death  or  other  injury  occurring  on  the 
road.  If  the  agreement  as  stated  in  the 
pleadings  do  not  appear  illegal,  but  cir- 
cumstances come  out  ia  the  evidence, 
tending  to  show  that  it  is  in  fact  tainted 
witli  illegality,  it  is  proper  for  the  court  to 
direct  an  inrpiiry  into  the  matter.  Barken 
V.  Whitby,  Turner  &  R.  366.  It  seems 
that  an  agreement  by  A,  that  all  the  prop- 
erty of  which  he  should  be  possessed  at 
the  time  of  his  death  should  be  held  by  his 
heirs  and  personal  rei)resentatives  in  trust 
for  the  use  of  B,  ou^lit  tiot  to  1)C  spccili- 
cally  executed  ;  for  if  a  ])arty  could  so 
contract  for  a  certain  sum  as  to  deprive 
liimself  of  tlic  possibility  of  realizing  prop- 
erty over  which  he  can  liavc  a  disposing 
power  ijy  will,  the  cfTect  would  be  to 
destroy  one  of  the  strongest  motives  for 
l)ett(Tiiig  his  cf)ndition  in  life.  Jlill  r. 
Goinnic,  5  Mylne  &  C.  250,  2.");{.  Sec 
Mundorir  r.  Kiliioum,  4  Md.  45'.).  With 
respect  to  an  agreement  between  jiartners, 
that  ori(!  on  retiring  from  tlu;  business 
Rliall  permit  the  oilier  to  carry  (Hi  business 
in  his  name,  sei;  'J'liornburv  v.  Bevill,  1 

[  G()2  J 


Younge  &  C,  Ch.  554,  565.  It  appears 
that  an  agreement  for  the  sale  and  pur- 
chase of  the  business  of  an  attorney,  whose 
name  is  to  be  continued  to  be  held  out  as 
engaged  in  it,  is  not  such  a  contract  as  a 
court  of  equity  ought  to  execute.  Bozon 
V.  Farlow,  1  Meriv.  459j  As  to  agree- 
ments in  restraint  of  trade,  see  Bryson  v. 
Whitehead,  1  Sim.  &  S.  74.  As  to  a  pri- 
vate arrangement  for  withdrawing  oppo- 
sition to  a  bill  in  Parliament,  see  Shrews- 
bury &  Birmingham  Railway  Co.  v.  Lon- 
don &  North-western  Railway  Co.  2  Macn. 
&  G.  324.  Specific  performance  may  be 
decreed  of  articles  of  separation  between 
husband  and  wife.  Wilson  v.  Wilson,  1 
H.  L.  Cas.  .538,  31  Eng.  L.  &  Eq.  29. 
See  farther  with  respect  to  arrangements 
altering  the  relation  which  the  law  estab- 
lishes between  husband  and  wife.  Jodrell 
i\  Jodrell,  2  Beav.  45  ;  Wallingsford  v. 
Wallingsford,  6  Harris  &  J.  489.  As 
to  the  distinction  between  enforcing  ille- 
gal contracts  and  asserting  title  to  money 
which  has  arisen  from  them,  see  Sharp  v, 
Taylor,  2  Phillips,  816-818. 

[v]  The  case  is  sometimes  presented 
where  the  agreement  as  originally  entered 
into,  comprehends  illegal  as  well  as  legal 
stipulations,  and  the  plaintiff  applies  to 
the  court  to  enforce  the  legal  part,  reject- 
ing that  which  is  contrary  to  law ;  and  the 
question  thus  raised  is  often  one  of  great 
difHculty.  It  may  be  supposed  that  a 
court  of  equity  in  the  exercise  of  its  dis- 
cretionary jurisdiction,  will  not  bo  as  ready 
as  a  court  of  law  to  jtick  out  the  materials 
of  a  valid  contract  from  an  admixture 
tainted  with  illegality;  for  the  ]iarty  has 
still  his  remedy  at  law  open  to  him,  and 
he  cannot  bring  a  j)crfect  ecjuity  when  he 
admits  that  his  purpose  in  the  beginning 
was  to  accomplish  something  that  was 
contrary  to  law.  Yet  if  the  illegal  stipu- 
lations were  introduced  without  his  fault, 
or  niiu'li  less  iiy  his  fault  than  by  tliat  of 
the  other  party,  it  is  possible  for  him  to 
Inive  a  standing  in  e(|uity.  Carolan  v. 
Braba/.on,  9  Irish  Kq.  224,  3  Jones  &  La 
'1".  200,  an  interesting  case  on  this  subject, 
was  an  ai)plication  by  a  tenant  for  the 
Bpecific  perfoniuuico  of  an  agreement  for 


CH.  IX.] 


SPECIFIC  PERFORMANCE. 


577 


A  recent  act  of  the  British  Parliament,  passed  in  1854,  and 
known  as  The  Common  Law  Procedure  Act,  gives  two  new 
proceedings,  or,  as  they  are  sometimes  called,  two  new  actions, 
to  the  courts  of  common  law,  —  the  action  of  rpandarrius  and 
the  action  of  injunction.  These  words  are  old,  but  the  reme- 
dies are  wholly  new.  By  the  first,  it  is  intended  to  enable  a 
plaintiff  to  compel  a  defendant  not  merely  to  pay  damages  for 
a  breach  of  duty,  for  that  the  law  did  before,  but  to  iierform  any 
duty  in  the  fulfilment  of  which  the  plaintiff  is  personally  in- 
terested. Damages  may  be  given  also  ;  and  judgment  may  be 
given  for  the  plaintiff,  "  that  a  mandamus  do  issue,  and  it  shall 
be  lawful  for  the  court  in  which  such  judgment  is  given,  if  it 
shall  see  fit,  besides  issuing  execution  in  the  ordinary  way  for 
costs  and  damages,  also  to  issue  a  peremptory  writ  of  manda- 
mus to  the  defendant,  commanding  him  forthwith  to  perform 
the  duty  to  be  enforced."  And  this  writ  will  have  the  same 
force  as  a  peremptory  writ  of  mandamus  issued  out  of  [the 
Court  of  Queen's  Bench,  and  in  case  of  disobedience  may  be 
enforced  by  attachment.  Of  the  action  of  "injunction,"  the 
intention  is  to  enable  a  plaintiff  "  to  prevent  the  repetition  or 


a  lease.  The  agreement  was  drawn  by 
the  defendant  himself;  who  also  in  the 
subsequent  proceedings  had  acted  vexa- 
tiously,  and  in  an  unfair  and  litigious 
spirit.  The  unobjectionable  terms  of  the 
contract  were  stated  explicitly ;  but  the 
illegal  provision  (namely,  that  the  tenant 
was  to  bear  certain  poor-law  rates,  tithe- 
rent,  &c.),  was  prefaced  with  the  words, 
"  with  the  understanding  that."  Tiie  de- 
cision went  off  on  the  ground  that  a  lease 
had  been  actually  drawn  by  the  defend- 
ant's solicitor,  carrying  out  the  valid  part 
of  the  agreement;  under  which  lease, 
though  not  executed  by  the  defendant,  the 
plaintiff  had  entered  and  paid  rent.  With- 
out the  consent  or  knowledge  of  the  de- 
fendant, the  term  in  the  lease,  as  drawn, 
was  longer  by  one  life  than  was  stipulated 
in  the  agreement,  and  therefore  it  was  re- 
formed by  the  court  in  this  respect,  so  as 
to  comply  with  the  original  terms.  But 
this  amendment  being  made,  it  was  treated 
as  a  substitute  for,  or  execution  of,  the 
agreement.  In  dealing  with  the  case  upon 
this  state  of  facts,  the  Lord  Chancellor 
who  before  coming  to  a  decision  had  vainly 


appealed  to  the  defendant  to  save  him  the 
necessity  of  meeting  the  main  difficulty  in 
the  case,  made  the  following  observations  : 
"  Then  there  is  a  question  as  to  the  poor- 
rate.  It  is  said  that  this  agreement  is 
contrary  to  the  Act  of  Parliament.  So  I 
think  it  is.  But  even  if  I  had  to  deal  with 
the  case  in  an  abstract  point  of  view,  I  am 
not  prepared  to  say  that  I  should  not 
have  given  a  decree  for  specific  perform- 
ance. If  parties  choose  to  enter  into  a 
contract  which  is  legal  to  a  certain  extent, 
to  which  it  is  to  be  executed  by  an  actual 
lease,  and  stipulate  for  something  beside, 
which  is  to  rest  on  understanding,  which 
is  not  malum  in  se,  but  merely  prohibited, 
I  am  not  prepared  to  say  that  in  such  a 
case  I  should  not  decree  a  specific  per- 
formance so  far  as  the  contract  is  legally 
capable  of  execution.  What  then  would 
be  the  effect  of  my  decree  ?  Simply  to  do 
what  the  parties  intended.  They  intended 
that  what  was  legal  should  be  inserted  in 
the  lease,  but  that  wiiat  M^as  not  legal 
should  not  be  in  the  lease.  Therefore,  I 
should  execute  the  contract  precisely  in 
the  form  which  the  parties  intended." 

[  603  ] 


578  THE  LAW  OF  CONTRACTS.  [PART  IL 

continuance  of  such  breach  of  contract,  or  other  injury,  or  the 
committal  of  any  breach  of  contract  or  injury  of  hke  kind  aris- 
ing out  of  the  same  contract,  in  relation  to  the  same  property 
or  right."  Here,  too,  damages  may  also  be  given,  and  proper 
writs  issued,  analogous  to  those  above  mentioned  in  the  action 
of  mandamus. 

Not  enough  of  adjudication  upon  these  new  actions  has  yet 
been  reported  to  illustrate  them  much.  It  seems,  however,  to  be 
thought  by  the  profession,  that  they  are  intended  only  to  enable 
the  courts  of  common  law  to  give  equity  relief  in  certain  cases, 
in  a  cheap  and  summary  way,  without  the  delay  and  cost  of 
sending  the  case  into  chancery.  Even  if  this  be  all,  something 
might  be  gained  by  similar  provisions  in  this  country,  although 
our  courts  of  equity  and  law  are  not  so  widely  separated  as 
those  in  England,  and  equity  relief  does  not  here  cost  so  much 
of  money  or  of  time,  as  there. 

[604] 


CH.  X.]  BANKRUPTCY   AND   INSOLVENCY.  *  579 


CHAPTER   X. 

ON  BANKRUPTCY  AND  INSOLVENCY. 

Sect.  I.  —  The  General  Purpose  of  Bankrupt  Laws. 

The  common  law  did  not  resort  to  imprisonment  as  a  means 
of  enforcing  payment  of  debts.  The  process  against  mere 
debtors,  or  defendants  charged  with  injuries  without  force,  be- 
ginning with  the  prcecipe,  which  was  only  a  command,  and 
following  this  by  a  pone,  which  was  an  attachment  to  require 
his  appearance  in  court,  was  completed  and  exhausted  by  the 
distringas,  or  distress  infinite,  which  authorized  the  sheriff  to 
take  the  goods  of  the  defendant  and  the  profits  of  his  lands. 
But  the  courts  permitted  a  fiction  of  law,  by  which  the  defend- 
ant, being  charged  with  a  breach  of  the  peace,  a  capias  ad  re- 
spondendum  issued  at  once,  and  after  judgment,  a  capias  ad  sat- 
isfaciendum, {a)  But  England  could  make  no  great  progress  in 
commerce  and  business  without  perceiving  the  necessity  of 
something  more  than  this  ;  and  after  some  earlier  statutes  relat- 
ing principally  to  foreigners,  in  the  34th  of  Henry  8  (1543),  an 
act  was  passed  which  may  be  considered  the  first  English  act 
of  bankruptcy,  (b)     And  this,  followed  by  13  Elizabeth,  ch.  7, 

(a)  3  Blacks.  Com.  279;  Harbert's  two  French  words  6angue  and  rowfe,  which 
Case/'S  Coke,  Rep.  12.  last  word,  he  says  (4  Inst.  277),  means 

(b)  With  regard  to  the  derivation  of  the  "a  sign  or  mark,  as  we  say  a  cart-rout, 
word  bankruptcy,  though  not  perhaps  es-  which  is  the  sign  or  mark  where  the  cart 
sential  to  the  present  discussion,  it  may  hath  gone ;  so,  metaphorically,  it  is  taken 
be  observed  that  high  authorities  are  in  for  him  that  hath  wasted  his  estate  and 
conflict  upon  it.  Mr.  Justice  Blackstone,  removed  his  bangue,  so  that  there  is  left 
in  his  Commentaries,  vol.3,  p.  471,  de-  but  a  mention  thereof."  The  meaning  of 
rives  it  from  the  word  bancus  or  banque,  the  term  has  been  so  often  passed  upon  by 
which  means  the  table  or  counter  of  a  courts  and  legislatures,  that  it  becomes  a 
tradesman,  and  ruptus,  broken,  denoting  question  of  little  practical  importance  at 
thereby  one  whose  shop  or  place  is  broken  this  day.  Yet,  in  favor  of  Mr.  Justice 
and  gone.  Sir  Edward  Coke,  on  the  Blackstone's  derivation  it  may  be  said  that 
other  hand,  more  metaphorically  and  it  seems  more  simple  and  appropriate,  and 
quaintly  makes  the  derivation  from  the  has  unquestionably  met  with  a  more  de- 

51*  [605] 

m 


580 


THE   LAW    OF    CONTRACTS. 


[part  II. 


(151),  and  the  21  Jac.  1,  ch.  19  (1624),  laid  the  foundations  of 
the  system  now  existing  in  England,  and  of  our  own,  so  far  as 
it  is  derived  from  that,  (c) 

How  the  common  law  lawyers  looked  upon  this  whole  thing, 
may  be  inferred  from  the  language  of  Coke.  He  says :  "  We 
have  fetched  the  name  as  well  as  the  wickedness  of  bankrupts 

from  foreign  nations In  former  times,  as  the  name  of  a 

bankrupt,  so  was  the  offence  itself,  a  stranger  to  an  Englishman. 
....  Neither  do  we  find  any  complaint  in  parliament,  or  any 
act  of  parliament  made  against  any  English  bankrupt  until  .... 
the  English  merchant,  had  rioted  in  three  kinds  of  costlinesses, 
namely,  costly  building,  costly  diet,  and  costly  apparel,  accom- 
panied with  neglect  of  his  trade  and  servants,  and  thereby  con- 
sumed his  wealth."  (d) 

We  need  not,  however,  impute  the  necessity  of  a  bankrupt 
law  in  England  to  the  increase  of  her  iniquity,  but  to  the  growth 
of  a  commercial  prosperity  which  far  outstripped  the  efficiency 
or  adequacy  of  the  common  law,  of  which  all  the  principles 


cided  measure  of  subsequent  approval 
than  tlie  other.  Further,  it  accords  with 
the  custom  which  formerly  obtained  among 
the  banl^ers  of  Italy,  wiio  used  to  carry  on 
their  business  in  tlie  public  places,  seated 
on  forms,  with  benches  to  count  their  cash 
upon,  and  of  whom  if  any  one  became  in- 
solvent, his  bench  was  broken,  either  as  a 
mark  of  infamy,  or  to  put  another  in  its 
place.  1  Bcawcs'  Lex  Mercatoria,  371. 
The  title,  however,  of  the  first  English 
statute  upon  this  subject,  relating  to 
Englisii  debtors  (34  &  35  Henry  8,  c.  4), 
might  well  have  suggested  to  Lord  Coke 
the  view  he  adopted.  It  was  "  against 
such  as  do  make  i)ankrupt,"  which  is  but 
a  literal  translation  of  the  French  idiom, 
"qui  foul  bdnijuc  route."  Story,  J.,  in 
Everett  c  Stone,  3  Story,  453. 

(c)  These  were  the  most  important 
statutes  on  this  subject  in  the  earlier  days 
of  the  bankrupt  law.  They  were  followed 
by  numerous  others,  varying  and  enlarg- 
ing the  [lowers  of  the  courts  of  bankruptcy, 
and  specifying  the  acts  of  banknijitcy  and 
various  rules  of  practice.  'J'licsc  statutes 
arc  not  enumerated  here,  as  being  of  no 
practical  utility,  but  will  be  f(junil  in  the 
collection  of  the  Stiilutcs  at  Laige.  They 
arc  twciity-on(t  in  niinilier,  and  wer(!  all 
repealed  by  the  (irst  clause  (>f  the  important 

[GOG] 


statute. of  6  Geo.  4,  c.  16.  This  statute 
made  material  alterations  in  the  law  of 
bankruptcy,  and  embraces  almost  every 
branch  and  division  of  the  former  bankrupt 
laws.  The  persons  liable  to  become  bank- 
rupt are  increased  in  number  and  more 
particularly  defined  ;  new  modes  of  com- 
mitting an  act  of  bankruptcy  specified  ; 
the  Lord  Chancellor  is  invested  with 
greater  powers  for  working  or  superseding 
tlic  commission,  and  for  saving  expense 
to  the  various  parties  interested  in  the 
bankrupt's  estate  ;  and  fuller  powers  of 
examination  and  discovery  arc  conferred 
ujwn  the  commissioners.  Subsequent  to 
tlie  passage  of  this  important  statute,  ten 
statutes  of  amendment  and  alteration  were 
enacted,  two  in  tiie  reign  of  William  4, 
and  eight  in  that  of  Victoria,  until  by  the 
statute  12  &  13  Vict.  c.  lOG,  entitled, 
"  An  Act  to  amend  and  consolidate  the 
Laws  relating  to  HankrujUs,"  consisting  of 
two  liundrcd  and  seventy-eight  sections, 
all  prt'vious  laws  on  the  subject  were  re- 
jieaU'd,  and  their  ])rinciples  eniliodicd  with 
little  alteration  in  the  rciiealing  act.  This 
last  statute  bears  date  August  1st,  1849. 
We  are  aware  of  no  subsecjuent  amend- 
ment.s  of  importance. 
((/)  4  Inst.  277. 


CH.  X.] 


BANKRUPTCY   AND   INSOIWENCY. 


581 


were  determined  and  most  of  the  processes  adopted  under  very- 
different  circumstances  and  exigencies.  The  common  law 
knows  but  two  parties,  the  plaintiff  and  defendant ;  between 
them  it  can  dojustice ;  but  if  the  relations  between  these  two 
are  complicated  with  the  rights  of  third  parties,  the  common 
law  has  very  inadequate  power.  One  effect  of  this  principle  is, 
that  if  a  debtor  pays  any  one  creditor  in  full,  the  law  asks  noth- 
ing as  to  how  this  payment  affects  other  creditors.  And  if 
any  creditor  resorts  to  law  to  obtain  payment  of  his  debt,  the 
law  lends  him  all  its  instruments,  without  any  inquiry  into  the 
effect  of  such  payment  upon  the  ability  of  the  debtor  to  satisfy 
other  creditors  whose  claims  are  equally  just  and  urgent.  In 
other  words,  the  common  law  permits  a  preference  among  the 
creditors,  without  any  limit  or  any  other  direction  than  may  be 
given  to  it  by  the  pleasure  of  the  debtor,  or  the  haste  or  good 
fortune  of  the  creditor,  (e) 


(e)  The  cases  upon  this  subject  seem  to 
be  of  two  cLasses  :  first,  when  the  payment 
is  made  directly  by  the  insolvent  to  the 
creditor ;  second,  when  this  is  effected 
through  the  medium  of  trustees,  by  as- 
signment. The  right  of  the  debtor  to  pay 
any  creditor  he  pleases  from  funds  in  his 
possession,  seems  to  be  clear,  in  the  ab- 
sence of  statutory  prohibition.  Clark  v. 
White,  12  Pet.  178  ;  Tompkins  v. 
Wheeler,  16  id.  106  ;  Buffura  v.  Green,  5 
N.  H.  71  ;  Tillou  v.  Britton,  4  Halst. 
120 ;  Stover  v.  Herrington,  7  Ala.  142 ; 
Johnson  v.  Whitwell,  7  Pick.  71  ;  Widg- 
ery  v.  Haskell,  5  Mass.  144  ;  Hatch  v. 
Smith,  5  Mass.  42  ;  Ex  parte  Conway,  4 
Ark.  302 ;  Ford  v.  Williams,  3  B.  Mon. 
550  ;  Mackie  v.  Cairns,  Hopkins,  373  ; 
Hendricks  v.  Mount,  2  Southard,  743; 
Blakey's  Appeal,  7  Barr,  449  ;  Wakcman 
V.  Grover,  4  Paige,  23.  In  the  case  of 
Hopkins  v.  Grey,  7  Mod.  139,  it  was  held 
by  Lord  Holt,  that  if  a  banker  or  gold- 
smith who  has  many  people's  money  re- 
fuse payment,  yet  keep  his  shop  open,  and 
as  often  as  he  is  arrested  give  bail,  he  may 
by  that  means  give  preference  of  payment 
to  his  friends  ;  and  when  he  has  done,  if 
he  runs  away,  yet  such  payment  shall 
stand  against  a  commission  of  bankruptcy. 
Cock  r.  Goodfellow,  10  Mod.  489.  The 
later  English  cases  adopt  the  same  view 
when  the  payment  has  been  made  on 
pressure  by  the  creditor,  and  is  without  a 


view  to  fraudiilent  preference  in  contem- 
plation of  bankruptcy.  Cook  v.  Pritchard, 
G  Scott,  N.  R.  34,  5  Man.  &  G.  329; 
Ogden  V.  Stone,  1 1  M.  &  W.  494 ;  Kyu- 
aston  V.  Crouch,  14  id.  266;  Green  v. 
Bradfield,  1  Car.  &  K.  449.  A  similar 
doctrine,  under  the  late  National  Bank- 
rupt Law  of  the  United  States,  was  adopt- 
ed in  Ogden  v.  Jackson,  1  Johns.  370 ; 
Phenix  r.  Ingraham's  Assignees,  5  id.  412. 
This  topic  will  be  further  considered  in  a 
subsequent  part  of  this  chapter.  The  ease 
of  Wall  V.  Lakin,  13  Met.  167,  was  de- 
cided upon  the  Mass.  Stat,  of  1841,  and 
the  doctrine  was  maintained  that  this  case 
of  payment  in  money  of  an  existing  debt 
by  an  insolvent  debtor,  is  not  among  the 
cases  embraced  within  the  provisions  of 
§  3  of  the  statute.  Mr.  Justice  Dewey, 
delivering  the  opinion  of  the  court,  said  : 
"  It  was  strongly  urged  upon  us  at  the 
argument,  that  it  was  against  the  whole 
policy  of  the  insolvent  laws  thus  to  allow 
a  payment  to  an  individual  creditor  to  be 
retained  by  him  to  his  own  use.  If  we 
look  merely  at  the  principle  of  equitable 
distribution  of  the  whole  assets  among  all 
the  creditors  pro  rata,  it  would  seem  to  be 
in  derogation  of  that  principle.  But  there 
are  other  principles  favoring  the  construc- 
tion we  have  given.  A  different  rule 
might  be  found  to  operate  with  great  prac- 
tical inconvenience  in  its  application  to 
payments  made  in  the  usual  course  of 

[607] 


582 


THil   LAAV   OF   CONTRACTS. 


[part  II. 


This  is  certainly  opposed  to  the  true  principles  of  commercial 
policy,  if  not  to  natural  justice.     And  we  have  no  hesitation  in 


business.  Many  cases  occur  of  traders 
and  other  persons  who  do  business,  M'hile 
there  is  a  strong  public  impression  that  if 
their  debts  were  at  once  all  demanded, 
there  might  not  be  assets  sufficient  to  pay 
them,  yet  who  continue  to  pay  such  debts 
as  are  most  strongly  pressed,  hoping  to 
survive  their  embarrassments,  and  by  bet- 
ter success  in  business  eventually  to  dis- 
charge their  whole  indebtedness.  Whether 
it  would  be  sound  policy  to  disturb  such 
payments  may  certainly  be  somewhat  ques- 
tionable." United  States  v.  Bank  of 
United  States,  8  Eob.  La.  262.  With 
regard  to  the  other  class  of  cases  of  pref- 
erence, where  an  assignment  is  made  to 
trustees,  the  doctrine  may  be  said  to  be, 
in  the  absence  of  statutory  prohibition, 
that  such  an  assignment,  when  absolute 
and  unconditional,  containing  no  reserva- 
tion or  condition  for  the  benefit  of  the 
debtor,  and  made  under  such  circum- 
stances as  not  to  extort  from  the  fears  or 
apprehension  of  the  creditors  an  absolute 
discharge  as  a  consideration  for  a  partial 
dividend,  will  be  valid.  In  this  note  we 
cite  the  most  important  cases  to  be  found 
in  the  books,  where  the  subject  of  assign- 
ments for  benefit  of  creditors  is  considered  : 
Williams  v.  Jones,  2  Ala.  314 ;  Hindman 
V.  Dill,  1 1  id.  689 ;  AVebb  v.  Daggett,  2 
Barb.  9 ;  Wilt  v.  Franklin,  1  Binn.  502, 
514;  Lippincott  v.  Barker,  2  id.  174; 
Lord  V.  Brig  Watchman,  8  Am.  Jur.  284 ; 
Rankin  v.  Lodor,  21  Ala.  380;  AVhite  v. 
Banks,  id.  705 ;  Mackie  v.  Cairns,  5 
Cowcn,  547 ;  De  Forrest  v.  Bacon,  2 
Conn.  633 ;  Ingraham  v.  Wheeler,  6  id. 
277;  Wintringham  v.  Lafoy,  7  Cowen, 
735;  Stewart  v.  Spencer,  1  Curtis,  157; 
Spies  r.  Joel,  1  Ducr,  669;  Burd  v.  Smith, 
4  Dallas,  85;  Moore  v.  Collins,  3  Dcv. 
126;  Vernon  i\  Morton,  8  Dana,  247; 
Sheppanls  v.  Turpin,  3  Gratt.  372  ;  Canal 
Bank  v.  Cox,  6  (ireenl.  395;  llicklcy  v. 
F.  &  M.  Bank,  5  Gill  &  J.  377 ;  .Mary- 
land V.  Bank  of  Md.,  6  id.  205 ;  Cole  v. 
Albcrs,  1  fJill,  412;  McCall  v.  Iliukley, 
4  id.  128;  Ham.sdell  /'.  Sigcrson,  2  (iil- 
man,  78  ;  Tillon  r.  J'.ritton,  4  llalst.  120; 
Nioloii  r.  Douglass,  2  Hill,  Cli.  443;  Ste- 
venson ?'.  Agry,  7  Ham.  pt.  2,  247  ;  Kcp- 
plicr  V.  Orrich,  id.  246 ;  Ilarslnnan  v. 
Lowe,  9  id.  92;  Hendricks  v.  I{o!iinson, 
2  JolmH.  Cfi.  2H3,  Kent,  C.  J. ;  M'Ncm- 
ony  i\  Ferrers,  .'t  Johns.  71,  84,  \'(iii  Avi.s-.s-, 
J.;  Wilkes  r.  Ferris,  5  id.  335;  llyslop 

[  cm  ] 


V.  Clarke,  14  id.  458,.T  a)i  Ness,  J. ;  Mur- 
ray IK  Riggs,  15  id.  571,  Thompson,  C. 
J.;  Hafner  v.  Irwin,  1  Ircd.  490;  All- 
mand  y.  Russell,  5  Ired.  Eq.  183;  East- 
man V.  McAlpin,  1  Kelly,  157  ;  Cameron 
V.  Scudder,  id.  204;  M'Cullough  v.  Som- 
merville,  8  Leigh,  415;  Halsey  r.  Whit- 
nej,  4  Mason,  206  ;  Lawrence  v.  Davis,  3 
McIiCan,  177;  Hatch  v.  Smith,  5  Mass. 
42 ;  Widgery  v.  Haskell,  id.  144 ;  Pearson 
V.  Rockhill,  4  B.  Mon.  296;  Marshall 
V.  Hutchison,  5  B.  Mon.  305 ;  Moffat  v. 
M'Dowall,  1  McCord,  Ch.  434 ;  BufFum 
V.  Green,  5  N.  H.  71;  Haven  v.  Richard- 
son, id.  113  ;  Atkinson  v.  Jordan,  5  Ham. 
293  ;  Brashear  v.  West,  7  Pet.  608 ;  Clark 
V.  White,  12  id.  178 ;  Tompkins  v.  Wheel- 
er, 16  id.  106;  Russell  v.  Woodward, 
10  Pick.  407;  Foster  v.  Saco  Manuf, 
Co.,  12  id.  451  ;  Nostrand  v.  Atwood,  19 
id.  281 ;  Beckwith  v.  Brown,  2  R.  I.  311 ; 
Smith  V.  Campbell,  Rice,  352 ;  Layson  v. 
Rowan,  7  Rob.  La.  1 ;  Dockray  v.  Dock- 
ray,  2  R.  I.  547  ;  Cameron  v.  Montgom- 
ery, 13  S.  &  R.  128;  Robinson  v.  Rapelye, 
2  Stew.  86 ;  Richards  v.  Hazzard,  1  Stew. 
&P.  139;  Brown  v.  Bartce,  10  Smedes 
&  M.  268 ;  Cross  v.  Bryant,  2  Scam.  36  ; 
Howell  V.  Edgar,  3  id.  417 ;  Hall  v.  Deni- 
son,  17  Vt.  310;  Howy.  Camp,  Walk.  Ch. 
427  ;  Marbury  v.  Brooks,  7  Wheat.  556  ; 
Spring  V.  S.  Car.  Ins.  Co.,  8  id.  268; 
Brooks  V.  Marbury,  11  id.  78;  Pearpoint 
V.  Graham,  4  Wash.  C.  C.  232  ;  United 
States  V.  King,  Wallace,  13;  Grover  v. 
Wakcman,  11  Wend.  187.  In  England, 
Estwick  V.  Caillaud,  5  T.  R.  420;  Nunn 
V.  Wilsmorc,  8  id.  521 ;  Small  r.  Oudley, 
2  P.  Wms.  427  ;  Cock  v.  Goodfellow,  10 
Mod.  489.  It  is,  however,  to  be  borne  in 
mind,  that  in  most  of  the  States  the  com- 
mon law  privilege  is  taken  away,  and  such 
j)rcfcrenccs  forbidden  by  statute.  The 
validity  of  assignments,  not  to  a  third 
person  in  trust,  Init  directly  to  the  creditor, 
by  way  of  payment  or  security,  was  main- 
tained in  several  of  the  al)ovc  cases,  and 
in  Ford  v.  Williams,  3  B.  Mon.  550;  Sto- 
ver r.  llcrrington,  7  Ala.  142;  Bruce 
V.  Smitli,  3  Harris  &  J.  499;  King  v. 
Trice,  3  Ired.  Imi.  5G8 ;  Stevens  v.  IJcll, 
6  Mass.  339  ;  Johnson  r.  Whitwell,  Wilde, 
J.,  7  Pick.  71;  Bates  v.  Coe,  10  Conn. 
280;  Waters  v.  Comly,  3  Ilarring.  117; 
Davis  )".  Anderson,  1  Kelly,  17();  Lcitch 
V.  Hoi  lister,  4  Comst.  211;  I*'asset  v.  Tra- 
iler, 20  Ohio,  540.    In  the  following  cases, 


CH.  X.]  BANKRUPTCY  AND   INSOLVENCY.  .  583 

saying  so,  although  the  great  commercial  State  of  New  York 
still,  to  a  considerable  degree,  permits  this  preference ;  that  is,  it 
still  permits  any  debtor  to  pay  whom  he  will,  and  on  what  terms 
he  will,  although  by  paying  some  more  or  all,  he  compels  him- 
self to  pay  others  less  or  none  ;  that  is,  it  permits  this  preference, 
and  makes  the  payments  valid,  only  preventing  the  insolvent 
who  uses  this  privilege  from  obtaining  his  discharge.  The  mis- 
chiefs of  this  permission  of  preference  are  very  great  and  very 
obvious ;  and  experience  —  through  which  most  of  our  States 
have  passed  —  proves  them  to  be  those  which  theory  would  in- 
dicate. Such  a  preference  always  works  injustice.  It  may 
only  carry  into  effect  a  previous  bargain  or  confidence ;  it  may 
only  pay  a  debt  which  it  was  agreed  or  understood  should  be 
paid  at  all  events,  whether  others  were  or  not ;  but  this  bargain, 
or  confidence,  was  itself  unfair.  It  introduces  into  the  com- 
plications of  trade  new  elements  of  disturbance  and  jealousy, 
and  new  temptation  to  get  the  better  of  one's  neighbor,  by  se- 
cret agreement,  or  haste  or  contrivance.  It  induces  an  insol- 
vent to  go  on  in  business  as  long  as  he  has  enough  to  pay 
finally  those  who  help  him,  because  he  can  only  fail  at  last, 
and  his  endeavor  to  put  off  the  evil  day,  makes  it  no  worse 
when  it  comes.  In  a  word,  it  is  a  most  injurious  principle, 
because  it  promises  and  it  gives  facilities  and  success  to 
fraud.  (/) 

the  transfer  was  by  the  voluntary  confes-  in  the  preceding  note,  strongly  set  forth 
sion  of  a  judgment :  Wilder  v.  Winne,  6  the  dangerous  tendency  of  such  a  doctrine. 
Cowen,  284 ;  Williams  v.  Brown,  4  Johns.  That  was  a  case  where  an  assignment  had 
Ch.  682  ;  Blakey's  Appeal,  7  Barr,  449.  been  made  by  a  debtor  of  all  his  property 
In  Holbird  v.  Anderson,  5  T.  R.  235,  a  in  trust,  to  pay  the  trustees  and  such  other 
preference  was  effected  in  this  manner,  creditors  as  the  debtor,  in  one  year  by  deed, 
and  Lord  Kent/on  said  :  "  There  was  no  might  direct  and  appoint,  and  reserving  a 
fraud  in  this  case.  The  plaintiff  was  power  to  appoint  new  trustees  and  to  re- 
preferred  by  his  debtor,  not  with  a  view  of  voke,  alter,  add  to,  or  vary  the  trusts,  at 
any  benefit  to  the  latter,  but  merely  to  his  pleasure.  The  Chancellor,  while  pro- 
secure  the  payment  of  a  just  debt  to  the  nouncing  this  assignment,  with  such  reser- 
former  in  which  I  see  no  illegality  or  in-  vations,  void,  went  on  to  say  :  "  As  we 
justice."  It  need  hardly  be  observed  that  have  no  bankrupt  system,  the  right  of  the 
in  all  the  above  cases,  the  right  to  make  insolvent  to  select  one  creditor  and  to  ex- 
assignments  for  the  erjual  benefit  of  all  elude  another  is  applied  to  every  case, 
a-editors  is  fully  admitted,  unless  such  as-  and  the  consequences  of  such  partial  pay- 
signments  are  prohibited  by  statute.  ments  are  extensively  felt  and  deeply 
(/)  In  the  case  of  Riggs  v.  Murray,  2  deplored.  Creditors,  out  of  view  and  who 
Johns.  Ch.  565,  Chancellor  Kent,  though  reside  abroad  or  at  a  distance,  are  usually 
reluctantly  admitting  the  doctrine  which  neglected.  This  checks  confidence  in 
is  sustained  by  the  numerous  authorities  dealing,  and  hurts  the  credit    and   char- 

[  609  ] 


584 


THE  LAW   OF   CONTRACTS. 


[part  II. 


The  principle  of  the  bankrupt  and  insolvent  laws  is  diamet- 
rically opposite  to  this,  and  endeavors  to  prevent  or  to  cure  the 
very  mischiefs  which  the  principle  of  preference  causes.  It  is 
indeed  almost  expressed  by  the  phrase,  "  aes  alienum,''^  which 
was  very  generally  used  in  the  Roman  civil  law,  to  signify  debt. 
It  holds  the  property  of  a  debtor  not  to  be  his  own,  but,  to  the 
amount  of  the  debt,  it  is  "  aes  alienum^^  or  the  money  of 
another,  {g)  And  if  he  owes  more  than  he  can  pay,  all  his 
property  belongs  to  all  his  creditors ;  not  to  any  one  more  than 


acter  of  the  country.  These  partial  as- 
signments are  no  doubt  founded  in  cer- 
tain cases,  upon  meritorious  considera- 
tions. Yet  the  temptation  leads  strongly 
to  abuse  and  to  the  indulgence  of  im- 
proper motives.  The  Master  of  the  Rolls, 
in  Small  v.  Oudley,  2  P.  Wms.  427,  and 
the  Lord  Chancellor  in  Cock  v.  Good- 
fellow,  10  Mod.  489,  admit  that  such 
preferences  by  a  sinking  debtor  may,  and 
in  some  cases  ought  to  be  given,  and  are 
called  for  by  gratitude  and  benevolence  ; 
yet  at  the  same  time  it  is  acknowledged 
that  the  power  may  be  abused  and  be  ren- 
dered subservient  to  fraud.  Experience 
shows,  that  preference  is  sometimes  given 
to  the  very  creditor  who  i5  the  least  enti- 
tled to  it,  because  he  lent  to  the  debtor  a 
delusive  credit,  and  that  too,  no  doubt, 
under  assurances  of  a  well-grounded  con- 
fidence of  priority  of  payment  and  per- 
fect indemnity  in  case  of  failure.  How 
often  has  it  happened  that  that  creditor  is 
secured,  who  was  the  means  of  decoying 
others,  while  the  real  business  creditor, 
who  parted  with  his  property  on  liberal 
terms,  and  in  manly  confidence,  is  made 
the  victim  ?  Perhaps  some  influential 
creditor  is  placed  upon  the  privileged  list, 
to  prevent  disturbance,  while  those  who 
are  poor,  or  are  minors,  or  are  absent,  or 
want  tlie  means  or  the  s])irit  to  engage  in 
litigation,  arc  abandoned."  In  IJurd  v. 
Smith,  4  ])all.  70,  lirackmriihje,  ,].,  said: 
"  It  liiLs  been  said  that  a  debtor  may  favor 
particular  creditors.  1'he  right  has  been 
allowed  |)crliaps  on  a  principle  of  liiinian- 
ity  ;  or  in  I'avor  of  just  delits,  to  exclude 
debts  in  law  not  v,ir\ri\y  ex  dibilo  justiliiv. 
But  I  do  not  think  that  the  practice  is  to 
be  encouraged.  It  is  calculated  to  create 
confusion,  uncertainly,  and  collusion.  I 
see  nothing  that  will  prevent  the  mischiefs 
of  voluntary  sciiliincnts  and  <'oiiveyanccs 
but  a  gciicinl  declaration  that  they  are  all 

[OlO] 


void  as  against  creditors."  In  Cunning- 
ham r.  Freeborn,  11  Wend.  240,  Mr.  Jus- 
tice Nelson  earnestly  enters  a  protest 
against  the  doctrine  of  preference  of  cred- 
itors. So  also,  Wilde,  J.,  in  Pingree  r. 
Comstock,  18  Pick.  46;  Wrujht,  J.,  in 
Atkinson  v.  Jordan,  5  Ohio,  293.  The 
inadequacy  of  the  common  law  to  cases 
like  these,  and  considerations  in  the 
nature  of  those  advanced  in  2  Johns. 
Ch.  565,  have  induced  the  adoption  of 
provisions  in  the  insolvent  laws  of  many 
States,  suppressing  altogether  assign- 
ments with  preferences,  or  preferences 
of  creditors,  even  without  assignment. 
Of  these  provisions,  tliose  of  the  Mas- 
sachusetts insolvent  law  of  1838  and 
1841  may  serve  as  an  illustration.  In  § 
10  of  the  law  of  1838,  it  is  said,  that  "if 
after  this  act  shall  go  into  operation,  a 
debtor  shall,  in  contemplation  of  his  be- 
coming insolvent,  and  of  obtaining  a  dis- 
charge under  the  provisions  of  this  act, 
make  any  payment,  or  any  assignment, 
sale,  or  transfer  either  absolute  or  condi- 
tional of  any  part  of  his  estate,  with  a 
view  to  give  a  preference  to  any  creditor, 
or  to  any  person  who  is  or  may  be  liable 
as  an  indorser  or  surety  for  such  debtor, 
or  to  any  other  person  who  has  or  may 
have  any  claim  or  demand  against  him." 
It  is  further  provided  in  the  same  section, 
the  money  so  paid  the  ]ireferred  creditor 
may  be  recovered  by  the  assignees,  for  the 
use  of  the  other  creditors.  The  3d  sec- 
tion of  the  act  of  1841  contains  even  more 
stringent  provisions  upon  this  subject.  A 
similar  prohibilion  will  be  found  in  the 
English  statute  12  &  13  Vict. 

(7)  "  Ihltitor  iliK/ac  aes  allenum  contra- 
hcre  (lirilur  .  .  .  <iuia  (tea  quod  accipit, 
f/uoilrc  amtra/ilt,  aliciium,  id  est  creditoris, 
/nil."  Struvii  Syntagma  Jurispriidentire, 
']».  1002,  not(^  1?  (i'diiion  1718).  See  also, 
Aes.  in  Uesner's  Thesaurus. 


en.  X.]  BANKRUPTCY   AND   INSOLVENCY.  585 

to  any  other ;  but  to  all  alike,  without  reference  to  his  wishes 
or  their  efforts  ;  and  by  a  process  similar  to  the  civil  law  cessio 
bonorum,  (h)  the  statutes  of  bankruptcy  take  from  him  all  his 
property,  give  it  to  those  who  will  act  as  trustees  for  all  his 
creditors,  and  require  that  it  should  be  divided  in  exact  propor- 
tions to  their  several  debts,  among  all. 

The  early  bankrupt  laws  of  England  proceeded  upon  an  as- 
sumption, which  they  maintain  to  this  day  ;  it  is,  that  bank- 
ruptcy is  a  crime,  and  that  he  who  is  guilty  of  it  may  properly 
be  proceeded  against  as  a  criminal,  (j)  This  arose  in  part, 
from  the  fact  that  the  earliest  bankrupt  laws  were  aimed  against 
foreign  merchants,  who,  after  entering  into  mercantile  obliga- 
tions, too  often,  in  the  words  of  Coke,  "  suddenly  escaped  out 
of  the  realm,"  to  the  detriment  of  their  creditors,  (k)  And  in 
part  from  a  similar  fact,  that  after  these  laws  were  made  to 
operate  in  relation  to  all  merchants,  subjects  or  aliens,  they 
were  still,  as  for  some  purposes  they  now  are,  confined  to 
traders.  And  it  was  thought  to  be  a  grievous  wrong,  working 
extensive  mischief,  when  a  trader,  who,  from  the  nature  of  *his 
business,  generally  owes  many  persons,  should  deprive  them  all 
of  what  was  due  to  them,  and  perhaps  needed  by  them  to  dis- 
charge their  own  obligations. 

(/()  The  principle  of  cessio  hononim  was  rupt  and  insolvent  laws,  it  might  well  be 

introduced    by   the    Christian   emperors  ;  said,  that   the  foundation  of  bankruptcy 

and  by  it,  if  a  debtor  ceded  and  yielded  was  criminality,  and  that  of  insolvency, 

up  all  his  fortune  to  his  creditors,  he  was  misfortune.     But   when,   as  generally  at 

secured  from  imprisonment  for  his  debts,  the  present  day,  the  terms  bankrupt  and 

"  Omni  quoque  corporari  cruciatu  sernoto."  insolvent    are    used    interchangeably,    it 

Cod.  7,  71.  would  be  perhaps  too  much  to  say,  that 

(j)  That  such  was  the  assumption  on  the  accident  of  a  statute  being  called  one 
■which  the  eai-ly  laws  of  bankruptcy  were  or  the  other,  would  determine,  in  any  de- 
based, is  apparent  from  the  language  of  34  gree,  the  question,  whether  crime  or  mis- 
&  35  Hen.  VIII.  c.  4,  —  the  earliest  law  fortune  should  be  the  basis  of  a  proceeding 
on   this  subject  relating   to  Englishmen,  under  it. 

This  law  described  bankrupts  as  "  persons  (k)  The  most  important  of  the    early 

craftily  obtaining  into  their  hands   great  statutes  against  strangers,  was  that  against 

substance  of  other  men's  goods,  who  sud-  the   Lombards,  which    is   nowhere  to  be 

denly  Hee  to  parts  unknown  or  keep  their  found  at  this  day,  but  was  passed  in  the 

houses,  not  minding  to  pay  or  restore  to  reign  of  Edward  III.,  and  is  quoted  by 

their  creditors  their  debts  and  duties,  but  Lord  Coke  in  4  Inst.  277.    It  was  enacted, 

at  their  own  will  and  pleasure  consume  that  if  any  merchant  of  the  company  ac- 

the  substance  obtained  by  credit  of  other  knowledge  himself  bound  in  that  manner, 

rnen  for  their  own  pleasure  and  delicate  that  then  the  company  shall   answer  the 

living,  against  all  reason,  equity,  and  good  debt;  so  that  another  merchant  which  is 

conscience."     And  while  the  strict  line  of  not  of  the  company  shall  not  be  thereby 

distinction  was  maintained  between  bank-  grieved  nor  impeached. 

[611] 


586 


THE   LAW   OF   CONTRACTS. 


[part  II. 


The  statutes  of  insolvency  originally  differed  importantly 
from  those  of  bankruptcy.  They  began  much  later  than  the  bank- 
rupt laws ;  and  they  have  been  amended  and  varied  from  time 
to  time ;  and  in  this  way  two  systems,  one  of  bankruptcy  law, 
and  the  other  of  insolvency  law,  grew  up  together;  not  only 
differing  from  each  other,  but  to  a  certain  extent  complement- 
ary to  each  other.  But  in  recent  times  they  approach  so  near 
together  that  the  distinction  between  them  is  much  less  positive 
and  exact  than  it  once  was.  (/)  The  insolvency  law  operates 
upon  all  debtors  indiscriminately ;  but  upon  none,  in  invitum. 
That  is,  while  the  bankrupt  law  was  confined  to  traders,  but 
permitted  a  creditor  to  force  any  trader  who  did  not  pay  his 
debt  to  him,  into  bankruptcy,  the  insolvency  law  only  permitted 
any  and  every  debtor,  without  reference  to  his  occupation,  to 
divide  all  his  effects  ratably  among  all  his  creditors,  without 
disturbance  from  either  of  them.  And  then  the  bankrupt  law, 
perhaps,  because  it  began  with  seizing  and  sequestrating  the 
effects  of  the  debtor  as  if  he  were  fraudulent,  in  the  end  dis- 
cha\-ged  all  his  mercantile  debts,  if  all  his  effects  were  honestly 
given  up,  and  no  indication  of  fraud  appeared  anywhere.     On 


{})  Sponcc's  Equitable  Jurisdiction  of 
the  Court  of  Chancery,  198  and  following 
pages.  Also  a  learned  article  in  the  Lou- 
don Law  Magazine,  vol.  i.  n.  s.  87,  where- 
in the  policy  of  the  insolvent  and  bank- 
rupt systems  is  set  fortli,  and  the  English 
statutes  on  tiiese  subjects  examined.  See  2 
Kent,  394  and  note  ;  Blanchard  v.  Russell, 
13  Mass.  1 ;  Ogden  v.  Saunders,  12  Wheat. 
213.  In  the  case  of  Sturgcs  v.  Crownin- 
shield,  4  Wheat.  19,  the  distinction  be- 
tween bankrupt  and  insolvent  laws  was 
discussed  with  reference  to  the  clause  of 
the  Constitution  of  the  United  States, 
conferring  on  Congress  the  power  to  [lass 
uniform  laws  on  tiic  subject  of  baid^ruptcy. 
JUInrslittll,  C  J.,  delivering  the  opinion  in 
that  case  said  :  "  Tiie  sulijcct  is  (livisii)ie 
in  its  nntur(!  irUo  bankrupt  and  insolvent 
lawn,  tliougii  tiie  line  of  partition  ijctwcen 
them  is  not  so  distinctly  marked  ns  to  en- 
able any  person  to  say,  with  positive  prc- 
cLsion  what  belongs  exclusively  to  the  one 
and  not  to  the  other  class  of  laws.  J5ut  if 
an  act  of  Ci)iigresH  should  discharge  the 
person  of  tlie  baidirujit,  iiiid  leavr  liis  fu- 
ture ucfjiiisiiions  liable  to  his  creditors,  wo 

[G12] 


should  feel  much  hesitation  in  saying  that 
this  was  an  insolvent,  not  a  bankrupt  act, 
and  therefore  unconstitutional.  Another 
distinction  has  been  stated,  and  has  been 
uniformly  observed.  Insolvent  laws  op- 
erate at  the  instance  of  the  imprisoned 
debtor  ;  bankrupt  laws  at  the  instance  of 
a  creditor.  But  should  an  act  of  Congress 
authorize  a  commission  of  bankruptcy  to 
issue  on  the  application  of  a  debtor,  a 
court  would  scarcely  be  warranted  in  say- 
ing that  the  law  was  unconstitutional,  and 

the   commission   a  nullity This 

ditticulty  of  discriminating  with  any  accu- 
racy between  insolvent  and  bankrupt  laws, 
would  lead  to  the  ojiinion  that  a  bankrupt 
law  may  contain  those  regulations  that 
arc  generally  found  in  insolvent  laws,  and 
tliat  an  iiisolveiit  law  may  contain  those 
whicli  arc  ccnnmon  to  a  liankrujit  law." 
The  distinction  between  bankruptcy  and 
insolvency  will  bo  found  often  alluded  to 
in  the  cases  cited  iujhi.  See  especially, 
the  learned  o|)inion  of  Jironson,  J.,  in 
Sackett  v.  Aiulros,  ^>  Hill,  327  ;  Lioin;/- 
slon,  J.,  in  Adams  v.  Storey,  1  Paino,  C. 
C.  79. 


en.  X.]  BANKRUPTCY   AND   INSOLVENCY.  587 

the  other  hand,  the  insolvency  law,  which  attacked  no  one  but 
invited  all,  discharged  no  debt,  but  protected  the  honest  insol- 
vent from  further  legal  process  against  his  person ;  subjecting 
however  his  subsequently  acquired  property  to  a  liability  for  the 
debts  contracted  before  insolvency.  These  differences,  probably 
at  least,  for  it  may  not  be  quite  certain,  constituted  the  original 
distinction  between  bankruptcy  and  insolvency.  In  the  course 
of  this  chapter  we  use  the  words  indifferently,  as  if  they  were 
synonymous,  unless  we  indicate  expressly  or  by  the  context, 
that  we  speak  of  either  specifically.  As  we  have  said,  they 
have  certainly  come  much  nearer  together,  and  they  perfectly 
agree  in  their  general  purpose.  This  purpose  divides  itself  into 
two  parts ;  the  first,  to  secure  to  the  creditors  of  a  party  failing, 
a  ratable  distribution  of  all  his  property ;  the  second,  to.  secure 
to  the  honest  debtor  after  his  property  is  thus  applied,  immu- 
nity, in  a  greater  or  less  degree,  from  further  molestation.  («i) 


,  SECTION   II. 

THE   HISTORY   OF  AMERICAN   BANKRUPT   LAW. 

The  British  colonies  in  this  country  did  not  adopt  as  part  of 
their  common  law  the  English  laws  of  bankruptcy  and  insol- 
vency, but  in  many  instances  passed  insolvent  laws  of  their  own. 
When  they  became  independent,  and  the  present  Constitution 
of  these  United  States  was  formed,  the  framers  of  it  had  the 
sagacity  to  perceive  that  a  power  to  make  a  general  bankrupt 
law,  however  seldom  it  might  need  to  be  exercised,  must  always 
exist  in  the  general  goverimient  of  a  commercial  State ;  and 
this  Constitution  provides  that  "  Congress  shall  have  power  .  .  . 
to  establish  .  .  .  uniform  laws  on  the  subject  of  bankruptcies 
throughout  the  United  States."  (a)  As  this  does  not  expressly 
and   precise^  declare  that   Congress   may  "  pass   a    bankrupt 


(m)  See  the  remarks  of  Mr.  Justice  BJackstone,  on  the  purpose  and  policy  of  these 
laws.     2  Blacks.  Com.  473. 
(a)  Article  1,  section  8. 
VOL.  II.  52  [C13] 


588  THE  LAW  OF  CONTRACTS.  [PART  II. 

law,"  it  was  open  to  question,  or  at  least  to  argument,  whether 
Congress  could  make  such  a  national  law,  or  could  only  "estab- 
lish" uniformity  among  the  bankrupt  laws  of  the  several 
States.  But  this  question  is  now  settled.  It  is  indeed  gener- 
ally admitted,  that  the  almost  contemporary  construction  of  it 
should  have  sufficed  to  prevent  the  question.  For  on  the  4th 
of  April,  1800,  the  first  bankrupt  law  was  framed  by  Congress, 
It  was  limited  to  five  years,  and  thence  to  the  end  of  the  next 
session  of  Congress.     But  it  was  repealed  Dec.  19,  1803.  [b) 

If  this  early  repeal  indicated  the  unpopularity  of  such  a  law, 
that  was  further  proved  by  the  fact  that  no  serious  effort  was 
made  by  petition  to  Congress  to  renew  it,  or  provide  a  national 
bankrupt  law,  until  1840.  (c)  This  measure  was  then  pressed 
with  much  urgency,  but  very  earnestly  opposed;  and  it  was 
defeated  for  that  session.  In  the  next,  however,  the  effort  was 
renewed,  and  was  successful ;  a  bankrupt  law  was  enacted  on 
the  19th  of  August,  1841. 

The  opposition  was  grounded  in  part  upon  the  constitutional 
objection,  that  the  power  given  to  Congress  was  only  incident 
to  the  power  to  regulate  commerce,  and  that  "  bankruptcy,"  in 
the  constitution,  must  be  held  to  bear  its  limited  and  technical 
sense,  as  determined  by  English  law.  {d)     A  stronger  objection 


(b)  The  act  of  1800,  with  the  decisions  combats  tlic  objections  to  such  an  enact- 
upon  it,  will  be  found  in  the  second  volume  meut.  1  Am.  Jui'.  35. 
of  United  States  Statutes  at  Lar<,^c,  page  (d)  2  Kent,  480  (8th  ed.).  The  note 
19,  and  the  repealing  act  in  the  same  to  this  page  presents  the  legislative  history 
volume,  page  248.  In  this  repealing  act,  of  this  law,  in  a  manner  which  supersedes 
it  was  provided  that  the  repeal  "shall  in  the  necessity  of  examination  here.  Chan- 
nowise  ailect  the  execution  of  any  com-  ccllor  A'cnt  is  of  opinion,  that  the  pro- 
mission  of  bankruptcy  which  may  have  vision  in  the  bankrupt  act  which  rendered 
been  issued  jirior  to  the  passing  of  tliis  act,  it  a  general  insolvent  act  (that  which  pro- 
but  every  such  commission  may  and  shall  vided  for  voluntary  bankruptcy),  was  the 
be  proceeded  on  and  fully  executed  as  one  most  exclusively  in  operation,  and 
though  this  act  had  not  been  i)asscd."  gave  occasion  to  serious  doubts  whether 

{(■)  In    1829,    twelve   years   before   the  it  was  within  the   true  construction  and 

passage  of  the  last  national  bankrupt  law,  ]iurview  of  the  constitution,  and  that  it 

a  ]»owerful  article  appeared  in  ilic  Anicr-  was  that  branch  of  the  statute  that  l)rouglit 

ican  Jurist,  from  the  pen  of  Hon.   S.  E.  the   system,    in    his    ojuniun    justly,   into 

Sewall,    of    Massachusetts.      It   sti'ongly  general  discredit  and  cofliicmnation,  and 

sets    forth    the  condition  of  the  countiy,  led  to  the   repeal  of  the  law.      Notwith- 

under  the  contradictory  opinions  icgard-  standing  the  doubts  of  which  the  learned 

ing,  and   conOicting    adjudications   upon,  CiianccUor  s])eaks,  it  seems  to  have  been 

the    Stat(^    insolvent   laws,   calls    for    the  settled,  so  far  as  State  courts  could  do  it, 

enuclnient  of  a  national  law  wbi<li  shall  that  the  provision  for  raliuildn/  bankrupts 

establish  uniforinity  on  the   subject,  and  was  emudly  coustitutioiuil  with  the  rest  of 

[GM] 


en.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


589 


was  the  waste  and  expense  of  all  proceedings  in  bankruptcy. 
The  evidence  of  this  is  strong,  and  has  grown  in  strength  from 
the  first  operation  of  the  statutes,  and  has  called  forth  not  only 
an  unqualified  admission  of  the  fact,  but  the  regret  and  severe 
reprehension  of  the  best  judges,  (e)     But  by  far  the  greatest 


the  law,  and  that  it  applied  to  all  debts, 
except  tliose  specified  as  beyond  its  appli- 
cation, contracted  before  or  after  its  pas- 
sage. Kunzler  v.  Kohaus,  5  Hill,  317  ; 
Sackett  v.  Andross,  id.  327.  These  cases 
are  of  great  interest,  as  presenting  very 
fully  the  argument  on  one  side,  and  the 
other,  on  the  right  of  Congi-ess  to  pass  a 
law  for  the  benefit  of  voluntary  debtors, 
whicli  shoukl  apply  to  debts  contracted 
])eforc  the  act.  In  the  first  case,  Coweii, 
J.,  delivered  the  opinion  of  the  majority 
of  the  court,  vindicating  the  constitution- 
ality of  tlie  law  in  both  these  respects. 
From  that  opinion  Broiison,  J.,  dissented, 
and  in  the  second  case  above  cited,  set 
forth  liis  views  with  his  customary  earnest- 
ness and  ability,  in  an  opinion  of  nearly 
fifty  pages.  His  conclusion  is,  that  the 
voluntary  branch  of  the  bankrupt  law  was 
unconstitutional,  for  the  following  reasons  : 
1.  It  is  not  confined  to  traders,  but  ex- 
tends to  all  classes  of  debtors.  2.  It 
places  the  whole  power  in  the  hands  of  the 
debtor,  without  giving  any  means  of  coer- 
cion to  the  creditor.  3.  It  discharges  the 
debt  without  the  consent  of  the  creditor  in 
any  form,  and  so  violates  the  obligation  of 
the  contract.  4.  If  it  retroacts  so  as  to 
discharge  debts  contracted  before  its  pas- 
sage, then  it  not  only  violates  contracts, 
but  it  goes  entirely  beyond  the  scope  of 
the  bankrupt  power.  It  is  not  a  laic,  but 
a  sentence  or  judgment  against  creditors, 
and  Congress  has  no  judicial  power  over 
the  subject.  A  similar  view  was  adopted 
by  Judge  Wells,  of  the  U.  S.  District 
Court  of  Missouri,  in  the  case  of  Edward 
Klein.  The  opinion  will  be  found  in  2 
N.  Y.  Leg.  Obs.  184;  but  on  appeal,  his 
decision  was  reversed  by  Catron,  J.,  of  the 
U.  S.  Supreme  Court,  sitting  in  the  Cir- 
cuit Court.  He  held  that  the  law  of  1841 
was  constitutional.  In  the  matter  of 
Edward  Klein,  1  How.  277,  in  note  to 
Nelson  i'.  Carland.  The  law  was  pro- 
nounced constitutional  also  in  Thompson 
I'.  Alger,  12  Met.  428;  State  Bank  v. 
Wilborn,  1  Eng.  35  ;  Loud  v.  Pierce, 
25  Me.  233 ;  Morse  v.  Hovey,  1  Barb. 
Ch.  404 ;  Lalor  v.  Wattles,  3  Gilman, 
225  ;    Dresser  v.  Brooks,  3  Barb.   429. 


And  a  suit  which  had  been  commenced 
before  the  law  of  insolvency  went  into 
operation,  was  wholly  abrogated  by  the 
law  if  the  creditor  proved  his  debt ;  and 
in  case  of  the  failure  of  the  debtor  to 
obtain  a  discharge,  it  was  necessary  that 
the  action  should  be  recommenced  ab 
initio.  Haxtun  v.  Corse,  2  Barb.  Ch. 
506. 

(e)  Lord  Eldon  "  took  the  first  occasion 
of  expressing  strong  indignation  at  the 
frauds  committed  under  cover  of  the  bank- 
rupt laws,  and  his  determination  to  repress 
such  practices.  Upon  this  subject  his 
lordship  observed,  with  warmth,  that  the 
abuse  of  the  bankrupt  law  is  a  disgrace  to 
the  country,  and  it  would  be  better  at  once 
to  repeal  all  the  statutes,  than  to  sutler 
them  to  be  applied  to  such  purposes. 
There  is  no  mercy  to  the  estate.  Nothing 
is  less  thought  of  than  the  object  of  the 
commission.  As  they  are  frequently  con- 
ducted in  the  country,  they  are  little  more 
than  stock  in  trade  for  the  commissioners, 
the  assignees,  and  the  solicitor.  Instead 
of  solicitors  attending  to  their  duty  as 
ministers  of  the  court,  for  they  are  so, 
commissions  of  bankruptcy  are  treated  as 
matters  of  traffic,  A  taking  out  the  com- 
mission, B  and  C  to  be  his  commissioners. 
They  are  considered  as  stock  in  trade,  and 
calculations  are  made  how  many  commis- 
sioners can  be  brought  into  tlie  partner- 
ship. Unless  the  court  holds  a  strong 
hand  over  bankruptcy,  particularly  as 
administered  in  this  country,  it  is  itself  ac- 
cessory to  as  great  a  nuisance  as  any  known 
in  the  land,  and  known  to  pass  under  the 

forms  of  its  law His  lordship  added, 

that  he  was  determined  to  make  the  offi- 
cers of  this  court  responsible  to  the  justice 
of  the  country  for  their  dealings  in  this 
court ;  and  declared,  with  reference  to  the 
practice  of  lending  a  name  to  a  person 
forbid  by  the  court  to  take  out  a  petition, 
that  he  would  not  hesitate  to  strike  a 
solicitor  off  the  roll  who  dare  to  lend  his 
name  to  a  person  under  such  an  interdict, 
and  for  that  reason  alone ;  but  he  would 
go  further,  and  whenever  a  case  of  this 
nature  should  be  brought  forward,  would 
direct  the  Attorney-General  to  prosecute 

[615] 


590  THE  LAW  OF  CONTRACTS.  [PART  II. 

objection,  and  one  that  will  always  be  likely  to  make  a  national 
bankrupt  law  unpopular,  and  will  perhaps  prevent  its  occurring 
again  for  a  long  time  to  come,  is  the  universal  belief,  grounded 
upon  all  experience,  that  a  bankrupt  law  is  a  mere  sponge  to 
wipe  off  indebtedness. 

In  the  law  of  1841,  there  was  an  endeavor  to  avoid  a  part  of 
these  objections,  by  uniting,  in  certain  respects,  the  insolvency 
system  with  the  bankrupt  system.  Two  classes  of  debtors  were 
provided  for ;  or  rather  the  statute,  in  the  first  place,  permitted 
all  debtors  to  become  bankrupt,  excepting  only  public  defaulters, 
or  those  who  had  become  debtors  in  some  fiduciary  capacity.  (/) 
There  was  then  a  provision  intended  to  be  nearly  equivalent  to 
the  English  limitation  to  traders.  Debtors  who  belonged  to 
this  latter  class  might  be  made  bankrupts  by  compulsory  pro- 
cess, while  all  others  had  the  right  to  make  themselves  bankrupt, 
but  could  not  be  made  so  by  others.  In  this  respect  the  first 
provision  is  that  of  the  insolvency  system ;  and  the  second,  that 
of  the  bankruptcy  system.  But  then  the  statute  gives  to  all 
bankrupts  under  this  law,  whether  voluntary  or  involuntary, 
whether  traders  or  otherwise,  a  discharge  from  their  indebted- 
ness.    It  offered  in  fact  to  every  debtor  a  discharge  of  his  debts. 

The  condition  of  the  country  at  that  time  demanded  precisely 
this  relief.  The  community  was  burdened  with  an  immense 
amount  of  indebtedness,  which  embarrassed  the  debtors,  and 
prevented  their  engaging  in  any  business  that  might  give  them 
subsistence  and  promote  the  prosperity  of  the  country,  and  at 
the  same  time  it  gave  to  creditors  only  hopeless  and  valueless 
claims.  The  act  afforded,  in  point  of  fact,  the  very  relief  it  was 
intended  to  give ;  and  when  this  good  work  was  accomplished, 
the  general  objections  to  a  bankruptcy  law  reappeared  in  full 
force,  and  on  the  3d  of  March,  1843,  the  statute  was  repealed. 
But  wifliin  this  brief  period,  of  little  more  than  a  year  and  a 

for  a  cons]iiriiry  ;  for  no  worse  conspiracy  in  this  country,  under  tlie  nsitional  law  of 

can  lie  than  that,  the  ()l)ject  of  wiiich  is  to  1841,  would  not,  in  some  lucalities,  have 

make   wliat  tlie  lc;,'islature   intended  as  a  jnstilied,  to  some  extent,  tiie  languago  of 

lenient    profess    against    tiur  l)aid<ni|it,  a  J^ord  A'A/wi. 

mode  of  defrauding  tlie  creditors  and  the         {./')  As  to  wlio  may  he  made  bankrupts, 

hankrui)t."     i'>   Ves.   1.      It   niiglit  admit  or   nniy   lieeome  bankrupts  of  tlieir  own 

of  reasonabh'  douljt,  whether  the  pruelieo  motion,  see  inj'ru,  ^  5. 

[GIG] 


CH.  X.]  BANKRUPTCY   AND   INSOLVENCY.  591 

half,  an  immense  multitude  of  persons  availed  themselves  of  the 
opportunity  to  discharge  their  debts  by  bankruptcy. 

Since  then  we  have  had,  and  have  now,  insolvent  laws  of 
one  kind  or  another  in  almost  all  the  States.  These  differ  in 
their  provisions  very  much  ;  and  although  it  would  be  impossible 
to  point  out  with  any  distinctness  all  these  differences  in  a 
single  chapter,  we  shall  have  occasion  to  notice  some  among 
them. 

The  most  difficult  question  to  which  they  have  given  rise,  is 
as  to  the  operation  of  a  State  insolvent  law  upon  creditors 
who  live  in  another  State.  The  first  objection  was  to  the 
constitutionality  of  any  State  insolvent  law,  because  it  neces- 
sarily "impaired  the  obligation  of  the  contract"  of  the  debtor. 
But  this  was  disposed  of  mainly  by  the  help  of  a  distinction 
between  the  remedy  and  the  right ;  holding  the  first  to  be  with- 
in State  power,  but  the  latter  not.  {g)  This  distinction  was 
adopted  by  Chief  Justice  Marshall,  from  the  argument  of  coun- 
sel, and  sustained  by  him  with  great  ingenuity  and  force.  It 
certainly  is  very  nice ;  and,  when  critically  examined,  becomes 
almost  evanescent.  But  it  is  now  very  generally  admitted,  per- 
haps on  the  ground  that  its  want  of  exact  logical  reason  is  com- 
pensated by  the  absolute  necessity  that  this  clause  in  the  con- 
stitution should  be  thus  qualified.  But  after  this  objection  was 
disposed  of,  another  arose,  which  is  the  most  difficult  question 
the  State  insolvent  laws  have  ever  caused.     It  is  as   to   the 


(g)  This  distinction  was  made  by  Mr.  punishment,  or  may  withhold  this  means, 

Hunter,  in  his  argument  for  the  defendant  and  leave  the  contract  in  full  force.     Im- 

in  Sturges   v.   Crowninshield,   4  Wheat,  prisonment  is  no  part  of  the  contract,  and 

122:  "The  obligation  of  a  contract  and  a  simply  to  release  the  prisoner  does  not 

remedy  for  its  performance,  are  different    impair  its  obligation Statutes  of 

things."     Marshall,  C.  J.,  delivering  the  limitations  relate  to  the  remedies  which 

opinion  of  the  court  in  that  case,   said :  are  furnished  in  the  courts.     They  rather 

"  The  distinction  between  the  obligation  establish  that  certain  circumstances  shall 

of  a  contract  and  the  remedy  given  by  amount  to  evidence  that  a  contract  has 

the  legislature- to  enforce  that  obligation,  been  performed,  than  dispense  with   its 

has  been  taken  at  the  bar,  and  exists  in  performance.     If,   in   a    State  where  six 

the  nature  of  things.     Without  impairing  years  may  be  pleaded  in  bar  to  an  action 

the  obligation  of  the  contract,  the  remedy  of  assumpsit,  a  law  should  pass  declaring 

may  certainly  be  modified  as  the  wisdom  that  contracts  already  in   existence,  not 

of  the  nation  shall  direct.     Confinement  barred  by  the  statute,  should  be  construed 

of  the  debtor  may  be  a  punishment  for  not  to  be  within  it,  there  can  be  little  douht  of 

performing  his  contract,  or  may  be  allowed  its  unconstitutionality.     So  with  respect 

as  a  means  of  inducing  him  to  perform  it.  to  the  laws  against  usury."     Le  Roy  v. 

But  the  Stale  may  refuse  to  inflict  this  Crowninshield,  2  Mason,  151. 

52*  [617] 


592 


THE   LAW   OF   CONTRACTS. 


[part  II. 


effect  which  such  a  law  has  upon  creditors  residing  in  another 
State.  Considering  the  constant  and  very  extensive  commer- 
cial intercourse  between  the  different  States  of  this  Union,  it 
is  not  surprising  that  this  question  recurs  very  frequently ;  but 
it  is  very  much  to  be  regretted  that  judicial  opinions  concern- 
ing it  are  so  diverse  and  wholly  irreconcilable,  that  it  is  im- 
possible to  say  with  certainty  what  the  law  is  in  relation  to 
this  subject.  The  distinction  between  remedy  and  right  has 
been  so  applied,  as  to  hold  as  of  the  remedy  only,  —  priority  of  or 
security  to  any  particular  creditor,  imprisonment,  statutes  of 
limitation  and  usury,  laws  concerning  processes  in  State  courts, 
exemption  of  particular  kinds  of  property,  or  of  persons  en- 
gaged in  particular  duties,  or  privileges  attached  to  any  ofhce 
or  territory.  (//)     Thus  far,  there  is  nothing  to  permit  a  State  to 


(7()  Priority  of  payment  of  a  particular 
creditor,  is  matter  relating  to  the  remedy. 
Harrison  v.  Sterry,  5  Cranch,  289-298. 
Marshall,  C.  J. :  "  But  the  right  of  priority 
forms  no  part  of  the  contract  itself.  It  is 
extrinsic,  and  is  rather  a  personal  privi- 
lege dependent  on  the  law  of  the  place 
•where  the  property  lies,  and  where  the 
court  sits  which  is  to  decide  the  cause." 
Imprisonment,  —  Marshall,  C.  J.,  in  Stur- 
ges  V.  Crowninshicld,  above  cited ;  Beers 
V.  Haugliton,  9  Pet.  329 ;  Pugh  v.  Bussel, 
2  Bhu'kf.  394.  See  Washington,  J.,  in 
Camfranque  v.  Burncll,  1  Wash.  C.  C. 
340.  Statutes  of  limitation  and  usury, — 
Sturges  V.  Crowninsliield,  4  Wheat.  206  ; 
Lc  Hoy  V.  Crowninshicld,  2  Mason,  1.51, 
wherein  Slori/,  J.,  states  and  defines  the 
limits  of  the  doctrine ;  Decouchc  v.  Save- 
ticr,  3  Jolms.  Ch.  190.  Kent,  Ch. :  "  The 
plea  of  tlie  statute  of  limitations  docs  not 
touch  the  merits  of  tlie  action.  It  merely 
bars  tlie  remedy  in  the  particular  domestic 
forum,  and  does  not  conclude  the  plaintill" 
in  his  own  or  any  other  foreign  country." 
I'roccsscK  in  State  courts,  —  United  States 
V.  Robeson,  9  Pet.  319;  Bank  of  United 
States  1-.  llalstead,  10  Wheat.  .51.  K.k- 
emptioii  of  particular  persons  or  property, 
—  Morris  ''.  Kvcs,  11  Mart.  La.  730; 
Mather?'.  15iish,  10  .Johns.  233,  page  244, 
note  (h).  Privilege'  attaclied  merely  to 
person  or  territory,  —  Ilinkiey  v.  Morean, 
3Mii.son,8S.  Slon/,,1.:  "The  present  suit 
is  to  be  (leciiled  by  the  law  of  Massai-hii- 
sctls;  and  a  discharge  of  the  person  of  ihe 
debtor  in  .'iiiotiier  State  (Maryland  in  liic 

[G18] 


case  before  him),  which  leaves  the  con- 
tract in  full  force,  has  no  effect  to  dis- 
charge the  person  here.  No  court  gives 
efiect  to  tlie  local  laws  of  another  country 
or  State  in  respect  to  the  forms  or  force  of 
process."  In  Melan  v.  Fitz  James,  1  B.  & 
P.  138,  a  different  doctrine  was  laid 
down  by  the  majority  of  the  court,  con- 
trary to  the  opinion  of  Mr.  Justice  Heath. 
In  tmlay  v.  Ellefsen,  2  East,  454,  Lord 
Ellenhorough  expressed  his  unwillingness 
to  accede  to  the  doctrine  of  Melan  v.  Fitz 
James.  The  general  doctrine  of  Hinkley 
('.  Morean  is  recognized  in  Fenwick  v. 
Sears,  1  Cranch,  259 ;  Dixon  u.  Ramsay, 
3  id.  319  ;  Pearsall  v.  Dwight,  2  Mass.  84  ; 
3  Burge  on  Col.  &  For.  Law,  104G  ;  Story 
on  Contlict  of  Laws,  §  339 ;  Atwater  v. 
Townsend,  4  Conn.  47  ;  and  see  Smith  v. 
Ilealy,  id.  49  ;  Smith  v.  Spinolla,  2  Johns. 
198;  White  v.  Canfield,  7  Johns.  117; 
Titus  V.  Ilobart,  5  Mason,  378;  Nash  v. 
Tupper,  1  Caines,  402 ;  Lodge  v.  Plielps, 
2  Cnines'  Cas.  in  Error,  321  ;  Green  v. 
Sarinicnto,  3  Wash.  C.  C.  17;  Golden  v. 
Prince,  id.  314.  The  distinction  in  cases 
of  this  class  is  well  laid  down  l)y  Parris, 
J.,  in  Judd  V.  Porter,  7  (ircciil.  337: 
"  This  distinction  is  to  lie  found  in  ail  the 
cases,  tliat  when  tlie  contrat't  is  discharged, 
citiicr  by  a  certificate  of  liaiikruptcy  or 
otherwise,  the  body  of  the  dclitor  is  not 
theirnftcr  liable  to  arrest  in  any  jurisdic- 
tion for  debts  existing  at  the  time  of  tho 
bankruptcy  ;  for  the  contract  being  at  an 
end,  liicre  remains  nothing  upon  wiiich 
tiie  remedial  laws  of  any  government  can 


CU.  X.] 


BANKRUPTCY   AND    INSOLVENCY. 


593 


release  a  debtor  from  the  liability  of  his  subsequently  acquired 
property  for  his  debt.  And  formerly,  a  great  majority  of  the 
insolvent  laws  of  the  States,  conformed  to  the  insolvency  sys- 
tem of  England,  so  far  as  to  create,  or  rather  leave,  this  liabil- 
ity. But  it  was  afterwards  held  by  the  Supreme  Court  of  the 
United  States,  that  an  insolvent  law  which  took  away  this  lia- 
bility, still  affected  only  the  remedy,  (j)     Hence  the  clause  of 


operate.  But  when  tlio  body  only  of  the 
debtor  is  discharged,  leaving  the  contract 
unimpaired,  the  discharge  is  effectual  only 
to  the  extent  of  the  jurisdiction  under 
which  it  was  granted,  and  extra  territoriiim 
has  no  cthcacy."  In  addition  to  author- 
ity cited  above,  see  the  numerous  cases 
cited  by  Professor  Greenleaf,  in  the  argu- 
ment in  Judd  V.  Porter.  A  different  view 
was  adopted  in  Millar  v.  Hall,  1  Dall.  229. 
The  court  say  that  the  defendant  was  com- 
pelled by  law  to  transfer  all  his  property 
for  the  benefit  of  his  creditors.  "  Having 
done  this  we  must  presume  that  he  has 
fairly  done  it,  and  therefore  to  permit  the 
taking  his  person  here,  would  be  to  at- 
tempt to  compel  him  to  perform  an  im- 
possil)ility,  that  is,  to  pay  a  debt  after  he 
has  Ijcen  deprived  of  every  means  of  pay- 
ment, an  attempt  which  would  at  least 
amount  to  perpetual  imprisonment,  un- 
less the  benevolence  of  his  friends  siiould 
interfere  to  discharge  the  plaintiff's  ac- 
count." Smith  i\  Brown,  3  Binn.  201 ; 
Hilliard  v.  Greenleaf,  5  id.  336,  n. ;  Boggs 
V.  Teackle,  id.  332. 

(j)  It  was  at  one  time  supposed  that 
this  question  was  passed  upon  by  the 
Supreme  Coirrt  in  M'Millan  v.  M'Neill,  4 
Wheat.  209.  That  such  was  not  the 
case  see  the  remarks  of  Mr.  Justice  Waslc- 
ington,  12  Wheat.  254.  The  point  decided 
in  that  case  was,  that  a  discharge  under 
the  bankrupt  laws  of  one  government  does 
not  affect  contracts  made  or  to  be  execu- 
ted under  another,  whether  the  law  be 
prior  or  subsequent  in  the  date  to  that  of 
the  contract.  The  case  of  Ogden  v. 
Saunders,  12  Wheat.  213,  is  the  leading 
case  on  this  topic.  It  was  a  case,  as 
stated  by  Mr.  Justice  Washington,  deliver- 
ing his  opinion,  "  of  a  debt  contracted  in 
the  State  of  New  York,  by  a  citizen  of  that 
State,  from  which  he  was  discharged,  so 
far  as  he  constitutionally  could  be,  under 
a  bankrupt  law  of  that  State,  in  force  at 
the  time  when  the  debt  was  contracted." 
The  action  was  brought  by  a  citizen  of 


New  Orleans,  in  the  United  States  Dis- 
trict Court.  The  question,  tliercfore,  was 
directly  upon  the  constitutionality  of  this 
bankrupt  law,  discharging  as  it  did,  not 
only  the  jjerson  of  the  debtor,  but  his  sub- 
sequently acquired  effects,  from  liability 
to  attachment  and  levy.  And  this  ques- 
tion of  constitutionality  was  twofold.  1. 
As  affecting  the  rights  of  citizens  of  the 
same  State.  2.  As  affecting  the  rights  of 
citizens  of  different  States.  Washington, 
J.,  delivering  his  opinion,  drew  a  distinc- 
tion between  impairing  the  contract  and 
impairing  the  obligation  of  the  contract. 
What  is  the  obligation  ?  Marshall,  C.  J., 
in  4  Wheat.  197,  says,  it  is  "The  law 
which  binds  the  parties  to  perform  their 
agreement."  What  is  the  law  referred  to  1 
Not  the  moral  law,  not  exclusively  the 
universal  law  of  civilized  nations  (p. 
258).  It  is  the  municipal  law  of  the 
State  (p.  259)  which  is  a  part  of  the  con- 
tract, and  goes  with  it  wherever  the  par- 
ties are  to  be  found.  If  it  forms  part  of 
the  contract,  it  is  a  solecism  to  say  that  it 
impairs  the  obligation  (p.  260).  This  law 
no  more  impairs  the  obligation  of  con- 
tracts than  an  agreement  by  the  terms  and 
at  the  time  of  contracting,  that  in  case  of 
the  debtor's  insolvency  and  surrender  of 
all  his  property  for  the  benefit  of  his  credi- 
tors, he  should  be  discharged  from  his 
contract.  Nor  can  it  be  objected  that  if 
this  be  so,  a  repeal  of  the  law  in  exe- 
cution, where  the  contract  was  formed, 
could  violate  the  contract.  The  repeal 
would  only  affect  subsequent  contracts. 
This  may  be  illustrated  by  statutes  of  usu- 
ry, construction,  fraud,  and  limitation. 
In  all  these  the  distinction  between  retro- 
spective and  prospective  operation  is  to  be 
observed.  Especially  an  argument  might 
be  drawn  from  the  case  of  limitations. 
The  collocation  of  the  clauses  of  this  con- 
stitution, relating  to  this  subject,  forme* 
the  basis  of  an  argument.  The  conclu- 
sion reached  by  Mr.  Justice  Washington, 
was,  that  a  dischai-ge  under  these  circum- 

[619] 


594 


THE   LAW   OF   CONTRACTS. 


[part  II. 


the  constitution  prohibiting  the  impairing  of  the  obligation  of 
contracts,  may  be  said  to  permit  any  insolvent  law  which  does 
not  expressly  discharge  the  debt  itself.  And  as  those  of  the 
State  laws  which  discharge  the  debt,  as  that  of  Massachusetts, 
for  example,  are  made  to  apply  only  to  debts  founded  on  con- 
tracts entered  into  after  the  passing  of  the  act,  and  as  the  law 


stances  was  a  valid  bar;  the  question  of 
the  effect  between  citizens  of  different 
States  not  having  yet  been  argued  to  at 
the  bar.  Mr.  Justice  Johnson,  in  this  case, 
after  vindicating  the  doctrine  of  Sturges 
V.  Crowninshield,  examines  the  ethical 
force  of  the  terms  "  obligation  of  con- 
tracts," and  reaches  a  conclusion  which 
he  admits  goes  further  than  tlie  doctrine 
of  Sturges  v.  Crownin.shield,  that  a  law 
discharging  the  future  effects  of  the  debtor 
is  valid,  even  as  to  contracts  made  prior 
to  the  passage  of  the  law,  and  nnilto  fortiori, 
subsequent  ones.  He  repudiates  the  doc- 
trine that  the  remedy  is  ingrafted  into 
the  law,  but  maintains  that  inasmuch  as  a 
knowledge  of  the  laws  is  imputed  to  every 
one  who  enters  into  contracts,  no  one  can 
complain  of  surprise  or  want  of  public 
faith,  in  the  aj)plication  of  those  laws. 
The  right  to  pass  laws  of  limitation  can- 
not be  maintained,  if  that  to  pass  bank- 
rupt laws  of  this  character  is  denied.  The 
right  to  pass  such  laws  has  been  asserted 
by  every  civilized  nation  (p.  287).  Not  a 
sufficient  objection  to  say  that  if  the  obli- 
gation of  contracts  has  relation  to  all  the 
laws  which  give  or  modify  the  remedy,  the 
obligation  is  andjulatory  and  uncertain 
(p.  288).  Nor  can  a  right  in  the  States 
to  pass  tender  laws  be  derived  from  that  to 
pass  bankru])t  laws,  for  the  former  are 
expressly  forbidden.  It  is  urged  tliat  this 
is  an  arbitrary  act,  and  future  acquisitions 
niigiit  be  made  liable.  15ut  in  answer, 
why  may  it  not  be  urged,  tliat  the  com- 
munity lias  a  right  to  set  bounds  to  the 
will  of  contracting  parties,  for  the  public 
good,  in  lliis  as  in  many  other  instances 
(p.28'J)?  T/ioiii I ison  iu\i\  7'//;;//j/r,  ,J,J.,  con- 
curred with  tiic  abovc-UMincd  judges. 
IVoin  this  opiiii(jn  Slon/  and  Ditntll,  JJ., 
together  with  the  ('hief  Justice  dissented, 
and  these  wore  the  grounds  of  their  de- 
cision, lis  giithered  from  the  ojiinion  of 
Mursliiill,  (J.  J.:  1.  That  the  words  of  the 
rlause  of  the  constitution  under  considera- 
tion, taken  ill  their  tiiitiiriil  imd  obvious 
Bcnsc,  admit  of  a  jirosjiectivc  as  well  as  a 

[620] 


retrospective  operation.  2.  That  an  act 
of  the  legislature  does  not  enter  into  the 
contract,  and  become  one  of  the  condi- 
tions stipulated  by  the  parties ;  nor  does 
it  act  externally  on  the  agreement  unless 
it  have  the  full  force  of  law.  3.  That  con- 
tracts derive  their  obligations  from  the  act 
of  tlie  parties,  not  from  the  grant  of  gov- 
ernment ;  and  that  the  riglit  of  govern- 
ment to  regulate  the  manner,  or  to  pro- 
hibit such  as  may  be  against  the  policy  of 
the  State,  is  entirely  consistent  with  their 
inviolability  after  they  have  been  formed. 
4.  That  the  obligation  of  a  contract  is  not 
identified  with  the  means  which  govern- 
ment may  furnish  to  enforce  it ;  and  that 
a  prohibition  to  pass  any  law  impairing  it, 
does  not  imply  a  prohibition  to  vary  the 
remedy,  nor  does  a  power  to  vary  the 
remedy  imply  a  power  to  impair  the  obli- 
gation derived  from  the  act  of  the  parties. 
So  that  the  first  branch  of  the  question  of 
constitutionality  was  answered  in  the  af- 
firmative. The  second  branch  of  the 
question  having  been  argued,  Washington, 
Thompson,  and  Trimble,  JJ.,  were  of  opin- 
ion that  the  same  reasons  which  governed 
them  at  the  first  hearing  apjilied  in  this 
aspect  of  the  question.  Johnson,  J.,  who 
had  agreed  with  them  in  the  view  then 
adopted,  was  of  opinion  that  although, 
"  as  between  citizens  of  the  same  State  a 
discharge  of  a  bankrupt  by  the  laws  of 
that  State,  is  valid  as  it  affects  posterior 
contracts,"  yet,  "  tliat  as  against  creditors, 
citizens  of  other  States,  it  is  invalid  as  to 
all  contracts."  The  other  three  judges 
concurred  in  the  opinion.  Boyle  i'.  Zaeh- 
aric,  G  IVt.  'MS.  So  the  second  branch 
of  the  (|iicsiion  was  answered  in  the  nega- 
tive. JJhinclianl  c.  Kussell,  1.3  Mass.  1 ; 
Mather  ;•.  J5ush,  IG  Joliiis.  2.'33  ;  llicks  v. 
]Iotciiki.ss,  7  Johns.  Ch.  29'J;  Crittenden 
?'.  Jones,  5  Hall's  1^.  J.  .'i^O ;  Townsend 
V.  Townsend,  Niles'  Keg.  l.'itb  Sept.  1821  ; 
Siiaw  V.  l{(jbbins,  12  Wheat.  ;5G9,  note 
{(i\  ;  Mason  v.  Ilaiic,  12  Wheat.  370, 
]\  luthington,  J.,  dissenting. 


en.  X.]  BANKRUPTCY   AND   INSOLVENCY.  595 

existing  when  and  where  a  contract  is  made,  forms  a  part  of  it, 
and  consequently  enters  into  all  contracts  made  subsequently  to 
the  law,  it  may  now  be  said  that  a  State  law,  whatever  be  its 
name,  which  is  in  fact  a  bankrupt  law  in  all  respects,  may  be 
constitutional. 

In  the  next  place,  the  municipal  law  of  any  State  is  a  part  of 
every  contract  made  in  that  State,  and  to  be  performed  therein. 
If  the  contract  is  made  elsewhere,  but  to  be  performed  in  that 
State,  we  have  seen  in  our  chapter  on  the  law  of  place,  that 
the  contract  has  a  kind  of  twofold  law  of  place.  In  general  it 
is  said  that  the  place  of  a  contract  is  that  where  it  is  to  be 
performed,  because  it  may  be  presumed  that  the  parties  pro- 
posed to  be  governed  by  those  laws  in  the  performance  of  the 
contract,  [k)  Each  State  has,  then,  by  the  present  weight  of 
authority,  the  right  to  determine  for  its  oivn  citizens,  and  its 
own  courts,  what  it  will,  in  respect  to  a  contract  which  is  cither 
made  within  its  sovereignty,  or  to  be  performed  there.  Thus, 
for  instance,  the  insolvent  law  of  Massachusetts  "  absolutely 
and  wholly  discharges  the  debtor  from  all  debts,  ....  founded 
upon  any  contract  made  by  him  within  the  Commonwealth,  or 
to  be  performed  within  the  same."  (Z) 

(Ic)  See  supra,  the  chapter  on  the  Law  its  own  citizens  with  the  citizens  of  an- 

of  Place,  pp.  94  and  95.  other  State,  when  tlie  contract  is   on  its 

(/)  That  a  State  insolvent  law  may  face  to  be  performed  within  the  State 
provide  constitutionally  for  the  dischar^^e  granting  the  discharge,  is  one  which 
of  all  contracts  made  within  the  State  he-  stands  by  no  means  without  dispute  at 
tween  its  own  citizens,  is  a  proposition  this  day.  We  think,  however,  tliat  the 
which  may  now  be  considered  as  estab-  weight  of  authority  sustains  the  proposi- 
lished.  Ogden  v.  Saunders,  12  Wheat,  tion,  though  it  cannot  be  denied  that  the 
213,  368,  369;  Walsh  v.  Farrand,  13  decisions  of  courts  of  the  highest  charac- 
Mass.  19  ;  Brigham  v.  Henderson,  1  Cush.  ter,  and  the  dissent  of  at  least  one  of  the 
430  ;  Converse  v.  Bradley,  id.  434,  in  the  most  learned  judges  in  the  country  from 
note;  Babcock  v.  Weston,  1  Gallis.  168;  the  opinion  of  his  associates,  render  the 
Baker  v.  Wheaton,  5  Mass.  509 ;  Smith  future  preponderance  of  authority,  to  say 
V.  Smith,  2  Johns.  241;  Smith  v.  Par-  the  least,  doubtful.  In  Blanchard  y.  Eus- 
sons,  1  Ohio,  107.  So  those  persons  sell,  13.JMass.  1,  the  defendant,  a  mer- 
who  assent  to  the  operation  of  such  laws,  chant  of  New  York,  M-as  indebted  to  the 
by  participating  in  proceedings  had  under  plaintiff  on  account  stated  for  proceeds  of 
them,  are  bound  by  such  operation.  Clay  goods  consigned  to  him  by  plaintiff.  Sub- 
V.  Smith,  3  Pet.  411.  In  Farmers  &  Me-  sequently  the  defendant  took  advantage 
chanics  Bank  v.  Smith,  6  Wheat.  131,  a  dis-  of  an  act  for  the  benefit  of  insolvent  debt- 
charge  under  a  Pennsylvania  bankrupt  act  ors,  etc.,  of  the  State  of  New  York,  and 
was  held  not  to  affect  a  contract  between  was  discliarged  from  all  his  debts.  Tlie 
citizens  of  that  State  made  previous  to  the  plaintiff  did  not  prove  his  claim,  and  had 
passage  of  the  law.  But  the  proposition  no  knowledge  of  the  proceedings  save 
that  a  State  insolvent  law  may  operate  a  such  as  he  might  be  charged  with  from 
discharge  of  a  debt  contracted  by  one  of  the  existence  of  the  statute.     The  ques- 

[G21] 


596 


THE   LAW   OF   CONTRACTS. 


[part  ir. 


And  further,  as  a  correlative  proposition,  that  no  State  can,  by- 
its  municipal  law,  reach  a  contract  which  is  not  to  be  performed 


tion  was,  whether  under  these  circum- 
stances, the  certificate  of  discharge  was  an 
effectual  bar  to  the  plaintiffs  demand  1 
Parker,  C.  J.,  said  :  "  We  think  it  may- 
be assumed,  as  a  rule  affecting  all  per- 
sonal contracts,  that  they  are  subject  to 
all  the  consequences  attached  to  contracts 
of  a  similar  nature  by  the  laws  of  the 
country  where  they  are  made,  if  the  con- 
tracting party  is  a  subject  of,  or  resident 
in,  that  country  where  it  is  entered  into, 
and  no  provision  is  introduced  to  refer  it 
to  the  laws  of  any  other  country."  It 
was  held  that  the  certificate  was  a  bar. 
The  cases  of  Proctor  v.  Moore,  1  Mass. 
199  ;  Baker  v.  Wheaton,  5  id.  511  ;  Wat- 
son I'.  Bourne,  10  id.  337,  will  be  found 
in  the  opinion  of  Parker,  C.  J.,  not  to  bo 
in  conflict  with  Blanchard  i\  Russell  on 
this  point.  In  the  following  cases  the 
court  do  not  recognize  the  distinction  as 
to  place  of  performance  of  the  contracts, 
but  lay  down  the  doctrine  in  general 
terms  that  State  insolvent  laws  can  only 
operate  upon  those  who  are  citizens  of  the 
State  in  which  such  law  is  enacted.  But 
it  is  to  be  observed,  that  the  circumstances 
of  these  cases  were  such  as  not  to  demand 
a  recognition  of  such  distinction.  Ogdcn 
V.  Saunders,  12  Wheat.  213;  Shaw  v. 
Robbins,  id.  369,  note  ;  Boyle  v.  Zacharie, 
6  Pet.  348,  63.5  ;  Woodhull  v.  Wagner, 
1  Baldw.  296  ;  Prey  v.  Kirk,  4  Gill  & 
J.  509 ;  Springer  v.  Foster,  2  Story, 
387.  In  the  last  case,  Stori/,  J.,  said  : 
"  The  settled  doctrine  of  the  Supreme 
Court  of  the  United  States  is,  that  no 
State  insolvent  laws  can  discharge  the  ob- 
ligation of  any  contract  made  in  the  State, 
except  such  contract  is  made  between 
citizcHS  of  that  State."  The  cases  of 
Brayiiard  v.  Marshall,  8  Pick.  196  ;  Betts 
V.  Baglcy,  12  id.  572;  Agnew  v.  Piatt, 
15  Pick.  417,  go  so  far  only  as  to  hold, 
that  a  disdiarge  in  tliis  State  will  not  be 
an  clfcctuai  liar  to  the  claim  of  a  creditor 
of  another  State,  when  the  contract  was 
not  i)y  its  terms  to  lie  performed  in  this 
State.  'J'liey  do  not  decide  the  )><)iiit, 
when  there  is  sucii  Ktiimhition.  The  lan- 
guage of  the  judges  in  one  of  tliese  cases, 
must  he  held  to  be  uncalled  for  by  the 
necessities  of  tiie  case.  See  ihc^  strictures 
of  Stori/,  .}.,  on  flic!  case  of  IJraynard  v. 
Marshull,  in  his  Oondict  of  I.iaws.  The 
point  has  never  been  din;ctly  decided  in 
the  Supreme  Court  of  tii«  United  States. 

[622] 


Deivei/,  J.,  in  a  case  cited  below.  In 
Parkinson  v.  Scoville,  19  Wend.  150,  the 
Supreme  Court  of  New  York  decided  the 
precise  point,  that  an  insolvent  discharge 
(discharging  the  debtor  from  the  payment 
of  all  his  debts)  is  an  absolute  bar  to  a 
recovery  upon  a  contract  made  and  to  be 
executed  within  the  State,  although  the 
creditor  be  a  non-resident,  and  neither 
united  in  the  petition  for  a  discharge,  nor 
accepted  a  dividend,  Bronson,  J.,  deliver- 
ing the  opinion  of  the  court.  But  in  the 
later  case  of  Donnelly  v.  Corbett,  3  Seld. 
500,  the  New  York  Court  of  Appeals  held 
that  where  goods  had  been  purchased  of 
merchants  in  New  York,  by  citizens  of 
South  Carolina,  and  a  note  was  given 
payable  in  the  latter  State  upon  which  a 
judgment  was  subsequently  obtained  in 
its  courts,  and  the  debtor  imprisoned,  his 
discharge  from  his  imprisonment  and  the 
debt  under  an  insolvent  law  of  South 
Cai-olina,  was  invalid  —  four  judges  agree- 
ing in  this  opinion,  and  two  dissenting. 
In  Poe  V.  Duck,  5  Md.  1,  a  contract 
had  been  made  in  Maryland  between  a 
citizen  of  that  State  and  a  citizen  of 
another  State  (the  .creditor).  There  was 
an  arguable  question  as  to  the  place  of 
performance  of  the  contract.  The  credi- 
tor sued  upon  this  contract  in  the  court  of 
Maryland  after  the  discharge  of  the  debtor 
by  the  bankrupt  law  of  that  State.  The 
court  below  gave  judgment  for  the  plain- 
tiff. In  the  Court  of  Appeals,  tlie  appel- 
lant's counsel  contended,  that  the  eon- 
tract  was  made  and  to  be  performed  ia 
Maryland,  and  that  being  a  Maryland 
contract,  the  discharge  of  the  debtor  under 
the  law  of  that  State,  did  not  inijiair  its 
obligation.  It  was  urged  on  tlic  other 
hand,  that  whether  the  contract  was  a 
domestic  one  or  not  the  disciiarge  was 
inoperative  as  to  citizens  of  otiier  States. 
Tiie  court  said :  "  We  think  that  the 
judgment  of  the  court  below  must  be 
atlirnied,  btvcuse  the  creditor  is  a  citizen  of 
anolhtr  jSlatr,  and  shall  not  express  any 
opinion  on  the  (piestion,  whether  the  con- 
tract is  a  Maryland  one  or  not."  Pughv. 
Bussel,  2  IJlackf.  394,  and  Potter  ^K  Kerr, 
1  Md.  Ch.  275-281,  adoj)t  the  same 
view.  But  in  two  recent  cases,  one  re- 
lating to  a  discharge  in  a  foreign  country, 
and  the  other  tf)  a  disciiarge  in  another 
State  of  the  Union,  the  Supreme  Court  of 
Massachusetts    have  como  to  a  dificrcnt 


en.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


597 


within  its  sovereignty,  excepting  so  far  as  itself  and  its  own 
courts  are  concerned,  {m)     From  this  it  would  seem  to  follow 


conclusion  from  that  reached  in  the  cases 
last  cited  above.  In  May  v.  Breed,  7 
Cush.  15,  which  was  assumpsit  against 
defendants  as  acceptors  of  a  bill  of  ex- 
change drawn  by  parties  in  Boston,  on 
defendants  at  Liverpool,  and  accepted  by 
them  payable  at  London,  the  defendants 
pleaded  a  certificate  of  discharge,  under 
the  English  bankrupt  law,  obtained  sub- 
sequent to  the  acceptance  of  this  bill. 
The  plaintiffs  did  not  prove  their  claim, 
nor  had  they  received  a  dividend.  The 
case  was  argued  elaborately  and  learnedly 
at  the  bar,  and  Shaw,  C.  J.,  delivered  the 
opinion,  examining  the  authorities  and 
reaching  the  conclusion  that  a  discharge 
under  the  English  bankriipt  law  of  a  niei'- 
chant  residing  in  England,  from  a  debt  to 
a  citizen  of  Massachusetts,  contracted  and 
payable  in  England,  is  a  bar  to  a  subse- 
quent action  on  tlie  debt  in  tliis  State, 
and  that  whether  the  creditor  proved  his 
debt  under  the  English  statute  of  bank- 
ruptcy would  make  no  difference  in  the 
effect  of  the  discharge.  Scribner  v.  Fisher, 
2  Gray,  43,  was  assumpsit  on  promissory 
notes  payable  to  the  plaintiffs,  merchants 
of  New  York,  by  the  defendant,  a  citizen 
of  Lowell,  in  Massachusetts,  payable  at 
the  Lowell  Bank  in  Lowell.  The  defend- 
ant pleaded  in  bar  to  the  action  his  dis- 
charge in  insolvency,  under  the  Massachu- 
setts statute,  since  the  making  of  the  notes. 
The  plaintiffs  had  not  proved  nor  offered 
to  prove  their  claim.  The  court  held  as 
a  doctrine  sanctioned  by  the  spirit  of  the 
bankrupt  laws,  and  nowhere  contradicted 
by  the  decisions  of  the  Supreme  Court  of 
the  United  States,  that  a  certificate  of  dis- 
charge under  the  insolvent  laws  of  this 
State,  is  a  bar  to  an  action  on  a  contract, 
made  by  a  citizen  of  this  State  with  a 
citizen  of  another  State,  who  does  not 
prove  his  claim  under  those  laws,  if  the 
contract,  by  its  express  terms  is  to  be 
performed  in  this  State.  From  this  opin- 
ion Mr.  Justice  MetcaJf  dissented,  con- 
strained by  his  view  of  the  decisions  of  the 
Supreme  Court  of  the  United  States,  and 
the  authority  of  Johnson,  J.,  in  12  Wheat. 
3G8,  360,  Boyle  v.  Zacharie,  6  Pet.  348 ; 
Marshall,  C.  J.,  WoodhuU  v.  Wagner, 
Baldw.  300  ;  Springer  v.  Foster,  2  Story, 
387  ;  Story,  J.,  in  his  Commentaries  on 
the  Constitution,  Vol.  3,  sections  1110, 
1384;  Braynard  v.  Marshall,  8  Pick.  196. 
From  these  cases  he  deduces  the  doctrine  of 
the  Supreme  Court  to  be,  "  That  a  State 


insolvent  law  is  unconstitutional  when  it 
affects  the  rights  of  citizens  of  other  States, 
because  a  State  has  not  authority  by  such 
a  law,  to  affect  their  rights."  This  opin- 
ion, it  is  proper  to  say,  was  rendered  be- 
fore the  publication  of  the  cases  of  Don- 
nelly V.  Clark,  and  Poe  v.  Duck,  above 
cited.  But  it  has  been  affirmed  by  more 
recent  decisions.  Burrall  v.  Rice,  .5  Gray, 
539 ;  Capron  v.  Johnson,  1  id.  note. 

(/«)  In  Bradford  v.  Farrand,  13  Mass. 
18,  a  contract  had  been  made  in  Massa- 
chusetts, with  a  citizen  of  that  State,  by  a 
citizen  of  Pennsylvania,  and  no  express 
provision  was  made  that  it  should  be  per- 
formed in  Pennsylvania  ;  it  was  held  that 
the  disciiarge  of  the  debtor  under  the 
Pennsylvania  statute  of  insolvency  was 
no  bar  to  an  action  in  Massacluisetts  upon 
this  contract.  The  court  said  :  "  It  has 
been  settled  in  the  case  of  Blanchard  v. 
Russell,  that  a  certificate  of  discharge 
under  the  insolvent  law  of  another  State, 
is  binding  only  upon  contracts  made 
within  the  State  which  enacts  the  law,  or 
which  by  the  terms  of  them  are  to  be 
there  performed.  The  debt  in  this  case 
must  be  considered  to  have  arisen  within 
this  State  ;  the  bargain  from  which  it 
arose  was  made  here,  and  it  was  not  pro- 
vided that  it  should  be  performed  in 
Pennsylvania ;  although  the  plaintiff  might 
have  applied  there  for  his  remedij,  if  he  had 
seen  Jit."  In  Suydam  v.  BrcRidnax,  14 
Pet.  67,  a  note  had  been  made  in  New 
York,  payable  in  New  York,  to  citizens  of 
New  York,  by  citizens  of  Alabama.  The 
plaintiffs  sued  in  the  Circuit  Court  of  the 
United  States,  and  it  was  held  that  insol- 
vency of  the  estate,  judicially  declared 
under  the  statute  of  Alabama  is  not  suffi- 
cient in  law  to  abate  a  suit  instituted  in 
that  court,  by  a  citizen  of  another  State, 
against  the  representatives  of  a  citizen  of 
Alabama.  Boyle  v.  Zacharie,  6  Pet.  635  ; 
Cook  V.  Moffat,  5  How.  295  ;  M'Millan 
V.  M'Neill,  4  Wheat.  209.  In  Cook  v. 
Moffat,  Ogden  v.  Saunders  having  been 
cited  on  the  argument,  and  tlie  language 
of  .Johnson,  J.,  adverted  to,  Grier,  J.,  de- 
livering the  opinion  of  the  court  said : 
"  We  do  not  deem  it  necessary  on  the 
present  occasion,  either  to  vindicate  tlie 
consistency  of  the  propositions  ruled  in 
that  case  with  the  reasons  on  which  it 
appears  to  have  been  founded,  or  to  dis- 
cuss anew  the  many  vexed  questions 
mooted  therein,  and  on  which  the  court 

[G23J 


598 


THE   LAW   OP   CONTRACTS. 


[part  II. 


that  no  contract  made  in  one  State  and  to  be  performed  there, 
can  be  discharged  as  to  the  persons  of  that  State,  by  the  law 


were  so  much  divided.  It  may  be  re- 
marked, however,  that  the  members  of 
the  court  who  were  in  a  minority  on  the 
final  decision  of  it,  fully  assented  to  the 
correctness  of  M'iMilhin  v.  M'Xeill,  which 
rules  the  present  case."  In  Emory  v. 
Grenough,  3  Dall.  369,  tlie  debt  was 
contracted  between  citizens  of  Boston. 
Subsequently  tiie  defendant  removed  to 
Pennsylvania,  and  while  a  citizen  there 
took  advantage  of  the  bankrupt  law  of 
that  State.  Subsequent  to  his  discharge, 
he  returned  for  a  temporary  purpose  to 
Boston,  and  was  arrested  by  the  plaintiff, 
on  an  action  brought  by  the  Circuit 
Court.  It  was  held  in  that  court,  that 
the  certificate  was  no  bar.  On  a  similar 
state  of  facts,  a  directly  contrary  opinion 
was  adopted  by  the  Circuit  Court  of 
Rhode  Island,  3  Dall.  369.  A  writ  of 
error  on  the  Massachusetts  case  never 
reached  a  hearing.  A  valuable  transla- 
tion from  2  Hub.  Dc  Conflictu  Lcgum, 
p.  538,  is  appended  to  the  report  of  this 
case,  3  Dall.  370.  The  cases  of  Bray- 
nard  v.  Marshall,  8  Pick.  196;  Agnew  v. 
Piatt,  15  id.  417 ;  Bctts  v.  Bagley,  12  id. 
572;  and  Osborn  v.  Adams,  18  id.  245, 
in  which  this  matter  was  discussed,  were 
followed  by  the  recent  case  of  Savoye  v. 
Marsh,  Io"^Met.  594.  In  this  case  the 
facts  were,  that  the  defendants  made  a 
note  payable  to  their  own  order  and  in- 
dorsed it  ttPthe  plaintiffs  before  maturity. 
The  plaintiffs  were  inhaliitants  of  New 
York,  the  defendants  of  Lowell,  in  the 
State  of  ]Massachusctts.  The  note  was 
made  in  Boston.  The  defendants,  after 
the  making  of  the  note,  were  discharged 
by  the  Massachusetts  insolvent  law.  It 
was  held  that  this  was  not  a  bar  to  the 
action,  notwithstanding  the  fact  that  the 
action  was  hrought  in  the  court  of  the 
same  State  whicli  had  granted  the  dis- 
charge ;  and  Ihiwy,  J.,  delivering  the 
opinion  of  the  court,  laid  down  a  doctrine 
which  we  cannot  hut  regard  as  a  whole- 
some one,  as  follows :  "  The  distinction 
as  to  the  forum  wlicrc  the  party  elects  to 
institute  his  action,  may  be  \^i\-^'  material 
in  regard  to  all  that  is  mere  remedy. 
The  State  courts  may  in  all  actions  insti- 
tuted therein,  give  full  force  and  effect 
to  their  own  laws  as  to  forms  of  proceed- 
ing, rights  <if  attachment,  holding  to  bail, 
imprisoning  the  body  on  execution,  and 
the  like;  but  a  State  insolvent  law  ojier- 

[G24] 


ating  upon  the  contract  directly  and  dis- 
charging the  party  from  all  liability  there- 
on must,  as  to  those  to  be  affected  by  it, 
have  the  same  operation  in  both  tribu- 
nals. If  it  be  a  constitutional  law, — if 
in  its  provisions  it  does  not  transcend  the 
limits  of  State  authority,  —  it  must  be 
valid  in  all  tribunals.  State  or  national. 
If  otherwise,  it  must  be  held  invalid  and 
inoperative  in  all."  A  doctrine  so  reason- 
able as  this,  it  may  be  expected,  will  event- 
ually prevail.  And  see  further,  as  cases 
presenting  the  most  interesting  discussion 
of  this  subject,  Ogden  v.  Saunders,  12 
Wheat,  at  the  272d  page ;  Sturges  v. 
Crowninshield,  4  id.  122;  Clay  v.  Smith, 
3  Pet.  411.  Parker,  C.  J.,  in  Braynard 
V.  Marshall,  8  Pick.  194;  Norton  v.  Cook, 

9  Conn.  314  ;  WoodhuU  v.  Wagner,  1 
Baldw.  296.  And  see  the  text-book  au- 
thorities cited   below ;    Piske  v.  Foster, 

10  Met.  597.  The  following  authorities, 
in  addition  to  those  above,  tend  to  show 
that  if  the  contract  is  made,  or  is  to  be 
performed  abroad,  such  a  discharge  cannot 
be  held  a  bar.  Farmers  and  Mechanics 
Bank  v.  Smith,  6  Wheat.  131,2  Kent,  293, 
note  ;  Story  on  Bills,  sect.  165  ;  Story  on 
Conflict  of  Laws,  sect.  342;  3  Burge,  Col. 
&  For.  L.  925 ;  Lewis  v.  Owen,  4  B.  &  Aid. 
654  ;  Phillips  v.  Allan,  8  B.  &  C.  477 ; 
Smith  i\  Buchanan,  1  East,  6  ;  Sherrill 
V.  Hopkins,  1  Cowen,  103;  Ory  c.  Winter, 
16  Mart.  La.  277  ;  Watson  v.  Bourne,  10 
Mass.  337  ;  Baker  v.  Wheaton,  5  id.  509  ; 
Van  Raugh  v.  Van  Arsdaln,  3  Caines, 
154.  See  the  foot-note  to  this  case. 
Green  r.  Sarmiento,  3  Wash.  C.  C. 
17.  This  case  is  an  authority  for  the 
proposition  that  such  a  discharge  will  not 
1)0  considered  a  bar  if  the  contract  has 
been  sued  and  reduced  to  a  judgment 
elsewhere.  Nor  if  the  contract  was  made 
before  the  passage  of  the  insolvent  act, 
and  that  undertakes  to  release  the  debt, 
and  thus  impair  the  obligation  of  con- 
tracts. Sturges  V.  Crowinsliield  ;  Farm- 
ers and  Mechanics  Bank  v.  Smith,  cited 
supra.  The  following  cases  may  here  be 
not  inappropriately  cited  to  the  jioint  that 
insolvent  laws  affect  only  the  remedy, 
which  have  been  cited  ante,  to  other 
points.  Suydam  r.  Broadnax,  14  Pet. 
75;  Watson  ?-.  Bourne,  10  Mass.  337; 
Beers  v.  Ilaughton,  9  Pet.  329.  See  also. 
Proctor  V.  Moore,  1  Mass.  199,  and  the 
cases  cited  in  the  preceding  note.     The 


CII.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


599 


of  another  State  in  which  the  debtor  resides,  (n)  Thus,  a 
merchant  living  in  Boston,  makes  in  New  York  a  note  payable 
there,  and  then  becomes  insolvent  in  Massachusetts  and  is  dis- 
charged by  the  law  of  that  State.  If  now  the  New  York  cred- 
itor comes  to  Massachusetts  and  there  sues  the  insolvent  in  the 
courts  of  Massachusetts,  the  discharge  would  be  a  bar  to  the 
suit.  But  he  might  proceed  in  New  York,  under  the  law  of 
New  York,  against  the  person  or  property  of  the  debtor  if 
found  there,  and  the  discharge  in  Massachusetts  would  be  no 
bar.  If,  however,  the  note  was  made  in  Boston,  and  made 
payable  there,  and  the  New  York  creditor  sued  it  in  New  York, 
after  a  demand  and  refusal  in  Boston,  the  Massachusetts  dis- 
charofc  would  now  be  a  bar.  If  the  note  were  made  not  ex- 
pressly  payable  in  any  place,  and, were  made  to  a  New  York 
merchant,  or  becomes  his  property  in  good  faith  for  value  by 
indorsement  or  delivery  before  the  discharge,  is  it  now  avail- 
able by  the  New  York  holder  ?  We  should  say  it  was,  so  far 
as  the  courts  of  New  York  were  concerned,  because  they  would 
regard  it  as  a  debt  payable  in  New  York,  and  so  perhaps  it  would 


doctrine  is  laid  down  in  the  following 
cases,  as  applying  only  when  the  actions 
are  brought  on  contracts  made  or  to  be 
performed  elscwiiere.  Millar  v.  Hall,  1 
Dall.  229;  Emory  v.  Grenough,  3  id. 
3G9.  The  courts  of  Pennsylvania,  adopt 
the  same  rules  of  comity  towards  other 
nations  which  govern  them  in  their  deal- 
ings with  Pennsylvania  discharges.  Van 
Raugh  i\  Van  Arsdaln,  3  Caines,  154; 
Smith  V.  Smith,  2  Johns.  23.5  ;  Hicks  v. 
Brown,  12  id.  142  ;  Blanchard  v.  Russell, 
13  Mass.  I,  cited  supra;  Baker  v.  Whea- 
ton,  5  id.  509  ;  Pitkin  v.  Thompson,  13 
Pick.  64  ;  Lc  Roy  v.  Crowninsliield,  2 
Mason,  151-175,  together  with  Mr.  Justice 
Story,  in  his  Conflict  of  Laws,  sections 
281,  "284,  and  Mr.  Btirge,  in  his  Colonial 
and  Foreign  Law,  Vol.  3,  876-925,  and 
2  Kent,  390,  set  forth  the  doctrine  that  in- 
solvent laws,  relating  in  terms  to  the  con- 
tract, are  to  be  considered  a  part  of  the 
lex  loci  contractus,  and  govern  wherever 
the  creditor  may  live.  A  most  valuable 
case  relating  to  this  whole  subject,  is 
Towne  v.  Smith,  1  Woodb.  &  M.  115, 
where  the  view  of  the  text  is  confirmed  by 
Mr.  Justice  iroofffii(?'(/,  in  an  elaborate  and 
learned  opinion.     Woodbridge  v.  Allen, 

VOL.  II.  53 


12  Met.  470  ;  Tebbetts  v.  Pickering,  5 
Cush.  83  ;  Clark  v.  Hatch,  7  Cush.  455  ; 
Palmer  v.  Goodwin,  32  Me.  535  ;  Lar- 
rabee  v.  Talbott,  5  Gill,  426;  Evans  v. 
Spriggs,  2  Md.  457.  See  Perry  Manuf. 
Co.  V.  Brown,  2  Woodb.  &  M.  449. 

{n)  The  reason  of  this  doctrine  is  well 
set  forth  by  Marshall,  C.  J.,  in  Sturges 
V.  Crowninshicld,  above  cited  :  "  Every 
bankrupt  or  insolvent  system  in  the  world 
must  partake  of  the  character  of  a  judicial 
investigation.  Parties  whose  rights  are 
affected,  are  entitled  to  a  hearing.  Hence, 
any  bankrupt  or  insolvent  system  pro- 
fesses to  summon  the  creditors  before 
some  tribunal,  to  show  cause  against 
granting  a  discharge  to  the  bankrupt. 
But  on  what  principle  can  a  citizen  of 
another  State  be  forced  into  the  courts  of 
a  State  for  this  investigation  ?  The 
judgment  to  be  passed  is  to  prostrate  his 
rights ;  and  on  the  suliject  of  those  rights, 
the  constitution  exempts  from  the  juris- 
diction of  the  State  tribunals,  witliout  re- 
gard to  the  place  where  the  contract  may 
originate."  To  this  point  see  Ogden  ;;. 
Saunders,  above  cited  ;  Dinsman  v.  Brad- 
lev,  5  Grav,  487  ;  Houghton  v.  Maynard, 
id!  552. 

[C25] 


626 


THE   LAW  OF   CONTRACTS. 


[part  II. 


They  may  transfer  the  notes  of  the  insolvent,  by  indorsement 
or  delivery,  where  the  contract  or  obligation  of  the  insolvent 
requires  it.  {i)  But  as  a  general  rule,  while  assignees  may 
transfer  what  they  can  by  delivery,  if  negotiable  paper  requires 
indorsement,  this  should  be  made  by  the  insolvent,  who  retains 
the  power  to  make  an  indorsement  which  is  necessary  to  carry 
into  effect  a  previous  contract,  (j) 

They  may  compound  debts,  redeem  mortgages,  compromise 
claims  against  or  in  favor  of  the  insolvent,  [k)  and  in  general 


him  a  contract  as  their  agent  by  operation 
of  law,  and  on  their  account.  Therefore 
it  was  not  necessary  that  they  should  state 
themselves  to  be  assignees  in  the  declara- 
tion ;  though  in  respect  of  the  evidence  in 
support  of  the  action  it  might  be  incum- 
bent on  them  to  prove  the  trading,  bank- 
ruptcy, &c. ;  in  short,  the  whole  case."  As 
to  the  assignee  continuing  in  his  own  name 
an  action  commenced  in  the  name  of  the 
bankrupt,  see  Ames  v.  Gilman,  10  Met. 
239 ;  Smith  v.  Gordon,  6  Law  Reporter, 
313.  The  bankrupt  may  continue  it,  if  the 
assignee  make  no  objection,  and  be  held  as 
trustee  for  the  assignee  for  the  amount  of 
the  judgment.  Clark  v,  Calvert,  8  Taunt. 
742,  and  the  cases  reviewed.  Sawtelle  v. 
Rollins,  23  Me.  196.  If  the  assignee  is 
removed  or  die,  the  assignee  who  takes  his 
place  succeeds  to  his  powers,  and  holds 
his  place  in  court.  Page  v.  Bauer,  4  B. 
&  Aid.  345  ;  Richards  v.  Maryland  Ins. 
Co.  8  Crunch,  84  ;  Hall  v.  Gushing,  8 
Mass.  521 ;  Merrick's  Estate,  5  Watts  & 
S.  9. 

(i)  Ex  parte  Mowbray,  1  Jac.  &  W. 
428.  This  was  a  petition  praying  that 
assignees  might  be  ordered  to  indorse  a 
bill  of  exchange  which  had  been  trans- 
ferred before  his  bankrui)tcy,  for  valuable 
consideration,  but  without  indorsement; 
if  the  bill  was  not  indorsed,  the  petitioner 
claimed  to  be  a  creditor  for  the  amount. 
Lord  Clianccllor  JCIdon  said  :  "  Tiic  diffi- 
culty is,  to  frame  an  order  wliic^li  shall 
provide  for  a  special  indorsement,  tiiat 
will  prevent  the  assignees  from  l)eing 
personally  liable.  i{ut  if  a  Hpecial  in- 
dorgeiiK'iil  is  iriade,  and  the  petitioner  will 
be  content  with  it,  I  see  no  reason  wliy  I 
sliould  not  make  the  order ;  if  he  is  not 
Hatisfieil  wiili  that,  he  must  apply  iigain." 
Sec  also,  /'-'.':  jxirle  Brown,  1  (ilyn  i^  J. 
408  ;  Ex  iiiirtr  Hall,  1  Rose,  13  ;  Ex  parte 
Rowton,  i<l.  1.'). 

[652] 


{j)  Greening,  Ex  parte,  13  Vcs.  206-; 
Watkins  v.  Maule,  2  Jacob  &  W.  243; 
Smith  V.  Pickering,  Peake,  N.  P.  .50;  1 
Cooke's  B.  L.  295  (8th  ed.) ;  Owen  on 
Bankruptcy,  72,  73  ;  Archbold,  202  ;  Wal- 
lace V.  Hardacre,  1  Camp.  46;  Anony- 
mous, id.  492  ;  Lempriere  )'.  Pasley,  2 
T.  R.  485.  It  should  be  observed,  how- 
ever, that  matters  of  this  sort  are  usually 
provided  for  by  statute  regulation. 

(k)  Robson  v. ,  2  Rose,  50  ;  Dod  v. 

Herring,  1  Russ.  &  M.  153;  Richards  v. 
Merriam,  11  Cush.  582.  But  assignees  are 
not  bound  by  the  bankrupt's  submission 
to  arbitration.  Marsh  v.  Wood,  9  B.  &  C. 
659;  Snook  v.  Hellyer,  2  Chitty,  43; 
Andrews  v.  Palmer,  4  B.  &  Aid.  250. 
And  in  referring  disputes  to  arbitration, 
the  assignees,  for  their  own  security, 
should  protest  against  the  reference  being 
taken  as  an  admission  of  assets ;  and  if 
they  refer  generalhj  without  a  protest  of 
this  kind,  it  will  amount  to  such  admis- 
sion, and  they  will  be  personal/i/  liable  to 
pay  the  sum  awarded,  as  in  the  case  of 
executors   and   administrators.      Robson 

V.   ,   above   cited.     See    Deacon   on 

Bankruptcy,  323,  324.  On  the  subject  of 
mortgages,  see  the  following  cases,  where 
the  right  of  redemption  in  the  assignees, 
is  allowed,  and  discussed.  Higden  v. 
Williamson,  3  P.  Wms.  132;  Pope  v. 
(Jnslow,  2  Vcrn.  286  ;  Taylor  v.  Wheeler, 
2  id.  565  ;  Ex  parte.  Alsager,  2  Mont.  D. 
&  Do  G.  328;  Pye  v.  Dauliuz,  3  Bro. 
595  ;  Ex  parte  Hartley,  1  Deac.  288;  Ex 
parte  Co.x,  2  Mont.  1).  &  Do  G.  486 ;  Ex 
fiarle  I'cttit,  2  Glyn  &  J.  47  ;  Ex  parte 
Berredgc,  3  Mont."  D.  &  Do  G.  464;  Ex 
parte  Carr,  2  id.  534  ;  Ex  parte  Living, 
1  Dcac.  1  ;  Ex  parte  Wilson,  2  Ves.  & 
I{.  252;  Ex  parte  Barnes,  3  Deac.  223; 
/-;./■  parte  Temple,  1  Glyn  &  J.  216. 
Mortgages  of  j)crsonal  jjroperty, — Jones 
V.  Gibbons,  9  Ves.  407  ;  Ryall  v.  RoUe, 


CII.  X.]  BANKRUPTCY   AND    INSOLVENCY.  627 

do  whatsoever  trustees  may  do.  (/)  And  an  assignee  who  acted 
in  such  matters  in  good  faith  and  with  reasonable  discretion, 
would  seldom  be  molested  by  the  court.  But  it  is  always 
prudent  for  the  assignees  to  obtain  the  specific  instruction 
and  sanction  of  the  court,  for  whatever  they  may  do  in  this 
way. 

As  assignees  have,  in  general,  the  powers  of  trustees,  so  the 
responsibilities  of  trustees  attach  to  them,  (m)  Many  cases 
have  arisen  on  this  question,  and  it  will  often  be  difficult  to 
apply  to  the  facts  of  a  particular  case,  the  rules  of  law.  But 
^the  difficulty  cannot  lie  in  those  rules.  The  assignees  are 
trustees  and  agents  for  compensation.  They  will  therefore  be 
held  strictly  for  bad  faith.  But  beyond  this  it  is  believed  that 
they  can  be  liable  for  lack  of  discretion,  or  for  mistake,  only 
where  this  amounts  to  negligence ;  not  slight  negligence,  nor 
gross  negligence ;  but  the  ordinary  negligence  for  which  bailees 
and  trustees  with  compensation  are  usually  liable.  If  this  gen- 
eral rule  has  any  peculiar  modification  in  the  case  of  assignees, 
it  must  be  because  the  law  points  out  precisely  their  course, 
and  the  court  are  always  ready  to  direct  them,  and  therefore  a 
mistake  is  without  excuse,  and  a  slight  mistake  may  imply 
great  negligence. 


1  Atk.  165,  1  Ves.  Sen.  348;  Stephens  Ves.  707;  ^ar  ^arfe  Beaumont,  3  Deacon 

V.  Sole,  1   Ves.  752 ;  Bourne  v.  Dodson,  &  Ch.  549. 

1  Atk.  154;  Ex  parte  Austin,  1  Deacon  (/)    See  cases  cited  supra  in  notes  (v) 

&  Ch.  207  ;  Doane  v.  Eddy,  16  Wend,  and  (w). 

523;    Murray  v.  Burtis,  15  id.  212.     In  (m)  The  liabilities  of  assignees  in  re- 

this  country,  by  the  late  national  bank-  spect  of  negligence,  and  their  duties  as 

rupt  cases,  and  in  general  in  the  State  trustees,  have  been  set  forth  in  preceding 

insolvent    laws,   power  is   given   to   the  notes.     Especial  reference  is  made  to  the 

assignees  of  an  insolvent   to   compound  case  of  Belchier  v.  Parsons,   1   Kenyon, 

debts,  arbitrate  and   redeem   mortgages,  44,  where  this  subject  is  treated  at  much 

on  obtaining  the  approval  of  the  court  in  length.      Kinder  v.    Howarth,   2    Stark, 

that  behalf.      Generally,   he   should   de-  354;  Ex  parte  JjVine,  I  Atk.  90  ;  Ex  parte 

posit  all  moneys  collected  in  a  bank  of  Turner,  1  Mont.  &  McA.  52 ;  Knight  v. 

good  credit,  and  to  the  account  of  the  Lord  Plimouth,  3  Atk.  480.     See  cspec- 

bankrupts'  fund.     Ex  parte  Reynolds,  5  ially,  also.    Raw  v.  Cutten,  9  Biug.  96, 

Tindal,  C.  J. 

55*  [653] 


602 


THE   LAW   OF   CONTKACTS. 


[part  n. 


Congress  to  pass  such  a  law.  It  follows,  therefore,  that  the 
several  States  may  pass  laws  on  this  subject  when  there  is  no 
national  law.  But  as  soon  as  a  national  law  is  passed,  it  wholly 
supersedes  and  suspends  every  State  law.  (t)  Such  is  the  latest, 
and  we  think  the  best  doctrine.  But  as  it  only  supersedes  and 
suspends,  and  does  not  repeal,  we  thence  infer  that  the  State 
laws  so  suspended  would  revive  when  the  national  law  expired. 
A  somewhat  analogous  question  arises  in  the  several  States, 
but  is  sometimes  provided  for  by  the  statutes.  It  is,  whether 
an  insolvent  act  avoids  voluntary  assignments.  We  have 
already  intimated  that  the  general  purpose  of  an  insolvent  law 
being  to  produce  an  equal  or  ratable  division  of  the  effects  of 
a  debtor,  it  should  do  more  than  encourage  this ;  it  should  pro- 
hibit and  prevent  preferences,  by  something  more  effectual  than 
merely  withholding  a  discharge.  In  most  of  the  States  this  is 
now  done.  But  the  practice  does  not  always  conform  to  the 
law.  Thus,  in  Massachusetts,  where  a  voluntary  assignment  is 
void,  or  would  protect  the  transfer  of  no  property  against  process 
under  the  insolvent  law,  it  is  not  uncommon  to  make  such 
assignments,  the  assignees  being  required  to  collect,  dispose  of. 


(f )  "  So  far  as  the  State  insolvent  laws 
may  prevent  or  even  impede  the  operation 
of  the  bankrupt  law,  they  must  yield  to  it 
in  order  that  it  may  fully  accomplish  its 
ohject  of  establishing  a  uniform  system  of 
bankruptcy  throughout  the  United  States; 
but  wliilc  the  State  laws  thus  yiehl,  they 
arc  not  entirely  abrogated.  Tlicy  exist 
and  operate  with  full  vigor  until  the 
bankrupt  hiw  attaches  upon  tlie  person 
and  proficrty  of  the  bankrupt,  and  that  is 
not  until  it  is  judicially  ascertained  that 
the  petilioiHir  is  a  person  entitled  to  the 
benefits  of  the  bankru])!  law,  by  being  de- 
clared a  bankrupt  by  a  decree  of  the  court. 
Before  tliat  tiuK^  1  think,  upon  a  sound 
construction  of  the  bankrujit  act,  it  does 
not  necessarily  come  in  conflict  with  tlie 
insolvent  laws  of  the  State."  IJultlc,  J., 
delivering  the  ofiinion  of  the  Supreme 
Court  of  North  Carolina,  in  K.r  jxirte 
Ziegcnfuss,  2  Ircd.  4G;J.  But  this  doc- 
trine has  not  met  with  subscipient  approval. 
In  Judd  ('.  Ives,  4  Met.  401,  the  court 
Bay,  "  we  are  of  opinion  that  the  act  of 
Congress  to  establish  a  uniform  system 
of  baiikru|)tcy  throtiglioiit  tlie  Unilctl 
States  does  sus|)cnd  the  o])eration  of  llio 

[C28] 


law  of  this  Commonwealth,  entitled  '  An 
Act  for  the  relief  of  insolvent  debtors,'  &c., 
as  to  all  persons  and  cases  that  are  within 
its  provisions.  .  .  .  But  we  are  nevertheless 
of  opinion,  that  this  consequence  of  the  act 
is  limited  to  cases  instituted  under  the  in- 
solvent law  subsequent  to  the  period  when 
the  bankrupt  law  went  into  ojieration,  and 
that  it  cannot  supersede  or  suspend  pro- 
ceedings rightfully  commenced  under  the 
insolvent  act  prior  to  the  time  of  its  going 
into  operation."  Ex  parte  Eames,  2  Story, 
322,  .")  Law  Reporter,  117.  In  the  mat- 
ter of  Holmes,  5  Law  Rep.  3G0,  in  the 
District  Court  of  Maine.  In  Criswold  v. 
Pratt,  9  Met.  10,  the  doctrine  of  Zeigen- 
fuss'  case  was  adverted  to,  and  the  court 
said  :  "  This  ])rinciple,  though  at  first 
view  it  may  seem  ])lausiblc,  cannot  we 
think  be  sustained."  Bradford  v.  Kussell, 
1.'}  Mass.  l.and  the  cases  cited  by  l^arker, 
C.  J.  And  a  debt  contracted  while  the 
insolvent  law  was  suspended  i)y  the  na- 
tiomd  bankrupt  law  may  be  discharged 
under  tlio  insolvent  law,  which  revived 
when  the  bankrupt  law  was  repealed. 
Austin  V.  Caverly,  10  Met.  332. 


CH.  X.] 


BANKRUPTCY   AND    INSOLVENCY. 


603 


and  distribute  all  the  effects  and  property  of  the  assignor,  without 
preference  and  in  exact  conformity  with  the  provisions  of  the 
insolvent  law.  "Where  every  thing  is  done  under  such  an  assign- 
ment in  good  faith,  and  no  suspicion  attaches,  and  the  creditors 
come  in,  and  the  assignor  is  discharged  under  seal,  the  whole 
effect  of  the  insolvent  law  is  produced  without  the  delay  and 
cost  of  the  legal  processes,  (w)  Such  an  assignment  is  made 
legal  in  England  by  12  &  13  Vict.,  if  six  sevenths  of  the  credi- 
tors approve  it.  (v) 


(m)  It  may  properly  be  observed,  how- 
ever, that  there  is  always  more  or  less  of 
hazard  attending  such  assignments,  though 
they  are  frequently  made.  The  assign- 
ment must  be  drawn  in  all  its  details  with 
the  greatest  care,  and  slight  errors  are  of 
fatal  consequence.  Moreover,  there  is  not 
unfrequently  difficulty  in  relation  to  the 
assent  of  creditors.  If  any  of  them 
choose,  they  may,  unless  there  be  some 
statute  provision  allowing  such  assign- 
ments, invalidate  the  whole  proceedings. 
The  practice  may  be  indulged  in  so  long 
as  the  proceeding  is  wholly  m  pais,  but 
when  the  matter  comes  before  the  courts, 
they  are  bound  by  the  statutes.  Mann  v. 
Huston,  1  Gray,  250.  In  Barton  v.  Tower, 
5  Law  Reporter,  214,  an  assignment  of 
their  property  had  been  made  by  two 
partners,  with  a  direction  that  it  should  be 
distributed  among  their  creditors  by  the 
assignees,  "  in  the  same  manner  as  if  the 
same  were  in  the  hands  of  an  assignee 
under  the  bankrupt  act  of  the  United 
States,  by  virtue  of  proceedings  duly  had 
in  bankruptcy."  This  assignment  was 
held  an  act  of  bankruptcy  and  void.  And 
Co)?c/;/»i/7,  J.,  delivering  the  opinion  of  the 
court,  said  :  "  There  are  three  descriptions 
of  fraudulent  conveyances,  assignments, 
&c.,  which  bring  a  merchant,  banker,  fac- 
tor, &c.,  within  the  operation  of  the  first 
section  of  the  bankrupt  act.  1.  Such  as 
are  fraudulent,  or  against  the  common 
law,  or  the  provision  of  such  English  stat- 
utes as  have  been  incorporated  into  the 
jurisprudence  of  this  country;  2.  (as  I  am 
now  well  satisfied,  whatever  doubts  1  may 
have  originally  entertained),  such  as  are 
voluntarily  made,  in  contemplation  of 
bankruptcy,  and  for  the  purpose  of  giving 
a  preference  to  one  or  more  of  the  cred- 
itors of  the  debtor  over  his  other  creditors. 
The  making  of  a  conveyance  of  this  de- 
scription has  always  been  held  to  be  an 
act  of  bankruptcy  under  the  English  bank- 

53* 


rupt  law,  as  being  contrary  to  the  policy 
of  law,  without  any  express  words  in  the 
statute.  But  in  our  act  they  are  expressly 
declared  to  be  '  utterly  void,  and  a  fraud 
upon  this  act.'  3.  Assignments  of  all 
the  effects  of  the  debtor,  whether  upon 
trust  for  the  benefit  of  his  creditors  or 
not,  on  the  ground,  first,  that  the  debtor 
necessarily  deprives  himself,  by  sucli  an 
act,  of  the  power  of  carrying  on  his  trade, 
and  secondly,  that  he  endeavors  to  put 
his  property  under  a  course  of  application 
and  distribution  among  his  creditors,  dif- 
ferent from  that  which  would  take  place 
under  the  bankrupt  law.  It  is  unneces 
sary  to  cite  authorities  to  show,  that  such 
an  assignment  is  an  act  of  bankruptcy  in 
England,  because  it  has  been  a  well-settled 
and  familiar  rule.  It  is  a  sound  and  use- 
ful rule  ;  and  there  is  nothing  whatever 
in  the  language  of  our  act  which  requires 
a  difterent  construction  in  this  respect." 
Ex  parte  Breneman,  Crabbe,  456. 

(v)  Section  224  of  the  above  statute 
provides,  "  That  every  deed  or  memoran- 
dum of  arrangement  now  or  hereafter  en- 
tered into  between  any  such  trader  and 
his  creditors,  and  signed  by,  or  on  behalf 
of,  six  sevenths  in  number  and  value  of 
those  creditors  whose  debts  amount  to  ten 
pounds  and  upwards,  touching  such  tra- 
der's liabilities  and  Iiis  release  therefrom, 
and  the  distribution,  inspection,  conduct, 
management,  and  mode  of  winding  up  of 
his  estate,  or  all  or  any  of  such  matters, 
or  any  matters  having  reference  tiiereto, 
shall  (subject  to  the  conditions  hereinafter 
mentioned)  be  as  effectual  and  obligatory, 
in  all  respects,  upon  all  the  creditors  who 
shall  not  have  signed  such  deed  or  mem- 
orandum or  arrangement  as  if  they  had 
duly  signed  the  same."  Section  228 
enacts,  "  That  the  creditors  of  such  trader 
shall  have  the  same  rights  respectively  as 
to  set-off,  mutual  credit,  lien,  and  priority, 
and  joint  and  separate  assets  shall  be  dis- 

[629] 


604  THE  LAW  OF  CONTRACTS.  [PART  II. 

Always  and  everywhere,  an  assignment  for  the  benefit  of 
creditors  is  void  if  it  be  fraudulent.  But  it  seems  to  be  con- 
ceded, that  an  assignment  is  not  fraudulent  in  this  sense,  and  to 
this  effect,  whenever  the  assignee  may,  under  its  provisions,  com- 
mit a  fraud,  but  only  when  those  provisions,  if  carried  out  ac- 
cording to  their  fair  and  rational  meaning,  would,  of  themselves, 
work  a  fraud,  {va)  And  the  character  of  the  assignment,  in 
this  particular,  cannot  be  created,  or  even  affected,  by  events 
subsequent  to  the  assignment,  {vh) 

As  a  voluntary  assignment  is  a  contract  which  needs  the  con- 
currence of  both  parties,  —  the  debtor  and  his  creditors,  —  their 
assent  should  be  expressed  ;  but,  in  general,  it  may  be  presumed 
if  the  assignment  be  beneficial,  and  so  will  the  assent  of  the 
trustees  to  whom  the  assignment  is  made,  if  there  be  no  circum- 
stances to  indicate  that  the  assent  was  withheld,  {vc) 

A  voluntary  assignment  is  avoided,  generally,  by  a  provision 
that  but  a  certain  number,  or  a  certain  proportion,  of  the  as- 
signee's debts  should  be  paid  and  the  balance  returned  to 
him,  [vd)  unless  it  be  made  to  the  creditors  themselves  when  it 
is  held  as  only  an  additional  security  to  them,  (re)  So  if  it  be 
made  to  prevent  attachment,  although  the  debtor  intended  to 
benefit  his  creditors,  [vf)  And  if  it  provides  that  no  creditor 
shall  take  advantage  of  it  who  does  not  sign  in  and  thereby 
release  the  debtor  before  a  certain  day,  it  is  void  as  to  all  who 
do  not  assent,  [vg^)  And  it  has  been  held  that  an  authority  to 
the  trustees  to  sell  the  property  for  credit,  avoids  the  assign- 
ment ;  {vh)    but  this  is  doubted,  [vi)     And  so  it  is  whether  a 

tributcd  in  like  manner  as  in  bankruptcy."  311.     But  in  some  States,  there  must  also 

On  the  construction  of  these  clauses,  see  be  a  release,  to  make  the  assin;iimcnt  void. 

Tetlcy    V.    Taylor,    1    Ellis    &  B.  521,  8  Austin  r.  .loliiisoii,  7  llunipli.  I'.U  ;  llind- 

Eng.  L.  &  E(j.  .'{"O,  s.  c.   on  appeal   in  man  r.  Dill,  11  Ala.  (JS'J ;  Cirimshaw  v, 

Exch.  Ch.,   1   Ellis  &  B.  532,  12  Eng.  L.  Walker,  12  Ala.  lOl. 

&  Ya\.  409.  (re)  See  cases  in  last  note. 

(vu)  Ward   v.   Tinf^ley,   4    Sandf.  Ch.  (vf)  Kimball  v.   Thompson,   4    Cush. 

47C;   Weld)  f.  Daggett,  2  Barb. 'J.  441. 

(i'/<)  r.rowning    v.    Hart,  G   Barb.   91;  [nj)  Stewart  i-.  Spenser,  1  Curtis,  157; 

Avcrill  /•.  Loucks,  id.  470.  Bamsdell  v.   Sigerson,  2  (iilman,  78;  In- 

(rr)  Adams  y.  Blodgett,  2  Woodb.  &.M.  graham   v.   (irigg,  13  Smcdos  &   ]\I.  22; 

233.  Cotd<lingr.  Car.s(m,  U  111.  .-JOS  ;  MeCall 

(vd)  (ioodrieh  v.  Downs,  G    Hill,  438;  v.  llinkley,  4  Gill,  128. 

Barney  /•.    (irillin,  4    Sandf.   Cli.    .')52,  2  (rl,)  Harney  i-.  Grillin,  2  Comst.  3G5. 

Comst.  3(i.') ;  liciteii  v.  lloliistfr,  4  (Jomst.  (vi)  Nii'liolson  v.  Leavitt,  4  Sandf.  252. 
211;    iloopiT   );.    Tuckermaii,  3    Sandf. 

[  030  ] 


CH.  X.]  BANKRUPTCY   AND   INSOLVENCY.  605 

mere  intent  to  delay  creditors  is  necessarily  fraudulent,  or  has 
the  effect  of  avoiding  the  assignment,  .unless  it  be  actually 
fraudulent,  (vj) 

Perhaps  property  exempted  from  execution  cannot  be  fraudu- 
lently conveyed,  as  against  creditors,  (vk) 


SECTION     III. 

OF   INSOLVENCY   OR   BANKRUPTCY   UNDER   FOREIGN   LAWS. 

For  many  purposes  our  several  States  are  foreign  to  each 
other  in  reference  to  their  respective  insolvent  laws ;  but  the 
subject  we  would  now  consider,  because  that  of  the  preceding 
section  leads  to  it,  is  the  effect  of  bankruptcies  or  insolvencies 
under  the  laws  of  foreign  nations,  as  of  France  or  England,  for 
example ;  and  the  effect  of  bankruptcies  or  insolvencies  under 
our  own  laws,  upon  the  citizens  or  subjects  of  those  foreign 
governments. 

It  rnay  be  said  to  be  well  established,  and  mainly  on  the 
principles  and  authorities  already  stated,  that  the  discharge  of  a 
debt  not  made  nor  to  be  performed  within  the  State  where  it  is 
discharged,  has  no  force  elsewhere ;  and  that  the  discharge  of  a 
debt  in  the  State  in  which  it  was  made  and  is  to  be  performed, 
and  of  which  both  parties  are  citizens,  is  valid  everywhere. 
But  if  made  in  one  State,  to  be  performed  in  another,  the  laws 
of  the  first  State  cannot  operate  against  those  of  the  second. 
So,  if  made  between  citizens  of  two  States,  the  debtor  may  be 
discharged  by  the  laws  of  his  own  State,  and  yet  be  amenable 
under  the  laws  of  the  other,  (b) 

{vj)  See,  for  the  affirmative   case  last  v.  Crane,  7  Paige,  37 ;  Bryant  v.  Young, 

cited,con<?-a,Burdiclvt'.Post,  12Barb.  168;  21    Ala.    264;    Woodburn   r.  Mosher,  9 

and  see  Kellogg  V.  Slawson,  15  Barb.  56.  Barb.  255;   Rollins    v.   Mooers,  25  Me. 

(vk)  So  held  in  Bond  v.   Seymour,   1  192;    Webster  v.  Withey,  25  Me.  326; 

Chandler,  40.     But  a  general  assignment,  Montgomery   v.   Kirksey,   26   Ala.   172; 

containing  a  reservation  of  all  property  Wiley  v.  Knight,  27  Ala.  336;  Nesbitt  v. 

not  subject  to  attacliment,  was  held  to  be  Digby,  13  111.  387. 

thereby  avoided,  in   Sugg  v.  Tillman,  2  (/))  See  the  cases  already  cited  in  the 

Swan,  208.     As  to  what  stipulations  in  an  notes  of  the  last  section.     The  doctrine  of 

assignment  avoid    it   as    to  creditors,  see  the  text  is  well  set  forth  by  Belts,  J.,  de- 

Bodicy  V.  Goodrich,  7  How.  276 ;    Hart  livering  the  opinion  of  the  court  in  the 

[631] 


606 


THE   LAW    OF   CONTRACTS. 


[part  II. 


But  insolvent  and  bankrupt  laws  also  sequestrate  the  property 
of  the  insolvent  at  the  commencement  of  proceedings.  And  it 
is  an  important  question  how  far  a  foreign  law  can  operate  in 
this  respect.  Thus,  an  Englishman,  or  an  American  trader  in 
England,  is  there  a  bankrupt,  and  his  assignees  become  invested 
with  all  his  rights  of  property,  and  take  possession  of  his  effects 
as  far  as  they  can.  But  he  has  property  in  Boston,  and  a  cred- 
itor there  attaches  that  property  before  the  assignees  take  pos- 
session ;  and  the  question  comes  up,  whether  this  creditor  or 
his  assignees  have  the  better  right.  In  other  words,  can  the 
Boston  creditor  receive  his  whole  debt  out  of  the  property  he 
has  attached,  or  must  that  property  pass  into  the  general  fund, 
and  that  creditor  take  only  his  dividend. 


matter  of  Zarejra,  4  Law  Reporter,  480. 
"  It  appears  that  some  of  the  creditors 
of  the  petitioner  reside  abroad,  and  the 
objection  taken  by  the  opposing  counsel 
is,  that  the  discharge  gf  the  bankrupt 
under  the  laws  of  this  country,  do  not 
discharge  him  from  his  creditors  residing 
abroad.  The  exception  is  taken  under 
the  idea  that  the  debt  was  contracted  in 
Germany,  altliough  I  see  no  evidence 
before  the  court  to  that  effect,  or  any  thing 
to  show  but  that  the  debt  was  contracted 
here  in  the  ordinary  course  of  business 
transactions,  such  as  an  order  sent  abroad 
for  goods,  or  the  like.  It  is  not  essential 
to  ascertain  the  origin  or  location  of  the 
debt.  If,  however,  the  debt  was  con- 
tracted in  Germany,  it  might  have  an 
effect  on  the  proceedings  when  the  final 
steps  are  to  l)e  taken.  The  question  here 
is,  whetlicr  the  discharge  of  a  bankrupt 
under  the  law  of  this  country,  would 
operate  as  a  bar  to  the  demands  of  foreign 
creditors,  it  i)eiiig  asserted  that  the  United 
States  iiave  no  power  to  destroy  contracts 
entered  into  witiiout  their  jurisdiction,  and 
the  contract  is  to  be  left  to  the  jurisdiction 
of  that  country  wiiercin  it  originated.  It 
is  not  impf)riaiit,  in  dis|)osing()f  this(nics- 
tion,  to  I'Utcr  into  a  discussion  of  the 
essence  of  contracts  or  tiicir  obligations, 
nor  to  in(|iiire  int(j  tlie  effect  of  a  disclnirgc 
in  tiiis  country,  under  the  bankrupt  law, 
if  set  up  in  a  foreign  cfiunfry  as  a  bar  to 
the  claims  of  creditors.  In  ICnghmd,  as 
well  as  in  l'"nitirc  and  Holland,  and  ]>it- 
liaps  thniii;j;hout  JMirope  gcniraiiy,  the 
discharge  of  a  liankrupt,   under  tlio  laws 

[G32] 


of  either  country,  opei-ates  in  all  other 
places  whatsoever.  ISo  a  person  having 
been  decreed  a  bankrupt  in  France,  may 
avail  himself  of  the  privileges  it  confers  on 
him  in  any  part  of  England,  and  plead  it 
with  the  same  effect  as  in  his  own  country. 
So  in  England,  where  they  set  np  that 
claim  in  belialf  of  their  own  bankrupts  in 
foreign  countries,  they  allow  the  same 
privileges  to  others.  But  in  this  country 
we  do  not  recognize  such  a  doctrine.  A 
discharge  as  a  bankrupt  in  a  foreign  coun- 
try, is  not  deemed  here  as  a  bar  to  any 
action  that  may  be  brought.  The  dis- 
charge is  considered  as  local ;  and  although 
an  assignee  of  an  individual  declared  a 
bankrupt  in  a  foreign  country,  would  bo 
allowed  to  sue  as  such  assignee,  yet  our 
courts  would  not  recognize  the  discliarge 
as  a  bar  to  debts  contracted  in  this  coun- 
try, or  due  to  citizens  of  this  country." 
The  courts  of  Pennsylvania  seem  to  iiave 
ado[)ted,  to  a  considerable  extent,  the 
jirinciples  of  comity  vvhicli  have  ])revailed 
in  the  English  courts,  and  iiold  that  the 
same  effect  shall  be  given  to  a  discliarge 
in  insolvency  in  another  State,  which  that 
State  gives  to  discharges  in  tiic  State  of 
Tennsvlvania.  Smith  r.  Hrown,  .3  Binn. 
201  ;  iioggs  ('.  Teackle,  .'i  id.  3.32  ;  Walsh 
I'.  Nourjic,  id.  ;J81.  But  if  the  ilebt  is  both 
contracteil  and  to  be  discharged  in  the 
foreign  State,  a  discharge  then  will  bind 
the  cn-ditor,  even  if  he  be  a  resident  of 
this  country.  'l"he  cases  above  cited,  and 
cs])('cially  S/idir,  C.  J.,  in  May  v.  Breed, 
7  (Jush.  l."");  Shcrrill  v.  Hopkins,  1  Cow- 
en,  lO.');  Very  v.  Mellenry,  21)  Me.  206. 


CH.  X.] 


BANKRUPTCY  AND   INSOLVENCY. 


607 


It  is  obvious  that  the  system  of  bankrupt  laws  may  be  re- 
garded in  two  ways.  In  one,  it  would  be  merely  local  and 
municipal.  In  the  other,  it  would  be  in  some  sort  a  branch  of 
the  law  of  nations.  Assuming  that  all  civilized  nations  have 
now  some  kind  of  insolvent  system,  it  may  then  be  held  that  all 
of  these  taken  together,  constitute  the  insolvent  law  of  nations ; 
and  that  each  State  will  regard  the  peculiarities  of  its  own  law, 
but  will  respect,  as  far  as  possible,  the  law  of  other  nations,  and 
will  regard  the  general  principles  in  which  all  agree,  as  belong- 
ing to  a  system  of  law  which  is  obligatory  upon  all;  and 
among  these  general  principles  is  that  of  a  sequestration,  for 
the  general  good  of  all  the  creditors,  of  all  the  property  of  the 
insolvent. 

The  courts  of  England,  France,  (c)  and  Holland,  (d)  certainly 
lean  toward  this  latter  view  of  this  subject.  There  it  seems 
to  be  established,  that  a  transfer  in  bankruptcy  operates  in  the 
same  way  as  a  sale  or  other  voluntary  assignment  for  value  by 
the  insolvent,  and  effectually  conveys  all  his  property  wherever 
it  may  be,  in  the  same  manner  and  with  the  same  consequences 
as  if  he  had  sold  it.  (e)     There  are  obvious  and  powerful  rea- 


(c)  See  the  Appendix  to  Cooke's  Bank- 
rupt Law,  p.  27,  et  seq.  M'here  the  case 
of  Parish  v.  Scvon  is  reported,  as  having 
been  decided  in  the  French  court,  which 
accords  precisely  with  the  Enjrlish  doc- 
trine on  the  subject,  cited  by  Ciianctllor 
Kent,  in  Holmes  v.  Remsen,  4  Johns.  Ch. 
484. 

(d)  The  <rrounds  of  the  decisions  of  the 
courts  of  France  and  Holland,  are  thus 
summed  up  by  Story,  J.,  in  his  Conflict  of 
Laws,  §  417:  —  \.  That  the  law  of  the 
domicil  may  rightfully  divest  the  debtor 
and  the  administrator  of  his  property,  and 
place  it  under  the  administration  of  as- 
signees or  syndics.  2.  That  laws,  whose 
effects  are  to  regulate  the  capacity  and 
incapacity  of  persons,  their  personal  ac- 
tions and  their  movables,  everywhere  be- 
long to  the  category  of  personal  statutes. 
3.  That  it  is  a  matter  of  universal  juris- 
prudence, and  especially  of  that  of  France 
and  the  Netherlands,  that  the  debts  act- 
ually considered  of  an  inhabitant  against 
a  foreigner,  arc  deemed  a  part  of  his 
movable  property,  and  have  their  locality 
in  the  place  of  domicil  of  the  creditor. 
At  the  same  time,  it  is  admitted  that  a 
purchaser  from  the  bankrupt,  in  a  foreign 


country,  of  property  there  locally  situate, 
would  be  entitled  to  hold  it  against  the 
assignees,  if,  at  the  time,  he  had  no  knowl- 
edge of  any  bankruptcy,  or  of  any  intent 
to  defraud  creditors.  And  see  Henry  on 
Foreign  Law,  pp.  127,  135,  1.53,  160,248, 
250 ;  IMcrlin,  Repertoire  De  Jur.  Faillite 
et  Banqueroute. 

(e)  A  leading  case  in  England  upon 
this  subject  is  that  of  Sill  v.  Worswick,  1 
H.  Bl.  665.  The  question  considered  by 
the  court  without  going  into  the  details  of 
the  case,  was  simply  whether  an  assign- 
ment in  bankruptcy  in  England,  carried 
with  it  money  of  the  bankrupt  in  the 
island  of  St.  Christopher,  where  the  laws 
of  England  have  no  binding  force  as 
against  a  creditor  there,  who  had  attached 
tlie  property,  after  the  act  of  bankruptcy, 
but  before  assignment.  The  authorities 
were  examined  at  great  length  in  the 
argument,  and  by  the  judge  wlio  gave  the 
opinion  of  the  court.  And  Lord  Lough- 
horoiujli  said:  "It  is  a  clear  proposition, 
not  only  of  the  law  of  England,  but  of 
every  country  in  the  world,  where  law  has 
the  semblance  of  science,  that  personal 
property  has  no  locality.  The  meaning 
of  that  is,  not  that  personal  property  has 

[G33] 


608 


THE   LAW   OF   CONTRACTS. 


[part  II. 


sons  why  this  view  should  be  adopted  universally.     The  same 
reason  for  desirins^  to  make  uniform  the  laws  of  our  several 


no  visible  locality,  but  that  it  is  subject  to 
that  law  which  governs  the  person  of  the 
owner.  With  respect  to  the  disposition 
of  it,  with  respect  to  the  transmission  of 
it,  either  by  succession  or  the  act  of  the 
party,  it  follows  the  law  of  the  person. 
The  owner,  in  any  country,  may  dispose 
of  his  personal  property.  If  he  dies,  it 
is  not  the  law  of  the  country  in  which  the 
property  is,  but  the  law  of  the  country  of 
which  he  was  a  subject,  that  will  regulate 

the  succession Personal  property, 

then,  being  governed  by  the  law  which 
governs  the  person  of  the  owner,  the  con- 
dition of  a  bankrupt  by  the  law  of  this 
country  is,  that  the  law,  upon  the  act  of 
bankruptcy  being  committed,  vests  his 
property  upon  a  just  consideration,  not  as 
a  forfeiture,  not  on  a  supposition  of  a 
crime  committed,  not  as  a  penalty,  and 
takes  the  administration  of  it  by  vest- 
ing it  in  assignees,  who  apply  that  prop- 
erty to  tlie  just  purpose  of  the  equal  pay- 
ment of  his  debts.  If  the  bankrupt  hap- 
pens to  have  property  which  lies  out  of 
the  jurisdiction  of  the  law  of  England,  if 
the  country  in  which  it  lies  proceeds  ac- 
cording to  the  principles  of  well-regulated 
justice,  there  is  no  doubt  but  it  will  give 
effect  to  the  title  of  the  assignees.  The 
determinations  of  the  courts  of  this  coun- 
try have  been  uniform  to  admit  the  title  of 
foreign  assignees.  In  the  two  cases  of 
Solomons  v.  Ross,  and  Jollett  v.  Depon- 
thieu,  where  the  laws  of  Holland,  having 
in  like  manner  as  a  commission  of  bank- 
ruptcy here,  taken  the  administration  of 
the  projK-rty  and  vested  it  in  persons  wlio 
are  called  curators  of  desolate  estates,  the 
Court  of  Cliancery  iield  that  they  had, 
immediately  on  their  appointment,  a  title 
to  recover  the  debts  due  to  the  insolvent 
in  this  country,  in  preference  to  the  dili- 
gence of  the  ))articuhir  creditor  seeking  to 
attach  those  debts.  In  those  cases  the 
Court  of  Chancery  felt  very  strongly  the 

Erincipic  which  I  have  stated,  that  it  lias 
ad  a  very  universal  observance  among  all 
nations.  The  doctrine  of  tlie  ICnghsh 
cases  seemed  based  on  two  leading  prin- 
ciples. First,  that  the  system  of  the 
bankrupt  law  ought  not  to  be  considered 
locul,  but  uiiivcrsal,  and  that  llie  whole 
Hystem  of  lmnkrupt<-y  should  be  lield  to 
he  part  of  the  hiw  of  nulions,  and  as  such, 
the  actH  of  one  nation  thereunder  siioidd 
be  Cfjuuily  rcspeeteij  in  all.  The  otlier  is 
that  the  cH'eet  of  the  bankruptcy,  and  as- 

[  G34  ] 


signment,  is  to  sequestrate  all  the  bank- 
rupt's property  at  once,  and  transfers  all 
his  interest  to  his  assignees,  as  in  the  ease 
of  a  voluntary  transfer  or  grant ;  that  is 
to  say,  they  regard  the  act  as  his  own, 
though  done  under  compulsion  of  the 
law."  The  leading  case  also,  of  Royal 
Bank  of  Scotland,  &c.,i;.  Cuthbcrt  (Stein's 
case),  1  Rose's  Cases,  462;  Selkrig  v. 
Davics,  2  Rose,  291  ;  Quelin  v.  Moisson, 
1  Knapp,  265 ;  Selkrig  v.  Davies,  again 
reported,  2  Dow,  230;  Ex  parte  D'Obree, 
8  Ves.  82;  Pipon  v.  Pipon,  Ambler,  25  ; 
In  re  Wilson,  1  H.  Bl.  691  ;  Solomons  v. 
Ross,  id.  131,  note  ;  Jollett  v.  Deponthieu, 
id.  132,  note;  Neil  r.  Cottingham,  id.; 
Hunter  v.  Potts,  4  T.  R.  182  ;  Ex  parte 
Blakes,  1  Cox,  398 ;  Smith  v.  Buchanan, 
1  East,  6;  Potter  v.  Brown,  5  id.  124- 
131  ;  Wadham  v.  Marlowe,  1  H.  Bl.  437 
-439,  note,  s.  c.  8  East,  314-316,  note  (a); 
Philips  V.  Hunter,  2  H.  Bl.  402.  Before 
the  time  of  the  American  Revolution,  the 
English  courts  held  a  different  doctrine, 
adopting  the  view  which  prevails  at  this 
day  in  the  American  courts.  Cleve  v. 
Mills,  before  Lord  Mansfield,  1  Cooke,  B. 
L.  303.  In  Chevalier  v.  Lynch,  the  same 
doctrine.  A  creditor  of  the  bankrupt,  in 
that  case,  against  wliom  a  commission 
had  issued  in  England,  attached  a  sum  of 
money  in  the  hands  of  a  debtor  of  the 
bankru])t  in  St.  Cin-istopher,  an  island 
within  the  British  dominions.  The  court 
heldtliis  attachment  good.  Lord  Mans- 
^ficld:  "  If  a  bankrupt  has  money  due  to 
him  out  of  England,  the  assignment, 
under  the  bankrupt  laws,  so  far  vests  the 
right  to  the  money  in  the  assignees  that 
the  debtor  .shall  be  answerable  to  them. 
But,  if  in  the  mean  time,  after  the  bank- 
ruptcy, and  before  payment  to  the  as- 
signees, money  owing  to  the  I)ankrupt  out 
of  England,  is  attached  Imio  jidc,  by  regu- 
lar process,  according  to  the  law  of  the 
place,  the  assignees  in  such  case  cannot 
recover  the  debt."  Doug.  170;  Waring?;. 
Knight,  1  Cooke's  Bankrupt  Law,  307  ; 
Story  on  Conlliet  of  Laws,  tit.  Bank- 
ruiity.  See  the  JCnglish,  Scotch,  and  Irish 
authorities  collated  and  examined  in  2 
Bell,  Com.  081.  The  remarks  of  Slory, 
,).,  in  his  Conflict  of  Laws,  on  this  sub- 
ject, are  of  great  value  to  tlie  inijuirer. 
The  same  view  was  reeogni/.ed  and 
adopted  liy  th<'  learned  t'hanceilor  Kent, 
in  iloiiues  v.  Uemsen,  4  Joiins.  Ch.  460  ; 
so  in  Bird  v.  I'ierpoint,  1  Johns.  118,  the 


en.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


609 


States  respecting  bankruptcy,  would  lead  to  the  same  wish  in 
respect  to  the  commercial  nations  of  the  world.  That  every 
nation  has  a  perfect  right  to  regulate  this  matter  by  its  own 
laws,  so  far  as  it  concerns  its  own  courts  and  its  own  citizens, 
no  one  doubts.  The  only  question  is,  whether  that  amity  of 
nations  which  is  grounded  upon  the  highest  expediency,  and 
the  real  advantage  of  each  one,  would  not  lead  to  this  result. 
In  this  country  it  has  been  held  otherwise.  And  our  courts  re- 
gard the  bankrupt  laws  of  any  State  as  of  strictly  municipal 
origin  and  application,  and  as  wholly  without  force  or  influence 
abroad.  (/)      Hence  it  may  be  regarded  as  established  here,  by 


language  of  Licingston,  J.,  tends  to  show 
that  the  court  at  that  time  entertained  a 
similar  view.  Goodwin  v.  Jones,  3  Mass. 
517,  Parsons,  C.  J.;  Bird  v.  Caritat,  2 
Johns.  342.  See  a  tendency  to  the  same 
doctrine,  but  with  limitation,  in  Ingi-aham 
V.  Gcyer,  13  Mass.  147.  But  these  cases 
oppose  the  great  weight  of  American  au- 
thority.    See  infra. 

(f)  The  two  leading  principles  which 
govern  the  English  courts  in  their  admin- 
istration of  the  law  of  bankruptcy  in  cases 
of  foreign  assignment,  have  been  set  forth 
and  illustrated  ante.  The  grounds  on 
which  the  application  of  each  of  them  in 
this  country  has  been  denied,  may  be 
shown  from  the  language  of  two  eminent 
judges.  In  Saunders  v.  Williams,  .5  N. 
H.  215,  Mr.  Chief  Justice  7iicA«/c/so?i  said: 
"  The  rule,  which  must  give  effect  here  to 
a  bankrupt  law  of  a  foreign  country,  is  a 
mere  rule  of  amity,  and  not  of  interna- 
tional law,  and  in  the  present  circum- 
stances of  this  country,  it  is  thought  that 
no  rule  of  amity  can  require  us  to  give 
effect  to  a  foreign  law  of  bankruptcy  here, 
in  such  a  manner  as  to  deprive  our  own 
citizens  of  the  remedy  which  our  own 
laws  give  them  against  the  property  of 
their  foreign  debtors,  which  may  be  found 
in  this  country."  And  in  Milne  v.  More- 
ton,  6  Binn.  369,  Mr.  Chief  Justice  Tilgh- 
man  said  :  "  It  was  remarked,  during  the 
argument,  that  no  good  reason  can  be 
assigned,  why  an  assignment  by  the  bank- 
rupt himself  should  prevail,  and  not  the 
present  one,  as  made  by  the  commission- 
ers, which  ought  to  be  considered  as  equiv- 
alent thereto,  and  be  deemed  a  voJuntunj 
conveyance  made  by  the  bankrupt  him- 
self, for  a  valuable  consideration.  The 
difference  appears  to  me  sufficiently  ob- 
vious.    Eft'ect  is  given  to  the  fair  assign- 


ment of  the  bankrupt  himself,  because  it 
is  the  spontaneous  act  of  the  party  Iiaving 
the  full  dominion  over  the  property,  trans- 
ferring an  equitable  if  not  a  legal  title 
thereto,  after  which  his  interest  therein 
necessarily  ceases,  and  is  no  longer  sub- 
ject to  an  attachment.  It  is  wholly  super- 
fluous to  cite  Justinian,  lib.  2,  tit.  1,  § 
40,  to  show  that  nothing  is  more  conform- 
able to  natural  equity,  than  to  confirm  the 
will  of  him  who  is  desirous  to  transfer 
his  property  to  another.  But  effect  can- 
not be  given  to  the  assignment  by  the 
commissioners  unless  we  adopt  the  British 
statutes  of  bankruptcy,  as  laws  binding  on 
ourselves,  although  they  were  not  consid- 
ered to  affect  us,  when  we  were  the  colo- 
nies of  Great  Britain  ;  and  this,  too,  when 
their  operation  would  manifestly  interfere 
with  the  interests  of  our  own  citizens." 
So  in  Holmes  v.  Remsen,  20  Johns.  229 
-265,  in  which  case  the  decision  of  Chan- 
cellor Kent,  above  cited,  was  reversed,  the 
judge  delivering  the  opinion  of  the  court, 
said  :  "  It  is  an  establisiied  and  universal 
principle  that,  independent  of  express 
municipal  law,  personal  property  of  for- 
eigners dying  testate  or  intestate  has 
locality.  Administration  must  be  granted 
and  distribution  made  in  the  country 
where  the  property  is  found  ;  and  as  to 
creditors,  the  lex  rei  slice  prevails  against 
the  law  of  the  domicil  in  regard  to  the 
rule  of  preferences.  In  principle,  I  per- 
ceive no  difference  between  that  case  and 
the  present.  Why  should  not  a  liberal 
comity,  also,  demand  that  the  first  grant 
of  letters  of  administration  should  draw 
to  it  the  distribution,  among  creditors,  of 
the  whole  assets  wherever  situated  ?  The 
plausible  reason  for  the  distinction  may  be 
that  tlie  interests  of  commerce  require  a 
discrimination  in  favor  of  the  assignees  of 

[  635  ] 


610 


THE   LAW   OF   CONTRACTS. 


[part  II. 


the  past  adjudication  on  these  cases,  that  any  American  credi- 
tor may,  by  process  of  law,  retain  any  property  of  his  debtor 
which  he  can  get  a  legal  hold  upon,  by  transfer,  attachment,  or 
levy,  against  the  claims  of  any  foreign  assignee  in  bankruptcy,  (g") 


bankrupts.  But  in  practice  I  believe  it 
will  be  found  that  commerce  is  equally 
affected  by  the  rule  in  both  cases,  because 
the  rule,  in  either  case,  can  seldom  be  ap- 
plied, except  to  merchants  and  traders. 
And  whetlier  administration  be  committed 
to,  tlie  executors  or  administrators  of  a 
dead  man,  or  to  the  assignees  of  a  bank- 
rupt, is  not  very  material  to  the  point  be- 
fore us.  Anomalies  are  inconvenient  in 
the  law,  and  shouhl  not  be  allowed  with- 
out strong  reason." 

Ig)  The  case  of  Harrison  v.  Sterry,  5 
Cranch,  289,  was  decided  by  Marshall,  C. 
J.,  in  1809.  It  is  there  said,  "the  bankrupt 
law  of  a  foreign  country  is  incapable 
of  operating  a  legal  transfer  of  property 
in  the  United  States."  In  his  o])inion  in 
Holmes  v.  Remscn  above  cited,  Cliancel- 
lor  Ktnt  said,  tiiat  the  decree  of  the  court 
in  that  case,  and  on  this  point  wants  ex- 
planation, "  and  we  do  not  know  the 
grounds  of  the  decision.  It  is  never,  how- 
ever, to  be  presumed,  that  any  court  in- 
tends either  to  establish,  or  reject  a  liti- 
gated point  of  law,  of  great  importance, 
merely  by  a  dry  decision,  unaccompanied 
with  argument  or  illustration."  Yet  of 
this  case  it  may,  with  respect  to  so  great 
a  name  as  Chancellor  Kent,  be  ol)served, 
that  this  opinion,  although  unaccompanied 
witli  argument,  was  essential  to  tlie  decis- 
ion of  the  case,  and  can  by  no  means  be 
regarded  as  an  obitc}-  dictum,  and  that 
every  court  must  be  i)rcsumed  to  intend 
to  establish  every  poi'nt  of  law  passed  upon 
essential  to  the  decision  of  the  case.  The 
doctrines  of  this  case  have  been  univer- 
sally followed,  so  far  as  we  know,  in  tliis 
country,  with  tlie  limitation  set  forth  in 
the  following  note.  Blake  v.  Williams, 
and  Marsliall,  Trustee,  C  Pick.  286.  In 
that  case,  tlie  (picstion  was,  whetlier  Mar- 
shall, a  delitorof  Williams,  sliould  lie  held 
as  his  trustee,  and  to  jiay  to  the  jjlaintilf 
the  dcl)t  be  acknowledged  to  be  due  to  the 
jjrincipa!  dcfcMdant.  Tlie  trustec^'s  an- 
swer disclosed,  that  a  commission  of  l)aiik- 
ruptcy  liud  issued  against  WiiliMiiis  in 
England,  where  lie  resided,  anil  did  Inisi- 
ncsH  as  a  banker,  on  the  27th  of  October, 
182."),  in  (•onscf|iiciice  of  an  act  of  bank- 
ruptcy pii'viou^ly  committed  liy  Iiim  ;  and 
in  pursuance  r.f  the  commission,  tlie  com- 

[GOG] 


missioners  of  bankruptcy  proceeded  to 
assign  over  to  the  assignees  all  the  prop- 
erty of  Williams,  including  the  debts  due 
him.  It  appeared  further,  that  the  trustee 
had  received  no  formal  notice  of  the  as- 
signment by  the  commissioners  in  Eng- 
land, at  the  time  of  his  being  summoned, 
on  the  3d  of  December,  1825,  but  that 
such  notice  was  subsec|uently  given  —  and 
the  assignees,  by  a  person  authorized  by 
them  for  this  purpose,  had  demanded  of 
him  that  he  should  pay  over  to  them  the 
amount  of  the  debt  due  from  him  to  Wil- 
liams. Upon  these  facts,  tlie  court  said 
they  saw  no  reason  why  the  trustee  should 
not  be  charged.  Parker,  C.  J.:  "Does, 
then,  a  commission  of  bankruptcy  in  Eng- 
land, and  an  assignment  of  the  bankrupt's 
eflects  under  it,  so  transfer  a  debt  due  to 
the  bankrupt  from  a  citizen  of  tiiis  State 
to  the  assignees,  that  another  citizen  who 
is  a  creditor  of  the  bankrupt,  cannot  seize 
it  on  a  trustee  process  and  secure  it  to 
himself?  We  think  it  very  clear  that  this 
question  has  not  been  settled  in  the  affirm- 
ative in  this  State  nor  in  any  other  State 
in  this  Union,  nor  in  the  Supreme  Court 
of  the  United  States  ;  but  on  the  contrary, 
that  whenever  the  question  has  been 
raised,  it  has  been  determined  in  the  neg- 
ative. AVith  respect  to  our  own  State, 
the  (juestion  has  not  been  settled  either 
way  directly,  though  there  are  some  cases 
in  which  it  has  incidentally  occurred  ;  but 
from  tliem  nothing  favorable  to  such  as- 
signments can  be  inferred."  Ogden  v. 
Saunders,  12  Wheat.  213;  Dawes  v. 
Head,  3  Pick.  128;  Dawes  v.  Boylston, 
9  Mass.  337  ;  Milne  i-.  Moreton,  o'Binn. 
3.53;  Blanciiard  v.  Ivussell,  13  Mass.  1  ; 
Harrison  v.  Sterr}',  above  cited,  again  re- 
ported. Bee,  244  ;  tlic  comments  of  Par- 
ker, C.  J.,  on  Goodwin  ;•.  Jones,  3  Mass. 
."j  14,  in  6  Pick.  30.5;  Ward  r.  Morris,  4 
Harris  &  McII.  330  ;  Holmes  v.  Rem- 
scn, 20  Jolms.  229,  Piatt,  J.,  reversing 
the  decision  of  Koit,  Cli.,  in  Holmes  v. 
Bcm.sen,  4  Johns.  Cii.  4(50;  Wallace  v. 
I'altcrson,  2  Harris  &  McH.  4C3  ;  Ex 
]iiirlc  Franks,  1  (Cooke's  l>Mnkru])t  Laws, 
3;iC>  ;  Bulk  r.  M'Clain,  1  Harris  &  McH. 
2.30;  Mawdcsley  r.  Parke,  in  tin;  court  of 
Ikiiodc  Island,  cited  in  Sill  v.  Worswick, 
1  H.  Bl.  G80;  Topham  v.  Chapman,  3 


CH.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


611 


We  should  limit  this,  however,  to  cases  in  which  the  assignee 
had  not  previously  obtained  possession.  Our  courts  can  hardly 
deny  that  the  foreign  assignee  has  acquired  an  inchoate  title, 
and  a  right  to  perfect  his  title  by  possession  as  soon  as  he  can. 
And  if  he  thus  perfects  his  title,  having,  to  use  the  language  of 
the  civil  law,  not  only  the  jits  ad  rem  but  the  jus  in  re,  the  prop- 
erty should  be  held  to  be  his  by  legal  title  as  complete  and 
consummate  as  sale  with  delivery  could  give,  (h) 

Real  property  has  a  lex  loci,  a  positive  locality,  and  must  be 
governed  in  all  matters  relative  to  its  transfer  by  the  laws  of 


Consist.  K.  285 ;  Jones  v.  Blanchard, 
cited  in  the  last  case  ;  Taylor  v.  Geary, 
Kirby,  313  ;  Ex  parte  Blakes,  1  Cox,  398 
a  case  in  Virginia,  cited  in  Waring:  v. 
Kijight,  1  Cooke's  B.  L.  307  ;  Eichards  v. 
Hudson  (in  Virginia),  cited  4  T.  R.  187  ; 
Ward  V.  Morris,  4  Harris  &  McH.  330, 
in  the  notes.  See  also,  the  intimations  of 
the  courts  in  the  early  American  cases; 
Van  Raugh  v.  Van  Arsdaln,  3  Caines, 
154;  Bird  v.  Pierpont,  1  Johns.  118; 
Proctor  V.  Moore,  1  Mass.  198;  Baker  i'. 
Whcaton,  5  id.  509  ;  Watson  v.  Bourne, 

10  id.  337  ;  Ingraham  v.  Geyer,  13  id.  146  ; 
Walker  v.  Hill,  17  id.  383;  the  comments 
of  Parker,  C.  J.,  on  these  cases,  in  Blake 
V.  Williams,  above  cited  ;  Smith  v.  Smith, 
2  Johns.  235;  Bird  v.  Caritat,  id.  342; 
Abraham  v.  Plestoro,  3  Wend.  538  ;  John- 
son I'.  Hunt,  23  id.  90 ;  Lord  v.  Brig 
Watchman,  Ware,  232 ;  Borden  v.  Sum- 
ner, 4  Pick.  265 ;  Saunders  v.  Williams, 

5  N.  H.  213;  Mitchell  v.  M'Millan,  3 
Mart.  La.  676  ;  Olivier  v.  Townes,  14  id. 
93;  Norris  v.  Mumford,  4  id.  20;  Fall 
River  Iron  Works  v.   Croade,   15  Pick. 

11  ;  Fox  V.  Adams,  5  Greenl.  245. 
Chancellor  Kent,  in  his  Commentaries, 
admits  that  his  opinion  in  Holmes  v. 
Remscn,  cannot  now  be  held  to  be  the 
law  in  America.  2  Kent,  408,  in  the 
note ;  Merrick's  Estate,  4  Ashm.  485  ; 
Lowry  v.  Hall,  2  Watts  &  S.  129  ;  Mul- 
likin  r.  Aughinbaugh,  1  Penn.  117; 
Goodall  V.  Marshall,  11  N.  H.  88  ;  Mc- 
Neil V.  Colquhoon,  2  Hayw.  24 ;  Robin- 
son V.  Crowder,  4  McCord,  519  ;  the  re- 
cent and  instructive  cases.  May  v.  Breed, 
7  Cush.  15;  Towne  v.  Smith,  1  Woodb. 

6  M.  115  ;  Sanderson  v.  Bradford,  10  N. 
H.  260-264. 

(/t)  This  limitation  is  laid  down  in 
many  of  the  cases  in  the  preceding  note, 
expressly  or  by  implication,  as  in  Blake 

VOL.  n.  54 


V.  Williams,  6  Pick.  286.  See  Towne  v. 
Smith,  1  Woodb.  &  M.  115,  136;  The 
Watchman,  Ware,  232  ;  Merrick's  Estate, 
2  Ashm.  485.  In  May  v.  Breed,  7  Cush. 
15,  the  facts  of  which  have  been  stated, 
ajite,  Shaw,  C.  J.,  said  :  "  We  have  been 
strongly  pressed  by  the  argument  that,  in- 
asmuch as  assignees  of  an  English  bank- 
rupt cannot  sue  for  and  recover  debts 
due  the  bankrupt,  therefore  the  bankrupt 
law  has  no  extra-territorial  operation,  and 
cannot  give  effect  to  a  certificate  of  dis- 
charge, when  set  up  here  in  bar  by  an 
English  bankrupt.  But  we  cannot  per- 
ceive the  force  of  this  reasoning.  The 
two  things  are  not  irreconcilable ;  they 
stand  on  different  grounds  and  depend  on 
different  and  distinct  principles.  Though 
the  point  has  long  been  doubted,  we  con- 
sider it  now  settled  by  a  preponderance  of 
authority,  that  when  a  debt  due  by  an 
American  merchant  to  an  English  bank- 
rupt is  attached  by  an  American  creditor 
of  the  English  bankrupt,  by  a  trustee 
process  or  process  of  foreign  attachment, 
the  assignee  of  the  English  bankrupt  can- 
not come  in  and  interpose  such  assign- 
ment to  defeat  such  attachment,  and  claim 
the  assets  as  by  a  prior  title.  But  this  is 
the  extent  to  which  the  authorities  go.  It 
by  no  means  follows  that  the  English  law 
has  no  effect  here.  On  the  contrary,  we 
think  it  would  enable  the  assignee  to  take 
possession  of  and  appropriate  to  the  use 
of  the  creditors  personal  property  not  at- 
tached or  otherwise  subject  to  any  lien 
under  our  laws,  and  also  to  collect  and 
receive  all  moneys  due  the  bankrupt  and 
give  a  good  discharge  therefor,  and  sue  for 
and  recover  them  either  in  their  own  name 
or  in  the  name  of  the  bankrupt,  if  not  at- 
tached or  held  by  any  process  or  lien  by 
any  other  creditor." 

[637] 


612  THE  LAW  OF  CONTRACTS.  [PART  II. 

that  locality.  This  must  be  admitted  in  England  as  well  as 
here ;  and  would  be  so  the  more  readily,  because  it  is  so  sel- 
dom—  more  seldom  there  than  here  —  treated  as  merchan- 
dise, (i)  But  if  an  American,  owning  land  in  New  York,  and 
residing  and  trading  in  London,  became  bankrupt  there,  —  while 
his  New  York  land  certainly  would  not  pass  to  his  English  as- 
signee by  his  bankruptcy,  it  could  be  transferred  to  an  Ameri- 
can in  trust  for  his  assignee,  for  the  benefit  of  his  creditors,  by 
his  deed  regularly  and  in  good  faith  executed,  delivered,  and 
recorded,  before  any  attachment  or  other  process  in  this  coun- 
try- U) 


SECTION    IV. 

OF   THE   TRIBUNAL   AND   JURISDICTION. 

In  England,  since  the  beginning  of  the  reign  of  William  IV., 
there  have  been  judges  and  commissioners  in  bankruptcy,  con- 
stituting a  regular  court,  with  all  the  usual  powers  and  inci- 
dents. Each  judge  and  commissioner  may  sit  alone  to  hear 
applications  and  issue  the  proper  processes ;  and  for  that  pur- 
pose may  decide  the  questions  which  come  before  him.  And 
upon  questions  of  fact  may  order  a  jury.  Questions  of  law  go 
by  appeal  to  the  Lord  Chancellor,  and  finally  to  the  House  of 
Lords,  [k) 

(?)  Story  on  Conflict  of  Laws,  §§  20,  vails  generally  in  the  civil  law.    This  doc- 

364,   414;    M'Cormiek   v.    Sullivant,    10  trine   has   been  uniformly  recognized  by 

Wheat.    202 ;    Irigraham    v.    Geyer,    13  the  courts  of  the  United   States,  and  by 

Mass.  147;  Kogers  v.  Allen,  3  Ohio,  488  ;  the  courts  of  the  respective  States.     The 

Oshorn   V.    Adams,    18    Pick.    24.5.     Sir  form    of    conveyance    adopted    l)y   each 

William   fj'nnil,  in  Curtis  v.  Ilurton,  14  State   for   the   transfer  of  real   property 

Ves.    ."J."]?,    541,   said:  "The  validity   of  must  be  observed.     This  is  a  regulation 

every  disposition  of  real  estate  must  de-  which  belongs  to  the  local  sovereignty." 
))end  upon  the  law  of  the  coimtry  where         (j)  See  the  cases  cited  in  the  preceding 

that   estate    is    situated."     In    Oiikey    v.  notes. 

Bennett,  11  How.  .■J.'!-4.'),  ISIr.  .lusticc  Mr-  (Ic)  There  would  seem  at  one  time  to 
/yfdii,  delivering  the  o])iiii()ii  of  tlii'  court,  have  iicen  a  (piestion,  under  what  author- 
said  :  "  J5ut  it  is  an  afiniittcd  ])riu<'iple  in  ity  the  J^ord  (Miancellor  exercised  a  power 
all  countries,  where  the  common  law  pre-  in  cases  of  bankruptcy  ;  whether  under  the 
vails,  whatever  views  may  be  entertained  general  duties  of  his  oflice,  as  the  head  of 
in  regard  to  personal  i)rof)erty,  that  real  a  court  of  eiiuity,  or  by  virtue  of  special 
estate  can  be  conveyed  only  under  the  authority  conferred  upon  Iiim  i)y  statutes 
territorial  law.  .  .  .  The  same  rule  pre-  of  bankruptcy.     An  examination  of  the 


CH.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


613 


In  this  country,  the  bankrupt  law  gave  jurisdiction  in  these 
cases  to  the  district  judges  of  the  United  States.  (/)  But  com- 
missioners were  appointed  in  every  part  of  each  district,  who 
could  receive  applications,  and  take  proof,  and  send  it  to  the 
district  judge.  In  that  court  the  assignee  was  admitted  and 
authorized,  and  all  trials  took  place  there,  and  a  jury  was 
summoned  whenever  the  district  judge  thought  proper  to 
require  one. 

The  State  insolvent  laws  differ  in  these  particulars  consider- 
ably. Generally,  however,  judges  of  probate,  masters  in  chan- 
cery, or  commissioners  of  insolvency,  sit  in  fact  as  a  court,  and 
issue  process,  and  hold  meetings,  and  try  and  decide  questions, 
with  power  to  send  the  questions  of  fact  to  a  jury  if  necessary, 
and  with  an  appeal  in  matters  of  law  to  the  Supreme  Court  of 
law  or  equity,  (w) 

Of  the  proceedings  we  shall  speak  in  other  sections.     But  it 


authorities  on  this  subject  tends  to  show 
clearly  that  his  power  comes  from  the 
latter;  and  that  although  he  exercises 
great  discretionary  powers  in  superseding 
commissions,  and  regulating  proceedings 
under  them,  all  his  power  is  nevertheless 
derived  from  the  statutes  ;  he  has  none  as 
a  chancery  court,  or  by  virtue  of  his  office 
as  chancellor,  and  that  the  two  jurisdic- 
tions are  entirely  separate  and  distinct ; 
that  the  extraordinary  authority  which 
has  been  sometimes  exercised,  was  so  ex- 
ercised, not  by  virtue  of  chancery  power, 
but  as  conferred  by  implication  of  the 
statute.  See  on  this  subject,  Ex  parte 
Lund,  6  Ves.  781 ;  Phillips  v.  Shaw,  8 
id.  250;  Ex  parte  Dewdney,  15  id.  496; 
Ex  parte  Cawkwell,  19  id.  233;  Anony- 
mous, 14  id.  449;  Ex  parte  Thompson, 
1  Glyn  &  J.  308 ;  Ford  v.  Webb,  3  Brod. 
&  B.  243  ;  Ex  parte  Glanfield,  2  Glyn  & 
J.  387;  Ex  parte  Smith,  19  Ves.  474; 
Wilkinson  v.  Diggel,  1  B.  &  C.  160;  Ex 
parte  Dufrene,  1  Rose,  333  ;  Eden  on  B. 
Law,  449,  in  Law  Lib.  Vol.  34. 

[1]  The  jurisdiction  conferred  by  the 
National  Law  of  Bankruptcy  on  the  dis- 
trict judges  was  greater  than  that  exer- 
cised by  the  Lord  Chancellor.  In  Ex 
parte  Foster,  2  Story,  131,  Story,  J., 
alluded  to  the  matter  of  jurisdiction  as 
follows  :  "  And  here  I  lay  it  down  as  a 
general  principle,  that  the  district  court  is 


possessed  of  the  full  jurisdiction  of  a  court 
of  equity  over  the  whole  subject-matters 
which  may  arise  in  bankruptcy,  and  is 
authorized  by  summary  proceedings  to 
administer  all  the  relief  which  a  court  of 
equity  could  administer,  under  the  like 
circumstances,  upon  a  regular  hill,  and 
regular  proceedings,  instituted  by  com- 
petent parties.  In  this  respect  the  act  of 
Congress,  for  wise  purposes,  has  conferred 
a  more  wide  and  liberal  jurisdiction  upon 
the  courts  of  the  United  States  than  the 
Lord  Chancellor,  sitting  in  Bankruptcy, 
was  authorized  to  exercise.  In  short, 
whatever  he  might  properly  do,  sitting  in 
Bankruptcy,  or  sitting  in  the  Court  of 
Chancery,  under  his  general  equity  juris- 
diction, the  courts  of  the  United  States 
are,  by  the  Act  of  1841,  competent  to  do." 
See,  on  the  point  of  the  jurisdiction  of  the 
district  courts,  the  learned  opinion  of 
Hopkinson,  J.,  in  the  Eastern  District  of 
Pennsylvania  in  the  case  of  Robert  Mor- 
ris, reported  1  Law  Reporter,  354. 

(m)  In  1856,  the  Legislature  of  Massa- 
chusetts provided  by  statute  for  judges  of 
insolvency,  each  of  whom  should  have  his 
registrar,  and  hold  a  regular  court  at  stated 
periods.  It  may,  however,  be  presumed 
that  the  practice  will  not  vary  essentially 
from  what  it  has  been  under  the  commis- 
sioners of  insolvency. 

[  639  ] 


614 


THE  LAW   OF   CONTRACTS. 


[part  II. 


may  be  remarked  here,  that  the  statutes  generally  provide  for  a 
convenient  resort  to  the  court,  and  for  proceedings  of  sufficient 
rapidity,  v^^ithout  unsafe  haste.  And  that  the  community  are 
satisfied  with  the  character  and  results  of  these  proceedings  very 
generally,  may  be  inferred  from  the  infrequency  of  appeals. 


SECTION    V. 

WHO   MAY   BE   BANKRUPTS    OR   INSOLVENTS. 

We  have  seen  that  in  England,  until  very  recently,  and  under 
our  last  National  Bankrupt  Law,  all  persons  owing  debts  could 
become  insolvents  ;  {n)  or  by  their  own  action,  have  the  benefit  of 


(n)  It  has  been  already  said,  and  will 
be  seen  from  the  following  section  of  the 
late  United  States  Bankrupt  Act,  that  the 
old  distinction  between  bankruptcy  and 
insolvency  was  so  far  maintained  therein 
that  traders  could  be  compelled,  and  other 
debtors  could  apply,  to  go  into  insolvency, 
and  it  would  seem,  from  the  reasons  which 
have  heretofore  governed  legislators  in 
reference  to  this  distinction,  that  it  may 
be  expected  to  be  found  recognized  in  any 
future  national  bankrupt  act.  The  first 
section  of  the  late  act  provided  as  follows  : 
"  All  persons  whatsoever,  residing  in  any 
State,  District,  or  Territory  of  the  United 
States,  owing  dclHs  which  shall  not  have 
been  created  in  consequence  of  a  defalca- 
tion as  a  public  officer,  or  as  executor,  ad- 
ministrator, guardian,  or  trustee,  or  while 
acting  in  any  other  fiduciary  capacity, 
who  shall,  by  petition,  setting  forth  to  the 
best  of  his  knowledge  and  belief,  a  list  of 
his  orthcir  creditors,  their  respective  places 
of  residence,  and  tlio  amount  due  to  each, 
together  witli  an  accurate  inventory  of  his 
or  tlicir  property,  rights,  and  credits,  of 
everv  name,  kind,  and  (b'scriptioii,  and 
the  location  ami  situation  of  cacii  and 
every  jiarcel  anil  portion  thereof,  verified 
by  OJifh,  or  if  conscientiously  scrupidf)us 
of  taking  an  oath,  l)y  solemn  affirmation, 
apply  to  tli'-  jiropcr  court,  as  hei-cinaftcr 
mentioned,  for  tlu^  benefit  of  this  act,  and 
therein  (iccliirc  lliemselves  to  lie,  unable  to 
meet  tlieir  (h'lits  and  engagements,  shall 

[C40] 


be  deemed  bankrupts  within  the  purview 
of  this  act,  and  may  be  so  declared  accord- 
ingly by  a  decree  of  such  court ;  all  per- 
sons being  merchants,  or  using  the  trade 
of  merchandise,  all  retailers  of  merchan- 
dise, and  all  bankers,  factors,  brokers, 
underwriters,  or  marine  insurers,  owing 
debts  to  the  amount  of  not  less  than  two 
thousand  dollars,  sliall  be  liable  to  become 
bankrupts  within  the  true  intent  and  mean- 
ing of  this  act,  and  may,  upon  the  petition 
of  one  or  more  of  their  creditors,  to  whom 
they  owe  debts  amounting,  in  the  whole, 
to  not  less  than  five  hundred  dollars,  to 
the  appropriate  court,  be  so  declared  ac- 
cordingly, in  the  following  cases,  namely : 
whenever  such  person,  being  a  merchant, 
or  actually  using  the  trade  of  merchandise, 
or  being  a  retailer  of  merchandise,  or  being 
a  banker,  factor,  broker,  uiulerwriter,  or 
marine  insurer,  shall  dcjiart  from  the  State, 
district,  or  territory,  of  which  he  is  an 
inhabitant,  with  intent  to  dcfrainl  his  cred- 
itors, or  shall  conceal  himself  to  avoid 
being  arrested,  or  shall  willingly  or  fraud- 
ulently ])rocure  himself  to  be  arrested,  or 
his  gooils  and  chattels,  lands  or  tenements, 
to  be  attached,  distrained,  or  secjuestrated, 
or  taken  in  execution,  or  shall  remove  his 
goods,  chattels,  an<l  effects,  or  conceal 
tlieni  to  prevent  their  being  levied  upon, 
or  taken  in  execution,  or  by  any  other 
jH'occss,  or  make  any  fraudulent  convey- 
ance, assignment,  sale,  gift,  or  other  trans- 
fer of  his  lands,  tenements,  goods  or  chat- 


CII.  X.] 


l^NKRUPTCY   AND   INSOLVENCY. 


615 


the  law.  But  that  none  could  be  made  bankrvpls,  against  their 
will  and  at  the  suit  of  others,  who  were  not  traders,  or  quasi 
traders.  There  have  been  many  nice  questions  and  much  con- 
flict, as  to  who  were  traders  in  this  sense,  (o)     But  no  such 


tels,  credits,  or  evidence  of  debt."  Upon 
this  section  of  the  statute  it  was  clear  tiiat 
debtors  of  two  classes  were  debarred  from 
the  privileges  of  the  act  —  those  owing  the 
United  States  for  default  in  office,  and 
those  owing  debts  in  any  fiduciary  capac- 
ity. It  was  further  clear  that  no  person 
owing  debts  of  either  of  these  classes,  and 
no  other,  could  be  declared  a  bankrupt. 
But  a  question  ai'ose,  whether  a  person 
owing  such  a  debt  as  those  above  men- 
tioned, and  also  being  a  debtor  in  his 
ordinary  business  capacity,  was  deliarrcd 
the  privileges  of  this  act,  from  the  fact  of 
the  existence  of  such  fiduciary  debt.  The 
question  was  differently  decided  in  differ- 
ent courts ;  but  we  are  convinced,  on  the 
reason  of  the  case,  that  the  existence  of 
such  debts  ought  not  to  be  a  bar  as  to  the 
others,  tliough  with  great  deference  to  the 
high  authority  which  has  adopted  the  con- 
trary view.  In  the  matter  of  John  Hardi- 
son,  5  Law  Keporter,  25.5,  in  the  Circuit 
Court  of  the  United  States,  Eastern  Dis- 
trict of  Virginia,  Mr.  Justice  Daniel,  re- 
gretting that  there  was  no  English  autlior- 
ity  to  aid  in  the  solution  of  the  question, 
held,  that  a  party  cannot  be  decreed  a 
bankrupt  while  owing  any  debt  created  in 
consequence  of  defalcation  as  a  public 
officer,  or  whilst  acting  in  any  fidnciar}' 
capacity,  although  he  may  owe  other  debts 
not  of  such  character.  A  similar  doctrine 
was  maintained  in  the  District  Court  of  the 
Western  District  of  Virginia,  by  Mr.  Jus- 
tice Penni/hacker.  In  the  matter  of  Cease, 
5  Law  Reporter,  408.  On  the  other  hand, 
in  the  District  Court  of  Connecticut,  Jud- 
son,  J.,  held,  that  the  existence  of  fiduciary 
debts  would  not  prevent  a  claim  as  to  other 
debts.  In  the  matter  of  Young,  5  Law  Re- 
porter, 128.  So  in  the  Circuit  Court,  at 
Cincinnati,  In  the  matter  of  Lord,  5 
Law  Reporter,  2.58.  The  same  doctrine 
was  maintained  in  the  Southern  District  of 
New  York,  In  the  matter  of  Brown,  5 
Law  Reporter,  258.  And  by  Story,  J.,  in 
the  Circuit  Court  for  the  first  circuit.  In 
the  matter  of  Tebbetts,  5  Law  Reporter, 
259.  Chapman  v.  Forsyth,  2  How.  202  ; 
Haym.an  r.  Pond,  7  Met.  328 ;  Morse  v. 
Lowell,  id.  152.  And  see  Gilbert  v.  He- 
bard,  8  id.  129.  The  effect  of  the  dis- 
charge in  bankruptcy  upon   such  debts, 

54* 


will  be  considered  under  the  subject  of 
Discharge,  infra.  In  addition  to  the  ex- 
cepted cases  in  the  statute,  it  appears 
that  the  court  will  exercise  the  power  of 
dismissal  of  a  petition  to  be  decreed  a 
bankrupt,  when,  in  their  opinion,  the  ends 
of  justice  require  it ;  for  in  the  matter  of 
Cotton,  6  Law  Reporter,  546,  it  was  held, 
that  where  a  petitioner  for  a  decree  in 
bankruptcy  set  forth  in  his  schedule  only 
two  debts,'one  of  which  was  a  judgment 
recovered  against  him  on  a  bastardy  pro- 
cess, and  the  other  was  a  judgment  in 
favor  of  the  fiither  for  the  seduction  of 
his  daughter,  the  petition  should  be  dis- 
missed. It  could  hardly  be  successfully 
contended  that  these  were  debts  con- 
tracted in  a  fiduciary  capacity. 

(o)  This  conflict  has  been  much  greater 
in  England  than  in  this  country,  and  the 
decided  cases  are  more  numerous  there. 
We  give  the  enumeration  which  occurs 
in  the  latest  English  statute  on  tiie  sub- 
ject, and  leading  cases  upon  the  various 
classes.  Section  65  of  the  statute  12  &  13 
Vict,  on  this  subject,  provides  :  §  65.  "That 
all  alum-makers,  apothecaries,  auctioneers, 
bankers, — Ex  parte  Wilson,  1  Atk.  218; 
Ex  parte  Wyndham,  1  Mont.  D.  &  D.  146 ; 
Ex  parte  Hall,  3  Deac.  405  ;  Ex  parte 
Brundrett,  2  id.  219  ;  Ex  parte  Brown,  2 
Mont.  D.  &  D.  758.  Bleachers,  brokers, 
—  Pott  V.  Turner,  6  Bing.  702  ;  Highmore 
V.  Mollov,  1  Atk.  206  ;  Rawlinson  v. 
Pearson, "5  B.  &  Aid.  124  ;  Ex  parte  Ste- 
vens, 4  Madd.  256  ;  Ex  parte  Phipps,  2 
Deac.  487  ;  Ex  parte  Harvey,  1  id.  570,  2 
Mont.  &  A.  593  ;  Hankey  v.  Jones,  Cowp. 
745  ;  Ex  parte  Gem,  2  Mont.  D.  &  D.  99  ; 
Ex  parte  Moore,  2  Deac.  287.  Brick- 
makers,  —  Wells  I'.  Parker,  1  T.  R.  34  ;• 
Sutton  V.  Weeley,  7  East,  442  ;  Ex  parte 
Harrison,  1  Bro.  C.  C.  173.  Builders,  — 
Ex  parte  Neirinckx,  2  Mont.  &  A.  384; 
Ex  parte  Edwards,  1  Mont.  D.  &  D.  3 ; 
Ex  parte  Stewart,  18  L.  J.  Bankr.  14  ; 
Stewart  v.  Sloper,  3  Exch.  700.  Calen- 
derers,  carpenters, —  Cooke,  B.  L.  49; 
Chapman  r.  Lamphire,  3  Mod.  155  ;  Kir 
ney  v.  Smith,  1  Ld.  Raym.  741.  Carriers, 
cattle  or  sheep  salesmen,  —  Ex  parte  New- 
all,  3  Deac.  333.  Coach  proprietors,  — 
Ex  parte  Walker,  2  Mont.  &  A.  267 ; 
Martin  v.  Nightingale,  11  J.  B.  Moore, 
[641] 


616 


THE   LAW   OF   CONTRACTS. 


[part  II. 


distinction  exists  in  our  State  insolvent  laws ;  and  even  in 
England  it  has  lost  somewhat  of  its  importance.  We  say, 
however,  generally,  that  here  all  persons  may  be  insolvents ; 
and  where  the  State  statutes  permit  process  in  inviluni,  it  per- 
mits it  against  all  classes  or  kinds  of  debtors. 

There  must,  of  course,  be  some  exceptions  to  this  rule.  One 
wholly  and  always  a  lunatic  cannot  become  an  insolvent,  either 
on  his  own  application,  or  that  of  a  creditor.     But  if  one  who 


305.  Cow-keepers,  —  Carter  v.  Dean,  1 
Swanst.  64  ;  Ex  parte  Deering,  1  De  Gex, 
398.  Dyer-s,  fullers,  keepers  of  inns, — 
Patman  'v.  Vaughan,  1  T.  R.  572  ;  Smith 
V.  Scott,  9  Bing.  14;  Ex  parte  Birch,  2 
Mont.  D.  &  D.  659.  See  also,  Ex  parte 
Willes,  2  Deac.  1  ;  Ex  parte  Bovvers,  id. 
99;  Gibson  v.  King,  10  M.  &  W.  667; 
King  V.  Simmonds,  12  Jur.  903  ;  Ex  parte 
Daniell,  7  id.  334.  Taverns,  hotels,  or 
coffee-houses,  lime-burners,  livery-stable 
keepers,  —  Ex  parte  Lewis,  2  Deac.  318  ; 
Cannan  v.  Denew,  10  Bing.  292.  Market- 
gardeners, —  Ex  parte  Hammond,  1  De 
G.  93  ;  also,  Carter  v.  Dean,  1  Swanst.  64. 
Millers,  packers,  printers,  shipowners, — 
Ex  parte  Bowes,  4  Ves.  162  ;  Ex  parte 
Wiswould,  Mont.  263.  Shipwrights,  victu- 
allers, warehousemen,  wharfingers,  persons 
using  the  trade  or  profession  of  scrivener, 
receiving  other  men's  moneys  or  estates 
into  their  trust  or  custody,  —  Adams  v. 
Malkin,  3  Camp.  538  ;  Lett  v.  Melville, 
3  Man.  &  G.  52 ;  Hamson  v.  Harrison,  1 
Esp.  555 ;  In  re  Lewis,  2  Rose,  59  ;  Hurd 
V.  Brydges,  Holt,  N.  P.  654 ;  In  re  Warren, 
2  Sch.  &  L.  414 ;  Hutchinson  v.  Gas- 
coigne,  Holt,  N.  P.  507  ;  Ex  parte  Bath, 
Mont.  82  ;  Ex  parte  Gem,  2  Mont.  D.  & 
D.  99.  I'cr.sons  insuring  ships  or  their 
freight,  or  other  matters  against  jierils  of 
the  sea,  and  all  persons  using  the  trade  of 
mcrciiandise  by  way  of  bargaining,  ex- 
change, liartering,  commission,  consign- 
ment, or  otiierwisc,  in  gross,  or  iiy  retail, 
and  all  persons  who,  either  for  themselves, 
or  as  a^icnts  or  factors  for  others,  seek 
their  living  i>y  liuying  and  selling,  —  Er 
partr  Jlcrlicrt,"2  liosc,  248;  Hale  v.  Small, 
2  Brod.  &  B.  25  ;  Parker  v.  Wells, 
Cooke,  5H  ;  Summersett  v.  Jarvis,  3  Brod. 
&  B.  2  ;  I'.ollon  v.  Sowerliy,  1 1  East,  274  ; 
Pnttcii  ".  I'.rownc,  7  Taunt.  409  ;  Ex  /xirle 
Sulkeld,  .•!  .Mont.  I).  &  D.  125  ;  Ex  pnr/i- 
Atkinson.  I  Mont.  I).  &  I).  .•(()() ;  Dally  r. 
Kmiili,  4   I'.Mir.  2148;  Heuniiey  i'.  Birch, 

[(;i2] 


3  Camp.  233  ;  Port  v.  Turton,  2  Wilson, 
169;  Paul  ;;.  Dowling,  3  C.  &  P.  500; 
Ex  parte  Burgess,  2  Gill  &  J.  183  ;  Heane 
V.  Rogers,  9  B.  &  C.  577  ;  Ex  parte  Bow- 
ers, 2  Deac.  99;  Ex  parte  Wiswould, 
Mont.  263  ;  Patman  v.  Yaughan,  1  T.  R. 
572 ;  Ex  parte  Cromwell,  1  Mont.  D.  & 
D.  i58;    Ex    parte   Blackmore,    6    Ves. 

3  ;  Hankey  v.  Jones,  Cowp.  748  ;  Bolton 
V.  Sowerby,  11  East,  274;  Gale  v.  Half- 
knight,  3  Stark.  56  ;  Ex  parte  Lavender, 

4  Deacon  &  C.  487  ;  Valentine  y. Vaughan, 
Peake,  76;  Newton  v.  Trigg,  Salk.  109; 
Mayo  V.  Archer,  1  Stra.  513  ;  Stewart  v. 
Ball,  2  N.  R.  78 ;  Cobb  v.  Symonds,  5 
B.  &  Aid.  516  ;  Saunderson  v.  Rowles,  4 
Burr.  2066  ;  Ex  parte  Meymot,  1  Atk. 
196  ;  Millikin  v.  Brandon,  1  C.  &  P.  380; 
Colt  V.  Nettervill,  2  P.  Wms.  308.  Or  by 
buying  and  letting  for  hire,  or  by  the 
workmanship  of  goods  or  commodities, 
shall  be  deemed  traders  liable  to  become 
bankrupt ;  provided,  that  no  farmer,  gra- 
zier, common  laborer,  or  workman  for  hire, 
receiver-general  of  tlie  taxes,  or  member 
of  or  subscriber  to  any  incorporated  com- 
mercial or  trading  com])any  established  by 
charter  or  act  of  parliament,  shall  be 
deemed,  as  such  a  trader,  liable  to  become 
bankrupt."  The  meaning  of  the  word 
trader  was  well  set  forth  by  ]\lr.  Justice 
Tlionipson,  m  the  Circuit  Court  of  the 
United  States.  Wakcinan  v.  Hoyt,  5  Law 
Reporter,  310.  Tlie  doctrine  of  the  court 
was,  that  any  person  engagc<l  in  business 
requiring  the  purchase  of  ai'ticles  to  be  sold 
again,  cither  in  the  sanicorin  an  iinjiroved 
shape,  must  be,  regarded  as  using  the  trade 
of  mcrciiandise,  wiiiiin  the  intent  of  the 
bankrupt  law.  The  learned  opinion  of 
(JoiichliiKi,  J.,  In  the  matter  of  lOeles,  5 
J>aw  Kcportcr,  27.'t,  wlu're  he  Inld  that  a 
disiillcr  who  hoiiglil  grain  and  converted 
it  into  alcohol  and  sold  the  alcohol,  was  a 
trader. 


CII.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


617 


incurs  debts,  and  is  unable  to  pay  them,  becomes  a  lunatic, 
process  may  now  issue,  and  the  usual  proceedings  be  had  for 
the  benefit  of  the  creditors,  {p) 

As  all  the  acts  of  an  infant,  in  the  way  of  trading,  are  void- 
able by  him,  it  follows  that  a  decree  declaring  him  to  be  a 
bankrupt,  would  be  void,  (q)  But  it  has  been  held,  that  if  he 
had  held  himself  out  as  of  full  age,  and  had  traded  as  such,  he 
might  be  decreed  a  bankrupt,  (qa) 


(p)  It  seems  to  be  well  settled  that  a 
lunatif,  wliile  in  an  insane  condition,  can- 
not l)ind  liiinself  by  contract,  unless  the 
contract  he  for  necessaries.  Gore  v.  Gib- 
son, 13  M.  &  W.  6-27  ;  Neill  v.  Morley,  9 
Ves.  478  ;  McCriUis  v.  Bartlett,  8  N.  H. 
569;  Richardson  v.  Strong,  1.3  Ired.  106; 
Baxter  v.  Earl  of  Portsmouth,  5  B.  &  C. 
1 70,  and  the  cases  cited  in  them  ;  or  where 
a  contract  is  made  with  him,  under  such 
circumstances  that  the  other  party  did  not 
know  his  lunacy,  and  took  no  advantage, 
and  the  contract  is  so  far  executed  as  to 
render  it  impossible  to  restore  the  parties 
to  their  original  condition.  Molton  v. 
Camroux,  4  Exch.  17.  And  see  Jackson 
V.  King,  4  Cowen,  207  ;  Hall  v.  Warren,  9 
Ves.  60.5;  Pitt  ;;.  Smith,  3  Camp.  33; 
Stock  on  Lunacy,  p.  38;  Browning  i\ 
Eeanc,  2  Phillim.  Doc.  Com.  69  ;  Ex  parte 
Clarke,  2  Russ.  575  ;  Turner  v.  Meyers,  1 
Ilagg.  Consist.  414;  Capper  v.  Dando,  2 
A.  &  E.  458 ;  Sander  v.  Sander,  2  CoU- 
yer,  276  ;  Countess  of  Portsmouth  v. 
Earl  of  Portsmouth,  1  Ilagg.  Eccl.  355  ; 
Weaver  v.  Ward,  Hobart,  134  ;  Stephens 
V.  Dc  Medina,  4  Q.  B.  422;  Biffin  v. 
Yorke,  6  Scott,  N.  R.  233;  Woods  v. 
Reed,  2  M.  &  W.  784  ;  Groom  r.  Thomas, 
2  Ilagg.  Eccl.  436.  We  are  aware  of  no 
case  in  wliich  it  has  been  sought  to  charge 
a  lunatic  in  bankruptcy  for  such  debts. 
In  Layton,  ex  parte,  6  Ves.  434,  Lord 
Eldon  said,  making  no  distinction  in  the 
cases,  that  where  one  partner  is  a  lunatic, 
there  cannot  be  a  joint  commission  against 
the  others,  but  separate  commissions  must 
be  issued.  In  this  case,  however,  it  does 
not  appear  that  the  debts  were  contracted 
by  the  lunatic  partner  while  compos  mentis. 
It  cannot,  therefore,  be  considered  an 
authority  against  the  doctrine  of  the  text. 
And  in  Anonymous,  13  Ves.  590,  the 
same  Lord  Chancellor  held,  that  when 
the  bankrupt  had  become  lunatic,  and  no 


affidavit  yet  provided  in  support  of  the 
petition,  a  commission  of  lunacy  will  not 
protect  the  lunatic  against  an  action ;  and 
a  commission  of  bankruptc}'  is  a  species 
of  action  against  which  the  lunacy  cannot 
be  a  defence.  Barnesley  v.  Powell,  Ambl. 
102. 

(q)  Barwis,  ex  parte,  6  Ves.  601  ;  Bar- 
row, ex  parte,  3  id.  554 ;  Henderson,  ex 
parte,  4  id.  163  ;  Ex  parte  Adam,  1  Ves.  & 
B.  494;  Stevens  v.  Jackson,  4  Camp. 
164,  6  Taunt.  106;  Ex  parte  Moule,  14 
Ves.  603 ;  O'Brien  v.  Currie,  3  C.  &  P. 
283;  Belton  v.  Hodges,  9  Bing.  365; 
Thornton  v.  Illingwortli,  2  B.  &  C.  826 ; 
Mason  i'.  Uenison,  15  Wend.  64;  Ex  parte 
Sydebotham,  1  Atk.  146.  "No  man  can 
be  a  bankrupt  for  debts  which  he  is  not 
obliged  to  pay."  Per  Lord  Holt,  Rex  v. 
Cole,  1  Ld.  Raym.  443.  Whether  an  in- 
fant may  be  declared  an  insolvent  on  his 
own  petition,  was  doubted,  in  the  matter 
of  Cotton,  6  Law  Reporter,  546.  Yet  we 
see  not  why  he  may  not  adopt  that  meth- 
od of  ratifying  his  obligation  as  well  as 
any  other.  The  opinion  of  the  court  is 
stated  absolutely,  and  without  reasons 
given.  It  may  be  that  it  went  on  the 
ground  of  the  invalidity  of  infants'  con- 
tracts, or  the  duty  of  tlie  court  to  pro- 
nounce them  void  or  binding,  according 
as  they  were  for  his  benefit.  But  at  this 
day  it  is  clear  that  no  debts  of  an  infant 
are  void,  but  simply  voidable  at  his  elec- 
tion. See  notes  and  authorities  on  this 
subject  in  the  chapter  on  Infants,  and 
especially  the  discriminating  remarks  of 
Bell,  J.,  on  the  vague  and  indefinite  use  of 
the  words  void  and  voidable,  in  State  v. 
Richmond,  6  Foster,  232.  It  is  further 
clear  that  a  contract  com])leted  by  the 
transfer  of  the  consideration  on  both  sides, 
cannot  be  avoided  by  the  infant,  without 
a  return  of  the  pro])erty  at  least  he  has 
acquired  by  the  contract.     This  being  so, 


[qa)  Ex  parte  Watson,  16  Ves.  265;  Ex  parte  Bates,  2  Mont.  D.  &  D.  337. 

[643] 


618 


THE   LAW   OF   CONTRACTS. 


[part  II. 


If  a  married  woman  act,  lawfully,  as  sole,  incur  debts,  give 
notes,  or  carry  on  trade  in  a  way  or  on  grounds  to  relieve  the 
husband  from  liability,  there  seems  no  reason,  and  no  rule  of 
law,  which  would  prevent  her  from  being  proceeded  against,  or 
from  proceeding,  as  an  insolvent,  (r) 


SECTION    VI. 

OF   THE   ASSIGNEES. 

In  this  country,  the  assignees  are  not  official  persons,  but 
are  appointed  by  the  creditors  at  a  regular  meeting,  (s)  The 
court  of  commissioner  may  appoint  assignees  when  the  cred- 
itors do  not,  or  when  the  purposes  of  the  assignment  require 
them  to  do  so.  (t)     Assignees  are  not  removable  by  a  vote  of 


and  insolvency  being  but  a  means  of  pay- 
ing (lues,  it  seems  that  it  might  be  ex- 
pected that  American  authority  would 
differ  from  the  English,  insolvency  being 
a  voluntary  act,  and  that  an  infant  might 
be  declared  insolvent  on  his  petition. 

(r)  La  Vie  v.  Piiilips,  1  W.  Bl.  570 ;  Ex 
parte  Carrington,  1  Atk.  206.  So  the  wives 
of  convicts  may  be  deemed  bankrupts,  and 
on  a  similar  j)rinciple.  Ex  parte  ^''ranks, 
7  Bing.  762.  In  Megrath  r.  Robertson, 
1  Desaus.  445,  it  was  iieid  that  a  wife  may 
become  a  sole  trailer  liy  permission  of  her 
husband,  even  witliout  deeds,  and  she  be- 
comes entitled  to  all  iier  earnings  as  her 
separate  estate.  King  v.  Paddock,  18 
Joiins.  141  ;  Baker  v.  Barney,  8  id.  72. 
The  cases  are  numerous  where  it  has  been 
licld,  partly  under  statute  law  and  ])artly 
by  deci.sioris  of  the  courts,  that  a  married 
woman  iTiay  l)ecomc  trader,  and  uiuler 
certain  circiimstaiu-es  bo  liable,  and  enti- 
tled to  tli(^  siinic  j)r()ccss  as  if  sole.  They 
will  !)(■  fouml  collcctrd  in  the  notes  to  Jiagc 
300  of  tli(r  fn>t  volume  of  this  work. 

(.s)  And  where  this  jjower  is  vested  in 
the  creditors,  we  know  no  reason  why  they 
may  not  exercise  it  in  the  freest  possii)l(! 
manner,  and  elect  whom.soever  they  please 
to  the  of1i<(;  of  assignee.  By  provision  of 
many  of  the  stiitiitcs,  ihi;  power  ol  rejec- 
tion is  vested  in  the  comniibsioiierK.     TJio 

[644] 


consideration,  whether  the  person  chosen 
is  or  is  not  a  creditor  of  the  bankrupt 
estate,  should  have  no  weight  in  inducing 
the  commissioner  to  reject.  Ex  parte  Greig- 
nier,  1  Atk.  91;  In  re  Litchfield,  id.  87; 
Jackson  v.  Irvin,  2  Camp.  48.  But  Lord 
Eldon  placed  this  limitation  on  the  power 
of  the  creditors  to  elect  whom  they  pleas- 
ed ;  that  they  should  not  elect  the  bank- 
rupt to  be  assignee  of  his  own  estate,  on 
the  ground  of  the  >frcAt  inconvenience  at- 
tending such  a  relation.  Ex  parte  Jack- 
son, 2  Rose,  221.  And  it  has  been  said 
that  neither  the  solicitor  to  the  commission- 
er, nor  his  partner,  could  be  elected.  Ex 
parte  Rice,  Mont.  259  ;  Ex  /larte  Badcock, 
Mont.  &  McA.  2.'51 .  And  in  Ex  parte  La- 
cey,  0  Ves.  025,  Lord  Eldon  said,  that  the 
banker  reccivmg  the  money  under  the 
baid^rujitcy,  ought  not  to  be  assignee. 
But  a  solvent  partner  could  be.  Ex  parte 
Stoveld,  1  Glyn  &  J.  30;5. 

{t)  In  some  of  tlie  statutes,  jirovision  is 
made  for  the  appointment  of  assignees  by 
the  court,  without  reference  to  the  prefer- 
ence of  the  creditors.  See  §  3  of  the  late 
National  ]$aid;rii|>t  Act.  And  where  such 
power  is  vested  in  the  court,  no  person 
ought  to  be  ajipointed  who  is  interested  in 
(he  b:inki'ui)t's  estate,  or,  at  least,  has  an 
inlerest  ailveise  to  that  of  the  creditors. 
Ex  jiurtc  l)c  Tasted,  1   Rose,   324 ;   Ex 


CH.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


619 


the  creditors,  nor  by  the  court,  or  any  tribunal,  but  for  cause 
shown.  But  the  proper  tribunal  must  listen  to  any  proper  ap- 
plication by  the  creditors,  or  any  part  of  them,  for  his  removal, 
and  must  ascertain  whether  there  be  sufficient  cause ;  and  gen- 
erally may  remove  if  such  cause  exist,  and  is  judicially  known 
by  them,  without  application.  But  these  matters  are  all  regu- 
lated by  the  different  statutes,  and  with  great  variety,  (u) 


parte  Surtees,  12  Vcs.  10;  Ex  parte  Town- 
shend,  15  id.  470 ;  Ex  parte  Shaw,  1  Glvn 
&  J.  127  ;  Shclton  v.  Walker,  10  Law  Re- 
porter, 124.  Shaw,  C.  J.,  in  this  case  said : 
The  grounds  of  complaint  against  the 
assignee  in  this  case,  were  that  he  had 
exercised  undue  influence  in  procuring  his 
appointment  as  assignee ;  that  his  interests 
were  adverse  to  those  of  the  otiier  credi- 
tors ;  and  that  he  had  used  improper 
means  to  secure  his  claims  against  the  in- 
solvent. It  had  been  decided  in  England, 
that  one  who  had  an  adverse  interest,  or 
who  pursued  his  interest  in  opposition  to 
that  of  tlie  creditors  generally,  was  an  un- 
fit person  to  be  assignee.  It  was  not 
merely  on  account  of  the  large  amount  of 
the  demand  for  which  the  assignee  might 
be  interested ;  for  all  creditors  might  be 
supposed  to  have  opposing  interests  in 
their  claims  upon  an  insolvent  estate. 
But  to  disqualify  him,  he  must  be  in  such 
a  situation  as  to  be  under  temptation  to 
secure  himself  from  a  scrutiny  to  wliich 
he  would  have  been  subjected  had  another 
been  assignee,  or  he  must  have  manifested 
some  intention  to  use  his  position  to  obtain 
some  undue  advantage. 

(u)  If,  accidentally,  a  Iarj:e  proportion 
of  the  creditors  have  been  absent  at  the 
choice  of  the  assignee,  a  new  choice  may 
be  ordered.  Ex  parte  Gregnier,  1  Atk. 
90  ;  Ex  parte  Hawkins,  Buck.  520 ;  Ex 
parte  Dechapeaurouge,  1  M.  &McA.  174  ; 
Ex  parte  Edwards,  Buck,  411.  And  if, 
after  choice  made,  the  commissioner  should 
decide  that  the  person  chosen  is,  for  any 
reason,  unfit  for  the  discharge  of  the  duties, 
and  refuse  to  admit  him  to  the  care  of  the 
estate,  an  appeal  lies  to  the  Supreme  Court 
of  Bankruptcy.  Ex  parte  Candy,  1  Mont. 
&  McA.  197.  And  the  court  also  in  gen- 
eral has  power  to  remove  an  assignee  who 
proves  incompetent,  from  any  reason,  to 
discharge  his  office  ;  or  if  there  has  been 
a  fraud  in  procuring  the  appointment.  In 
Ex  parte  Shaw,  1  Glyn  &  J.  156,  Lord 
Eldon  said  :  "  Assignees  owe  a  duty  to 
every  creditor,  and  each  creditor  ow'es  a 


duty  to  the  other  creditors.  With  respect 
also  to  the  solicitors  under  the  commission, 
I  can  only  say,  that  it  sometimes  happens 
that  the  best  men  are  employed  for  parties 
having  adverse  interests ;  yet  I  cannot 
permit  my  observations  to  be  closed,  with- 
out saying  that  it  is  the  duty  of  the  solic- 
itor employed  l)y  the  bankrupt,  if  he  find 
that  he  is  employed  by  the  assignees,  to 
see  that  he  can  do  his  duty  to  every  cred- 
itor, as  well  as  to  the  bankrupt.  If  he  is 
the  agent  of  all,  he  must  do  his  duty  to 
each  and  all  of  them,  however  difficult  it 
may  be  to  discharge  that  duty.  I  must 
say,  that  I  never  saw  proceedings  in  any 
bankruptcy  in  which  there  was  a  necessity 
for  the  interference  of  the  court  more  im- 
perious than  in  tliis  ;  for  whether  Carroll 
can  or  cannot  ]3rove  the  rest  of  his  debt 
(and  it  would  be  improper  in  me  to  ex- 
press an  o])inion  on  that  part  of  the  sub- 
ject, even  if  I  liad  formed  an  opinion  upon 
the  merits  of  it),  yet  I  cannot  read  the 
proceedings  without  observing,  that  the 
case  calls  for  much  adverse  examination. 
I  take  into  consideration  all  tlie  other  cir- 
cumstances that  have  occurred,  and  with- 
out saying  whether,  if  /  were  bound  to 
decide  this  question  merely  upon  the  in- 
terposition of  the  bankrupt,  I  could  get 
satisfivctorily  to  the  conclusion  what  were 
the  motives  which  induced  the  nomination 
of  these  parties,  after  a  laborious  research 
into  the  evidence,  I  have  no  difficulty  in 
stating  that,  taking  the  case  altogether,  if 
the  nomination  had  been  carried  into  exe- 
cution by  assignment,  I  should  have  been 
of  opinion  that  Carroll  stands  under  cir- 
cumstances in  which  he  should  not  be 
assignee."  So  if  the  assignee  buy  in  the 
estate  of  the  bankrupt,  or  a  portion  of  it, 
the  general  rule  is  to  remove  him.  Ex 
parte  Alexander,  2  Mont.  &  A.  492.  So 
the  court  will  remove  an  assignee  who 
converts  to  his  own  use  the  property  of 
the  bankrupt.  Ex  parte  Townshcnd,  15 
Ves.  470.  The  case  was,  a  petition  to 
remove  assignees  under  a  commission  of 
bankruptcy,   and   to   charge   interest  for 

[645] 


620 


THE   LAW   OF   CONTRACTS. 


[part  U. 


These  statutes  also,  to  a  considerable  extent,  define  or  declare 
his  duties  and  his  powers.  Many  cases  have  arisen  in  which 
questions  relating  to  these  rights  and  duties  have  been  deter- 
mined ;  and  it  may  be  well  to  speak  of  them  at  more  length. 

The  assignees  are  the  trustees  of  all  the  creditors  ;  and  are 
bound  by  the  ordinary  obligations  of  trustees  in  relation  to  the 
property  in  their  own  hands,  (v)  They  cannot  buy  it  in  ;  nor 
acquire  a  title  to  it  or  to  any  part  of  it,  by  buying  in  shares  or 


money,  part  of  the  bankrupt's  estate,  re- 
ceived hy  one  of  the  assignees,  paid  in  at 
his  banker's,  to  his  own  account,  and  used 
as  his  own  property.  The  Lord  Chan- 
cellor said  :  "  Under  these  circumstances, 
therefore,  the  former  assignees  having  been 
actually  discharged  for  this  very  reason, 
using  money,  part  of  the  banki-upt's  estate, 
as  their  own,  the  new  assignees  chosen  in 
execution  of  the  principle  respecting  such 
use  of  the  property,  no  substantial  reason 
appearing  for  not  having  made  this  money 
the  subject  of  dividend,  being  taken  by 
this  person,  one  of  the  new  assignees, 
placed  by  him  at  his  banker's,  used  as  his 
own  money,  his  clerk  furnished  with  au- 
thority to  draw  it  out  as  he  pleased,  and 
actually  doing  so,  I  must,  by  enforcing 
this  rule,  if  possible,  convince  persons 
standing  in  the  situation  of  trustees,  as 
assignees  in  bankruptcy,  that  they  are  not 
to  make  use  of  the  bankrupt's  estate  for 
their  own  private  purposes.  For  that 
reason  alone,  I  shall  direct  a  meeting  to 
be  called  for  the  purpose  of  choosing  an 
assignee  instead  of  that  one,  who  has  made 
this  use  of  the  property."  And  in  an 
early  case,  Kx  parte  Ilaliday,  7  Vin.  Abr. 
77,  wliere  the  commissioners  of  the  bank- 
rupt's estate  had  charged  more  than  20s. 
apiece  at  each  meeting,  and  likewise  or- 
dered great  sums  to  be  charged  for  their 
eating  and  diinking,  the  Lord  Chancellor 
declared  them  iiica|)able  of  longer  holding 
their  odice.  A'.r  jKirte  llcynolds,  .'i  Ves. 
707.  So  if  th(!  assignee  remove  from 
the  State  in  whicii  the  decree  issued,  or 
beyond  the  jurisdiction  of  the  court  by 
whicli  the  decree  was  issued.  In  A'.c  purte. 
Grey,  l.'{  Ves.  274,  the  Lord  Chancellor 
Baid  :  "  I  am  clearly  of  opinion  that  the 
assignee!  ought  to  In;  rctiiovcd.  lit-  is 
trustee  for  tlic,  lpatikrii|pt  and  tlic  cn'ditors. 
Yet,  whilst  li(!  is  resident  in  Scotland,  I 
have  no  hold  over  liini,  ami  can  reach  him 
with  no  jiroccKs."     And  sec /ix /w;7e  Lc- 

[GIO] 


man,  13  Ves.  271.  The  cases  are  numer- 
ous in  England,  where  the  right  of  re- 
moval has  been  considered.  In  America, 
it  seems  to  have  been  little  discussed. 
We  cite  some  of  the  leading  and  most  in- 
structive cases  on  this  subject :  Ex  parte 
Rapp,  1  Deacon  &  Ch.  461  ;  Ex  parte 
Thorley,  Buck,  231  ;  Ex  parte  Copeland, 
1  Mont.  &  A.  306  ;  Ex  parte  KoUs,  3  id. 
702;  Ex  parte  Mills,  3  Ves.  &  B.  139; 
Ex  parte  De  Tastct,  1  id.  280,  1  Rose, 
324;  Ex  parte  Morse,  1  De  Gex,  478; 
Ex  parte  Nash,  1  Deacon  &  Ch.  445  ;  Ex 
parte  Barnctt,  2  Mont.  D.  &  De  G.  692  ; 
Ex  parte  Shaw,  1  Glyn  «&.  J.  127,  above 
cited;  Ex  parte  Molineux,  3  Mont.  &  A. 
703  ;  Ex  parte  Candy,  Mont.  &  ]\IcA. 
198  ;  Ex  parte  Surtecs,  12  Ves.  10,  above 
cited  ;  Ex  parte  Hawkins,  Buck,  520 ; 
Ex  parte  Morris,  1  Dcac.  498;  Ex  parte 
Edwards,  Buck,  411  ;  Ex  parte  Decha- 
peaurouge,  Mont.  &  McxV.  174  ;  Ex  parte 
Spiller,  2  Mont.  D.  &  De  G.  43  ;  Ex  parte 
Stagg,  id.  186  ;  Ex  parte  Mendel,  4  Deac. 
&  Ch.  725  ;  Ex  parte  Perrycr,  1  Mont.  D. 
&  De  G.  276  ;  Ex  parte  Reynolds,  5  Ves. 
707  ;  Ex  parte  Steel,  1  Deacon  &  Ch. 
488  ;  Shelton  v.  Walker,  10  Law  Reporter, 
124.  But  in  general,  in  tlie  later  bank- 
rupt laws,  it  is  provided  tliat  assignees 
may  be  removed  at  discretion  by  the  court. 
As  in  the  late  U.  S.  Bankrupt  Law,  "  the 
court  may  exercise  such  power  of  ap- 
pointment and  removal  at  its  discretion 
tot  its  fpioties." 

(r)  Ex  parte  Laccy,  6  Ves.  625;  Ex 
parte  Belchier,  Ambl.  218  ;  Belchiert'.  Par- 
sons, 1  Kcnyon,  44  ;  /^.i; /»ff/7(' Wilkinson, 
Buck,  197  ;  Primrose  r.  Hromley,  1  Atk. 
89  ;  In  re  Earl  of  Litchlield,  id.  87  ;  Ex 
parte  Lane,  id.  90  ;  Knight  v.  I'limouth, 
3  id.  480  ;  Adams  r.  Claxton,6  Ves.  226; 
Raw  V.  Cutleii,  9  Hing.  90  ;  1  Cooke,  B. 
L.  263  ;  /■;./•  parte  Read,  1  Glvn  &  J.  77  ; 
and  cases  cited  in  the  subsequent  notes. 


en.  X.J 


BANKRUPTCY   AND   INSOLVENCY. 


621 


claims  of  creditors,  (w)  And  if  they  make  any  gain  out  of  any 
transaction  in  relation  to  it,  the  creditors  may  demand  that  this 
ofain  be  added  to  the  assets  of  the  insolvent,  and  accounted  for 
as  a  part  of  them,  (x)  So,  too,  the  assignees  are  trustees  of  each 
creditor  as  well  as  of  all  the  creditors.  It  would  seem  to  follow, 
therefore,  that  no  assignee  could  protect  himself  against  any 
claim  or  suit  of  any  creditor,  by  showing  only  that  he  had  acted 
in  obedience  to  a  majority  of  the  creditors,  or  of  any  number  or 
proportion  of  them,  however  great,  (y)  It  is,  however,  obvious 
that  there  are  some  things  which  must  be  determined  by  the 
will  of  the  majority,  as  who  shall  be  assignee,  and  other  impor- 
tant matters  concerning  wiiich  it  is  impossible  that  every  man 


(lo)  The  contrary  seems  to  have  been 
held  bj'  Lord  Uurdwicke,  in  Whelpdalc  v. 
Cookson,  1  Ves.  Sen.  9,  stated  from  the 
Register's  book  in  Campbell  v.  Walker, 

5  Ves.  682.  He  confirmed  a  sale  by  the 
assignee  to  himself,  in  case  the  majority  of 
the  creditors  should  not  dissent.  But  in 
Ex  parte  Lacey,  6  Ves.  625,  Lord  Eldon 
said  :  "  With  all  humility  I  doubt  the 
authority  of  that  case,  for  if  the  trustee  is 
a  trustee  for  all  the  creditors,  lie  is  a  trus- 
tee for  them  all  in  the  article  of  selling  to 
others  ;  and  if  the  jealousy  of  the  court 
arises  from  the  dithculty  of  a  cestui  que  trust 
duly  informing  himself  what  is  most  or 
least  for  his  advantage.  I  have  consider- 
able doubt  whether  the  majority  in  that 
article  can  bind  the  minority,  the  question 
does  not  arise  upon  the  state  of  facts  in 
this  case."  Lord  Eldon  expressly  denies 
that  the  assignee  can  buy  the  estate  of 
the  bankrupt,  and  going  further,  he  says  : 
"As  to  the  purchase  of  del)ts  by  the  as- 
signee, as  assignees  cannot  buy  the  estate 
of  the  bankrupt,  so  they  cannot  for  their 
own  benefit  buy  an  interest  in  the  bank- 
rupt's '  estate ;  because  they  are  trustees 
for  the  creditors."     In  Ex  parte  Tanner, 

6  Ves.  630  ;  Ex  parte  Attwood,  id.  ;  Owen 
V.  Foulkes,  id.,  the  Lord  Chancellor  laid 
down  the  general  rule,  that  no  trustee 
shall  buy  the  trust  property,  until  he  strips 
himself  of  that  character,  or  by  universal 
consent  has  acquired  a  ground  for  becom- 
ing a  purchaser  ;  and  added  that  the  rule 
is  to  be  more  peculiarly  applied  with  un- 
relenting jealousy  in  the  case  of  an  as- 
signee of  a  bankrupt,  and  that  it  must  be 
understood,  that  whenever  assignees  pur- 
chase, they  must  expect  an  inquiry  into 


the  circumstances.  Ex  parte  Reynolds, 
5  Ves.  707 ;  Ex  parte  Shaw,  1  Glyn  &  J. 
127  ;  Ex  parte  Steel,  1  Deacon  &  Ch.  488. 
And  see  Fox  i'.  Mackreth,  2  Bro.  C.  C. 
400,  2  Cox,  320;  Whichcote  f.  Lawrence, 
3  Ves.  740 ;  Campbell  v.  Walker,  5  Ves. 
678;  Ex  parte  Hughes,  6  id.  617;  Lister 
?'.  Lister,  id.  631  ;  Ex  parte  Morgan,  12 
Ves.  6  ;  Ex  parte  Hodgson,  1  Glyn  &  J. 
14;  Ex  parte  Lewis,  id.  70;  Ex  parte 
Buxton,  id.  357  ;  Ex  parte  Bage,  4  Madd. 
460.  But  in  Ex  parte  Reynolds,  5  Ves. 
707,  it  was  held  that  in  case  the  subsequent 
sale  did  not  produce  as  much  as  the  as- 
signee had  given,  he  should  then  be  bound 
by  his  wrongful  purchase. 

(.r)  This  seems  naturally  to  follow  from 
their  character  as  trustees.  The  general 
doctrine  is  clear  (see  the  chapter  on  Trus- 
tees, vol.  1  of  this  work),  that  when  the 
trustee  has  used  trust  funds  for  his  own 
benefit,  he  shall  be  held  liable  to  account  for 
the  profits  accruing  to  him  from  the  same, 
and  pay  them  over  to  the  cestui  que  trust. 
If  he  refuse  to  account,  and  if  tlie  negli- 
gence and  refusal  is  continued  for  a  long 
period,  he  will  be  charged  compound 
interest  on  the  sum  in  his  hands ;  and  we 
see  not  why  this  same  doctrine  may  not 
apply  in  case  of  bankrupt's  assignees. 
Barney  v.  Saunders,  16  How.  535  ;  Rowan 
V.  Kirkpatrick,  14  111.  1  ;  Jones  v.  Foxall, 
15  Beav.  388,  13  Eng.  L.  &  Eq.  140; 
Schieffelin  v.  Stewart,  1  Johns.  Ch.  620; 
Boynton  v.  Dyer,  18  Pick.  1,  and  numer- 
ous other  cases,  cited  page  103  of  the  1st 
volume,  note  (6). 

(ij)  The  cases  cited  in  the  three  previous 
notes  seem  to  establish  this. 

[647]   . 


622  THE  LAW  OF  CONTRACTS.  ^  [PART  II. 

should  have  his  own  way,  and  here  the  statute  provides  accord- 
ingly that  the  will  of  the  majority,  under  certain  precautions 
against  fraud  or  oppression,  should  prevail.  It  may,  however, 
be  laid  down  as  a  rule  with  scarcely  an  exception,  that  no  as- 
signee is  safe  in  relying  upon  a  majority  vote  or  act,  excepting 
in  the  very  cases  and  the  very  way  pointed  out  by  the  statutes. 
It  is  obvious  that  if  a  majority  had  any  general  power,  they 
might  easily  exert  it  to  defeat  the  whole  purpose  of  insolvent 
Jaws,  which  is  equal  justice  to  all. 

It  is  one  of  the  earliest  duties  of  assignees  to  take  possession 
and  charge,  without  any  delay,  of  the  effects  of  the  insolvent. 
And  they  would  not  only  be  responsible  for  any  injury  to  this 
property  while  in  their  possession,  if  caused  by  their  own  de- 
fault, but  for  any  injury  caused  by  a  faulty  delay  in  taking  pos- 
session, (c) 

An  assignee  has,  however,  a  certain  discretion  in  this  matter. 
He  is  not  bound  to  accept  and  receive  what  might  prov^e  to  be 
a  damnosa  hcrcditas,  or  any  thing  of  that  kind.  If  the  insolvent 
has,  for  example,  leasehold  property,  the  assignee  ma?/  take  it 
into  his  possession.  But  if  it  be  incumbered  with  charges  and 
obligations,  he  takes  it  cum  onere,  and  must  fulfil  all  these 
obligations ;  and  if  these  would  make  it  cost  more  than  it  is 
worth,  so  that  taking  it  would  diminish  rather  than  enlarge  the 
funds  to  which  the  creditors  look,  he  may,  as  their  trustee, 
refuse  to  take  it.  (a)     But  then  other  parties  who  have  these 

(s)  This  doctrine  is  laid  down  in  all  the  rupt  laws,  that  the  assignee  is  not  bound 

text-hooks  on  tiiis  suhject,  and  si'cnis  no-  to  take  the  lease  and  charge  the  estate 

where    contradicted    hy   the    antiioritics.  with  the  payment  of  rent.     The  rent  may 

And  usually  statute  provision  is  made  for  he  greater  than  the  value  of  the  lease,  and 

the  purp(jse  of  enaliling  hini  to  take  pos-  thus  the  estate  may  he  burdened  instead  of 

session,  as  in  the  late  national  act,  that  being  benefited  by  taking  the  lease,  and 

for  tliis  |)ur|)ose  tlic  clerk  should  deliver  to  in  such  a  case  the  thniniosa  hercditas  may 

the  assignee  a  certihed  copy  of  the  de-  be  abandoned  by  the  assignee.    I  have  had 

cree.  occasion  to  consider  tliis  question  in  an- 

((;)  In  Smitlu,'.  Gordon,  f'l  Law  Ticporter,  other  case,  and  I  came  to  tlic  conclusion 

31.'5,    Willi,  J.,  said:    "  ]5y  th<-  baukni])t  that  this  doctrine  C(iually  holds  under  our 

act  all  the  property  and  i-iglits  of  property  of  bankniiit  law.     Ex  jnirte  Whitman,  Dc- 

lhel)ankru|)l,  liy  forceoftliedecreeof  bank-  cemher,  1842.     And  I  take  the  principle 

ruptcy,  pass  to  the  assignee  by  operation  of  to  be  a  general  one,  that  the  assignee  is 

law,  ami  become  vested  in  him  as  soon  as  not,   at    least   ordinarily,   bound    to   tako 

he  isapjiointed.    IJut  thou;^!)  the  legal  title  into  his  possession  jn'operty  which  will  bo 

pusses  lie  is  not  bound  to  take  possession  of  a  burden  instead  of  a  bcneiit  to  the  estate. 

all.    It  is  perfectly  \m'I1  sellled  with  respect,  If  tlu!  assignees  elects  a  right  iu)t  to  take, 

to  leajjchold  estates, uuderthe  English  bank-  the  property  remains  in  the  bankru])t,  and 

[  G48  ] 


CH.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


623 


charges  and  obligations  against  the  debtor,  may  come  in  as 
creditors,  if  their  claims  are'  of  a  kind  to  be  proved,  and  take 
their  dividend.  Neither  can  the  assignee  select  or  divide  what 
he  may  thus  take,  if  it  be  entire  in  itself.  He  cannot  take  it  so 
far  as  it  is  good,  and  reject  it  as  far  as  it  is  bad,  but  must  do 
one  or  the  other,  altogether,  (b).  Indeed,  it  is  a  universal  rule, 
that  the  assignee  represents  the  insolvent,  so  far  as  to  be  subject 
to  all  the  equities  against  him  which  attach  to  any  effects  in 
the  assignee's  hands,  (c)     So  he  must  make  restitution  of,  or  if 


no  one  has  a  right  to  dispute  his  posses- 
sion. His  possessory  title  is  good  against 
all  the  world  but  his  assignee.  Thus  in 
this  case  it  the  assignee  elected  not  to  take 
the  right  of  the  bankrupt  and  cliarge  the 
estate  with  the  costs  of  a  suit  in  equity  the 
issue  of  which  was  uncertain,  the  right, 
whatsoever  it  was,  remained  in  the  bank- 
rupt, and  might  be  pursued  by  any  credi- 
tor who  had  not  proved  under  the  bank- 
ruptcy." Nias  V.  Adamson,  3  B.  &  Aid. 
22.5  ;  "Wheeler  v.  Borman,  3  Camp.  340 ; 
Turner  v.  Richardson,  7  East,  335  ;  Cope- 
land  V.  Stephens,  1  B.  &  Aid.  593  ;  Bour- 
dillon  V.  Dalton,  1  Esp.  233 ;  Ex  parte 
Fuller,  2  Story,  327.  And  the  cases  allow 
him  a  reasonable  time,  in  which  to  con- 
sider and  decide  whether  he  will  take  or 
not.  If  the  assignee  refuse  to  take  pos- 
session, the  title  remains  in  the  bankrupt, 
with  the  same  rights  of  defence  of  title, 
and  the  same  privilege  to  sue  for  damages 
to  his  possession,  as  if  his  remaining  goods 
had  not  been  distributed  for  the  benefit  of 
his  creditors.  Smith  v.  Gordon,  above 
cited ;  AVebb  v.  Fox,  7  T.  R.  391  ;  Fow- 
ler V.  Down,  1  B.  &  P.  44  ;  Turner  v. 
Richardson,  above  cited.  But  if  the  as- 
signee takes  the  property,  he  takes  it  cum 
onere,  and  is  liable  for  covenants  and  in- 
cumbrances. Holford  V.  Hatch,  Doug. 
183  ;  Corsbiew.  Free,  Craig  &P.  64;  Page 
V.  Way,  3  Beav.  20 ;  Pierce  v.  Thornely, 
2  Sim.  167.  See  also.  Bull.  N.  P.  159  ; 
Parker  v.  Webb,  3  Salk.  5;  Harley  v. 
King,  5  Tvrw.  692  ;  Luxmore  v.  Robson, 
1  B.  &  Aid.  584 ;  Demarest  v.  Willard, 
8  Cowen,  206;  Taylor  v.  Shum,  1  B.  & 
P.  21 ;  Ai-mstrong  v.  Wheeler,  9  Cowen, 
88,  Bac.  Abr.  Tit.  Cor.  But  not  if  he 
abandons  the  possession,  for  the  liability 
is  only  as  perdurable  as  the  possession. 
Valliant  v.  Dodemede,  2  Atk.  546 ;  Pitcher 
V.  Torcy,  12  Mod.  23;  Armstrong  v. 
Wheeler,  above  cited.     Onslow  v.  Corrie, 

VOL.  II.  55 


2  Madd.  330 ;  Wilkins  v.  Fry,  2  Rose, 
371  ;  Taylor  v.  Shum,  1  B.  &  P.  21  ; 
Eaton  V.  Jaques,  Doug.  456. 

(b)  See  cases  cited  in  the  preceding  note. 

(c)  In  Ex  parte  Newhall,  2  Story,  360, 
Sion/,  J.,  said:  "I  take  the  clear  rule  in 
bankruptcy  to  be  that  the  assignee  takes 
the  property  and  rights  of  property  of  the 
bankrupt,  subject  to  all  the  rights  and 
equities  of  third  persons,  which  are  at- 
tached to  it  in  the  hands  of  the  bankrupt." 
And  the  language  of  Erskine,  L.  Ch.,  in 
Ex  parte  Hanson,  12  Ves.  346,  is  equally 
unqualified.  "  Here  is  a  clear  principle 
which  decides  this  case,  that  assignees  in 
bankruptcy  take  subject  to  all  equities  at- 
taching upon  the  bankrupt ;  and  on  the 
condition  of  the  bankrupts  if  they  had  con- 
tinued solvent,  would,  as  between  them 
and  these  persons,  be  such  as  I  have  rep- 
resented, that  must  be  the  condition  of  the 
assignees."  Ex  parte  Herbert,  13  Ves. 
188;  Mitford  v.  Mitford,  9  Ves.  100; 
Pope  V.  Onslow,  2  Vern.  286  ;  Brown  v. 
Heathcote,  1  Atk.  160,  162;  Scott  v. 
Surnam,  Willes,  402 ;  Leslie  v.  Guthrie, 
1  Bing.  N.  C.  697 ;  Fletcher  v.  Morey,  2 
Story,  555  ;  Mitchell  v.  Winslow,  id.  630 ; 
Humphreys  v.  Blight,  1  Wash.  C.  C.  44 ; 
Stouffer  V.  Coleman,  1  Yeates,  399.  In 
the  matter  of  McLellan,  6  Law  Repor- 
ter, 440 ;  Tallcott  v.  Dudley,  4  Scam.  427. 
See  also,  Ex  parte  Marsh,  1  Atk.  159; 
Ex  parte  Butler,  id.  213  ;  Clopham  v. 
Gallant,  1  Com.  Dig.  533;  Howard  v. 
Jcmmet,  3  Burr.  1369  ;  Winch  i;.  Keely,  1 
T.  R.  619;  Grant  v.  Mills,  2  Ves.  &  B. 
309.  In  the  matter  of  BLuggridge,  5  Law 
Reporter,  351 ;  Ex  parte  Copeland,  3 
Deacon  &  Ch.  199  ;  Ex  parte  Prescott,  1 
Mont.  &  A.  316  ;  Ex  parte  Flower,  2  id. 
224 ;  Ex  parte  Plant,  4  Deacon  &  Ch. 
160;  Griswold  v.  McMillan,  11  111.  591  ; 
Strong  V.  Clawson,  5  Oilman,  346.  The 
assignee  takes  only  the  bankrupt's  heneji- 

[649] 


624 


THE   LAW   OF   CONTRACTS. 


[part  II. 


trover  be  brought,  refund  in  damages  for  any  property  he  has 
taken  as  the  insolvent's,  to  which  some  one  else  has  a  better 
title,  (d) 

Assignees  must  act  jointly,  neither  having  the  power  of  both ; 
nor  can  either  or  both  delegate  their  power,  or  substitute  others 
as  assignees,  (e)  But  they  may  employ  attorneys  or  agents  to 
act  for  them  in  all  matters  in  which  their  own  personal  action 
is  not  necessary  ;  (/)  and  their  liability  for  the  acts  of  their 
agents  would  be  determined  by  the  general  principles  of  the 
law  of  agency,  (g-)     They  may  sue  in  their  own  name,  on  the 


cial  interest,  Ontario  Bank  v.  Mumford, 
2  Barb.  Ch.  596.  The  rule  above  stated 
is  liable  to  no  exception  whatever  except 
in  case  of  fraud,  which  "  vitiates  every 
thing,"  and  which,  where  it  exists,  pre- 
vents the  operation  of  every  general  rule. 
Stori/,  J.,  in  the  cases  cited  from  2  Story. 
The  right  always  exists  in  the  assignees 
of  defeating  any  conveyance  made  by  the 
bankrupt  in  fraud  of  his  creditors  or  of 
the  bankrupt  laws.  Williams  v.  Ver- 
meule,  4  Sandf.  Ch.  388. 

(d)  It  seems  that  no  authority  under  a 
decree  in  bankruptcy  to  take  possession 
of  the  goods  of  A  would  make  a  party  the 
less  a  wrongdoer  who  should  under  the 
color  of  that  authority  seize  the  goods  or 
estate  of  B,  and  assignees  are  to  use  great 
diligence  in  avoiding  the  seizing  of  prop- 
erty of  persons  other  than  the  bankrupt, 
for  in  the  case  of  Ex  parte  Cowan,  3  B.  & 
Aid.  123,  it  appeared  that  the  assignees 
liad  seized  as  the  property  of  the  bankrupt 
a  farm  belonging  to  A  13  and  had  kept 
it  a  long  time,  and  mismanaged  it,  and 
that  the  Lord  Chancellor  had  referred  it 
to  a  Master  to  take  the  account  between 
A  and  B  and  the  assignees  in  respect  of 
sucii  property  and  of  its  mismanagement, 
and  afterwards  upon  his  report  had  ordered 
a  certain  sum  to  be  paid  to  A  B  by  the 
assignees,  the  commission  having  been  pre- 
viously suspended.  Tliis  was  a  motion 
for  a  proliibition  to  the  Lord  Cliancellor. 
In  sujtport  of  the  motion  the  fullowing 
niitlioriticH  were  relied  on.  Davy's  case, 
Lord  Jt'iipiiond,  .')31  ;  Kjr  ]imir  Uowton, 
17  Vcs.  420  ;  Eyre  v.  Jackson,  1  Chan. 
licp.  220  ;  Hrymcr  v.  Atkins,  1  II.  Bl. 
164;  A'r  jmrh-  Karl  of  Litchfield,  1  Atk. 
88.  But  the  court  held  that  the  cliancel- 
lor had  not  exceeded  his  jurisdiction  in 
making  the   assignees   iicisonallv  liable, 

[  G50  ] 


beyond  the  funds  in  their  hands,  for  such 
mismanagement.  In  the  matter  of  Che- 
ney, 5  Law  Reporter,  19. 

(e)  Williams  v.  Walsby,  4  Esp.  220; 
Lord  Lovelace's  case,  Sir  W.  Jones,  268  ; 
Can  V.  Reed,  3  Atk.  695.  See  Smith 
V.  Jameson,  1  Esp.  114;  Bristow  v.  East- 
man, id.  172. 

(/)  This  would  seem  to  follow  as  a 
right  incident  to  their  character  as  trus- 
tees. 

(g)  It  has  been  held  that  if  an  assignee 
employs  an  agent  in  the  conduct  and 
management  of  the  bankrupt's  property, 
who  misapplies  and  embezzles  any  part  of 
the  effects,  the  assignee  will  be  liable  to 
make  it  good,  unless  he  had  consulted 
the  body  of  the  creditors,  who  are  his  ces- 
tuis  que  trust,  in  the  appointment  of  such 
agent.  In  the  matter  of  Earl  of  Litch- 
field, 1  Atk.  87.  But  it  is  clear  that 
when  the  assignees  employ  a  person  either 
from  necessity,  or  conformably  to  the  gen- 
eral usage  of  mankind,  they  are  not  then 
liable  for  losses,  or  for  the  default  of  such 
agents.  Thus,  when  an  assignee  em- 
ployed a  broker  to  sell  a  quantity  of  to- 
bacco, and  the  broker  received  tlie  money, 
and  in  ten  days  failed  without  having  paid 
it  over,  the  assignee  in  this  case  was  iield 
not  bound  to  make  it  good.  Ex  parte 
Belchier,  Ambl.  218;  Belchier;'.  Parsons, 
1  Kcnyon,  44.  See  7'>.r  parte  Wilkinson, 
Buck,  197  ;  Deacon  on  Bankruptcy,  339. 
In  Bclcliicr  ?•.  Parsons,  above  cited,  the 
duty  and  rigiit  of  assignees  in  tliis  matter 
are  well  set  forth  :  "  I  am  of  opinion  that 
there  are  no  grounds  to  make  Mrs.  Par- 
sons answerable  in  tliis  cause  for  any 
more  of  the  money  than  what  she  actually 
received.  Were  it  once  to  bo  laid  down, 
as  a  rule  in  this  court,  that  an  assignee, 
or  trustee,  sliould   bo   answerable  in  all 


CH.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


625 


contracts  or  choses  in  action  of  the  insolvent,  which  they  take 
for  the  creditors,  (h) 


events  for  the  people  they  employ,  no 
man  in  his  senses  would  ever  undertake 
those  offices.  In  the  case  of  executors 
and  administrators,  the  common  law  does 
in  most  cases,  consider  the  persons  receiv- 
ing hy  their  directions  only  as  the  hands 
by  which  they  receive ;  and  this  court, 
likewise,  to  preserve  some  consistency 
with  the  common  law,  does  confine  them 
to  stricter  rules,  and  what  is  a  devastavit 
at  law,  must  be  so  here.  But  in  the  case 
of  trustees,  and  assignees  particularly, 
who  are  acting  immediately  under  the 
authority  of  this  court,  it  has  always  ad- 
mitted of  greater  latitude ;  nay,  in  the 
former  case,  this  court,  and  sometimes 
even  the  courts  of  law,  have  dispensed 
with  that  rigor.  In  cases  of  this  kind,  it 
is  not  to  be  expected  that  the  assignees 
will  themselves  attend  the  disposition  of 
the  bankrupt's  effects,  and  less  so  still  in 
the  present  case,  from  the  sin  of  the  per- 
son whom  the  creditors  have  thought 
proper  to  choose  assignee  ;  nor  would  it 
indeed  be  for  the  benefit  of  the  creditors, 
if  they  did.  Brokers,  and  such  sort  of  peo- 
ple, being  more  conversant  with  the  effects 
to  be  disposed  of,  are  better  judges  of  their 
value,  and  more  capable  of  disposing  of 
them  to  advantage." 

(h)  The  following  cases  serve,  perhaps, 
sufficiently  to  illustrate  the  doctrine  of  the 
text,  showing  the  various  kinds  of  actions 
which  assignees  have  been  permitted  to 
bring :  —  Parker  v.  Manning,  7  T.  R.  537 ; 
Bedford  i-.  Brutton,  1  Bing.  N.  C.  399; 
Snellgrove  «.  Hunt,  1  Chitty,  71  ;  Bloxam 
V.  Hubbard,  .5  East,  407 ;  Kitchen  v. 
Campbell,  3  Wilson,  304,  2  W.  Bl.  827 ; 
Hcwiti;.  Mantell,  2  Wilson,  372 ;  Winter  v. 
Kretchman,  2  T.  R.  45 ;  Vernon  v.  Han- 
son, id.  287  ;  Noble  v.  Kersey,  4  C.  &  P. 
90 ;  Tennant  v.  Strachan,  Moody  &  M. 
377,  4  C.  &  P.  31  ;  Waller  v.  Drakeford, 
1  Stark.  481  ;  Thomason  v.  Frere,  10 
East,  418;  Rawson  v.  Walker,  1  Stark. 
361  ;  Brandon  v.  Pate,  2  H.  Bl.  308; 
Carter  v.  Abbott,  2  Dow  &  R.  575,  1  B. 
&  C.  444;  McKeon  v.  Caherty;  Hurst 
r.  Gwennap,  2  Stark.  306 ;  Yates  v. 
Carnsew,  3  C.  &  P.  99  ;  Farrington  v. 
Pavne,  15  Johns.  431 ;  Tompkins  v.  Haile, 
3  Wend.  406 ;  Smith  v.  Milles,  1  T.  R. 
475;  Cooper  r.  Chitty,  1  Burr.  20;  Men- 
ham  V.  Edmonson,  1  B.  &  P.  369 ;  Rush 
V.  Baker,  2  Stra.  996  ;  Elderkin  v.  Elder- 
kin,  1  Root,  139  ;  Gray  v.  Bennett,  3  Met. 


522  ;  Wright  v.  Fairfield,  2  B.  &  Ad.  727  ; 
Partridge  v.  Hannum,  2  Met.  569  ;  Smith 
V.  Coffin,  2  H.  Bl.  445 ;  Day  v.  Laflin,  6 
Met.  280  ;  Mitchell  v.  Hughes,  4  M.  &  P. 
577  ;  Ward  y.  Jenkins,  10  Met.  583  ;  Gib- 
son V.  Carruthers,  8  M.  &  W.  321  ;  Brown 
V.  Cuming,  2  Caines,  33  ;  Porter  v.  Vor- 
ley,  9  Bing.  93;  M'Menomy  v.  Fencrs,  3 
Johns.  71  ;  Edwards  v.  Coleman,  2  Bibb, 
204  ;  Kelly  v.  Holdship,  1    Browne,  36 ; 
Cornwell's  Appeal,  7  Watts  &  S.  305  ; 
Burnside  v.  Merrick,  4  Met.  537  ;  Hancock 
V.  Caffyn,  8  Bing.  358  ;  Hill  r.  Smith,  12 
M.  &  W.  618  ;  the  instructive  case,  Moore 
V.  Jones,  23  Vt.  739.     Ejectment,  —  Bar- 
stow  V.   Adams,   2  Day,  70  ;  Talcott  v. 
Goodwin,  3  id.  264.     It  seems  that  if  the 
cause  of  action  arise  before  the  bankruptcy, 
the  assignee  may  sue,  but  must  declare  as 
assignee ;  if  it  arise  after  the  bankruptcy, 
the  assignee  may  now  sue  in  his  own  right, 
and  need  not  describe  himself  as  assignee. 
When  the  bankrupt  sells,  or  makes  any 
contract  respecting  property  a/Cer  the  com- 
mission, the  assignees  may,  in  that  respect, 
treat  him  as  their  agent.     Evans  v.  Mann, 
Cowp.  569 ;  Thomas  v.  Rideing,  Wightw. 
65,    1    Rose,    121;    Kiggil   v.   Player,    1 
Salk.  Ill;  and  the  cases  cited,  Deac.  on 
Bankruptcy,  731.     In  the  case  of  Evans 
V.  Mann,  the  fiicts  were,  that  the  bankrupt, 
after  his  bankruptcy,  and  before  he  had 
obtained    his    certificate,   carried   on   his 
trade  as  a  lighterman,  and  both  built  and 
sold  lighters.     He  sold  one  to  the  defend- 
ant, who  paid  him  part  of  the  purchase- 
money  ;  after  which  the  assignees  apply  to 
the  defendant  for  the  value  of  the  lighter  ; 
and  so  far  affirm  the  contract  as  to  enter 
into  an  agreement,  by  which  they  are  con- 
tent to  be  paid  the  residue  of  the  purchase 
money,  after  deducting  what  the  bankrupt 
had  received.     And  for  this  residue  they 
have  brought  the  action.     The  objection 
to  the  form    of  the   action  was  that  the 
plaintiffs,  being    assignees  under  a  com- 
mission, did   not   state  themselves  to  be 
assignees  in  the  declaration  :  "  On  consid- 
eration, there  seems  to  be  this  distinction, 
—  if  the  assignees  bring  an  action  on  a 
contract  made  by  the  bankrupt,  befoj-e  his 
bankruptcy,  they  must  state  themselves  in 
the  declaration  to  be  assignees.     But  here 
the  contract  was  after  bankruptcy,  when 
the  bankrupt  could  have  no  property  of  his 
own.     The  lighter  was  the  property  of  the 
assignees ;  and  consequently  the  sale  by 

[651] 


626 


THE   LAW   OF   CONTRACTS. 


[part  II. 


They  may  transfer  the  notes  of  the  insolvent,  by  indorsement 
or  delivery,  where  the  contract  or  obligation  of  the  insolvent 
requires  it.  (i)  But  as  a  general  rule,  while  assignees  may 
transfer  what  they  can  by  delivery,  if  negotiable  paper  requires 
indorsement,  this  should  be  made  by  the  insolvent,  who  retains 
the  power  to  make  an  indorsement  which  is  necessary  to  carry 
into  effect  a  previous  contract,  (j) 

They  may  compound  debts,  redeem  mortgages,  compromise 
claims  against  or  in  favor  of  the  insolvent,  [k)  and  in  general 


him  a  contract  as  their  agent  by  operation 
of  law,  and  on  their  account.  Therefore 
it  was  not  necessary  that  they  should  state 
themselves  to  be  assignees  in  the  declara- 
tion ;  though  in  respect  of  the  evidence  in 
support  of  the  action  it  might  be  incum- 
bent on  them  to  prove  the  trading,  bank- 
ruptcy, &c. ;  in  short,  the  whole  case."  As 
to  the  assignee  continuing  in  his  own  name 
an  action  commenced  in  the  name  of  the 
bankrupt,  see  Ames  v.  Gilman,  10  Met. 
239 ;  Smith  v.  Gordon,  6  Law  Reporter, 
313.  The  bankrupt  may  continue  it,  if  the 
assignee  make  no  objection,  and  be  held  as 
trustee  for  the  assignee  for  the  amount  of 
the  judgment.  Clark  v,  Calvert,  8  Taunt. 
742,  and  the  cases  reviewed.  Sawtelle  v. 
Rollins,  23  Me.  196.  If  the  assignee  is 
removed  or  die,  the  assignee  wlio  takes  his 
place  succeeds  to  his  powers,  and  holds 
his  place  in  court.  Page  v.  Bauer,  4  B. 
&  Aid.  345  ;  Richards  v.  Maryland  Ins. 
Co.  8  Cranch,  84  ;  Hall  v.  Cushing,  8 
Mass.  521 ;  Merrick's  Estate,  5  Watts  & 
S.  9. 

(i)  Ex  parte  Mowbray,  1  Jac.  &  W. 
428.  This  was  a  petition  praying  that 
assignees  might  be  ordered  to  indorse  a 
bill  of  cxcliange  which  had  been  trans- 
ferred before  his  liankruptcy,  for  valuable 
consideration,  but  without  indorsement; 
if  the  hill  was  not  indorsed,  the  ])etitioncr 
claimed  to  be  a  creditor  for  the  amount. 
Lord  Cliancellor  JCldon  said  :  "  Tlie  dilli- 
culty  is,  to  frame  an  order  whicli  shall 
provide  for  a  special  indorsement,  tliat 
will  pn-vent  the  a.ssignecs  from  being 
personally  liable.  Jiiit  if  a  s[)ccial  in- 
dorsement is  iMude,  and  the  j)etitioner  will 
be  content  with  it,  I  see  no  niason  wliy  I 
should  not  make  the  order;  if  he  is  not 
satisfied  with  that,  Ik;  must  apply  again." 
Sec  also,  ]'lx  jKirli'  l{ro\vn,  1  (ilyn  &  J. 
408;  Ex  jKirtf  Hall,  I  Rose,  13  ;  Ex puiie 
Rowtun,  id.  15. 

[G52] 


(/)  Greening,  Ex  parte,  13  Ves.  206 -; 
Watkins  v.  Maule,  2  Jacob  &  W.  243; 
Smith  V.  Pickering,  Peake,  N.  P.  .50;  1 
Cooke's  B.  L.  295  (8th  ed.);  Owen  on 
Bankruptcy,  72,  73  ;  Archbold,  202  ;  Wal- 
lace V.  Hardacre,  1  Camp.  46 ;  Anony- 
mous, id.  492  ;  Lempricre  ?'.  Pasley,  2 
T.  R.  485.  It  should  be  observed,  how- 
ever, that  matters  of  this  sort  are  usually 
provided  for  by  statute  regulation. 

(k)  Robson  v. ,  2  Rose,  50 ;  Dod  v. 

Herring,  1  Russ.  &  M.  153;  Richards  v. 
Merriam,  11  Cush.  582.  But  assignees  are 
not  bound  by  the  bankrupt's  submission 
to  arbitration.  Marsh  v.  Wood,  9  B.  &  C. 
659;  Snook  v.  Hellyer,  2  Chitty,  43; 
Andrews  v.  Palmer,  4  B.  &  Aid.  250. 
And  in  referring  disputes  to  arbitration, 
the  assignees,  for  their  own  security, 
should  protest  against  the  reference  being 
taken  as  an  admission  of  assets ;  and  if 
they  refer  generally  without  a  protest  of 
this  kind,  it  will  amount  to  such  admis- 
sion, and  they  will  be  personally  liable  to 
pay  the  sum  awarded,  as  in  the  case  of 
executors   and   administrators.      Robson 

V.   ,   above   cited.     See    Deacon   on 

Bankruptcy,  323,  324.  On  the  subject  of 
mortgages,  see  the  following  cases,  where 
the  right  of  redcm|)tion  in  the  assignees, 
is  allowed,  and  discussed.  Higden  v. 
Williamson,  3  P.  Wms.  132;  Pope  v. 
Onslow,  2  Vern.  286  ;  Taylor  v.  Wheeler, 
2  id.  565 ;  Ex  parte  Alsaj^cr,  2  Mont.  D. 
&  Uc  G.  328;  Pye  v.  Daubuz,  3  Bro. 
595  ;  Ex  parte  Hartley,  1  Deac.  288 ;  Ex 
parte  Cox,  2  Mont.  1).  &  Do  G.  486;  Ex 
parte  Pettit,  2  Glyn  &  J.  47  ;  Ex  parte 
Berrcdf;e,  3  Mont.  D.  &  De  G.  464;  Ex 
parte  Carr,  2  id.  534  ;  I'lx  jiarte  Living, 
I  Deac.  1  ;  Ex  parte  Wilson,  2  Ves.  & 
B.  252 ;  Ex  mirte  Barnes,  3  Deac.  223  ; 
Ex  parte  Temple,  1  (ilyn  &  J.  216. 
Mortgages  of  personal  property,  —  Jones 
V.  Gibbons,  9  Ves.  407  ;  Ryall  v.  RoUe, 


en.  X.]  BANKRUPTCY   AND    INSOLVENCY.  627 

do  whatsoever  trustees  may  do.  (/)  And  an  assignee  who  acted 
in  such  matters  in  good  faith  and  with  reasonable  discretion, 
would  seldom  be  molested  by  the  court.  But  it  is  always 
prudent  for  the  assignees  to  obtain  the  specific  instruction 
and  sanction  of  the  court,  for  whatever  they  may  do  in  this 
way. 

As  assignees  have,  in  general,  the  powers  of  trustees,  so  the 
responsibilities  of  trustees  attach  to  them,  (m)  Many  cases 
have  arisen  on  this  question,  and  it  will  often  be  difficult  to 
apply  to  the  facts  of  a  particular  case,  the  rules  of  law.  But 
the  difficulty  cannot  lie  in  those  rules.  The  assignees  are 
trustees  and  agents  for  compensation.  They  will  therefore  be 
held  strictly  for  bad  faith.  But  beyond  this  it  is  believed  that 
they  can  be  liable  for  lack  of  discretion,  or  for  mistake,  only 
where  this  amounts  to  negligence ;  not  slight  negligence,  nor 
gross  negligence ;  but  the  ordinary  negligence  for  which  bailees 
and  trustees  with  compensation  are  usually  liable.  If  this  gen- 
eral rule  has  any  peculiar  modification  in  the  case  of  assignees, 
it  must  be  because  the  law  points  out  precisely  their  course, 
and  the  court  are  always  ready  to  direct  them,  and  therefore  a 
mistake  is  without  excuse,  and  a  slight  mistake  may  imply 
great  negligence. 


1  Atk.  165,  1  Ves.  Sen.  348;  Stephens  Ves.  707;  JE^o:  parte  Beaumont,  3  Deacon. 

V.  Sole,  1  Ves.  752 ;  Bourne  v.  Dodson,  &  Ch.  549. 

1  Atk.  154;  Ex  parte  Austin,  1  Deacon  (/)   See  cases  cited  supra  in  notes  (v) 

&  Ch.  207  ;  Doane  r.  Eddy,  16  Wend,  and  (w). 

523;    Murray  v.  Burtis,  15  id.  212.     In  (m)  The  liabilities  of  assignees  in  re- 

this  country,  by  the  late  national  bank-  spect  of  negligence,  and  their  duties  as 

rupt  cases,  and  in  general  in  the  State  trustees,  have  been  set  forth  in  preceding 

insolvent    laws,   power  is    given   to   the  notes.     Especial  reference  is  made  to  the 

assignees  of  an  insolvent   to   compound  case  of  Belchier  v.  Parsons,   1   Kenyon, 

debts,   arbitrate  and   redeem   mortgages,  44,  where  this  subject  is  treated  at  much 

on  obtaining  the  approval  of  the  court  in  length.      Kinder  v.    Howarth,   2    Stark, 

that  behalf.      Generally,   he   should   de-  354;  Ex  parte  liSinQ,  I  Atk.  90  ;  Ex  parte 

posit  all  moneys  collected  in  a  bank  of  Turner,  1  Mont.  &  Mc A.  52 ;  Knight  v. 

good  credit,  and  to  the  account  of  the  Lord  Plimouth,  3  Atk.  480.     See  espec- 

bankrupts'  fund.     Ex  parte  Revnolds,  5  ially,  also,    Raw  v.  Cutten,  9  Bing.  96, 

Tindal,  C.  J. 

55*  [653] 


628 


THE   LAW   OF   CONTRACTS. 


[part  II. 


SECTION  VII. 

WHAT   REAL  PROPERTY   INSOLVENCY  TRANSFERS   TO   THE   ASSIGNEE. 

The  theory  of  the  bankruptcy  system  is,  that  it  places  in  the 
hands  of  the  assignees  all  the  property  and  effects  of  the  bank- 
rupt which  can  be  made  available  for  his  debts ;  and  renders 
unnecessary  and  therefore  supersedes  any  other  measures  on 
their  part,  {n)  The  real  estate  of  the  bankrupt  may  be  an  im- 
portant part  of  his  property ;  and  it  all  goes  with  the  rest  to  his 
assignees. 

It  is  a  question  of  some  little  difficulty,  or  has  been  thought 
so  in  some  cases,  in  what  way  or  by  what  kind  of  transfer,  the 
land  goes  to  the  assignees.  It  seems,  however,  to  be  now  set- 
tled, that  bankruptcy  operates  not  so  much  as  a  grant  or  trans- 
fer, but  rather  as  a  sequestration  or  forfeiture,  (o)  No  deed,  or 
instrument  of  any  kind  is  necessary  to  give  title  to  the  as- 
signees.    It  is  as  completely  his  by  the  judicial  record  of  bank- 


(n)  See  Arclibold  on  Bankruptcy; 
Cooke  on  the  Bankrupt  Law ;  Deacon 
on  Bankruptcy ;  2  Kent's  Com.  390 ; 
Com.  Dig.  Tit.  Bankrupt,  D.  (26)  ;  2 
Black.  Com.  285,48,5;  Ex  parte  Newhall, 
2  Story,  360  ;  In  the  matter  of  Ciiency,  5 
Law  Reporter,  19;  Clarke  v.  Minot,  4 
Met.  346 ;  French  v.  Carr,  2  Gilman,  664. 
As  to  the  time  at  which  the  title  to  the 
bankrupt's  property  vests  in  his  assignees, 
see  infra,  §  10. 

(o)  This  must  still  bo  considered  to  a 
great  extent  matter  for  statute  provision. 
In  tlie  earlier  JOnglisii  statutes,  and  even 
in  Stut.  6,  (Jeo.  IV.  c.  16,  provision  was 
made  for  tlie  conveyance  of  the  estate  of 
the  l)ankruj(t  hy  the  commissioners,  witli 
formal  deeds,  ami  further  providiug  (hat 
until  sucli  conveyance,  tlie  act  of  hank- 
ruptcy  and  decree,  and  appointment  of 
assignees,  should  have  no  operation  w 
effect  in  passing  tlu;  estat(r,  and  it  was  as 
CBsentia!  that  all  formalities  siiould  he  oh- 
scrvcd  in  the  execution  of  the  eommis- 
sioncrrt'decd  as  inthatof  a  ])rivat(!  person. 
Sec   on   tiic   construction   of   tiio   earlier 

[G54] 


statutes  in  this  respect,  and  on  the  matter 
of  the  last  note,  —  Perry  v.  Bowers,  T. 
Jones,  196  ;  Thomas  v.  Popliam,  Dyer, 
218;  Elliot  v.  Danby,  12  Mod.  3;  Ben- 
nett V.  Gandy,  Carth.  178 ;  Doe  v.  Mitch- 
ell, 2  M.  &  S.  446;  Perry  v.  Bowes,  1 
Vent.  360,  s.  c.  1  Show.  206 ;  Bain- 
bridge  V.  Pinhorn,  Buck,  135;  Ex  parte 
Proudfoot,  1  Atk.  253 ;  Jacobson  v.  Wil- 
liams, 1  P.  Wms.  383  ;  Carlcton  v.  Leigh- 
ton,  3  Meriv.  667  ;  Lunmius  v.  Fairfield, 
5  Mass.  249.  See  Com.  Dig.  as  above 
cited.  See  also,  on  the  matter  of  sccpics- 
tration,  tlie  important  case  of  The  Royal 
Bank  of  Scotland  ?;.  Cuthbcrt,  1  Rose, 
462  ;  Selkrig  v.  Davies,  2  Dow.  230.  At 
this  day,  iiowever,  the  provisions  of  the 
statutes  of  bankrujjtey,  usually  are  to  tho 
elfect  that  the  decree  in  bankruptcy  seques- 
trates at  (Mice  the  projierty  of  the  bankrupt, 
and  leaves  it  in  the  hands  of  his  assignees, 
without  the  necessity  of  grant.  See  tho 
statutes  of  tho  States,  and  the  provision  of 
the  late  National  Act;  Carr  v.  Gale, 
Daveis,  328,  331. 


en.  X.] 


BANKRUPTCY  AND   INSOLVENCY. 


629 


ruptey  and  his  appointment,  as  land   is  in  England  his  who 
takes  it  by  fine  and  common  recovery,  (p) 

Nor  is  an  inventory  or  schedule  essential,  (q)  They  are 
proper,  and  assist  in  defining  the  property  and  the  title ;  but 
land  and  interests  in  land  which  were  never  entered  upon  the 
schedule,  pass  none  the  less  to  the  assignee.  And  this  applies 
to  all  interests  in  land  vested  in  the  bankrupt  by  any  means 
whatever,  whether  of  law  or  of  the  bankrupt's  act.  This  rule 
will  include  equally  all  the  rights  or  interests  vested  in  him  by 
contract,  in  respect  to  which  the  assignees  have  all  his  reme- 
dies, and  among  them  that  of  specific  performance ;  (r)  and  also 
all  those  which  come  to  him  by  devise  or  inheritance,  (s)     And 


(  p)  Burnside  v.  Merrick,  4  Met.  537  ; 
Dyer  v.  Clark,  5  id.  562;  Howard  v. 
Priest,  id.  582. 

{g)  It  is  not  unusual  to  insert  a  pro- 
vision in  insolvent  laws,  to  the  effect  that 
a  schedule  shall  be  prepared  by  the  debtor 
of  his  debts  of  all  kinds,  the  persons  to 
•whom  due,  and  whether  collateral  security 
has  been  given,  verified  by  the  oath  of  the 
debtor,  and  delivered  to  the  assignees, 
but  subject  under  certain  i-estrictions  to 
amendment.  Such  will  be  found  in  gen- 
eral to  be  the  provision  of  the  Massachu- 
setts Statutes  of  Insolvency.  The  vari- 
ous statutes  of  this  State  will  be  found 
collected  in  Cutler's  Insolvent  Laws,  a 
handbook  of  great  convenience  to  the 
practitioner.  But  where  such  regulations 
are  provided,  they  are  matter  of  form 
and  directory  rather  than  of  substance, 
and  the  property  of  the  insolvent  passes, 
without  reference  to  them  ;  but  if  not  ob- 
served, the  discharge  may  be  refused. 
Jewett  V.  Preston,  27  Maine,  400.  In  the 
matter  of  Frisbee,  4  Law  Reporter,  48.3; 
Downer  v.  Dana,  22  Vt.  337.  In  the 
case  of  Jewett  v.  Preston,  Whitman,  C.  J., 
said  :  "  The  property  of  Preston,  on  his 
becoming  bankrupt,  vested  in  his  assignee, 
who  instantly  thereupon  became  entitled  to 
possession  of  it,  and  might  have  taken  it 
from  the  bankrupt  or  from  any  one  else 
in  possession  of  it.  In  fact  the  possession 
of  it  by  the  bankrupt  was  the  possession 
of  the  assignee,  the  bankrupt  being  but 
the  keeper  of  it  for  the  assignee.  It  was 
not  necessary  that  it  should  be  inserted  in 
the  bankrupt  schedule  in  order  to  give  the 
assignee  such  right.  The  bankrupt  act  of 
1841,  section  3,  is  explicit  to  this  effect. 


The  right  to  the  property  for  the  conver- 
sion of  which  this  action  was  brought, 
and  which  was  never  out  of  the  custody 
of  Preston,  if  the  defendant  Prancis  had 
no  right  to  it,  might  be  sold  by  the  as- 
signee, under  the  order  of  the  court  ob- 
tained for  that  purpose ;  and  it  appears 
that  the  assignee  had  authority  to  sell, 
and  did  sell  whatever  right  he  had  to  it 
to  the  plaintiff."  Burton  v.  Lockert,  4 
Eng.  411. 

(r)  Hillary  v.  Morris,  5  C.  &  P.  6 ; 
Valpy  V.  Oakelev,  16  Q.  B.  941,  6  Eng. 
L.  &  Eq.  168;  Ward  v.  Jenkins,  10  Met. 
583  ;  Lombard  Bank  v.  Thorp,  6  Cowen, 
46;  Alivon  v.  Furnival,  4  Tyrw.  751,  1 
Cromp.  M.  &  R.  277  ;  Carnegie  v.  Morri- 
son, 2  Met.  381 ;  Gibson  v.  Carruthers,  8  M. 
&  W.  321 ;  Akhurst  v.  Jackson,  1  Swanst. 
85;  Boorman  v.  Nash,  9  B.  &  C.  145; 
Goodwin  v.  Lightbody,  Daniell,  153.  See 
also.  Coles  v.  Trecothick,  9  Ves.  234;  Ex 
parte  Peake,  1  Madd.  346  ;  Jackson  v. 
Lever,  3  Bro.  C.  C.  605;  Mortimer  v. 
Capper,  1  id.  156;  Gray  v.  Bennett,  3 
Met.  522 ;  Sharke  v.  Roahde,  2  Rose, 
192  ;  Brooke  v.  Hewitt,  3  Ves.  253  ;  Wil- 
lingham  v.  Joyce,  id.  168.  If  a  contract 
for  a  lease  has  been  made,  merely  for  the 
personal  accommodation  of  the  bankrupt,  the 
assignees  are  not  entitled  to  specific  per- 
formance. Flood  V.  Findlay,  2  Ball  & 
B.  9. 

(s)  Tudway  v.  Bourn,  2  Burr.  716; 
Toulson  V.  Grout,  2  Vern.  432 ;  Ex  parte 
Anscll,  19  Ves.  208  ;  Ranking  v.  Barnard, 

5  Madd.  32 ;  Ex  parte  O'Ferrall,  1  Glya 

6  J.  347  ;  Cherry  v.  Boultbee,  4  INIylne 
&  C.  442 ;  Ex  parte  Man,  Mont.  & 
McA.  210  ;  Ex  parte  Makins,  Mont.  D.  & 

[655] 


630 


THE   LAW    OF   CONTRACTS. 


[rART  II. 


if  these  rights  are  only  inchoate,  and  require  some  act  on  the 
part  of  the  insolvent  to  make  them  complete,  the  assignee  may 
in  general  do  that  act,  or  the  court  of  equity  will  compel  the 
insolvent  to  do  it.  (t) 

Some  qviestion  has  arisen  where  a  devise  falls  to  the  insol- 
vent after  the  proceedings  commence,  but  before  he  obtains  his 
discharge.  It  is  certainly  true  that  a  devise  is  not  effectual  to 
pass  the  property  to  the  devisee,  without  his  consent  and  ac- 
ceptance, any  more  than  a  gift  can  vest  in  the  donee  without 
his  consent  and  acceptance.  If,  then,  the  bankrupt  refused  to 
accept,  the  devise  might  pass  to  the  heir  of  the  devisor,  perhaps 
by  a  corrupt  bargain  with  the  bankrupt,  and  the  creditors  be 
defrauded.  To  guard  against  this  mischief,  it  is  held,  that  if 
the  devise  be  absolute,  and  without  charge  or  incumbrance, 
and  plainly  for  his  benefit,  the  law  will  presume  his  acceptance, 
and  the  assignees  take  his  title,  (u)  And  we  think  the  princi- 
ple would  be  applied,  even  if  there  w^ere  charges  or  conditions 
to  the  devise,  but  upon  the  whole  it  would  certainly  be  benefi- 


De  G.  613 ;  Brandon  v.  Robinson,  1 
Rose,  197. 

(t)  This  point  will  be  found  considered 
in  the  cases  above  cited  in  note  ( /),  p. 
622,  with  reference  to  indorsement,  and 
the  rights  of  tlie  assignees  in  the  contracts 
of  the  bankrupts. 

{ii)  If  a  devise  falls  after  the  petition 
and  licfore  decree,  this  will  pass  to  the 
assignees  of  the  bankrupt.  In  /i.r  parte 
Newhall,  2  Story,  360,  Story,  J.,  said  : 
"  The  third  section  of  the  bankruj)!  act  of 
1841,  chap.  9,  declares  that  all  property 
and  rights  of  property  of  every  bankrupt 
who  shall,  by  the  decree  of  the  proper 
court  l)C  declared  a  bankrupt  within  the 
act,  shall,  by  mere  operation  of  law,  ipso 
facto,  from  the  time  of  such  decree,  be 
deemed  to  be  divested  out  of  the  bank- 
rupt, and  the  same  shall  l)c  vested,  by 
force  of  the  same  decree  in  sucli  assignee, 
as  from  lime  to  time  sliall  lie  appointed 
by  the  propi-r  court  for  tills  jjurposc.  It 
seems  to  nic  tiiat  tlie  natural,  and  even 
necessary  interpretation  of  this  clause  is, 
that  ail  the  property  and  rights  of  ))rop- 
crty  of  the  bankrupt  at  the  lime  of  tliO 
decree  are  intended  to  be  passed  to  the 
jissigncc.  It  is  tru(;  fiiat  tlie  decrees  will 
iiy  relation  cover  all  tli(^  property,  which 
he  hud  at  the  time  of  liling  the  petition, 

[G5G] 


and  at  all  intermediate  times,  to  effect  the 
manifest  purpose  of  the  act.  But  this  is 
rather  a  conclusion,  deducible  from  the 
general  provisions  and  objects  of  the 
whole  act,  than  a  positive  provision.  It 
results  by  necessary  implication  in  order 
to  effect  the  obvious  purposes  of  the  act, 
and  to  prevent  what  otherwise  would  or 
might  be  irremediable  mischief  ...  I 
take  the  plain  distinction,  running  through 
the  act  to  be,  that  it  is  not  intended  to 
touch  any  property  or  rights  of  property 
which  may  be  acquired  by  a  descent  to 
him  after  the  decree  in  bankruptcy,  by 
which  he  has  been  decreed  to  be  ajjank- 
rupt ;  but  that  it  covers  all  liis  ))roperty, 
ac(iuired  by  or  descended  to  him  or  be- 
longing to  him  before  the  decree.  The 
English  statutes  of  bankruptcy  go  furtjier, 
ami  vest  in  the  assignee  all  the  property 
of  the  bankrupt  which  comes  to  him  by 
descent,  distrihution,  or  otherwise,  before 
tlu!  discharge  is  granted.  ]5ut  this  doc- 
trine stands  only  upon  tlie  positive  lan- 
guage of  those  statutes,  and  not  ujion  any 
general  principles  of  law  applicable  to  the 
sul)ject."  A'.r  i>iirte  Fuller,  2  Storv,  327  ; 
Townson  v.  Tickell,  3  B.  &  Aid.  31  ; 
Doe  (>.  Smvth,  6  B.  &  C.  112;  Brown  v. 
Woo.i,  17  iVIass.  (kS;  Ward  v.  Fullci-,  15 
rick.  185.     tjec  next  note. 


en.  X.] 


BANKRUPTCY  AND   INSOLVENCY. 


631 


cial ;  and  of  course  the  assignees  would  take  the  devise  cum 
onere.  {v) 

If  the  interests  are  vested  in  the  insolvent,  the  assignee  takes 
them,  although  they  are'  not  in  his  possession,  as  a  remainder 
or  reversion.  So  if  it  rest  on  a  contingency,  the  assignee  takes 
subject  to  the  contingency,  or  rather  takes  the  right  to  recover 
if  the  contingency  happens,  [iv) 

By  this  is  meant,  however,  a  legal  contingency,  and  not  a 
mere  possibility,  without  some  vested  legal  interest.  Thus,  any 
beneficial  contingency,  however  distant  or  improbable  in  fact, 
if  it  be  actually  vested,  will  go  to  the  assignee ;  but  if  the  insol- 
vent be  the  only  son  of  a  father  who  is  aged,  single,  wealthy, 
diseased,  or  even  incurably  insane,  so  that  his  enjoying  the  in- 
heritance seems  placed  beyond  any  question,  if  it  does  not  in 
fact  fall  to  him  by  the  death  of  his  father,  before  he  obtains  his 


{v)  In  the  case  of  Ex  parte  Newhall, 
cited  in  preceding  note,  the  facts  were, 
that  after  tlie  filing  of  the  petition,  and 
before  the  decree  in  bankruptcy,  the  l)anlv- 
rupt  became  entitled  to  certain  property 
as  heir  to  his  mother,  to  whom,  when 
alive,  he  had  been  indebted.  Judge  Story 
held  that  the  assignee  of  the  bankrupt  was 
only  entitled  to  the  bankrupt's  moiety,  or 
distributive  share  after  deducting  there- 
from his  debt  to  the  estate.  See  the  cases 
cited  in  note  (c),  §  6,  ante,  p.  620. 

(w)  The  test  seems  to  be  a  clear  one 
and  easy  of  application.  It  is  this  :  an 
interest  (as  has  already  been  stated), 
which  can  be  assigned  or  transmitted  by 
the  bankrupt  himself,  will  pass  to  the  as- 
signee. The  leading  case  on  this  sub- 
ject is  Higden  v.  Williamson,  3  P.  Wms. 
132.  In  this  case,  one  seized  of  a  copy- 
hold estate,  surrendered  the  premises  to 
the  use  of  his  last  will,  and  afterwards 
devised  them  to  his  daughter  for  life,  then 
to  trustees  to  be  sold,  and  the  money 
arising  from  the  sale  to  be  divided  among 
such  of  his  daughter's  children  as  should 
be  living  at  her  death.  Testator  died  ;  the 
daughter  had  issue,  among  others  a  son, 
who  was  a  trader,  and  became  bankrupt, 
and  the  commissioners  assigned  his  estate. 
The  bankrupt  got  his  certificate  allowed, 
and  then  his  mother  died.  The  assignees 
brought  tiieir  bill  for  the  bankrupt's  share 
of  the  money  arising  from  the  sale.  The 
case  of  Jacobson  v.  Williams,  1  P.  Wms. 
385,  having  been  relied  on  by  counsel, 


Sir  J.  Jel-yll,  M.  R.,  decreed  for  the  plain- 
tiffs, distinguishing  the  principal  case  from 
that  of  Jacobson  v.  Williams,  for  there 
the  husband,  the  bankrupt,  could  not  have 
come  at  his  wife's  portion  by  the  aid  of 
equity  without  making  some  provisions 
for  her,  and  it  was  not  reasonable  the  as- 
signees, who  stood  but  in  his  place,  and 
derived  their  claim  from  him,  siiould  be 
more  favored.  Also  the  Master  said  he 
laid  his  finger  and  chiefly  grounded  his 
opinion  on  the  words  of  the  statute  13 
Eliz.  cap.  7,  sect.  2,  which  enacts  "  that 
the  commissioners  shall  be  empowered  to 
assign  over  all,  that  the  bankrupts  might 
depart  withal."  Now  here  the  son  might, 
in  his  mother's  lifetime,  have  released  his 
contingent  interest,  so  that  the  commis- 
sioners by  virtue  of  that  act,  are  enabled 
to  assign  it,  and  consequently  these  as- 
signees must  be  well  entitled.  The  same 
test  was  admitted  by  Lord  Hardwicke,  in 
Jewson  V.  Moulson,  2  Atk.  417,  though 
differing  on  the  question  whether  the  pos- 
sibility in  Heyden  v.  Williams  was  not  of 
this  class  which  might  be  assigned  at  least 
in  equity.  Taylor  v.  Wheeler,  2  Vern. 
565 ;  Ex  parte  Goldney,  3  Deacon,  570 ; 
Ex  parte  Foster,  1  iVIont.  D.  &  De  G. 
418;  Foster  v.  Hudson  (on  appeal),  2 
id.  177;  Moth  v.  Frome,  Ambl.  394; 
Carleton  v.  Leighton,  3  Meriv.  667 ; 
French  v.  Carr,  2  Oilman,  664  ;  Dom- 
mett  V.  Bedford,  6  T.  K.  684,  Loftt,  71  ; 
Perry  v.  Jones,  1  H.  Bl.  30,  in  error,  3  T. 
E.  88. 

[657] 


632  THE  LAW  OF  CONTRACTS.  [PART  II. 

discharge,  it  belongs  to  him,  and  the  assignees  have  no  claim 
whatever.  Equities  of  redemption  are  among  those  real  inter- 
ests which  most  frequently  pass  to  the  assignee.  For  it  gener- 
ally happens  that  a  bankrupt  has  already  endeavored  to  extri- 
cate or  save  himself  by  raising  what  money  he  could  by 
mortgages  on  whatever  property  which  he  could  use  for  that  pur- 
pose. We  have  already  said  that  the  assignees  may,  in  gener- 
al, redeem  all  mortgages ;  (x)  or  they  may  sell  the  equities  ;  this 
last  is  the  most  usual  way ;  but  if  there  is  any  question  what- 
ever, the  order  or  permission  of  the  proper  court  should  be  ob- 
tained. 

An  interesting  question  has  arisen  as  to  the  effect  of  a  want 
of  record.  Wherever  this  record  is  required  when  land  is  trans- 
ferred, as  is  the  case  in  all  our  States,  it  is  obvious  that  no 
mortarasre  which  is  unrecorded  can  be  made  available  for  the 
mortgagee  or  his  assigns  or  representatives,  against  one  who 
purchases  the  land  in  good  faith,  without  notice.  But  in  Eng- 
land, where  there  is  no  general  law  of  record,  there  is  a  strong 
disposition  to  hold  a  purchaser,  by  copyhold  for  example  where 
there  has  been  no  surrender  and  the  legal  title  is  incomplete,  as 
a  purchaser  by  contract,  and  therefore  holding  by  good  title 
against  the  assignees,  (y)  In  this  country,  however,  it  seems  to 
be  settled  by  the  highest  authority,  that  the  requirement  of  rec- 
ord is  peremptory,  and  not  to  be  set  aside,  (z)  And  an  assignee 
would  hold  where  the  insolvent  had  made  a  mortgage  which 
was  not  recorded ;  and  would  not  hold  where  a  mortgage  was 
made  to  him,  and  he  had  not  recorded  it,  and  a  party  claims  to 
hold  it  by  subsequent  transfer  from  the  mortgagor,  for  value  and 
without  notice. 

We  do  not  know  in  this  country,  or  scarcely  know,  the  equi- 
table mortgage  of  the  English  law,  which  is  created  by  a  mere 
delivery  of  the  title  deeds,  (a)     Still  we  have  equitable  mort- 

(x)  Sec  supra,  p.  (".23,  and  cases  cited.  (ri)  Ik'riy  r.  Mutual  Ins.  Co.  2  Johns. 

(y)  Deacon  on   Hankniptcy,  tit.  Copy-  Cli.  (iO.'J ;  I'ortwood  v.  Outton,  ;}  B.  Mon. 

holii,  ."{.'» 4  ;    Taylor  v.  Wiieeler,  2  Vern.  247;  Itoekwell  f .  Hobby,  2  Sandf.  Cli,  9 ; 

565.     Sec  also,  J-Jx  /xtrlr  Ilarvcv,  IJuck,  Williams  v.  Stratton,   10  Smedes    &    M. 

493;    j:.r  parte.    Holland,  4  Madd.  4H;i  ;  418;   Welsli  r.  Usher,  2  Hill,    Eq.    170. 

Doc  V.  (Mark,  1  Dow.  &  K.  44,  5  IJ.  &  See  also,  Sliitz  v.   Diellenhach,  ;}   Tcnn. 

_^1,|.  4r)K.  St.    2.'!.')  ;    Vaiinieter    v.  McKaddin,  8  B. 

(z)  4  Kent's  Comm.  1C8,  and  notes.  Mon.  435;  Adams'  Equity  (Am.cd.),333. 

[G.3H] 


CH.  X.]  BANKRUPTCY   AND   INSOLVENCY.  633 

gages,  or  rights  or  liens  to  which  a  court  of  equity  would  give 
such  an  effect.  And  the  court  would  probably  enforce  such  a 
mortgage,  at  the  suit  of  the  assignee,  or  for  his  benefit,  if  no 
positive  law  made  a  record  necessary. 

If  the  insolvent  can  maintain  a  writ  of  entry,  or  any  action 
for  land,  or  for  the  rents  and  profits  of  the  land,  the  assignees 
take  all  these  rights,  (b) 

So,  if  the  insolvent's  wife  has  land,  and  the  insolvent  has  any 
estate  or  interest  in  it  as  her  husband,  for  her  life,  or  as  tenant 
by  the  curtesy  for  his  own,  all  this  interest  of  the  husband 
passes,  to  the  assignee,  (c)  And  it  passes  so  absolutely,  that  it 
seems  no  suit  can  be  brought  against  the  husband  after  the  act 
of  bankruptcy,  for  division,  or  for  any  purpose,  and  no  such 
action  can  be  defended  against  by  the  bankrupt  himself,  or  in 
his  own  name,  but  only  by  the  assignee,  (d) 

In  regard  to  the  real  estate,  as  well  as  to  the  personal  estate 
of  the  insolvent,  it  may  be  regarded  as  a  very  general,  if  not  a 
universal  rule,  that  whatever  the  insolvent  could  himself  trans- 
fer to  his  creditors  or  to  his  assignees  for  them,  the  law  itself, 
without  his  act,  transfers  to  his  assignees,  (e) 


(b)  Smith  V.  Coffin,  2  H.  Bl.  444;  this  —  that  in  many  cases,  from  the  policy 
Mitchell  V.  Hughes,  4  Moore  &  P.  577,  6  of  the  law,  a  right  of  action  does  not  pass. 
Bing.  689.  The  case  of  Smith  v.  Cof-  But  here  the  policy  is,  that  every  right, 
fin  was  a  writ  of  entry  sur  abatement,  belonging  in  any  shape  to  the  bankrupt, 
brought  by  the  assignees  of  a  bankrupt,  should  pass  to  his  assignees.  And  this 
Eyre,  L.  C.  J.,  said  :  "  This  case  has  been  being  the  clear  intent  of  the  law,  a  par- 
very  elaborately  and  ably  argued  by  my  ticular  recital  of  this  species  of  right  could 
brother  Williams,  but  his  argument  goes  not  be  necessary.  I  think  it  is  a  clear 
against  the  most  express  and  plain  spirit  case,  both  on  the  words  of  the  act  of  par- 
of  the  bankrupt  laws,  which  is,  that  every  liament,  and  on  the  subject-matter."  See 
beneficial  interest  wliich  the  bankrupt  has  also,  cases  cited  ante,  note, 
shall  be  disposed  of  for  the  benefit  of  his  (c)  Jacobson  v.  Williams,  1  P.  Wms. 
creditors.  ...  It  is  true,  that  on  general  383.  See  further  cases  cited  ante,  note 
principles,  rights  of  action  are  not  forfeit-  {h},  sect.  6,  p.  621. 

able  nor  assignable,  except  in  a  particular  (d)  Mitchell   v.  Hughes,  6  Bing.  689. 

mode;   but  that  rule   is  founded  on  the  Tindal,  C.  J. :  "  Upon  the  general  ground 

policy  of  the  common  law,  which  is  averse  therefore,  that  in  all  instances   in   which 

to  encoui'age  litigation ;  but  in  this  case  the  assignees  take  any  thing  derivatively 

the  policy  of  the  bankrupt  laws  requires  from  the  bankrupt,  they  are  empowered 

that  the  right  of  action  should  be  assign-  by  the  bankrupt  act  to  sue  in  their  own 

able  and  transferred  to  the  assignees   as  names.     We  think  the  present  court,  in 

much  as  any  other  species  of  property.    It  which  the  bankrupt  sues  to  recover  in  his 

is  an  hereditament,  and  the  words  of  the  own  name  and  that  of  his  wife,  land   in 

statute  are  large  enough  to  comprehend  which    he    would   take   a  freehold,   that 

it ;  and  no  case  has  been  shown  to  prove  would  forthwith  belong  to  the  assignees, 

that  it  ought  not  to  pass.     What  then  cannot  be  supported." 

does  the  whole  argument  amount  to  but  (e)  See  cases  cited  a?jfe,  note  (n),p.  624. 

[659] 


634 


THE   LAW   OP   CONTRACTS. 


[part  II. 


It  is  an  apparent  exception  and  not  a  real  one,  which  will 
not  permit  an  assignee  to  take  what  the  insolvent  holds  in  trust, 
or  in  any  fiduciary  relation.  For  the  insolvent  could  not 
transfer  that  in  payment  of  his  own  debts,  honestly  or  legally. 
But  it  may  be  sometimes  difficult  to  distinguish  between  such 
fiduciary  interest,  which  the  assignee  would  not  take,  and  an 
interest  incumbered  with  a  charge,  which  he  would  take.  In 
general,  it  may  be  said,  that  if  the  thing  to  be  done  be  capable 
of  immediate  performance,  and  the  assignee  can  do  it  as  well 
as  the  insolvent,  and  by  doing  it  a  valuable  interest  becomes 
vested  in  the  assignee,  which  he  can  use  for  the  benefit  of  the 
creditors,  without  detriment  to  any  person,  such  an  interest  or 
right  the  insolvent  will  take. 


SECTION    VIII. 

what  personal  property  insolvency  transfers  to  the 

assignee. 

Some  of  the  principles  already  stated  as  to  real  property  apply 
equally  to   personal  property.  (/)      Thus,  the  assignee  takes 


(/)  ^6  collect  in  this  note  a  few  of  the 
more  instructive  cases,  in  regard  to  the 
transfer  of  personal  property  in  possession, 
in  addition  to  those  cited  in  the  precedhig 
section  :  Jewett  v.  Preston,  27  Maine, 
400;  Griswold  w.  Pratt,  9  Met.  16,  cited 
alitf^r  to  another  point ;  Gary  v.  Crisp,  1 
Salk.  108 ;  IJillon  v.  Hyde,  1  Ves.  Sen.  328. 
In  this  case  Lord  llardwicke  said  :  "  By 
tlie  act  of  liankruptcy,  all  the  real  and  per- 
sonal estate  vested  in  the  assignees,  and 
the  property  veste<l  in  them  from  tiic  time 
of  the  act  committed,  and  that  may  go 
back  to  a  great  Ic^ngth  of  time;  and  it 
overcharges  all  those;  acts,  without  regard 
to  the  fairness  or  frand  in  tlicin,  so  that  a 
sale  of  goods  hy  the  hankrnpt  after  the  act 
committed,  is  a  sale  of  their  |)roperty,  and 
for  wliieli  tiny  may  maintain  trover."  In 
Cooper  ('.  (!liitty,  1  IJurr.  .'Jl,  Lord  Afnns- 
Jicld  Hi\\(\  :  "This  relation  the  statntes  of 
liankruptcy  introdnccil  to  avoid  frauds. 
They  vest  in  tlu;  assignees  all  the  ])roi)erty 

[  GGO  ] 


that  the  bankrupt  had  at  the  time  of  what 
I  may  call  the  crime  committed  (for  the 
old  statutes  consider  him  a  criminal)  ; 
they  make  a  sale  by  the  commissioners 
good  against  all  persons  who  claim  by, 
from,  or  under  the  bankrupt,  after  the  act 
of  bankruptcy,  and  against  all  executions 
not  served  and  executed  before  the  act  of 
bankruptcy."  Kitchin  v.  Campbell,  3 
Wilson,  304;  Lazarus  v.  Waithman,  5  J. 
B.  Moore,  313  ;  Balme  v.  Ilutton,  9  Bing. 
471  ;  llouch  v.  The  Great  Western  Rail- 
way Co.  1  Q.  B.  .'il  ;  Winks  r.  Hassall, 
9  B.  &  C.  372  ;  Kynaston  v.  Crouch,  14 
M.  &  W.  2C)r)  ;  Pca'rson  r.  Graham,  6  A. 
&  10.  899 ;  Ilarwood  r.  Bartlett,  6  Bing. 
N.  C.  61  ;  Stei)hcns  v.  Klwall,  4  M.  &  S. 
259 ;  Coles  c.  Wright,  4  Taunt.  198 ; 
Tope  r.  Uockin,  7  B.  &  C.  110;  Ward 
V.  Dalton,  7  C.  B.  643  ;  Acrauian  v.  Mor- 
rice,  8  id.  449;  Tooke  v.  Ilollingworth, 
.^>  T.  1{.  2ir,  ;  Valpy  IK  Sandars,  5  C.  B. 
886  ;    Wilkins   v.  Promhead,  6  Man.  & 


CH.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


635 


no  chattels  or  choses  in  action  held  by  the  insolvent  only  in  a 
fiduciary  capacity  ;  but  if  any  be  held  by  him  partly  for  the 
benefit  of  others  and  partly  for  his  own  benefit,  his  own  personal 
interest,  if  it  be  severable,  would  pass  to  the  assignee,  (g-)  So, 
all  the  contracts  of  the  assignee  which  relate  to  personalty,  may 
•be  assumed  and  executed  by  the  assignee  for  the  benefit  of  the 
fund,  unless  the  services  to  be  rendered,  or  the  work  to  be  done, 
could  be  only  performed  by  the  insolvent  individually,  and  not 
by  any  other  person  in  his  stead,  (h) 

This  is  true  even  if  the  contract  forbid  assignment,  and  make 
it  void.     Thus,  fire  policies  generally,  and  marine  policies  often, 


G.  963 ;  Carvalho  v.  Burn,  4  B.  &  Ad. 
382 ;  Dangerfield  v.  Thomas,  9  A.  &  E. 
292  ;  Anderson  v.  Miller,  7  Smedes  &  M. 
586;  Ex  parte  Cotterill,  3  Mont.  &  A. 
376  ;  Belcher  v.  Campbell,  8  Q.  B.  1. 

(g)  Carpenter  v.  Marnell,  3  B.  &P.  40 ; 
Copeman  v.  Gallant,  1  P.  Wms.  314; 
Ex  parte  Gillett,  Ex  parte 'Bacon,  3  Madd. 
28  ;  Joy  v.  Campbell,  1  Sch.  &  L.  328  ; 
Winch  V.  Keeley,  1  T.  R.  619  ;  Ex  parte 
Martin,  19  Ves.  491  ;  Gardner  v.  Rowe, 
2  Simons  &  S.  346  ;  Ex  parte  Chion,  3 
P.  Wms.  187,  n.  (a)  ;  Walker  v.  Bur- 
nell,  Doug.  317;  Collins  v.  Forbes,  3 
T.  R.  316. 

(h)  Whitworth  v.  Davis,  1  Ves.  &  B. 
54.5 ;  Sloper  v.  Fish,  2  id.  145  ;  Sharpe  v. 
Roahde,  2  Rose,  192  ;  Goodwin  v.  Light- 
body,  1  Daniell,  153;  Butler  v.  Carver, 
2  Stark.  433 ;  Brooke  v.  Hewitt,  3  Ves. 
25^  Weatherall  v.  Geering,  12  id.  513; 
Smith  v.  Coffin,  2  H.  Bl.  444  ;  Moyses  v. 
Little,  2  Vern.  194  ;  Drake  v.  Mavor  of 
Exeter,  1  Ch.  Ca.  71, 1  Eq.  Ca.  Abr.  53; 
Valpy  V.  Oakelev,  16  Q.  B.  941,  6  Eng. 
L.  &  Eq.  168;  Alder  v.  Keighlev,  15  M. 
&  W.  117;  Hill  V.  Smith,  12  id.  618; 
Gibson  v.  Carruthers,  8  id.  321  ;  Boor- 
man  V.  Nash,  9  B.  &  C.  145;  Splidt  i>. 
Bowles,  10  East,  279 ;  Kymer  v.  Larkin, 
5  Bing.  74  ;  Akhurst  v.  Jackson,  1 
Swanst.  85  ;  Flood  v.  Finlav,  2  Ball  & 
B.  9 ;  Ex  parte  Goodall,  2  Glyn  &  J.  281. 
And  see  other  cases  cited  ante,  sect.  6, 
n.  (iv),  p.  617.  Other  interests  of  a  char- 
acter somewhat  uncertain  will  pass  to  the 
assignee.  Thus,  in  the  case  of  a  patent 
right,  it  was  held  that  this  would  pass. 
Hesse  v.  Stevenson,  3  B.  &  P.  565.  Lord 
Alvanley,  C.  J.,  said  ;  "  It  is  contended  that 
the  nature  of  the  property  in  this  patent 
was  such  that  it  did  not  pass  under  the 
assignment ;  and  several  cases  were  cited 

VOL.  11.  56 


in  support  of  this  proposition.  It  is  said, 
that  although,  by  the  assignment,  every 
right  and  interest,  and  every  right  of 
action,  as  well  as  right  of  possession  and 
possibility  of  interest,  is  taken  out  of  the 
bankrupt  and  vested  in  the  assignees,  yet 
that  the  fruits  of  a  man's  own  invention 
do  not  pass.  It  is  true  that  the  schemes 
which  a  man  may  have  in  his  own  head 
before  he  obtains  his  certificate,  or  the 
fruits  which  he  may  make  of  such  schemes 
do  not  pass,  nor  could  the  assignees 
require  him  to  assign  them  over,  provided 
he  does  not  carry  his  schemes  into  effect 
until  after  he  has  obtained  his  certificate. 
But  if  he  avail  himself  of  his  knowledge 
and  skill,  and  thereby  acquire  a  beneficial 
interest,  which  may  be  the  subject  of  assign- 
ment, I  cannot  frame  to  myself  an  argu- 
ment why  that  interest  should  not  pass 
in  the  same  manner  as  any  other  property 
acquu-ed  by  his  personal  industry.  Can 
there  be  any  doubt  that  if  a  bankrupt 
acquire  a  large  sum  of  money,  and  lay  it 
out  in  land,  that  the  assignees  may  claim 
it  ?  They  cannot  indeed  take  the  profits 
of  his  daily  labor.  He  must  live.  But  if 
he  accumulate  any  large  sum,  it  cannot 
be  denied  tliat  the  assignees  are  at  liberty 
to  demand  it ;  though,  until  they  do  so,  it 
does  not  lie  in  the  mouth  of  strangers  to 
defeat  an  action  at  his  suit  in  respect  of 
such  property,  by  setting  up  his  bank- 
raptcy.  We  are,  theref'ore,  clearly  of 
opinion,  that  the  interest  in  the  letters 
patent  was  an  interest  of  such  a  nature  as 
to  be  the  subject  of  assignment  by  the 
commissioners."  So  an  interest  in  a  pol- 
icy of  insurance.  Schondler  v.  Wace,  1 
Camp.  487,  and  infra.  So  an  interest  in 
improvements  made  by  the  bankrupt  upon 
a  tract  of  government  land.  French  v. 
Carr,  2  Gilman,  664. 

[GGl] 


636  THE  LAW  OP  CONTRACTS.  [PART  IL 

prohibit  assignment,  and  the  insured  might  lose  any  benefit 
under  them  by  a  voluntary  assignment.  But  in  bankruptcy  and 
insolvency,  although  the  word  "  assignee  "  is  used,  it  is  inaccu- 
rate, as  the  property  is  transferred  by  the  law,  and  not  by  the 
owner,  who  is  the  only  party  who  can  assign,  (t)  For,  as  we 
have  seen,  the  process  of  transfer  to  the  assignee  is  rather  one 
of  sequestration ;  the  law  taking  the  property  or  interest  from 
the  insolvent,  and  then  placing  it  in  the  hands  of  the  assignee 
as  trustee.  But  courts  have  gone  still  further.  In  one  case,  at 
least,  the  insurance  was  held  not  to  be  forfeited  by  a  voluntary 
assignment  by  the  insured  to  assignees  in  trust  for  creditors,  (j) 
The  true  ground  for  such  a  doctrine  would  seem  to  be,  that  the 
assignment  left  the  property  insured,  and  the  interest  in  the 
policy  substantially  belonging  to  the  owner,  and  applicable  only 
to  payment  of  his  debts,  with  the  right  to  any  surplus  which 
might  remain  ;  so  that  the  assignee  is  only  acting  as  the  agent 
of  the  insolvent.  This  doctrine  is  generally  acquiesced  in,  and 
all  voluntary  assignments  for  creditors  do,  we  believe,  transfer 
the  insured  property  and  the  policies ;  but  still  it  is  customary 
and  safer  to  obtain  the  consent  of  the  insurers. 

The  assignee  takes  all  personal  property  abroad,  under  the 
qualification  imposed  by  the  American  rule,  as  stated  above ; 
that  is,  he  acquires  no  right  which  can  avail  against  an  attach- 
ment or  levy  made  in  the  State  where  it  is  situated,  in  favor  of 
a  citizen  of  that  State,  before  the  assignee  takes  actual  posses- 
sion, (k) 

As  to  the  wife's  choses  in  action,  it  seems  now  to  be  settled, 
after  a  considerable  conflict  and  uncertainty,  that  the  assignee 
takes  the  husband's  right  of  reducing  them  to  possession,  and 
collecting  and  holding  the  proceeds  for  the  benefit  of  the  cred- 
itors.    It  would  seem,  therefore,  that  an  endeavor  by  the  hus- 

((■)  Lazarus  v.  Commonwealth  Ins.  Co.  Harris  &  McII.  23G  ;  Milne  v.  Moreton,  6 

5  rick.  7(1,  1!)  id.  Kl.  Binn.3.'j;j  ;  Abraham  ?'.  ricstoro,  a  Wend. 

(/)   1  rhillij)S  ou   Insurance,    73,  74;  .538;  Merrick's  case,  2  Ashm.  485  ;  John- 

15riciitii  ().  N.  Y.  La  Fayette  Ins.  Co.  2  son  v.  Hunt,  23  Wend.  DO,  91  ;  Lord  v. 

Hall,  372.  Brip  Wutdiman,  Ware,  232  ;  Fall  llivcr 

(/•)  See  the  oases  cited  on  tlie  suhjcct  Iron  Works  r.  Croade,  1.5  Pick.  11  ;  Fox 

of  the  transfer  of  goods  by  fr)reit,ni  asKit;n-  v.   Adams,   5   (Jrcenl.   24.5;    Saunders  v. 

mcnt  in  l)atd<ru])t<'v,  and  especiallv  to  this  Williams,  .5  N.  II.  213;  Op,den  r.  Saun- 

),r»inl,  I'.iakn  r.  Williams,  0  Tick."  280;  2  ders,  12  Wheat.  213  ;  Agncw  v.  Piatt,  15 

Kent,  400,  cl  set/.;   Burk  v.  M'Ulain,    I  Tick.  417. 

[CG2] 


CH.  X.] 


BANKRUPTCY   AND    INSOLVENCY. 


637 


band  to  put  his  wife's  unreduced  choses  in  action  out  of  the 
reach  of  his  creditors,  and  to  secure  them  for  her  by  trustees  or 
otherwise,  would  be  as  ineffectual  as  an  effort  to  appropriate  a 
part  of  his  money  for  the  same  purpose.  Whether  insolvency 
operates  a  reduction  to  possession,  or  only  transfers  to  the 
assignee  the  right  to  reduce,  has  been  much  disputed.  But  the 
better  reason  and  the  better  authority  favor  the  view,  that  it 
gives  only  a  right  to  reduce ;  and,  therefore,  the  assignee  has 
no  property  in  the  thing  until  actually  reduced.  (/) 


(/)  The  doctrine  of  the  law  upon  this 
subject  was  well  set  forth  by  Shaw,  C.  J., 
delivering  the  opinion  of  the  court  in  Da- 
vis V.  Newton,  6  Met.  537 :  "  The  other 
material  question  is,  whether  the  assignee 
had  a  right,  and  whether,  in  the  proper 
discharge  of  liis  duty  as  assignee,  he  ought 
ID  have  asserted  his  right  to  the  notes  and 
securities  which  are  claimed  as  the  choses 
in  action  of  the  wife  of  the  insolvent.  It 
is  undoubtedly  the  policy  and  the  legal 
effect  of  the  insolvent  laws,  to  transfer  to 
the  assignees,  for  the  benefit  of  creditors, 
all  the  property  of  the  debtor,  and  all  the 
rights  and  interests  which  he  could  prop- 
erly transfer  by  his  own  act ;  and  the  ex- 
tent of  this  assignment  is  very  broad  and 
comprehensive.  And  the  English  bank- 
rupt laws,  which  are  nearly  in  the  same 
terms,  recognize  the  right  of  the  assignee 
to  possess  himself  of  the  choses  in  action, 
and  other  property  of  the  bankrupt's  wife. 
For  the  purpose  of  the  law  is  to  transfer 
the  rights  of  the  debtor,  in  the  same  plight 
whicli  tiiey  were  in,  in  the  hands  of  the 
debtor  himself,  subject  in  all  respects  to 
the  same  liens,  incumbrances,  and  equities. 
But  it  seems  to  be  a  well-settled  rule,  that 
the  property  of  the  husband  in  the  rights 
and  choses  in  action  of  the  wife,  is  not 
absolute  and  unlimited.  Gassett  v.  Grout, 
4  Met.  486.  The  husband  may  reduce 
the  wife's  choses  in  action  to  possession, 
and  assign  the  same  to  his  creditors  ;  but 
ordinarily  he  is  not  compellable  to  do  so, 
and  if  he  does  it,  and  they  require  the  aid 
of  a  court  of  justice,  it  will  not  be  granted 
unless  a  reasonable  provision  be  made  out 
of  it  for  the  wife."  Gray  v.  Bennett,  3 
Met.  522  ;  Mitford  v.  Mitford,  9  Ves.  87  ; 
Jewson  V.  Moulson,  2  Atk.  420 ;  Gayner 
V.  Wilkinson,  Dickens,  491 ;  Saddington 
V.  Kinsman,  1  Bro.  C.  C.  44  ;  Van  Epps 
V.  Van  Deusen,  4  Paige,  64 ;  Pierce  v. 
Thornely,  2  Simons,  167  ;  Christian  on  the 


Bankrupt  Law,  270  ;  Hornsby  v.  Lee,  2 
Madd.  16;  Wooland  v.  Crowther,  12 
Ves.  174;  Nash  v.  Nash,  2  Madd.  133; 
2  Story,  Eq.  Jur.  eh.  37,  \  1411  et  seq.;  1 
Fonbl.  Eq.  B.  1,  ch.  4,  §  24;  Forrest  v. 
Warrington,  2  Desaus.  254 ;  Thomas  v. 
Kelsoe,  7  T.  B.  Mon.  523;  Ripley  v. 
Woods,  2  Simons,  165;  Ex  parte  Beres- 
ford,  1  Desaus.  268;  Forbes  v.  Phipps, 
1  Eden,  502  ;  Gallego  v.  Gallego,  2  Brock. 
285  ;  Ryland  v.  Smith,  1  Mylne  &  C.  53  ; 
Poindextery.  Blackburn,  1  Ired.  Eq.  286  ; 
Snowhill  V.  Snowhill,  1  Green,  Ch.  30; 
Outcalt  u.  Van  Winkle,  id.  516;  Oglan- 
der  V.  Boston,  1  Vern.  396 ;  Milner  v. 
Milnes,  3  T.  R.  627  ;  Parsons  v.  Parsons, 
9  N.  H.  309 ;  Hay  ward  v.  Hayward,  20 
Pick.  517;  Page  v.  Estes,  19  id.  269; 
Holbrook  v.  Waters,  id.  354  ;  Wheeler  v. 
Bowen,  20  id.  563.  See  the  remarks  of 
Shaw,  C.  J.,  in  Davis  v.  Newton,  6  Met. 
537,  defining  the  extent  of  the  doctrine  of 
the  last  two  cases.  Miles  v.  Williams,  I 
P.  Wms.  249 ;  Bosvil  v.  Brander,  id. 
458;  Mitchell  v.  Hughes,  6  Bing.  689. 
On  the  conflict  of  opinion  in  the  earlier 
and  later  English  cases,  as  to  the  effect  of 
assignment,  see  the  note  to  p.  119  of  the 
second  volume  of  Kent's  Commentaries, 
8th  ed.,  and  the  following  additional  cases  ; 
Chandos  v.  Talbot,  2  P.  Wms.  601 ; 
Hawkyns  v.  Obyn,  2  Atk.  549  ;  Bates  v. 
Dandy,  id.  207 ;  Hornsby  v.  Lee,  above 
cited  ;  Purdew  v.  Jackson,  1  Russell,  70; 
Honner  v.  Morton,  3  id.  65 ;  Wright  v. 
Morley,  11  Ves.  12;  Ellison  v.  Elwin, 
13  Simons,  309;  Elliott  v.  Cordell,  5 
Madd.  149;  Stanton?;.  Hall,  2  Russ.  & 
M.  175;  Tidd  v.  Lister,  10  Hare,  140, 
17  Eng.  L.  &  Eq.  567  ;  Shawr.  Mitchell, 
5  Law  Reporter,  453.  The  right  in 
equity  of  the  wife  to  a  provision  out  of  her 
choses  in  action,  when  the  assignee  asks  the 
aid  of  equity  to  aid  him  in  enforcing  his 
remedies,  seems  clearly  settled  at  this  day. 

[663] 


638 


THE  LAW   OF   CONTRACTS. 


[part  II. 


All  the  money  in  the  insolvent's  hands,  or  in  deposit  at  any 
bank  or  elsewhere  for  him,  or  in  the  hands  of  any  agent  or 
attorney,  passes  at  once  to  the  assignee,  and  his  order  or  check 
for  it,  after  notice  as  assignee,  is  valid,  and  the  insolvent's  check 
is  not  valid,  (m) 

So  the  assignee  claims  all  debts ;  and  if  there  be  mutual 
accounts  or  claims  betv^een  the  insolvent  and  another,  the  as- 
signee takes  only  the  balance  due  the  insolvent,  with  full  right 
of  set-off  in  the  creditor,  {n)     If  the  other  party  has  a  right  as 


In  addition  to  the  cases  above  cited,  the 
doctrine  will  be  found  elaborately  and 
clearly  set  forth  in  2  Kent's  Commenta- 
ries, pp.  121,  et  see].,  where  numerous  au- 
thorities on  the  point  are  examined. 

(m)  This  seems  necessarily  to  follow 
from  the  cases  already  cited,  showing;  that 
all  the  property  of  the  bankrupt  is,  by  the 
decree  in  bankruptcy,  transferred  to  the 
assignees.  Hill  r.  Smith,  12  M.  &  W. 
618.  In  all  such  cases,  the  simple  test 
question  would  seem  to  be,  "  Can  the 
money,  in  whosesoever  hands  it  may  be, 
be  clearly  recognized  as  the  bankrupt's  1 " 
Godfrey  v.  Furzo,  3  P.  Wms.  185;  Ex 
parte  Kowton,  17  Ves.  426  ;  Ex  parte 
Sollers,  18  id.  229.  In  Scott  v.  Surman, 
Willes,  400,  it  was  held  that  if  goods  be 
consigned  to  a  factor  for  sale,  and  he  sell 
and  receive  the  money  before  his  bank- 
ruptcy, and  do  not  purchase  with  it  any 
specilic  thing,  capable  of  being  distin- 
guished from  the  rest  of  his  property,  the 
consignors  cannot  recover  the  whole  money 
from  the  assignees,  but  must  come  in  un- 
der the  commission.  But  that  if  the  goods 
remain  in  spec'ic  in  the  factor's  hands  at 
the  time  of  the  bankruptcy,  the  consignors 
may  recover  the  goods  in  trover  from  the 
assignees.  Or  if  a  factor  sell  goods  for 
his  principal,  and  become  bankrupt  before 
payment,  and  his  assignees  afterwards  re- 
ceive tiie  money  for  them,  the  principal 
may  recover  it  from  them  in  an  action  for 
money  liad  and  \|cccive<l.  The  court,  with 
regard  to  the  jiarticular  facts  before  tliem, 
held  that  tiu^  money  wliicii  had  hccn  re- 
ceived l)y  the  factor  in  payment  for  goods 
sold,  could  not  be  recovered  in  full,  lie- 
cause  here  it  could  not  be  distinguished 
from  otluT  money  of  the  bankrupt  factor. 
Money  has  no  earmark,  and  ihereforo 
caruiot  lie  followed.  H7//rN,  (;.  J.,  in 
this  case.  Hut  in  the  modern  piaclice  of 
factors,  where  money  is  deposited  to  the 

[664] 


particular  account  of  each  consignor,  it  is 
conceived  that  such  money  may  well  be 
held  to  possess  an  earmark.  And  to  the 
same  point  are  Burdett  v.  Willett,  2  Vern. 
638  ;  Tooke  v.  Hollingworth,  .5  T.  R.  21.5, 
Lord  Kenijon,  C.  J. :  "  If  goods  be  sent  to 
a  factor  to  be  disposed  of,  who  afterwards 
becomes  a  bankrupt,  and  the  goods  remain 
distinguishable  from  the  rest  of  his  prop- 
erty, the  principal  may  recover  the  goods 
in  specie,  and  is  not  driven  to  the  neces- 
sity of  proving  his  debt  under  the  commis- 
sion of  bankrupt.  Nay,  if  the  goods  be 
sold,  and  reduced  to  money,  provided  that 
money  be  in  separate  bags,  and  distin- 
guishable from  the  factor's  other  property, 
the  law  is  the  same."  Hall  v.  Boardman, 
14  N.  H.  38;  Price  v.  Ralston,  2  Dall. 
60 ;  Taylor  v.  Plumer,  3  M.  &  S.  .562 ; 
Dcnston  v.  Perkins,  2  Pick.  86;  Ches- 
terfield Manuf.  Co.  v.  Dehon,  5  id.  7  ; 
Scrimchire  v.  Alderton,  2  Stra.  1182.  So 
in  the  case  of  an  executor,  —  Howard  v. 
Jemmett,  3  Burr.  1369,  note.  Lord 
Mamjield  said :  If  an  executor  becomes 
bankrupt,  the  commissioners  cannot  seize 
the  specific  effects  of  his  testator,  not  even 
in  money  which  speciJicaUij  can  be  dis- 
thKjuished  and  ascertained  to  l)clong  to  such 
testator,  and  not  to  the  bankrupt  himself. 
Ex  parte  Chion,  cited  siijira.  And  where 
the  bankrupt's  wife  is  an  executor,  the 
property  shall  be  preserved  entire  to  the 
testator's  representatives.  Viner  v.  Ca- 
dell,  3  Ksp.  88. 

(;()  It  is  an  error  to  suppose,  as  has 
sometimes  been  supposed,  that  the  right  of 
set-oil',  or  the  law  of  mutual  credits  in 
bankruptcy,  originated  in  statute  provis- 
ions, it  had  been  adopted  by  the  courts 
of  law,  without  any  legislative  interfer- 
ence. They  j)crmittcd  a  creditor  to  set 
ofl'  his  debts  against  the  bankrupt  debtor, 
and  pay  over  to  llu;  assignees,  or  prove  for 
the  balance,  as  the  adjustment  of  accounts 


CH.  X.] 


BANKRUPTCY   AND    INSOLVENCY. 


639 


against  the  insolvent  to  retain  the  whole  and  settle  the  whole 
account,  until  a  final  balance  is  struck,  he  would  have  the  same 
right  as  against  the  assignee.  Thus,  if  a  member  of  a  partner- 
ship became  insolvent,  his  interest  in  the  property  of  the  firm 
would  pass  to  his  assignee,  subject  to  the  rights  of  the  other 
partners,  much  as  it  would  by  attachment  or  levy,  as  has  been 
described  in  our  chapter  on  partnership,  (o) 


might  require.  Anonymous,  1  Mod.  215; 
Chapman  v.  Derby,  2  Vern.  117  ;  1  Christ. 
Bankrupt  Law,  279-499 ;  1  Gooding, 
Bankrupt  Law,  1 90  ;  and  later  cases  cited 
below,  recognize  this  right  as  existing  at 
the  common  law.  The  first  English  statute 
which  alkided  to  this  right  was  the  4  and  5 
Anne,  c.  17.  The  operation  of  this  statute 
was  continued  by  7  Anne,  c.  25,  §  4.  This 
last  statute  was  reenacted  lay  5  Geo.  1,  c.  24, 
which  was  restricted  in  point  of  time,  and 
after  its  expiration  still  more  effectual  pro- 
vision was  made  on  the  subject  of  mutual 
debts  and  credits,  in  that  of  5  Geo.  2,  c. 
30.  Further  provision  was  added  in  46 
Geo.  3,  and  these  statutes  form  the  basis 
of  the  English  statutes  of  the  present  day, 
relating  to  this  matter.  From  the  Eng- 
lish, this  doctrine  has  been  introduced  into 
the  American  bankrupt  law.  The  cases 
on  this  subject  are  very  numerous.  Many 
of  them  will  be  found  collected  and  ex- 
amined in  1  Deacon  on  the  Law  of  Bank- 
ruptcy, 698  ct  seq.  We  cite  those  cases 
which  seem  most  clearly  to  set  forth  the 
doctrine.  The  opinion  of  Tindal,  C.  J., 
in  Gibson  v.  Bell,  1  Bing.  N.  C.  743.  In 
Ex  parte  Deeze,  1  Atk.  228,  Lord  Hard- 
ivicke  said  :  "  Notwithstanding  the  rules 
of  law  as  to  bankrupts  reduce  all  creditors 
to  an  equality,  yet  it  is  hard  when  a  man 
has  a  debt  due  from  a  bankrupt,  and  has 
at  the  same  time  goods  of  the  bankrupt  in 
his  hands,  which  cannot  be  got  from  him 
without  the  assistance  of  law  or  equity, 
that  the  assignee  should  take  them  from 
him  without  satisfying  the  whole  debt, 
and  therefore  the  claim  in  the  statute  re- 
lating to  mutual  credit  has  received  a  very 
liberal  construction  ;  and  then  there  have 
been  many  cases,  which  that  clause  has 
been  extended  to,  where  an  action  of  ac- 
count would  not  lie,  nor  could  the  Court 
of  Chancery  upon  a  bill  decree  an  ac- 
count." Murray  v.  Riggs,  1 5  Johns.  571 ; 
Bize  V.  Dickason,  1  T.  R.  285  ;  Smith  v. 
Hodson,  4  id.  211  ;  Tucker  v.  Oxley,  5 
Cranch,  34 ;  Ex  parte  Prescot,  1  Atk. 
230 ;  Browa  v.  Cuming,  2  Caines,  33,  and 

56* 


reporter's  note  ;  Bigelow  v.  Folger,  2  Met. 
255;  Bolland  v.  Nash,  8  B.  &  C.  105; 
Boyd  V.  Mangles,  16  M.  &  W.  337  ; 
Marks  v.  Barker,  1  Wash.  C.  C.  178; 
Demmon  v.  Boylston  Bank,  5  Cush.  194, 
and  cases  cited  ;  Sarratt  v.  Austin,  4 
Taunt.  199;  Humphries  v.  Blight's  as- 
signees, 4  Dall.  370  ;  Bemis  v.  Smith,  10 
Met.  194;  Hewison  v.  Guthrie,  3  Scott, 
298 ;  Russell  v.  Bell,  1  Dowl.  n.  s.  107  ; 
Hulme  V.  Muggleston,  3  M.  &  W.  30 ; 
Young  V.  Bank  of  Bengal,  1  Deacon,  622 ; 
Rose  V.  Hart,  8  Taunt.  499.  See  the 
learned  note  on  this  case,  2  Smith's  L.  C. 
172,  wherein  the  cases  upon  this  point  are 
collected  and  discussed ;  Rose  v.  Sims,  1 
B.  &  Ad.  521  ;  Abbott  v.  Hicks,  7  Scott, 
715;  Groom  v.  West,  8  A.  &  E.  758; 
Tamplin  v.  Diggins,  2  Camp.  312  ;  Rid- 
•  out  V.  Brough,  Cowp.  133.  The  debts 
must  be  due  in  the  same  right;  Forster  v. 
Wilson,  12  M.  &  W.  191 ;  Ex  parte  Blag- 
den,  2  Rose,  249  ;  Yates  v.  Sherrington,  1 1 
M.  &  W.  42, 12  id.  855  ;  Belcher  v.  Lloyd, 
10  Bing.  310. 

(o)  Note  [y),  sect.  14  of  the  chapter  on 
Partnership  ;  note  (c),  p.  620,  sect.  6,  of 
the  present  chapter,  that  all  liens  and  equi- 
ties which  would  avail  against  the  bank- 
rupt will  be  good  against  his  assignees. 
In  Collyer  on  Partnership  (Perkins'  ed.), 
§  111  and  passim;  Gow  on  Partnership, 
ch.  5,  §  3,  p.  256-348,  3d  ed. ;  Watson 
on  Partnership,  ch.  5,  p.  243-356,  2d 
ed.  ;  1  Montagu  on  Partn.  B.  2,  ch. 
7,  p.  226-233,  Am.  ed. ;  Cooke  on 
Bankrupt  Law ;  Christian  on  Bankrupt- 
cy ;  Deacon  on  Bankruptcy ;  Montagu 
t&  Ayrton  on  Bankruptcy.  Under  the 
head  of  Partnership,  the  right  of  partners 
in  case  of  insolvency  of  one  of  their  num- 
ber is  fully  discussed.  The  general  doc- 
trine on  this  subject  is  set  forth  by  Lord 
Chief  Justice  Eyre,  delivering  the  opinion 
of  the  court  in  Bolton  v.  Puller,  1  B.  & 
P.  539  :  "  Bankruptcy,  when  it  intervenes, 
may  very  much  change  the  situation  of 
these  parties.  Mr.  Justice  Heath  suggest- 
ed this  consideration  at  the  close  of  the 

[665] 


640 


THE   LAW   OF   CONTRACTS. 


[part  II. 


In  one  respect  an  assignee  acquires  rights  which  the  insol- 
vent himself  does  not  possess.  For  if  the  insolvent  has  fraudu- 
lently conveyed  any  property,  real  or  personal,  although  he 
would  not  be  able  to  defeat  the  operation  of  his  own  fraud  and 
recover  the  property  for  his  own  benefit,  the  assignee  may  cer- 
tainly do  that  for  the  benefit  of  the   creditors,  (p)     Difficult 


first  argument.  It  is  a  very  important 
consideration.  If  all  become  bankrupts, 
all  the  joint  and  all  the  separate  property 
will  vest  in  the  assignees,  whether  the 
commissions  are  joint  or  several.  If  a 
separate  commission  issue  against  one 
partner,  his  assignees  will  take  all  his  sep- 
arate property,  and  all  his  interest  in  the 
joint  property.  If  a  joint  commission 
issues  against  all,  the  assignees  will  take 
all  the  joint  property  and  all  the  separate 
property  of  each  individual  partner.  In 
the  distribution  to  creditors  a  rule  of  con- 
venience has  been  adopted.  To  under- 
stand it,  we  should  see  what  the  rights  of 
creditors  were  as  to  execution  for  their 
debts  before  bankruptcy.  A  separate 
creditor  might  take  at  his  election  the 
separate  estate  of  his  debtor,  or  his  debt- 
or's share  of  the  joint  estate,  or  both,  if 
necessary.  A  joint  creditor  might  take- 
the  whole  joint  estate,  or  the  whole  sepa- 
rate estate  of  any  one  partner.  But  the 
rule  of  convenience  which  has  been  adopt- 
ed, restrains  the  separate  creditor  from 
resorting  in  the  first  instance  to  his  debt- 
or's share  of  the  joint  property,  and  also 
restrains  a  joint  creditor  from  resorting  in 
the  first  instance  to  the  separate  projjerty 
of  his  debtor.  Bankruptcy  has  been 
called  a  statute  execution,  but  if  it  has 
any  analogy  to  an  execution,  it  is  certainly 
very  much  modilicd,  and  as  I  take  it,  by 
the  authority  of  the  Chancellor,  who  is  to 
take  order  for  the  distribution  of  the 
effects  of  a  bankrupt.  Under  tlie  rule, 
the  se])aratc  creditors  have  a  right  to  l)e 
satisfied  for  their  debts  out  of  the  .separate 
property,  in  preference  to  the  joint  credi- 
tors. But  what  shall  1)0  deemed  sepa- 
rate prop<'rty,  or  what  effect  the  claims  of 
third  persons  upon  that  wiiich  as  be- 
tween one  partner  ami  the  partnership 
would  be  separate;  property,  are  (|uestions 
whieli  neitiier  bankruptc)'  nor  the  rui(!  of 
disliibuiions  Hcenis  to  touch.  The  assign- 
ees stand  but  in  the  ])luce  of  the  baid^- 
nipt,  and  take  tlie  efi'ects  suliject  to  ever}' 
legal  and  e{|uitablo  claim  upon  those 
cfiecLs." 

[  ocd;  ] 


(p)  The  rule,  that  the  assignees  take 
subject  to  all  equities  which  attach  to  the 
claim  when  in  the  hands  of  the  bankrupt, 
meets,  like  all  other  general  rules,  with  an 
exception  in  cases  of  fraud.  Mitchell  v. 
Winslow,  2  Storv,  6-30  ;  Graham  v.  Chap- 
man, 12  C.  B.  85,  11  Eng.  L.  &  Eq.498  ; 
Newton  v.  Chantler,  7  East,  138  ;  Butcher 
V.  Easto,  Doug.  295  ;  Metcalf  v.  Seholey, 
2  N.  R.  462  ;  Scott  v.  Seholey,  8  East, 
467  ;  Worsely  v.  I)e  Mattos,  1  Burr.  467  ; 
Wilson  V.  Day,  2  id.  827;  Siebert  v. 
Spooner,  1  M.  &  W.  714;  Balme  v.  Hut- 
ton,  2  Younge  &  J.  101  ;  Baxter  v. 
Pritchard,  3  Nev.  &  Man.  6.38 ;  Robert-  . 
son  V.  Liddell,  9  East,  487  ;  Ex  parte 
Bourne,  16  Ves.  148.  The  case  of  Stew- 
art V.  Moody,  1  Cromp.  M.  &  R.  777,  was 
an  action  of  trover  by  the  assignees  of 
one  Grinsdale,  a  bankrupt,  for  certain 
furniture  and  goods  the  property  of  the 
bankrupt.  The  defendants  justified  under 
an  indenture  of  assignment,  whereby 
Grinsdale  had  assigned  all  his  property  to 
the  defendants,  in  trust,  to  pay  off  a  mort- 
gage, and  afterwards  to  discharge  and  pay 
all  his  just  debts  ;  it  was  further  alleged 
that  said  Grinsdale  was  a  trader ;  that  he 
was  in  embarrassed  circumstances  at  the 
time  he  executed  the  assignment,  and  that 
it  was  fraudulently  executed  by  the  said 
Grinsdale.  The  rejoinder  to  the  replica- 
tion denied  that  the  bankrupt  executed 
the  deed  fraudulently,  and  witii  intent  to 
defeat  or  delay  his  creditors.  Parke, 
Baron,  said  :  "  It  has  been  clearly  settled 
that  if  the  necessary  consecpiences  of  a 
man's  act  is  to  delay  his  creditors,  he 
must  be  taken  to  intend  it.  When  a  man 
assigns  all  his  property,  and  jjuts  it  into 
a  did'erent  course  of  distribution  from 
what  ihc  bankrupt  laws  direct,  he  commits 
an  act  of  l)ankruptcy.  Tliis  deed,  being 
an  assignment  l)y  Grinsdale  of  all  his 
jiroperty,  is,  therefore,  clearly  an  act  of 
liankriiptcy."  A  rule  to  set  aside  the  ver- 
dict for  the  ])laintifi's  was  tiierefore  refused. 
Chase  c.  (ioblc,  2  Man.  &  G.  930; 
]Iooper  V.  Smith,  1  W.  P.l.  441.  Lord 
Maitsjicld  in   this  case  said  :  "  If  a  man 


en.  X.] 


BANKRUPTCY    AND   INSOLVENCY. 


641 


questions  of  fact,  rather  than  of  law,  sometimes  arise  as  to  what 
is  fraud  in  this  sense.  Most,  if  not  all,  of  the  statutes  in  States 
prohibiting  preference,  in  different  ways  provide  for  this  case ; 
and  although  the  language  is  very  various,  the  general  purpose 
is  the  same.  It  is,  to  make  void  any  transfers;  whether  outright 
or  by  way  of  mortgage  or  pledge,  which  were  intended  to  give 
any  creditor  an  advantage  over  any  others.  The  transfer  must 
be  made,  therefore,  when  the  transferrer  was  either  insolvent,  or 
contemplated  insolvency,  (q)     So,  if  any  transfer  was  made  to 


makes  over  so  much  of  his  stock  in  trade, 
as  to  ditiahle  himself  from  being  a  trader, 
this  would  he  fraudulent.     It  would  be  as 

1  said  in  Compton  v.  Bedford  (Hil.  Vac. 

2  Geo.  3),  an  assignment  of  his  solvency. 
An  assignment  of  all  his  household  goods 
would  be  the  same  ;  for  a  man  cannot  go 
on  without  them."  Hassel  v.  Simpson, 
1  Bro.  C.  C.  99  ;  Tappenden  v.  Burgess, 
4  East,  230  ;  1  Cooke,  B.  L.  110  (2d  ed.) ; 
Harman  v.  Fisher,  Cowp.  117;  Dutton 
r.  Morrison,  17  Ves.  193,  1  Rose,  213; 
Gorham  v.  Stearns,  1  Met.  3G6  ;  Fidgeon 
V.  Sharpe,  5  Taunt.  ,539 ;  Carr  v.  Burdiss, 
1  Cromp.  M.  &  R.  443;  Newnham  v. 
Stevenson,  10  C.  B.  713,  3  Eng.  L.  & 
Eq.  512.  In  this  case  it  was  held  that 
the  right  of  avoiding  such  fraudulent 
transfer  was  in  the  assignees  alone,  and 
that  if  they  did  not  choose  to  interfere, 
a  third  party  had  no  right  to  intervene, 
and  the  right  cf  the  grantee  of  the  bank- 
rupt might  be  vindicated  by  an  action 
against  snch  interfering  third  party. 
Wedge  I'.  Newlyn,  4  B.  &  Ad.  831  ;  Pul- 
ling V.  Tucker,  4  B.  &  Aid.  382  ;  Arnold 
V.  Maynard,  2  Story,  349 ;  Steenc  v. 
Aylesworth,  18  Conn."  244;  Rose  v.  Hay- 
cock, 1  A.  &  E.  460  ;  Thompson,  J.,  in 
Wakeman  r.  Hoyt,  5  Law  Reporter,  309  ; 
Butler  V.  Hildreth,  5  Met.  49. 

(q)  The  nature  of  the  fraud  in  trans- 
fers of  this  character  is  stated,  in  addition 
to  the  above  cases  by  Lord  Tenterden,  in 
Cook  V.  Caldecott,  Moody  &  M.  525: 
"All  other  proof  of  any  act  of  bankruptcy, 
previous  to  tiie  sales  in  question,  having 
failed,  the  only  question  is,  whether  the 
transactions  in  themselves,  or  either  of 
them,  arc  to  be  considered  as  acts  of  bank- 
ruptcy, within  the  6  G.  4,  c.  16,  s.  3.  The 
•words  of  the  clause  are  'fraudulent  gift, 
delivery,  or  transfer,'  the  word  '  frauilu- 
lent'  of  course  applying  to  each  of  those 
•which    follow    it.     Now  the    sale    is   a 


'  transfer  ;  '  and  therefore  may  come 
within  the  provisions  of  the  statute  as  a 
'fraudulent  transfer.'  But  though  it 
may  do  so,  it  is  not  from  its  nature,  a 
transaction  exposed  to  the  same  suspicion, 
as  some  of  those  which  would  be  compre- 
hended under  the  former  words  ;  and  I 
think  that  a  sale  cannot  in  reason  be  held 
to  be  a  fraudulent  transfer,  unless  it  takes 
place  under  such  circumstances  that  the 
buyer,  as  a  man  of  business  and  under- 
standing, ought  to  suspect  and  believe 
that  the  seller  means  by  it  to  get  money 
for  himself  in  fraud  of  his  creditors  ;  and 
that  the  sale  is  made  for  that  purpose. 
The  question,  therefore,  for  the  jury  is, 
whether  they  think  that  the  defendant  as 
a  man  of  business  ought  to  have  known 
that  Down  must  have  eiTected  these 
sales,  or  either  of  them,  for  the  purpose 
of  putting  the  proceeds  in  his  own  pocket 
and  defrauding  his  creditors  1  If  so, 
the  verdict  should  be  for  the  plaintiffs, 
for  all  goods  comprised  in  that  transac- 
tion or  delivered  subsequently  to  it." 
The  meaning  of  the  clause  "  in  contem- 
plation of  bankruptcy,"  which  occurs  iu 
nearly  all  the  statutes,  has  been  the  sub- 
ject of  judicial  discussion.  In  Arnold  v. 
Maynard,  2  Story,  349,  it  was  held  by 
Judge  Story  that  the  clause  does  not  neces- 
sarily mean  in  contemplation  of  his  being 
declared  a  bankrupt  within  the  statute, 
but  in  contemplation  of  his  actually  stop- 
ping his  business,  because  of  his  insol- 
vency and  incapacity  to  carrj'  it  on.  In 
this  case  the  English  authorities  are  re- 
viewed, and  the  conclusion  reached  is, 
that  if  when  the  party  "  is  deeply  involved 
in  debt,  and  intending  to  fail  and  break 
up  his  whole  business  at  once,  he  makes  a 
conveyance  to  a  particular  creditor  to  give 
him  a  preference  overall  the  rest,  it  seems 
to  me  irresistible  evidence  that  he  does 
the  act  in  contemplation  of  bankruptcy. 

[G67] 


642 


THE   LAAV   OP   CONTRACTS. 


[part  II. 


benefit  the  insolvent  himself  illegally,  it  would  be  voidable  by 
the  assignee.  And,  in  general,  the  assignee  would  not  be  barred 
from  procuring  any  property  of  the  insolvent,  by  his  act,  if  it 
were  fraudulent  or  against  the  statute  of  insolvency,  or  the  gen- 
eral statute  of  Elizabeth,  or  common  law.  (r) 

Ships  in  the  port  where  the  insolvent  resides,  pass  to  the  as- 
signee like  other  chattels,  (s)  If,  however,  they  are  at  sea,  the 
effect  of  insolvency  may  not  be  certain.  "We  should  say,  how- 
ever, that  the  general  rules  respecting  the  transfer  of  this  prop- 
erty, by  which  an  inchoate  title  is  given  by  the  bill  of  sale, 
which  is  completed  by  actual  possession,  without  laches,  would 
apply  here.  If  we  suppose  a  ship-owner  transfers  his  ship  at 
sea  by  a  bill  of  sale,  in  good  faith,  and  afterwards  becomes  in- 
solvent, his  assignee  takes  only  a  right  to  get  possession  of  the 
ship  or  a  property  in  it,  if  he  can  do  so,  before  the  former  trans- 
ferree,  and  without  any  laches  on  the  part  of  that  transferree.  (t) 


1  do  not  think  that  it  is  necessary  for  this 
purpose  tliat  he  should  contemplate  the 
conveyance  as  an  act  of  bankruptcy,  or 
that  he  should  make  it  with  a  present  and 
immediate  intention  to  take  the  benefit  of 
that  statute.  And  in  8  Met.  385,  Jones 
V.  Howland,  it  was  held  that  though  in- 
solvency in  fact  exists,  yet  if  the  debtor 
honestly  believes  he  shall  be  able  to  go  on 
in  liis  business,  and  with  such  belief  pays 
a  just  debt,  without  design  to  give  a  pref- 
erence, such  payment  is  not  fraudulent, 
though  bankrnptcy  subsequently  ensue." 
And  the  same  doctrine  was  held  in  the 
District  Court  of  Vermont,  by  Pren- 
tins,  J.,  6  Law  Kcportcr,  261.  See  also 
the  language  of  (JMs,  C.  J.,  in  Fidgcon 
V.  Sluirpe,  above  cited;  of  Dewri/,J.,  in 
Gorham  v.  Stearns  ;  of  Lord  Mansjleld 
in  Hassels  v.  Simpson,  Doug.  89,  in 
notes ;  and  Lord  Klli'iihorowjh,  in  Newton 
V.  Chantler  ;  Fiook  v.  Jones,  4  IJing.  20  ; 
Poland  ?'.  Glyn,  id.  22,  n. ;  Kidiey  v. 
Gydc,  9  ill.  o49  ;  Morgan  v.  15rnndrctt,  5 
IJ.  &  Ad.  289 ;  Abbott  v.  IJurliagc,  2 
Bing.  N.  C.  444  ;  llartsliorn   r.   Slodden, 

2  B.  &  P.  .582  ;  Gibbins  v.  Piiillips,  7  B. 
&  C.  529 ;  Atkinson  v.  Brindall,  2  Bing. 
N.  C.  225;  Belcher  ;;.  I'rittic,  10  id.  408. 
But  confession  of  a  judgment  is  valid,  in 
view  of  tills  ]irovision,  if  it  lie  not  volun- 
tary but  llie  cHict  of  measures  taken  by 
the   creditor  or   in   his   power    to    take. 

[GG8] 


Haldeman  v.  Michael,  6  Watts  &  S.  128. 
Though  the  confession  be  but  ten  days 
before  the  filing  of  the  petition.  Taylor 
I'.  Whitthorn,  5  Humph.  340.  And  se- 
curity given  to  a  creditor  in  contempla- 
tion of  bankruptcy,  with  a  view  to  prefer, 
is  not  void,  if  the  act  be  not  strictly  volun- 
tary. Phoenix  v.  Assignees  of  Ingraham, 
5  Johns.  412;  M'Mechen's  Lessee  v. 
Grundy,  3  Harris  &  J.  185.  As  to  the 
efiect  of  a  discharge  obtained  after  such 
transfer  in  contemplation  of  bankruptcy, 
see  Brereton  v.  Hull,  1  Denio,  75 ;  Beek- 
man  v.  Wilson,  9  Met.  434. 

(r)  See  the  cases  cited  in  the  two  pre- 
ceding notes.  Certain  .statute  provisions 
relating  to  and  governing  this  matter  of 
fraudulent  conveyances,  with  judicial  con- 
struction thereon,  will  be  found  consid- 
ered infra,  under  "  Question  of  time." 

(s)  This  would  seem  dearly  to  follow 
from  the  cases  already  cited,  on  the  sub- 
ject of  the  transfer  of  jjersonal  property  in 
possession,  which  see. 

(/)  A  leading  case  upon  this  subject  is 
Mair  v.  Glennie,  4  M.  &  S.  240."  The 
facts  were  bricfiy,  so  far  as  the  present 
subject  is  concerned,  that  one  Mair,  by 
excculing  a  bill  of  sale  of  the  shij)  Navi- 
gator and  cargo,  then  at  sea,  and  deliver- 
ing it  to  Sliarpe  (.t  Co.,  together  with  a 
)M)licy  of  insurance  upon  tlie  ship  and 
cargo,  and  indorsing  the  bill  of  lading, 


en.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


643 


Bills  of  lading  are  so  far  negotiable  instruments,  that  a 
transfer  and  delivery  of  them  in  good  faith  vests  in  the  trans- 
ferree  the  property  not  only  in  the  bills,  but  in  the  property,  as 
if  by  a  constructive  delivery,  (w)  Hence,  if  the  bills  arc  in 
the  hands  of  the  insolvent,  they  pass  to  the  assignee.  But  if 
they  have  been  transferred  by  him  without  fraud,  the  assignee 
cannot  hold  the  goods,  even  if  on  arrival  they  are  delivered  to 
him,  for  they  became,  by  the  transfer,  the  property  of  the  trans- 
ferree.  (v)     So,  if  the  bills  were  sent  to  a  consignee,  as  factor, 


transferred  said  ship  and  cargo  to  Sharpe 
&  Co.  as  a  security  for  money  boiTowed. 
Sharpe  &  Co.  neglected,  upon  the  ship's 
return  and  notice  thereof,  to  take  posses- 
sion, or  to  do  any  act  notifying  the  trans- 
fer of  the  property  to  them.  Soon  after 
the  ship's  return,  Mair  became  bankrupt ; 
and  it  was  held  that  the  property  in  the 
ship  passed  to  his  assignees,  and  that  by 
the  neglect  of  Sharpe  &  Co.  to  take  pos- 
session after  the  arrival  of  the  sliip,  their 
property  in  her  was  lost.  Atkinson  v. 
Maling,  2  T.  R.  462;  Joy  v.  Sears,  9 
Pick.  4 ;  Portland  Bank  v.  Stubbs,  6 
Mass.  422  ;  Lamb  v.  Durant,  12  id.  54 ; 
Brown  v.  Heathecote,  1  Atk.  160;  Kyall 
V.  Rolle,  1  Atk.  165  ;  Moss  v.  Charnock, 
2  East,  399  ;  RoUeston  v.  Ilibbert,  3  T. 
R.  406  ;  RoUeston  v.  Smith,  4  id.  161. 

(u)  This  proposition  seems  also  neces- 
sarily to  follow  from  the  cases  already 
cited,  showing  that  all  projierty  and  rij;hts 
of  property  of  the  bankrupt  pass  to  his 
assignees.  And  see  Conard  v.  Atlantic 
Insurance  Co.  1  Pet.  386 ;  Lickbarrow 
V.  Mason,  2  T.  R.  63,  5  id.  683,  6  E.  21  ; 
Nathan  v.  Giles,  5  Taunt.  558 ;  Turner  v. 
Trustees  of  the  Liverpool  Docks,  6  Exch. 
543,  6  Eng.  L.  &  Eq.  507  ;  Akerman  v. 
Humphery,  1  C.  &  P.  53. 

(v)  Tlie  leading  case  on  the  subject  of 
transfer  of  property  by  indorsement  of  a  bill 
of  lading,  is  Lickbarrow  v.  Mason,  above 
cited.  The  case  is  an  authority  for  saying, 
that  after  a  bond  fide  indorsement  by  the 
vendee  of  goods  to  a  third  party,  who  has 
no  notice  of  cincumstances  of  suspicion,  the 
title  of  such  third  party  will  be  good,  not- 
withstanding any  such  subsequent  circum- 
stances, as  the  insolvency  of  tlie  vendee, 
and  the  assignment  of  his  property  for  the 
benefit  of  his  creditors.  Ashurst,  J.,  de- 
livering his  opinion  in  this  case,  when 
there  had  been  a  transfer  by  indorsement 
of  the  vendee,  and  subsequent  insolvency, 


said  :  "  Now  in  this  case  the  goods  were 
transferred  by  the  authority  of  the  vendor, 
because  he  gave  the  vendee  a  power  to 
transfer  them ;  and  being  sold  by  his  au- 
thority the  property  is  altered.  And  I 
am  of  opinion,  that  this  right  of  the  as- 
signee could  not  be  divested  by  any  sub- 
sequent circumstances."  In  Wright  v. 
Campbell,  4  Burr.  2046,  Lord  Mansfield 
said :  "  If  the  goods  be  bond  fide  sold  by 
the  factor  at  sea  (as  they  may  be  when  no 
other  delivery  can  be  given),  it  will  be 
good  notwithstanding  the  statute  21  Jac. 
1,  c.  19.  The  vendee  shall  hold  them  by 
virtue  of  the  bill  of  sale,  though  no  actual 
possession  is  delivered,  and  the  owner  can 
never  dispute  with  the  vendee  because  the 
goods  were  sold  bond  fide  and  by  the 
owner's  own  authority."  It  has  already 
appeared  that  the  assignee  in  bankruptcy 
stands  in  the  same  position  as  his  bank- 
rupt, except  in  cases  of  fraud.  See  ante. 
In  Conard  v.  The  Atlantic  Insurance  Co. 
1  Pet.  386-445,  it  is  said  :  "  By  the  well- 
settled  principles  of  the  commercial  law, 
the  consignee  is  thus  constituted  the  au- 
thorized agent  of  the  owner,  whoever  he 
may  be,  to  receive  the  goods,  and  by  his 
indorsement  of  the  bill  of  lading  to  a 
bond  fide  purchaser  for  a  valuable  consid- 
eration without  notice  of  any  adverse  in- 
terests, the  latter  becomes,  as  against  all 
the  world,  the  owner  of  the  goods.  .  .  . 
Such  an  assignment  not  only  passes  the 
legal  title  as  against  his  (the  owner's) 
agents  and  factors,  but  also  against  his 
creditors,  in  favor  of  the  assignee."  Bul- 
ler,  J.'s  learned  opinion  in  Lickbarrow  v. 
Mason,  6  East,  21,  n. ;  Abbott  on  Ship- 
ping, 471.  But  it  seems  that  nothing  less 
than  a  bond  fide  sale,  accompanied  by 
transfer  of  the  bill  of  lading,  will  so  far 
divest  the  consignee's  right  that  his  as- 
signees in  bankruptcy  will  take  no  interest 
in  the  goods.     The  cases  above  cited  go 

[669] 


644 


THE  LAW   OP   CONTRACTS. 


[part  IL 


with  a  right  of  sale,  his  sale  and  transfer  of  the  bills  passes  the 
property,  if  no  notice  of  a  previous  transfer  by  insolvency 
reaches  the  factor  or  the  purchaser  before  such  transfer.  And 
if  it  reached  the  factor,  so  that  his  sale  was  fraudulent,  it  might 
be  doubted  whether  the  sale  would  be  void  against  an  insolvent 
purchaser.  If  the  bills  of  lading  contain  on  their  face  qualifica- 
tions or  restrictions,  these  will  prevail,  (w) 

If  the  bankrupt  have  sent  forward  any  goods  to  buyers, 
whose  insolvency  would  give  the  bankrupt  a  right  to  stop  the 
goods  in  the  transit,  this  right  accrues  to  the  assignee,  who 
may  exercise  it  in  the  same  way  and  to  the  same  extent  and 
with  the  same  effect,  as  the  bankrupt  himself  could  have 
done,  (x) 

Leases  in  England  are  sometimes  of  great  value,  as  they  run 
for  a  long  time  at  a  nominal  rent.  Leases  of  that  kind  exist  in 
this  country,  but  are  much  more  rare.  Here,  in  the  very  great 
majority  of  cases,  the  insolvent  who  holds  any  property  as  lessee, 
pays  as  much  for  the  use  of  it  as  it  is  worth,  and  the  assignee 
would  gain  nothing  by  taking  the  lease.  He  has,  however,  al- 
ways the  right  to  do  this,  and  not  unfrequently  we  see  adver- 


no  further.  The  question  in  cases  of  this 
kind  must  be,  has  the  title  passed "?  It 
does  not  pass  by  delivery  merely  of  the 
bill  of  lading,  without  indorsement,  the 
same  being  in  the  hands  of  the  original 
consignee.  Tucker  r.  Humphrey,  4  Bing. 
516,  1  Moore  &  P.  394,  Park^  J.,  s.  c. 
And  the  mere  delivery  of  a  shipping  note 
of  the  goods,  or  a  delivery  order  for  them, 
instead  of  a  bill  of  lading,  will  not  pass 
the  property  from  the  vendee.  Jenkyns  v. 
Usbornc,  7  Man.  &  G.  678 ;  Townlcy  v. 
Crump,  4  A.  &  E.  58  ;  M'Ewan  v.  Smith,  2 
II.  L.  (Jas.;JO!» ;  Akerman  v.  Humphery,  1 
C.  &  P.  53.  See  Ilollingsworth  v.  Napier, 
3  Caines,  182  ;  Walter  v.  Ross,  2  Wash.  C. 
C.  28.'};  Pivberg  r.  Snell,  id.  403;  Carter 
V.  Wiilard.MO  Pick.  I  ;  Suydam  i-.  Clark, 
2  Sandf.  l.'!3;  Withers  v.  Eyss,  4  Camp. 
237  ;  Hentall  v.  IJurn,  3  JJ.  &  C.  42.'.<. 
Sec  Hcarle  v.  Kecves,  2  Esp.  598,  contni, 
which  must  1)C  considered  overruled  by 
Biibseipicnt  cases.  It  has,  however,  been 
held,  that  when  flic  delivery  order  has 
been  lodged  with  //c  w/inr/inj/cr,  with  or 
even  witiiout  a  transfer  on  bis  books,  tlint 
this  will  operate  a  coui[dcte  divc^sting  of 
the  title  of  tiic  vendor,  and  the  wharfinger 

[  ^70  ] 


holds  for  the  purchaser's  account.  Har- 
man  v.  Anderson,  2  Camp.  243  ;  Tucker 
V.  Huston,  2  C.  «&  P.  86.  In  such  cases, 
it  is  clear  that  the  interest  in  the  goods 
cannot  pass  to  the  assignees  in  bankruptcy 
of  the  vendor. 

(w)  The  cases  cited  in  the  preceding 
notes,  and  especially  Turner  ?•.  Trustees 
of  Liverpool  Docks,  6  Exch.  543,  6  Eng. 
L.  &  Eq.  507 ;  Akerman  v.  Humphery, 
1  C.  &  P.  53  ;  Jenkyns  v.  Usbornc,  7 
Man.  &  G.  675-678. 

(x)  Abbott  on  Shipping  (Perkins'  Ed.), 
614;  Long  on  Sales.  And  see  the  chap- 
ter. Stoppage  in  Transitu,  vol.  1.  And, 
with  reference  to  the  effect  of  stoppage  on 
the  vendee's  transferable  ]iro])erty,  it  may 
be  stated  generally,  that  "  the  assignment 
of  the  commissioners  does  not  pass  any 
property  to  the  assignees  in  goods  con- 
signed to  the  bankrupt  which  may  be 
stopped  in  transitu,  whether  such  goods 
are  consigned  to  the  bankrupt  himself,  or 
whcliicr  he  obtains  jjossession  of  tliem  in 
t/ii'ir  tnnisil  to  the  hands  of  the  regular 
consigiu'C."  Deacon  on  J5ankruptcy,  449, 
where  this  subject  is  elaborately  and 
learnedly  discussed. 


CH.  X.]  BANKRUPTCY   AND   INSOLVENCY.  645 

tisements  of  the  sale  of  such  interests  by  assignees.  But  the 
question  has  even  more  importance  here  than  in  England, 
whether  an  assignee  is  bound  to  take  a  lease  held  by  his  insol- 
vent, and  what  amounts  to  an  acceptance  by  an  assignee. 

We  have  already  considered  an  analogous  topic,  the  accept- 
ance of  a  devise  by  the  assignee,  (y)  A  lease  differs  from  a 
devise  materially,  in  that  the  lessee  always  pays  something, 
which  may  be  the  full  value  of  what  he  gets.  The  general 
principle,  that  a  grantee  may  be  presumed  to  accept,  which  cer- 
tainly conforms  to  the  fact,  is  far  more  applicable  to  a  devise 
than  to  a  lease.  Moreover,  an  assignee  is  not  a  grantee ;  we 
have  seen  that  even  the  name  assignee  is  inaccurate.  He  is  a 
trustee,  for  the  creditors  mainly,  but  in  some  respect  for  all  par- 
ties. And  if  the  question  is  answered  on  technical  grounds,  it 
may  be  said  that  at  common  law  a  lessee  has  no  estate,  and  is 
not  bound  to  rents  and  covenants,  until  entry.  But  on  more 
general  grounds,  the  assignee  must  be  considered  as  acquiring 
by  the  insolvency  only  a  right  to  take  the  lease ;  and  until  he 
makes  his  election,  the  lease  either  remains  in  the  insolvent,  or 
may  be  considered  in  abeyance.  If  the  assignee  elects  not  to 
take,  the  lease  remains  in  the  insolvent,  with  all  its  advantages 
and  all  its  burdens,  and  free  from  all  claims  or  right  either  of 
the  assignee  or  of  the  creditors,  (z) 

(t/)  See  ante,  note  (a)  to  the  section  on  from  other  sources,  cannot  be  within  the 

Assignees,  p.  619.  scope  of  their  trust  and  duty.      And  in 

(z)  In  Copeland  v.  Stephens,  1  B.   &  this  respect,  such  a  term  differs  from  the 

Aid.  593,  Lord jE//e?i6omi(^/i  said  :  "Anas-  debts  of  the  bankrupt,  and  his  unincum- 

signmcnt  by  commissioners  of  bankruptcy  bcred  effects  and  chattels."    The  court,  on 

is  the  execution   of  a  statutable   power,  examination,  come  to  the  further  conclu- 

given  to  them  for  a  particular  purpose,  sion,  that  as  to  such  estates  the  effect  of 

namely,  the  payment   of  the   bankrupt's  the  commission  is  suspended  until  accept- 

debts.      Nothing  passes  from  them,  for  ance.     "  And  if  the  operation  of  the  deed 

nothing  was  vested  in  them.     Whatever  of  assignment  be   suspended,   the   estate 

passes,  passes  by  force  of  the  statute,  and  must  necessarily  remain  in  the  bankrupt 

for  the  purpose  of  effecting  the  object  of  during   the  period   of  suspension,  for  it 

the  statute.     And,  therefore,  the  assignees  cannot   be  in   abeyance    and  must   exist 

of  a  bankrupt  are  not  bound  to  accept  a  in  some  person.     And  the  respective  sit- 

term  of  years  that  belonged  to  the  bank-  uations  of  the  bankrupt  and  his  assignees 

rupt,  subject  to  the  rents  and  covenants,  will  be  similar  to  those  of  a  lessor  and 

for  the  object  of  the  statute  and  of  the  his  lessee  before  entry,"  —  the  assignees 

assignment  being  the    payment    of    the  having  what  might  be  called  an  interesse 

bankrupt's  debts,  and  the  assignees  under  termini.     Bourdillon  v.  Daltou,  1  Peake, 

the   commission   being  trustees   for  that  N.  P.  238 ;  Turner  v.  Eichardson,  7  East, 

purpose;  the  acceptance  of  a  term  which  33.5;  Wheeler  ?;.  Bramah,  3  Camp.  340; 

instead   of  furnishing  the  means  of  such  Ex  parte  Williams,  3  Mont.  &  A.  210;  Ex 

payment  would  diminish  the  fund  arising  parte  Clunes,  1  Madd.  76 ;  Ex  parte  Baa- 

[671] 


646 


THE   LAW   OF   CONTRACTS. 


[part  II. 


The  remark  may  be  made  generally,  that  whatever  does  not 
pass  to  the  assignee,  remains  in  the  bankrupt,  free  from  all 
claim,  {a) 

Assignees  may  take  possession  of  leasehold  property  in  many 
ways ;  and  their  possession  may  be  implied  from  their  words  or 
acts.  If  they  actually  take  possession,  it  will  be  presumed  they 
do  so  under  their  title  as  assignees.  If  they  demand  and  receive 
rent  or  profits  or  other  advantages  from  the  leased  property, 
this  will  be  deemed  generally,  a  taking  possession,  {b)  But 
the  mere  offering  the  lease  for  sale,  may  be  regarded  as  only  a 
justifiable  experiment  to  ascertain  whether  it  is  worth  any  thing, 
so  that  it  will  be  for  the  benefit  of  their  trust  that  they  should 
take  possession,  (c)      They  cannot  take  in  part,  and  reject  in 


bury,  7  Jur.  6G0 ;  Ex  parte  Vardy,  3 
Mont.  D.  &  D.  340;  Ex  parte  Norton,  id. 
312. 

(a)  Smith  i\  Gordon,  6  Law  Reporter, 
313;  Webb  v.  Fox,  7  T.  II.  391  ;  Fowler 
V.  Down,  1  B.  &  P.  44  ;  Turner  v.  Rich- 
ardson, 7  East,  335.  The  case  of  Webb  v. 
Fox  was  an  action  of  trover  for  300  yards 
of  quilting.  Defendants  pleaded  not  guilty, 
on  which  issue  was  joined  ;  and  secondly, 
the  bankruptcy  of  the  plaintiff  before  the 
time  of  the  conversion  stated  in  the  declara- 
tion, setting  forth  the  trading,  petitioning 
creditor's  debt,  bankruptcy,  commission, 
assignment,  &c.  Plaintiff  replied  that  he 
became  possessed  of  the  goods  after  as- 
signment, and  was  so  possessed  without 
molestation,  &c.,  till  defendant  took  the 
said  goods,  &c.  Defendants  rejoined  that 
plaintiff  had  not  obtained  his  certificate. 
Demurrer  to  the  rejoinder.  Ashurst,  J., 
said  :  "  I  take  tlie  general  rule  to  be  that 
a  bankrupt  lias  a  right  against  all  persons 
but  the  assignees  ;  here  a  lawful  ])Osscs- 
sion  in  him  is  admitted  and  that  is  suffi- 
cient for  wrongdoers."  In  Smith  v.  Gor- 
don above  cited,  Ware,  J.,  said  :  "If  the 
assignee  elects  not  to  take,  the  property 
remains  in  the  bankrupt,  and  no  one  has 
a  right  to  dispute  his  ])ossession.  ]Iis 
possessory  title  is  gooil  against  all  the 
world  but  his  assignee." 

(It)  Where  the  assignees  took  posses- 
sion, they  were  held  to  have  made  their 
election,  allhougli  the  ])crsonal  effects  of 
the  bankrupt  wci-c;  upon  the  premises,  and 
the  assignees  delivered  up  the  key  iui- 
mediutely  afier  the  cllccts  were  sold. 
Hanson  v.  Stevenson,  1  B.  &  Aid.  303.    So 

[G72] 


when  the  assignees  took  upon  themselves 
the  management  and  direction  of  the 
bankrupt's  farm.  Thomas  v.  Pemberton, 
7  Taunt.  206.  See  also,  Welch  v.  Myers, 
4  Camp.  368.  So  also,  where  the  as- 
signees of  a  termor  who  had  become  bank- 
rupt put  up  the  lease  for  sale,  and  sold  it, 
and  received  a  deposit  from  the  purchaser, 
it  was  held  that  they  had  made  their  elec- 
tion and  were  liable  to  the  landlord  as 
assignees  of  the  lease.  Hastings  v.  Wil- 
son, Holt,  N.  P.  290,  and  see  the  cases 
cited  ante. 

(c)  In  Turner  v.  Richardson,  7  East, 
335,  which  may  be  called  the  leading  case 
on  this  subject,  the  facts  were  briefly  that 
the  assignees  of  a  bankrupt  advertised  the 
lease  of  certain  premises,  of  which  the 
bankrupt  was  lessee,  for  sale  by  auction 
(without  stating  themselves  to  be  own- 
ers or  possessed  thereof);  no  bidder  ap- 
peared ;  no  subsequent  possession  was 
taken  by  the  assignees.  After  solemn 
argument  the  court  delivered  their  opin- 
ions seriatim,  and  Grove,  J.,  said  :  "  They 
were  to  consider  whether  it  were  for  the 
benefit  of  the  creditors  that  they  should 
take  to  this  property  or  waive  it.  On  the 
one  hand,  if  they  entered  and  were  possess- 
ed tlicy  became  liable  to  be  sued  upon 
the  l)aiikrii])i's  covenants  for  rent  and 
non-repair  which  might  amount  to  more 
than  the  value  of  the  lease ;  on  the  other 
hand  if  the  lease  were  valuable  and  they 
did  not  take  to  it,  the  creditors  would  have 
had  a  right  to  call  uiion  them  for  neglect 
of  their  duty.  In  ordi'r,  therefore,  to  ascer- 
tain th(^  fact  of  the  value,  they  advertised 
tlio  property  for  sale,  without  stating  how- 


CH.  X.] 


BANKRUPTCY   AND    INSOLVENCY. 


647 


part,  unless  what  seems  to  be  a  whole  is  in  fact  only  several 
wholes  put  together,  and  capable  of  severance. 

If  an  assignee  takes  a  leasehold  estate,  he  thereby  becomes 
liable  for  the  rent  and  covenants  during  the  whole  term,  (d) 
But  he  may  transfer  the  lease,  and  his  transferree  takes  his  place 
and  his  burden.  And  it  has  been  held  that  if  an  assignee  finds 
an  estate  burdensome,  and  attempts  to  free  himself  by  transfer 
to  a  mere  beggar,  the  law  sustains  him  in  this ;  mainly  on  the 
ground  that  the  landlord  has  a  claim  against  the  assignee  only 
by  privity  of  estate  and  not  of  contract,  there  being  no  personal 
confidence  between  them,  and  that  as  soon  as  the  assignee  parts 
with  the  estate  this  claim  is  gone,  (e) 


ever,  that  it  was  in  their  possession ;  it 
was  no  more  than  making  an  experiment 
whether  tlie  property  were  of  any  and 
what  value,  ...  it  is  plain  from  the  evi- 
dence, that  finding  they  were  of  no  value 
they  never  did  enter  into  possession  ;  the 
defendants  were  not  assenting  to  the  assign- 
ment of  these  premises  to  them,"  and  all 
the  judges  were  agreed  in  this.  Wheeler  v. 
Bramah,  3  Camp.  340,  to  the  same  point. 
Mere  neglect  to  deliver  up  the  premises 
will  not  be  held  an  election  to  take: 
Wheeler  v.  Bramah,  above  cited,  Canaan 
V.  Hartley,  14  Jurist,  577,  or  paying  rent 
for  the  purpose  of  avoiding  a  distress,  id. 
Releasing  an  nnder-tenant  even,  will  not 
be  deemed  an  election  to  accept.  Hill  v. 
Dobie,  8  Taunt.  325,  2  J.  B.  Moore,  342. 
See  also,  Lindsay  v.  Limbert,  12  J.  B. 
Moore,  209  ;  Gibson  v.  Courthorpe,  1 
Dow.  &  R.  205  ;  Page  i'.  Godden,  2 
Stark.  309  ;  Thomas  v.  Pemberton,  7 
Taunt.  206. 

(f/)  This  doctrine  is  laid  down  in  the 
cases  already  cited.  Ansell  v.  Robson,  2 
Cromp.  &  J.  610,  was  an  action  against 
assignees  of  a  bankrupt  for  rent;  on  the 
trial  it  appeared  that  the  bankrupt  was  a 
coachmakcr,  and  at  the  time  of  the  bank- 
ruptcy had  numerous  coaches  let  on  hire, 
under  contract.  The  assignees  entered 
upon  the  premises  to  keep  the  coaches  in 
repair  in  pursuance  of  the  bankrupt's  con- 
tracts. In  August  the  bankrupt's  effects 
were  sold,  and  the  key  of  the  premises  de- 
livered to  the  bankrupt,  but  the  assignees 
paid  tlic  rent  up  to  Michaelmas  following. 
It  was  sought  in  this  action  to  recover 
rent  for  the  quarter  ending  at  Christmas 
following.  Lord  Lyndhurst  said  :  "  If  as- 
signees go  on  the  premises  for  the  purpose 

VOL.  II.  57 


of  taking  possession,  and  actually  take 
possession,  that  is  sufficient  to  bind  them 
to  take  the  premises.  A  tenancy  from 
year  to  yeai',  until  it  is  terminated,  is 
the  same  as  a  lease.  The  interest  of  the 
bankrupt  vested  in  the  defendants  ;  and  it 
was  expressly  found  by  the  jury  that  they 
took  possession  and  occupied  with  a  view 
to  benefit  the  estate  ;  a  finding  perfectly 
consistent  with  the  evidence."  And  a  rule 
to  set  aside  a  verdict  for  the  plaintiff  was 
refused.  If  the  assignees  accept  the  lease 
the  bankrupt  is  absolutely  discharged  from 
the  covenants,  and  if  he  afterwards  be- 
comes assignee  of  his  assignees,  he  will  be 
under  no  greater  liability  than  any  other 
assignee.  Doe  v.  Smith,  5  Taunt.  795 ; 
note  to  Auriol  v.  Mills,  1  Smith,  L.  C. 
455;  Boot  w.  Wilson,  8  East,  311.  If  on 
the  other  hand  the  assignees  decline  to 
accept,  they  cannot  maintain  an  action  on 
the  covenants  for  breach  thereof  by  the 
lessor.  Kearsey  v.  Carstairs,  2  B.  &  Ad. 
716;  Fairburn  v.  Eastwood,  6  M.  &  W. 
679.  And  it  is  said  that  if  the  assignees 
refuse  to  accept  the  lease  it  maj'  be  con- 
sidered a  determination  of  the  term  ;  and 
if  the  bankrupt  lessee  might  according  to 
the  terms  of  the  lease,  at  the  determination 
of  the  term  take  the  off-going  crop  on 
payment  of  the  rent,  the  assignees  may  do 
the  same.  Ex  parte  Maundrell,  2  Madd, 
315  ;  Ex  parte  Nixon,  1  Rose,  445;  and 
so  if  the  lessee  was  bound  to  leave  straw, 
&c.,  the  assignees  must  also  do  so.  Ex 
parte  Whittington,  Buck,  87.  In  re  Gough, 
Buck,  85 ;  Broom  v.  Robinson,  cited  7 
East,  339. 

(e)  The  case  of  Onslow  v.  Corrie,  2 
Madd.  330,  decided  this  precise  point. 
The  facts  were  in  substance  that  assignees 

[673] 


648 


THE   LAW    OF   CONTRACTS. 


[part  II. 


If  the  lease  contains  covenants  that  the  lessee  shall  not 
assign,  and  that  if  he  does  the  lease  shall  be  forfeited,  it  is  held 
that  the  lease  nevertheless  passes  to  the  assignee,  and  that  he 
may  transfer  it.  But  it  is  also  held  that  the  landlord  may  look 
not  only  to  the  assignee,  while  he  holds  it,  or  to  his  transferree 
afterwards,  but  to  the  original  lessee  also ;  on  the  ground  that 
the  bankruptcy  discharges  or  bars  only  the  debts  due  at  the 
time.  (/)  The  English  cases  on  this  subject  (and  we  have 
few  American  ones),  are  not  quite  consistent,  nor  would  they  be 
altogether  applicable  here,  as  they  rest  in  part  on  technicalities 
of  the  common  law  which  would  have  less  force  with  us.  And 
a  distinction  has  been  taken  there  on  this  point  between  bank- 
ruptcy and  insolvency,  (g-)  The  process  against  the  bankrupt 
is  in  invitum;  but  the  insolvent  moves  himself,  and  seeks  to 


of  a  bankrupt,  after  examination,  con- 
cluded to  accept  a  lease.  Subsequently, 
finding  they  had  miscalculated  its  value 
they  assigned  to  a  person  who  at  the  time 
of  the  assignment  was  insolvent,  for  the 
purpose  of  exonerating  themselves  from 
payment  of  rent  and  performance  of  cov- 
enants. The  Vice-Chancellor,  Sir  Thomas 
Pliimer,  said  ;  "  Why  is  the  assignee  lia- 
ble to  the  landlord  ?  Because  of  the 
pririfi/  of  estate.  The  original  lessee  is 
liable  in  respect  of  the  privity  of  contract. 
The  liability  of  an  assignee  of  a  lease  be- 
gins and  ends  with  his  character  as  as- 
signee. In  him  there  is  no  personal  con- 
fidence of  the  lessor.  Ever  since  the  case 
of  Pitcher  v.  Tovey,  it  has  been  held  that 
I)y  an  assignment,  an  assignee  exonerates 
himself  from  all  claims  in  respect  of  rent 

oven  though  he  assigns  to  a  beggar 

This  being  the  general  law  on  tlie  subject 
as  to  an  assignment,  how  does  the  case 
stand  upon  an  assignment  by  the  assign- 
ees of  a  bankrupt  '.  Such  assignees  are 
trustees  for  the  creditors  of  tiic  liankrupt. 
If  in  general  an  assignee  of  a  lease  is  not 
lialile  to  rent  after  an  assignment,  I  see  no 
ground  whatever  for  saying  assignees  of 
a  b:inkrui)t's  estate  should  be  in  a  worse 
comlition  than  other  assignees  of  a  lease." 
Yalliatit  v.  Dodemede,  2  Atk.  .')4()  ; 
Pitclicr  V.  'J'ovcy,  Carth.  177,  1  Salk.  81, 
4  Mod.  71,2  Vent.  228,  S.  c.  tiom.  Tovey 
V.  I'itclicr,  .'J  Lev.  2'.).'),  1  Show.  ;J4();  Le- 
kcux  )'.  Nash,  Stra.  1221  ;  Ciianccllor  v. 
I'oolc,  Doug.  7fi4  ;  Odell  v.  Wake,  .1 
Camj).  .')!)4.     In  I'liiipot  v.  Iloarc,  2  Atk. 

[074] 


219,  Ambl.  480,  it  was  held  that  covenants 
did  not  bind  the  assignee  of  the  lessee  who 
had  become  bankrupt.  Here  the  assign- 
ment was  fraudulent.  Walker  v.  Reeves, 
Doug.  461 ;  Buller,  N.  P.  159;  Tavlor  v. 
Shum,  1  B.  &  P.  21  ;  Wilkins  v.  Fry,  2 
Rose,  371 .  The  case  of  Knight  v.  Peachy, 
1  Vent.  329,  T.  Raym.  303,  is  contra,  but 
must  be  considered  as  overruled  by  sub- 
sequent cases. 

(/)  Thursby  v.  Plant,  note  .5,  1  Sannd. 
240  ;  Barnard  v.  Godscall,  Cro.  Jac. 
309  ;  Brett  i'.  Cumberland,  id.  521  ; 
Bachelour  v.  Gage,  Cro.  Car.  188;  Nor- 
ton V.  Acklane,  id.  579  ;  Jodderell  v.  Cow- 
ell,  Cas.  temp.  Hardw.  343  ;  Mayor  v. 
Steward,  4  Burr.  2443 ;  Cantrel  v.  Gra- 
ham, Barnes'  Notes,  69.  Lord  Mansfield 
in  Wadham  ;;.  Marlowe,  1  H.  Bl.  437,  a 
better  report  in  8  East,  31 1 ,  n.  Auriol  v. 
Mills,  4  T.  R.  94 ;  Rowe  v.  Gallicrs,  2  id. 
133;  Boot  V.  Wilson,  8  East,  311  ;  Val- 
liant  V.  Dodemede,  2  Atk.  546 ;  Doe  v. 
Carter,  8  T.  R.  57,  where  several  addi- 
tional cases  bearing  on  this  point  are  col- 
lected. ]:)oe  V.  Bevan,  3  M.  &  S.  353; 
Tuck  r.  Fyson,  6  Bing.  321. 

{</)  Sec  the  English  statutes,  49  Geo. 
III".  V.  121,  6  Geo.  IV.  c.  Ill  ;  Dommett 
V.  Bedford,  3  Vcs.  149;  Wilkinson  v. 
Wilkinson,  Cooper,  261,  2  Wils.  Ch.  57  ; 
Ilolyland  v.  De  Mendez,  3  Meriv.  184; 
Doe  V.  Carter,  8  T.  R.  61,  s.  c.  id.  301  ; 
Corric  v.  Onslow,  2  Madd.  341  ;  Shee 
r.  Iliilc,  13  Ves.  404,  and  see  Sturges 
V.  Crowninsliield,  4  Wheat.  122;  Ogden 
V.  Saunders,  12  id.  213. 


CH.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


649 


transfer  his  property.  This  is  therefore  a  voluntary  breach  of 
a  covenant  not  to  assign,  and  so  works  a  forfeiture.  The  proper 
way  is  to  insert  in  every  lease  the  proviso  suggested  by  Lord 
Ellenborough,  —  that  bankruptcy  or  insolvency  by  the  lessee 
shall  determine  the  lease.  (A) 

Some  questions  have  arisen  as  to  the  rights  of  the  assignees 
to  or  over  commercial  paper  held  by  the  insolvent.  In  general, 
all  such  paper  passes  to  the  assignee,  and  carries  with  it  all  the 
rights  and  interests  of  the  insolvent.  Nor  does  the  title  of  the 
assignee  depend  upon  the  negotiable  quality  of  the  paper;  for 
the  very  reason  that  he  takes  it,  not  by  transfer  or  purchase,  but 
by  sequestration,  (i)  But  the  title  and  equities  of  third  parties 
often  depend  upon  the  negotiability  of  the  paper.     Frequently 


(h)  Doe  V.  Clarke,  8  East,  185  ;  Doe 
V.  Carter,  above  cited,  where  all  the  prior 
cases  are  collected.  Cooper  v.  Wyatt,  5 
Madd.  489  ;  Rex  v.  Robinson,  W'ightw. 
393  ;  Brandon  v.  Robinson,  18  Vcs.  434. 
These  cases  show  that  it  is  competent  for 
a  grantor,  devisor,  or  lessor  to  attach  con- 
ditions to  the  effect  that  the  grant,  devise, 
or  lease,  shall  cease  on  the  bankruptcy  of 
the  beneficiary.  But  it  appears  that  he 
himself  will  not  be  allowed  to  enter  into 
an  agreement  as  by  bond,  for  the  subse- 
quent transfer  of  his  property  for  certain 
specified  uses  in  the  event  of  his  bank- 
ruptcy. Thus  a  contingent  settlement  by 
a  trader  of  his  own  property  upon  his 
wife,  to  take  effect  in  case  he  should  be- 
come a  bankrupt,  would  be  a  limitation 
in  fraud  of  creditors,  and  could  not  be  al- 
lowed ;  but  it  is  said,  that  if  the  wife  brings 
a  fortune  to  her  husband,  she  may  allow 
him  to  use  it  with  the  proviso,  that  in  case 
of  his  bankruptcy  it  shall  return  to  her. 
Ex  parte  Cooke,  8  Ves.  353  ;  Higinbotham 
V.  Holme,  19  Ves.  92;  Ex  parte  Hinton, 
14  id.  598  ;  Ex  parte  Young,  3  Madd. 
130.  In  the  matter  of  Murphy,  1  Sch. 
&  L.  49 ;  Higginson  v.  Kelly,  1  Ball  & 
B.  256  ;  In  the'matter  of  Meaghan,  1  Sch. 
&  L.  180;  Ex  parte  Hodgson,  19  Ves. 
207  ;  Stavely  v.  Parsons,  stated  in  Mr. 
Sumner's  learned  note  to  8  Ves.  357. 

(i)  Wallace  v.  Hardacre,  1  Camp. 
45  ;  Hall  v.  Barnard,  1  C.  &  P.  382.  In 
the  case  of  Ex  parte  Smith,  Buck's  C.  B. 
355,  no  question  was  made  that  bills  of 
exchange,  like  other  property  of  the  bank- 
rupt, pass  to  the  assignees.  Here  two 
firms,  one  upon  the  continent  of  Europe, 


and  the  other  in  London,  had  been  in  the 
habit  of  drawing  upon,  and  transmitting 
bills  of  exchange  to  one  another  on  general 
account.  In  this  instance,  bills  had  been 
sent  by  the  continental  house  to  the  Lon- 
don firm  for  the  especial  purpose  of  raising 
money  thereon  for  the  account  of  the  house 
abroad.  Befoi'e  this  had  been  done,  and 
while  the  bills  were  in  their  possession,  the 
firm  in  London  failed,  and  their  assignees 
took  possession  of  these  bills.  A  petition 
having  been  filed  praying  that  these  bills 
might  be  taken  from  the  assignee,  and  re- 
turned to  the  petitioners,  the  Vice-Chan- 
cellor  said  :  "  In  cases  of  this  nature,  the 
case  always  turns  upon  the  fact,  whether 
the  bills  are  remitted  in  order  that  the 
party  to  whom  they  are  sent  may  recover 
the  amount,  as  the  agent  of  the  party  re- 
mitting, or  whether  the  bills  are  so  sent, 
on  a  general  account  between  the  parties, 
that  the  person  receiving  them  has  a  right 
to  deal  with  them  for  his  own  use.  Cer- 
tainly, bankers  are  the  persons  who  are 
employed  in  such  agencies  ;  but  a  mer- 
chant, or  any  other  person,  may  be  so  em- 
ployed  In  this  case,  the  admitted 

facts  exclude  all  doubts  as  to  the  actual 
nature  of  the  transaction.  Messrs.  Power 
&  Co.  are  desired  to  do  the  needful  with 
the  bills,  and  to  place  the  amount  to  the 
credit  of  the  petitioners  when  in  cash.  In 
answer,  Messrs.  Power  &  Co.  say,  '  The 
needful  shall  be  done.'  They  were  bound, 
therefore,  to  receive  the  amount  of  the 
bills,  as  the  agent  of  the  party  remitting, 
and  were  not  at  liberty  to  deal  with  the 
bills  for  their  purposes."  So  they  did  not 
pass  to  the  assignees. 

[675] 


650 


THE  LAW   OF   CONTRACTS. 


[part  II. 


these  come  into  conflict  with  those  of  the  assignee,  or  of  other 
parties  ;  and  in  such  cases  the  general  rule  would  seem  to  be, 
that  the  bankruptcy  overrides  the  commercial  law  or  rules ;  and 
the  title  of  an  innocent  party  is  made  to  yield  to  that  of  the 
assignee,  where  it  would  be  available  against  any  others.  Hence, 
a  bankrupt's  transfer  by  his  bill  of  funds  in  the  hands  of  a 
drawee,  would  be  invalid  against  the  assignees  who  take  these 
funds  by  the  bankruptcy,  {j)  But  if  the  bill  were  drawn  for 
more  than  the  funds,  and  was  accepted,  the  holder  could  recover 
from  the  acceptor  the  excess  of  the  amount  of  the  bill  over  the 
funds  in  his  hands,  (k)  This  applies,  however,  only  when 
some  act  of  the  bankrupt  is  necessary  to  make  out  a  party's 
title ;  for  if  he  can  rest  his  claim  on  his  own  equity,  it  would  be 
good.  Nor  can  the  assignees  take  paper  which  was  transferred 
by  indorsement  of  the  bankrupt  after  bankruptcy,  if  it  be  such 
that  they  could  not  make  it  available  for  the  funds  of  the  assign- 
ment. Thus,  if  the  bankrupt  indorsed  over  accommodation 
paper,  which  he  might  indorse  but  could  not  sue,  the  assignees 
do  not  take  it.  (/)     So  if  bankers  or  others   held  commercial 


(J)  Willis  V.  Freeman,  12  East,  656. 
This  was  an  action  against  the  defendants 
as  acceptors  of  a  bill  of  exchange  for 
1,400/.,  drawn  by  one  Anderson,  payable 
to  his  own  order,  and  indorsed  by  him  to 
the  plaintiff  for  value.  And  the  defence 
was,  that  in  consequence  of  a  prior  act  of 
bankruptcy  by  Anderson,  which  had  since 
been  followed  by  a  commission,  Ander- 
son's indorsement  transferred  no  right  to 
the  plaintiff.  Other  facts  in  this  case  will 
be  stated  in  the  notes  below.  Of  the  point 
here  considered.  Lord  EUenhorough  said : 
"  It  may  be  considered  as  clear,  that,  ex- 
cept in  cases  provided  for  by  particular 
statutes,  a  trader  who  has  committed  an 
act  of  itaiikruptcy,  upon  whicii  a  commis- 
sion afterwards  issues,  can  make  no  trans- 
fer of  his  ])ropcrty  to  the  prejudice  of  his 
assignees,  nor  do  any  act  to  interfere  with 
their  rights  ;  but  every  such  attempted 
transfer  or  act  is  liable  to  be  vacated  by 
his  assignees.  On  the  other  iiand,  when 
it  docs  not  affect  the  rights  and  interests 
of  tiie  assignees,  the  act  of  a  man  who  lias 
committed  an  act  of  iiankniptcy  lias  tlie 
same  effect  as  the  act  of  any  oilier  jierson. 
The  question,  therefore,  for  consideration 
here  is,  wiu;ther  this  indorsetneiit  l»y  An- 
derson, if  allowed  to  be  effectual,  could 

[G7GJ 


prejudice  his  assignees,  or  interfere  with 
their  rights,  because  so  far  forth  as  it 
would  do  so,  it  would  be  inoperative." 

(k)  Wilkins  v.  Casey,  7  T.  R.  711. 
The  case  of  Willis  v.  Freeman,  above 
cited,  also  is  an  authority  upon  this  point. 
In  that  case,  the  trader,  after  the  secret 
act  of  bankruptcy,  as  above  set  forth, 
having  securities  in  his  banker's  hands  to 
a  certain  amount,  drew  on  them  a  bill  for 
a  larger  amount  for  his  accommodation, 
payable  to  his  order,  which,  after  accept- 
ance, he  indorsed  to  the  plaintiff  (who 
knew  of  his  partial  insolvency,  but  not  of 
the  act  of  bankruptcy),  the  commission 
having  been  subsequently  taken  out,  it 
was  held  that  the  plaintiff,  who  was  to 
make  title  through  the  bankrupt's  indorse- 
ment after  his  bankruptcy,  though  he  was 
entitled  to  sue  the  acceptors  upon  the  bill, 
could  only  recover  on  it  the  amount  of  the 
sum  accepted  for  the.  accommodation  of  the 
bankrupt  over  and  above  the  amount  of  the 
bankrupt's  effects  in  the  hands  of  the  ac- 
ceptors at  the  time  of  the  bankruptcy. 
And  this  on  the  ground  that,  by  his  re- 
covery, the  amount  of  the  assignees  and 
creditors  would  lujt  be  damnified. 

(/)  Arden  v.  Watkins,  '^  P^ast,  317. 
It  seems   that   the   same   j)rinciples   will 


CH.  X.]  BANKRUPTCY   AND    INSOLVENCY.  651 

paper  only  for  the  owners,  if  they  are  insolvent  it  docs  not  go 
to  their  assignees.  It  is  sometimes  difficult  to  determine  the 
facts  on  which  this  question  turns  ;  but  in  general,  the  rule  is 
this.  If  the  insolvent  held  the  paper  only  for  collection,  the 
assignee  does  not  take  it.  If  he  has  held  it  to  collect  and  hold 
in  any  trust,  or  for  any  especial  purpose,  and  had  placed  or  held 
the  proceeds  in  separate  or  special  deposit,  applicable  to  a 
special  purpose,  the  assignees  do  not  take  the  proceeds.  If  he 
had  advanced  money  on  the  paper,  the  assignees  take  his  claim 
for  reimbursement  and  his  lien.  If  he  had  discounted  the  paper, 
or  made  it  his  own  otherwise,  as  by  purchase,  then  the  assignee 
takes  it.  Generally,  (m)  if  the  insolvent  holds  such  paper,  even 
by  a  legal  title,  but  the  beneficial  interest  is  in  another,  the 
assignee  does  not  take  it.  (w) 

It  has  been  held,  on  strong  grounds,  and  apparently  in  con- 
formity with  established  principles,  that  an  assignee  takes  the 
benefit  of  a  promise  made  to  the  insolvent,  which  could  be 
available  only  on  the  happening  of  a  contingency,  as  a  success- 
ful termination  of  a  suit,  which  did  not  happen  until  after  the 
insolvency,  (o) 

Where  an  assignee  sues  for  damages,  the  measure  to  him  is 
not  always  the  injury  to  the  estate,  for  he  rests  upon  a  strict 
legal  right,  (p) 


govern  the  case  of  accommodation  paper,  Smith  v.  Knox,  above  cited,  and  5  Taunt, 

when  proof  of  it  is  attempted  against  a  192;  ^.r  ywj-te  Bloxham,  6  Ves.  449,  600  ; 

bankrupt's  estate,  as  would  apply  if  suit  Ex  parte  Bloxham,  8  Ves.  531  ;  Bank  of 

had  been  brought  upon  it  against  the  bank-  Ireland  v.  Beresford,  6  Dow,  238;    Ex 

rupt ;  and  the  same  reasons  hold  when  the  parte  King,  Cooke,  157  ;  Ex  parte  Lee,  1 

bankrupt  has  given  accommodation  notes  P.  Wms.   782.     See  Jones  v.  Hibbert,  2 

or  acceptances.     It  is  clear  on  the  authori-  Starkie,  304. 

ties,  that  no  action  could  be  maititained  in  (/«)  Kitchen  v.  Bartsch,  7  East,  53; 
eitherof  the  above  cases.  Smithy.  Knox,  Giles  i\  Perkins,  9  id.  12;  Tennant  v. 
3  Esp.  46  ;  Fentum  v.  Pocock,  5  Taunt.  Strachan,  4  C.  &  P.  31. 
192  ;  Thompson  r.  Shepherd,  12  Met.  311;  (?;)  Anonymous,  in  the  notes,  1  Camp. 
Brown  v.  Mott,  7  Johns.  361  ;  Grant  v.  492  ;  Bourne  v.  Cabot,  3  Met.  305  ;  AVal- 
Ellicott,  7  Wend.  227  ;  Charles  v.  Mars-  ler  v.  Drakeford,  1  Starkie,  481  ;  Green- 
den,  1  Taunt.  224  ;  Carruthers  v.  West,  ing,  ex^parte,  13  Ves.  206;  Ex  parte  Deey, 
11  Q.  B.  143;  Renwick  v.  Williams,  2  2  Cox,  424  ;  Watkins  r.  Maule,  2  Jacob  & 
Md.  356  ;  Molson  v.  Hawley,  1  Blatchf.  W.  243  ;  Smith  v.  Pickering,  Peake,  N. 
C.  C.  409.  If  the  accommodation  bill  is  P.  50  ;  Ex  parte  Hall,  1  Rose, '  13 ;  Ex 
in  the  liands  of  a  third  party,  who  took  it  parte  Rowton,  id.  15. 
bona  fide,  even  with  notice  of  its  being  an  (o)  Johnson,  C.  J.,  in  Burton  v.  Lock- 
accommodation  bill,  he  may  prove  against  ert,  4  Eng.  411. 

the  estate  of  either  party  to  it,  and  recover  (;>)  Hill  ;;.  Smith,  12  M.  &  W.  618; 

a  dividend  on  it  to  the  amount  due  him.  Thorpe  v.  Thorpe,  3  B.  &  Ad.  580;  Col- 

57  *  [  G77  ] 


652 


THE   LAW   OF   CONTRACTS. 


[part  II. 


SECTION    IX. 

what  interests  or  property  of  the  bankrupt  do  not  pass  to 

THE   assignee. 

As  it  is  the  purpose  of  the  insolvent  laws  to  give  to  the  cred- 
itors all  they  could  take  by  attachment  or  levy,  so  it  gives  them 
nothing  more.  In  all  the  States,  some  specified  property  of  cer- 
tain kinds,  real  and  personal,  is  exempt  from  attachment,  and 
generally,  at  least,  the  same  is  exempt  from  the  operation  of  the 
insolvent  laws.  Where  this  exemption  is  for  a  certain  amount 
of  property,  the  question  has  been  raised,  whether  this  relieves 
merchandise  of  that  value,  or  is  confined  to  household  goods,  or 
other  similar  things.  This  must  be  a  question  of  construction 
of  a  statute.  But  on  general  principles,  we  should  not  extend 
the  exemption  to  merchandise. 

It  has  been  said,  that  all  rights  of  action  pass  to  the  assignee ; 
but  there  is  one  broad  exception  to  this.  No  rights  of  action  for 
mere  personal  injury  pass,  (pa)  None,  for  example,  for  assault 
and  battery,  and  none  for  slander,  (q)     And  it  has  been  held 


son  V.  Welsh,  1  Esp.  379.  See  also,  Por- 
ter V.  Vorley,  9  Bing.  93,  s.  c.  2  Moore  & 
S.  141. 

(pa)  Stone  V.  Boston  &  Maine  Rail- 
road, 7  Gray,  539. 

{(/)  Kogcrs  V.  Spence,  13  M.  &  W.  571. 
This  was  an  action  of  trespass  for  break- 
ing and  entering  tlie  dwelling-house  and 
garden  of  the  plaintiff,  and  making  a  great 
noise  and  distuii)an((;  therein,  damaging 
the  doors,  &e.,  of  the  house,  and  the  trees, 
&c.,  of  the  garden,  and  seizing  certain 
goods  of  plaintiff,  and  exf)Osing  them 
to  sale  on  the  premises  without  his  leave  ; 
wherel)y  the  jilaintifl'  and  his  family  weie 
greatly  disturbed  and  annoyed  in  the 
peacealile  [)Ossession  of  tiie  dwelling-house 
and  }xarden,  and  the  ])lainliff  was  pre- 
vented from  carrying  on  iiis  lawfid  busi- 
nC88.  'J'lie  defendant  [)leaded  in  bar,  tiiat 
the  ()hiintifl'  became  liaid<ru])l  after  tlu; 
action  brontilit,  and  that  an  assignee  had 
been  a])pointcd,  wiio  accepted,  &c.,  and 

[C7«J 


that  thereby,  under  the  statute,  the  cause 
of  action  became  vested  in  the  assignee. 
Demurrer  to  the  plea,  and  judgment  for 
the  plaintiff.  See  11  M."  &  W.  191. 
Held,  on  error  brought,  that  the  plea  was 
bad.  Lord  Denman  said,  ably  defining 
the  doctrine  on  this  subject :  "  As  the  ob- 
ject of  the  hiw  is  manifestly  to  benefit  cred- 
itors, by  making  all  the  pecuniary  means 
and  ])roperty  of  the  bankrupt  available  to 
their  payment,  it  has,  in  furtherance  of 
tins  object,  been  construed  largely,  so  as 
to  pass  not  only  what  in  strictness  may  bo 
called  the  projjerty  and  debts  of  the  bank- 
rupt, but  also  those  rights  of  action  to 
which  he  was  entitled,  fi)r  the  purpose  of 
recovering  in  s])ecie  real  or  personal  prop- 
erty, or  dannigcs  in  respect  of  that  which 
lias  been  unlawfully  damnified  in  value, 
witiihcld,  or  taken  from  him  ;  but  causes 
of  action  not  falling  within  this  description, 
]>iit  arising  out  of  a  wrong  personal  to  tho 
bankruiit,  for  which  he  would  bo  entitled 


CH.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


653 


that  the  assignee  took  no  right  of  action  for  breach  of  contract 
to  employ  the  insolvent  in  a  certain  way  for  certain  wages ; 
but  this  has  been  overruled,  (r)     It  may  sometimes  be  difficult 


to  remedy  whether  his  property  were  di- 
minished or  impaired,  or  not,  are  clearly 
not  within  the  letter,  and  have  never  been 
held  to  be  within  the  spirit,  of  the  enact- 
ment, even  in  cases  where  injuries  of  this 
kind  may  have  been  accompanied  or  fol- 
lowed by  loss  of  property  ;  and  to  this 
class  we  think  the  action  of  trespass  quare 
ckmsuin  fregit,  and  that  of  trespass  to  the 
goods  of  the  bankrupt,  must  be  considered 
to  belong.  These  rights  of  action  are 
given  in  respect  of  the  immediate  and 
present  violation  of  the  possession  of  the 
bankrupt,  independently  of  his  rights  of 
pijDpcrty ;  they  are  an  extension  of  that 
protection  which  the  law  throws  around 
the  person,  and  substantial  damages  may 
be  recovered  in  respect  of  such  rights, 
though  no  loss  or  diminution  in  value  of 
property  may  have  occurred ;  and  even 
when  such  an  incident  has  accompanied  or 
followed  a  wrong  of  this  description,  the 
primary  personal  injury  to  the  bankrupt 
being  the  principal  and  essential  cause  of 
action,  still  remains  in  him,  and  does  not 
vest  in  the  assignee,  either  as  his  property, 
or  his  debts."  s.  c.  on  Appeal,  12  Clark 
&  F.  700.  In  Howard  v.  Crowther,  8  M. 
&  W.  f)01,  which  was  case  for  the  seduc- 
tion of  the  sister  and  servant  of  plaintiff, 
Lord  Ahinger,  C.  B.,  said :  "  Has  it  ever 
been  contended  that  the  assignees  of  a 
bankrupt  can  recover  for  his  wife's  adul- 
tery, or  for  an  assault?  How  can  they 
represent  his  wounded  feelings  ?  Nothing 
is  more  clear  than  that  a  right  of  action 
for  an  injury  to  the  property  of  the  bank- 
rupt will  pass  to  his  assignees ;  but  it  is 
otherwise  as  to  an  injury  to  his  personal 
comfort.  Assignees  of  a  bankrupt  are  not 
to  make  a  profit  of  a  man's  wounded  feel- 
ings." Alderson,  B.,  said:  "The  service, 
for  the  loss  of  which  this  action  is  brought, 
is  of  more  value  to  one  person  than  another, 
and  the  loss  of  it  is,  therefore,  only  a  per- 
sonal injury."  Bird  v.  Hempstead,  3  Day, 
272 ;  Stanly  v.  Duhurst,  2  Root,  52 ; 
Nichols  V.  Bellows,  22  Vt.  .581.  As  early 
as  the  case  of  Benson  v.  Flower,  Sir  W. 
Jones,  215,  it  was  held  that  no  action  for 
slander  passed  to  the  assignee.  Clark  v. 
Calvert,  8  Taunt.  742,  3  Moore,  96  ;  Shoe- 
maker V.  Keelev,  1  Yeates,  245,  2  Dall. 
213  ;  Smith  v.  Milles,  1  T.  R.  475  ;  Bran- 
don V.  Fate,  2  H.  Bl.  308.     The  distinc- 


tion seems  to  rest  upon  the  solution  of  the 
questions.  Have  the  assignees  lost  any 
thing  ■?  What  ara  they  entitled  to  '!  Tlie 
bankrupt's  property.  If,  then,  that  prop- 
erty has  been  converted  or  injured,  they 
may  bring  an  action  ;  but  they  cannot  be 
said  to  have  a  property  in  the  personal 
feelings,  or  even  reputation  of  the  bank- 
rupt. In  Wright  v.  Fairfield,  2  B.  &  Ad. 
727,  the  right  of  assignees  to  sue  on  con- 
tracts and  for  injuries  affectimj  the  bank- 
rupt's property  was  declared.  Hancock  v, 
Coftyn,  8  Bing.  358,  1  Moore  &  S.  521 ; 
Bennett  i-.  Allcott,  2  T.  R.  166  :  Porter  v. 
Vorlev,  9  Bing.  93,  2  Moore  *  S.  141  ; 
Brewer  v.  Dew,  1 1  M.  &  W.  G25 ;  Chip- 
pendale V.  Tomlinson,  1  Cooke,  106; 
Clarkson  v.  Parker,  7  Dowl.  87  ;  Splidt 
V.  Bowles,  10  East,  279;  Kynier  v.  Lar- 
kin,  2  Moore  &  P.  183;  Rouch  v.  Great 
Western  Railway  Co.  1  Q.  B.  51.  So  it 
is  held  that  a  covenant  to  renew  a  lease  iu 
favor  of  one  who  subsequently  becomes 
bankrupt,  will  not  be  enforced  in  equity  in 
fevor  of  his  assignees.  Drake  v.  The 
Mayor  of  Exon,  1  Ch.  Ca.  71,  2  Freem. 
183 ;  Moyses  v.  Little,  2  Vern.  194,  1  Eq. 
Ca.  Abr.  53,  pi.  1 ;  Brooke  v.  Hewitt,  3 
Ves.  253;  Willingham  v.  Joyce,  id.  168; 
Buckland  v.  Hall,  8  id.  92  ;  Vandenanker 
V.  Desbrough,  2  Vern.  96.  So  with  an 
agreement  for  a  lease  for  the  personal  ac- 
commodation of  the  bankrupt.  Flood  v. 
Finlay,  2  Ball  &  B.  9. 

(r)  Beckham  v.  Drake,  8  M.  &  W.  846, 
9  id.  79.  Judgment  reversed  in  the  Ex- 
chequer Chamber,  11  id.  315.  The  facts 
briefly  were,  that  A  agreed,  in  writing, 
with  "B  and  C,  on  behalf  of  themselves  and 
D,  as  partners  in  trade,  to  serve  them,  B 
and  C,  and  the  survivor  of  them,  for  seven 
years,  as  their  foreman,  and  not  to  engage 
in  trade  on  his  own  account  during  that 
period  without  their  consent ;  and  B  and 
C  agreed  to  pay  him  wages  after  the  rate 
of  £3  3s.  per  week  so  long  as  he  should 
serve  them  faithfully.  The  Court  of  Ex- 
chequer held,  by  ParJce,  B.,  that,  as  the 
contract  related  to  the  employment  of  the 
personal  skill  and  labor  of  the  bankrupt, 
and  the  damages  for  the  breach  of  it  being 
compounded  partly  of  tiie  personal  incon- 
venience to  himself,  and  partlj'  of  the  con- 
sequential loss  to  his  personal  estate,  the 
right  of  action  did  not  pass  to  his  assignees. 

[679] 


654  THE  LAW  OF  COXTRACTS.  [PART  II. 

to  draw  the  line  between  the  rights  of  this  kind  which  the 
assignees  take,  and  those  which  they  cannot;  but  the  general 
rule  would  seem  to  be,  that  the  right  to  damages  passes  from 
the  insolvent  to  his  assignees  only  where  the  right  springs  from 
damage  actually  done  to  property,  or  distinctly  connected  with 
property,  (s)  And  even  here  it  is  obvious  that  cases  might 
occur  which  would  not  come  under  this  rule.  Thus,  the  insol- 
vent's claim  against  a  man  who  beat  his  horse  and  injured  him, 
or  who  had  poisoned  his  cattle,  would  not,  on  general  princi- 
ples, pass  to  the  assignee.  All  rights  of  this  kind  which  do  not 
pass  to  the  assignee,  must,  under  the  general  rule,  remain  with 
the  insolvent;  and  we  should  say,  therefore,  that  if  he  had,  be- 
fore bankruptcy,  commenced  an  action  for  assault  and  battery,  or 
any  other  action,  the  right  of  which  did  not  pass,  and  he  becariie 
bankrupt  pending  the  suit,  he  could  continue  to  carry  on  the 
suit  for  his  own  benefit.  But  if  the  claim  had  been  reduced  to 
a  judgment  before  the  insolvency,  there  would  be  strong  reason 
for  saying  that  this  judgment  passed  to  the  assignees,  because 
it  was  now  merely  a  settled  and  vested  claim  for  money,  [sa) 
If  this  judgment  had  been  satisfied,  the  money  in  his  hands 
would,  of  course,  go  with  the  rest  of  his  assets. 

Ou  error,  brought  to  the  Exchequer  son,  that  may  be  so  dependent  u])on  and 
Chamber,  it  was  held,  Denman,  C.  J.,  de-  inseparable  from  the  personal  injury  which 
livering  the  opinion  of  the  court,  that  the  is  the  primary  cause  of  action,  that  no 
right  of  action  for  the  dismissal  of  A  with-  right  to  maintain  a  separate  action,  in  re- 
out  reasonable  cause,  passed  to  his  assign-  spect  of  such  consequential  damage,  will 
ees  in  bankruptcy,  as  being  part  of  his  j)ass  to  the  assignees  of  a  bankrupt.  In 
personal  estate,  whereof  a  profit  might  be  all  those  cases,  the  primary  cause  of  action, 
made.  It  will  be  seen  that  the  difference  if  of  a  nature,  properly  speaking,  pcrson- 
of  opinion  was  not  so  much  upon  the  prin-  al,  and  the  right  to  maintain  it,  would  die 
ciplc  as  upon  the  a])plication  of  the  prin-  with  the  bankrupt.  In  tiic  present  case, 
ciplc  to  the  facts  before  the  court.  Lord  although  the  contract  was  for  the  personal 
Deiiiiiau  said  :  "  It  was  farther  argued  that  skill  and  labor  of  the  bankrii])t,  the  breach 
as  this  contract  related  to  the  person  of  of  that  contract  does  not  appear  to  cause 
the  bankrM|)t,  the  right  of  action  will  not  him  any  other  injury  than  the  dimiiuition 
pass.  There  is  no  (l(jul)t  that  a  right  of  of  his  personal  estate.  In  the  cases  referred 
action  for  an  injury  to  tlic  Iiody  or  feelings  to,  the  injunj  (ifciii/)  to  the  personal  estate, 
of  a  trader,  arising  from  a  tort  independent  is  a  consequence  of  an  injury  to  the  person  ; 
of  contract,  does  not  pass  to  his  assignees,  in  this  case,  the  injurij  to  the  person  (ifanij), 
ex.  gr.  for  an  assault  and  battery,  or  for  is  a  consequence  of  the  injury  to  the  jtersonal 
slander,  or  for  the  seduction  of  a  child  or  estate." 

servant,  and  the  same  may  be  said  of  some  (.s)  Sec  the  language  o{  JmyA  Denman 

personal  injm-ies  arising  out  of  breaches  of  in  Drake  v.  IJeckliam,  11   M.  &  W.  315, 

contracts,  such  as  contracts  to  cure  or  to  above  (pioted. 

marry;  and  if,  in  the  case  last  supposed,  {sn)  See  Stone  r.  Boston  &  Maine  Ivail- 

a    conse(|uential  damage    to  the  j)ersonal  road,  7  Gray,  539. 
estate  follows  from  liie  injury  to  the  ]ter- 

[G80] 


en.  X.] 


BANKRUPTCY  AND   INSOLVENCY. 


655 


The  choscs  in  action  of  the  wife  pass  to  the  assignee,  as  we 
have  seen  ;  but  he  acquires  no  interest  in  any  property,  real  or 
personal,  which  is  secured  to  her  separate  use  by  the  interven- 
tion of  trustees ;  or  without  trustees,  by  operation  of  law  or  in 
conformity  with  law.  For  here  the  husband  could  not  inter- 
fere, nor  give  his  creditors  or  his  assignees  a  right  to  inter- 
fere, (t) 

The  United  States  bankrupt  law  exempted  wearing  ap- 
parel ;  [u)  but  it  was  held  that  articles  of  jewelry  were  not 
exempt  under  this  clause,  (v)  But  it  was  held  in  the  District 
Court  in  New  York  that  such  articles,  if  they  belonged  to  the 
wife  before  marriage,  or  were  given  to  her  after  marriage,  and 
were  not  unsuitable  in  their  value  to  her  condition,  might  be  re- 
tained by  her.  [iv)  Our  State  statutes  frequently  contain  a  sim- 
ilar clause  of  exemption,  which,  it  might  be  supposed,  would  be 
similarly  construed.  In  Massachusetts,  Judge  Story  put  all 
these  things  on  the  footing  of  a  trust,  and  withheld  them  from 


(t)  Bennet  v.  Davis,  2  P.  Wms.  316; 
Robinson  v.  Taylor,  2  Bro.  C.  C.  589  ; 
Haselington  v.  Gill,  3  T.  R.  620,  note ; 
Jarman  v.  Woolloton,  id.  618;  Tullett 
V.  Armstrong,  4  Mylne  &  C.  377  ;  Ken- 
sington V.  DoUond,  2  Mylne  &  K.  184; 
Ex  parte  Killick,  3  Mont.  D.  &  De  G. 
480 ;  Gaunt  v.  Ward,  7  Bing.  608  ;  Ex 
parte  Coyscgamc,  1  Atk.  192,  Cooke, 
B.  L.  269;  Roberts  v.  Spicer,  5  Madd. 
491  ;  Ex  parte  Beilby,  1  Glyn  &  J.  167  ; 
Came  v.  B rice,  7  M.  &  W.  183;  Maho- 
ncy  V.  Porter,  3  Gush.  417.  In  the  mat- 
ter of  Snow  and  wife,  5  Law  Rep,  369, 
Shaw  V.  Mitchell,  id.  453 ;  Vandenanker 
V.  Desborough,  2  Vern.  96  ;  Jacobson  v. 
Williams,  1  P.  Wms.  382 ;  Bosvil  v. 
Brander,  id.  458 ;  Tyrrell  v.  Hope,  2 
Atk.  558 ;  2  Roper  on  Real  Property, 
159.  But  it  seems  that  if  the  wife  buy 
goods,  as  wearing  apparel,  with  the  in- 
come of  money  settled  to  her  separate 
use,  those  goods  after  purchase  are  the 
property  of  the  husband,  and  in  case  of 
his  bankruptcy  will  pass  to  his  assignees, 
unless  exempted  by  statute.  Carne  v. 
Brice,  above  cited.  So,  money  deposited 
in  a  bank  by  a  married  woman  who  lives 
separate  from  her  husband,  and  is  not 
supported  by  him,  is  the  property  of  the 
husband,  though  deposited  in  her  name, 
and  so  may  be  reached  by  the  creditors  of 


the  husband,  and  consequently  will  pass 
to  the  assignees.  Ames  i'.  Chew,  5  Met. 
320.  Where  there  was  a  devise  to  the 
separate  use  of  the  wife,  and  no  trustees 
appointed,  the  court  said  they  would 
make  the  husband  a  trustee  for  her,  and 
ordered  the  assignees  to  convey  to  a  Mas- 
ter for  her  separate  use.  Bennet  i'.  Da- 
vis, 2  P.  Wms.  316. 

(u)  The  substance  of  the  provision  of 
exemption  which  would  seem  to  be  in 
most  respects  adopted  in  the  various  in- 
solvent laws,  includes  the  necessary  house- 
hold and  kitchen  furniture  of  the  bank- 
rupt, and  such  other  articles  and  neces- 
saries as  the  assignee  might  designate  and 
set  apart,  having  reference  in  the  amount 
to  the  family,  condition,  and  circum- 
stances of  the  bankrupt,  but  altogether 
not  to  exceed  in  value,  in  any  case,  the 
sum  of  three  hundred  dollars  ;  and  also 
the  wearing  apparel  of  the  bankrupt,  and 
that  of  his  wife  and  children. 

(v)  In  the  matter  of  Kasson,  4  Law 
Rep.  489.  In  the  matter  of  Grant,  5  id. 
11,  2  Story,  312. 

{w)  In  the  matter  of  Kasson,  4  Law 
Rep.  489.  The  abstract  of  this  case  is 
substantially  the  proposition  of  the  text. 
We  have  been  unable  to  obtain  the  opin- 
ion of  Judge  Betts  in  the  case. 

[681] 


656 


THE   LAW   OF   CONTKACTS. 


[part  II. 


the  assignee  only  where  the  husband  could  be  regarded  as  the 
trustee  of  the  wife.  On  this  ground,  he  ordered  a  watch  given 
to  her  by  her  husband  after  marriage,  to  be  surrendered  to  his 
assignees ;  but  permitted  her  to  retain  a  mourning  ring  given 
her  by  her  friend.  So  it  was  held  that  watches  given  to  chil- 
dren by  a  friend  did  not  pass  to  the  assignee  of  the  father ;  nor 
would  they  if  they  were  given  by  the  father  himself  in  good 
faith,  and  were  suitable  in  kind  and  value  to  the  condition  and 
wants  of  the  children.  But  if  they  were  more  than  this,  it 
would  be  or  at  least  operate  as  a  fraud  upon  the  creditors,  to 
take  them  from  the  estate,  (x) 


SECTION    X. 


OF   THE   QUESTION   OF   TIME. 


This  may  be  important  in  the  law  of  bankruptcy  in  either  of 
two  ways.     One  refers  to  the  moment  when  the  bankrupt  loses 


{x)  In  the  matter  of  Grant,  2  Story, 
312,  5  Law  Rep.  11.  This  was  a  petition 
in  bankruptcy.  The  facts  stated  in  the 
petition,  so  far  as  material  to  the  present 
discussion,  were,  that  the  wife  of  the  peti- 
tioner was  possessed  of  a  watch  of  about 
the  vaUie  of  fifty  dollars,  presented  to  her 
by  the  petitioner  about  ten  years  before 
the  filing  of  the  petition  ;  that  she  had 
likewise  several  mourning  rings  and  pins, 
and  a  few  other  articles  of  jewelry  of  the 
value  of  at)Out  twenty-five  dollars,  some  of 
which  hail  been  given  her  by  friends,  and 
others  by  the  petitioner  some  years  pre- 
vious, and  one  mourning  ring  of  the  value 
of  about  five  dollars,  given  her  by  the 
petitioner  nearly  two  years  before  filing 
tlie  jictition.  Tiie  ]>ctition  further  stated 
that  his  two  sons,  of  the  respective  ages 
of  seventeen  and  twenty  years,  had  each  a 
gold  watch  of  the  value  of  about  fifty  dol- 
lars, which  iiad  liccn  ])ur(Iiascd  about 
two  years  lieforc  with  money  given  i)y  a 
friend,  and  witli  about  twenty-eiglit  <lol- 
lars  given  to  each  by  the  ]ictitioner,  out 
of  his  i)rivate  cash.  After  Slori/,  J.,  had 
recited  ibe  principal  facts,  he  said  :  "  The 
watch  of  till-  wife  anil  any  jewelry  given 
to  her  iiy  third  jxT^ons  before  the  mar- 
riage, or  by  iier  husljaud  cither  before  or 

[G82] 


since  the  marriage,  pass  to  the  assignee 
as  part  of  the  property  of  the  bankrupt,  to 
which  his  creditors  are  entitled.  But  jewel- 
ry given  by  third  persons  to  the  wife  since 
her  marriage  as  personal  ornaments,  and 
mourning  rings  given  to  her  by  third  per- 
sons since  the  marriage,  as  personal  me- 
morials, belong  to  the  wife  for  her  sole  and 
separate  use  in  equity,  and  do  not  pass  to 
the  assignee  under  the  bankruptcy  for  the 
benefit  of  the  creditors.  That  the  watches 
of  the  sons,  under  the  circumstances 
stated  in  the  petition,  belong  to  them  as 
their  property.  But  nevertheless,  if  the 
petitioner  was  insolvent  when  he  applied 
a  part  of  his  own  money  to  purchase  the 
same  for  his  sons,  he  had  no  right  so  to 
do  against  the  claims  of  the  creditors  ; 
and  tiiat  in  equity,  therefore,  if  tlie  peti- 
tioner was  so  insolvent,  the  sons  must  ac- 
count to  the  assignee  for  the  amount  of 
the  money  of  the  petitioner  so  paid  to- 
wards tlie  purchase  of  tlie  watches.  But 
if  the  petitioner  was  not  then  insolvent, 
ami  the  donation  on  his  part  was  made 
lionu  Jidc,  and  the  donation  was  suitable 
to  his  rank  in  life,  condition,  and  estates, 
tiicn  it  was  good,  and  not  witiiin  the  reach 
of  the  creditors,  or  in  fraud  of  their  rights 
under  the  baidvruptcy." 


CH.  X.]  BANKRUPTCY   AND   INSOLVENCY.  657 

his  power  over  his  effects,  or  in  fact,  loses  his  property  in  them, 
because  they  have  passed  to  his  assignees.  Of  course,  after 
this  moment  a  transfer  by  the  bankrupt  is  wholly  void  ;  and  it 
is  therefore  important  to  determine  what  is  this  point  of  time. 

In  England  the  lien  of  the  assignees  was  held  to  have  at- 
tached on  the  commission  of  the  first  act  of  bankruptcy  by  the 
bankrupt;  and  there  are  strong  cases  showing  that  any  act  of 
his  or  of  his  agent  afterwards  was  void,  (t)  But  though  the 
rule  itself  seems  to  be  well  settled  there,  some  doubt  exists  as 
to  its  ground.  But  this  was  confined*  to  cases  of  bankruptcy, 
where  the  proceeding  is  in  invilum.  Whether  the  reason  of 
the  rule  would  require  that  in  cases  of  insolvency  this  point  of 
time  should  occur  at  the  filing  of  the  petition  of  the  insolvent, 
or  at  the  first  publication  of  the  insolvency,  is  not  certain.  For 
the  first  conclusion  it  may  be  said,  that  his  petition  is  an  act  of 
surrender  by  the  insolvent  of  all  his  property,  to  be  dealt  with 
by  the  law.  For  the  other,  that  the  first  construction  might 
operate  as  a  fraud  upon  the  public,  that  is,  upon  those  who 
dealt  with  the  insolvent  after  his  petition,  in  good  faith,  and  in 
ignorance  of  it.     And  certainly  some  of  the  English  cases  have 

(0  Kynaston  v.  Crouch,  14  M.  &  W.  890,  2  Nev.  &  P.  636;  Vernon  v.  Hankey, 
266.  In  this  case,  one  Blake,  a  trader,  2T.  R.  113;  Turquand  y.  Vanderplank, 
had  committed  a  secret  act  of  bankruptcy,  10  M.  &  W.  180;  Stephens  v.  El  wall,  4 
by  leavinj?  his  house;  but  before  he  left,  M.  &  S.  259;  Thomason  v.  Frere,  10 
desired  his  foreman,  the  defendant,  who  East,  418  ;  Drayton  v.  Dale,  2  B.  &  C. 
had  been  accustomed  to  manage  his  busi-  293.  But  when  a  trader,  in  person,  em- 
ncss  for  him,  to  carry  it  on  in  his  absence,  ployed  an  auctioneer  to  sell  goods,  who 
The  defendant  did  so,  and  received  for  sent  him  the  proceeds  by  the  hands  of  the 
goods  sold,  and  for  debts  previously  due  defendant,  the  trader  having  become  bank- 
the  bankrupt,  the  sum  of  £153  13s. ;  but  rupt,  by  lying  two  months  ih  prison,  it 
of  this  amount,  he  made  bond  fide  sundry  was  held,  that  his  assignees  could  not  re- 
payments, some  to  creditors  of  the  bank-  cover  from  the  defendant,  who  was  a 
rupt  and  some  for  wages  due  himself,  mere  bearer,  the  money  he  had  so  received 
The  moneys  were  received  and  the  pay-  and  paid  over.  Coles  v.  Wight,  4  Taunt, 
ments  made  without  any  notice  of  the  act  198  ;  Coles  v.  Robins,  3  Camp.  183  ;  Tope 
of  bankruptcy.  The  assignees  brought  v.  Hockin,  7  B.  &  C.  101 ;  Shaw  v.  Bat- 
this  action  to  recover  the  £153,  &c.,  as  ley,  4  B.  &  Ad.  801.  And  where  one 
money  had  and  received,  to  their  use.  had  bought  goods,  bond  fide,  of  a  trader 
Plea,  never  indebted,  and  set-off  of  the  who  had  previously  committed  an  act  of 
payments  made.  Held,  that  the  assignees  bankruptcy,  and  paid  for  them,  without 
were  entitled  to  recover  all  the  money  re-  knowledge  of  the  bankruptcy,  it  was  held 
ceived  by  him  after  the  act  of  bankruptcy,  that  the  assignees  of  the  seller  could  not 
and  that  he  was  not  entitled  to  set  off  the  maintain  trover  for  the  goods,  the  pay- 
payments  he  had  made,  though  under  a  ment  having  been  protected  by  stat.  1, 
special  plea,  he  might  have  protected  him-  Jac.  1,  c.  15,  ^  14;  Cash  v.  Young,  2  B. 
self,  so  far  as  the  payments  made  without  &  C.  413 ;  Eouch  lu  The  Great  Western 
notice  of  the  act  of  bankruptcy  were  con-  Railway  Co.  1  Q.  B.  51 ;  Tripp  v.  Arm- 
corned.     Pearson  v.  Graham,  6  A.  &  E.  itage,  4  M.  &  W.  687. 

[683] 


658 


THE   LAW   OF   CONTRACTS. 


[part  II. 


this  aspect.  (?/)  But  if  the  moment  when  the  insolvent  loses 
his  power  over  his  property,  is  the  same  with  that  at  which  the 
public  is  notified  of  the  fact,  this  objection  ceases  to  apply. 
And  this  last  is  the  view  prevailing  in  this  country.  ~{a)  The 
time,  however,  is  usually  settled  by  statutory  provision,  leaving 
little  question  of  law. 

It  has  been  held  that  where  land  was  seized  on  execution  be- 
fore the  publication,  and  the  levy  completed  afterwards,  the 
creditor  took  the  land  and  not  the  assignee,  because  the  levy,  by 
relation  of  law,  referred  oack  to  the  time  of  the  seizure  on  ex- 
ecution, (b) 

But  the  question  of  time  has  also  another  importance.  Our 
national  bankrupt  law  contained,  and  many,  if  not  all  of  our 
statutes  of  insolvency  contain  a  provision  as  to  the  length  of 


()/)  Kynastoii  v.  Crouch,  14  M.  &  "W. 
266,  above  stated.  See  Plurst  v.  Gwen- 
nap,  3  Stark.  306  ;  Saunderson  v.  Gregg, 
3  id.  72 ;  Cash  v.  Young,  2  B.  &  C.  413. 
See  also,  Copland  v.  Stein,  8  T.  K.  199. 

(a)  For  such  a  provision  will  be  found 
incorporated  in  most  of  our  insolvent 
laws.  The  language  of  Shaio,  C.  J.,  in 
Clarke  v.  ]\Iinot,  4  Met.  346,  upon  this 
point,  may  be  quoted :  "  This  question 
depends  upon  the  provisions  of  the  insol- 
vent hiAV,  determining  the  time  at  which 
the  assignment  shall  take  effect,  so  as  to 
divest  the  property  of  the  insolvent  in  his 
real  and  personal  estate  and  choses  in 
action,  and  vest  the  same  in  his  assignees. 
This  clearly  is  not  the  time  of  tlie  act  of 
assignment,  for  that  is  always  some  time 
after  the  commencement  of  the  proceed- 
ings and  l>y  the  terms  of  the  statute  it 
relates  back  to  an  anterior  pei'iod.  One 
other  consideration  must  be  obvious  — 
which  is,  that  the  judge,  by  such  assign- 
ment, merely  executed  a  power  devolved 
by  law  ujion  him;  he  conveys  no  interest 
of  his  own  ;  the  ])ropcrty  which  passes  by 
it  is  transferred  liy  force  of  the  statute, 
and  therefore  the  legal  etVcctof  such  trans- 
fer depends  little  upon  the  terms  of  the 
assignment,  either  a.s  to  the  property 
transferred,  or  the  tinu;  at  wliicli  it  shall 
take  effect.  ]5nt  the  legal  efVcct  and 
operation  of  the  assignment,  in  thesci  re- 
specf*,  must  depend  upon  the  provisions 
of  the  u.Msignment.  It  is  purely  n  statute 
title,  under  which  an  uHsigneo  claims 
cither  the  goods  or  clioscH  in  action  of  the 
insolvent;  and  to  the  statute  wc  must  look 

[084] 


for  the  nature  and  extent  of  that  title." 
And  so  it  was  held,  that  under  the  Massa- 
chusetts statute,  the  transfer  took  place  at 
the  time  of  publication.  Prentiss,  J.,  in 
Downer  v.  Brackett,  5  Law  Eep.  392. 
The  case  of  Kittridge  v.  McLaughlin,  33 
Me.  327,  seems  contra,  but  it  is  to  be  ob- 
served that  the  doctrine  laid  down  in  a 
portion  of  the  head  note,  on  this  point, 
was  not  expressly  or  directly  maintained 
by  the  court,  and  that  so  fivr  as  the  time 
of  the  transfer,  as  between  that  of  the 
petition,  or  tlic  publication,  the  point  did 
not  come  up  in  the  case. 

(b)  Gushing  v.  Arnold,  9  Met.  23. 
Deweij,  J.,  said  :  "  The  second  objection 
to  the  levy  of  the  execution  is,  that  it  had 
not  taken  effect  so  as  to  divest  the  prop- 
erty of  the  debtor,  before  the  institution 
of  the  proceedings  in  insolvency,  and 
therefore  the  estate  passed  to  the  assignee. 
The  extent  of  the  right  of  the  assignee 
under  the  deed  of  assignment,  and  to 
what  period  of  time  it  attaches,  are  ques- 
tions now  very  well  settled.  Such  deed 
transfers  all  the  property  of  the  insolvent 
as  held  at  the  time  of  the  first  publication 
by  the  messenger.  It  is  admitted  that  the 
levy  was  commenced  before  the  petition 
for  proceedings  in  insolvency  was  filed, 
but  it  is  said  that  it  was  not  completed 
till  after  i)ul)licati()n.  J}ut  as  well  by 
statute,  as  by  the  decisions  of  this  court, 
the  levy  of  an  execution  is  to  take  effect 
from  the  time  of  the  seizure  on  execution." 
Ileywood  v.  llildreth,  9  Mass.  393; 
Waterhouso  i'.  Waite,  11  id.  210. 


en.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


659 


time  before  insolvency,  which  must  intervene  to  make  certain 
transfers  by  the  insolvent,  made  in  contemplation  of  insolvency, 
void,  (c)  This  differs  in  the  different  statutes.  In  the  bankrupt 
law  it  was  two  months  before  the  decree  of  bankruptcy.  If 
before  this  time  a  party  deal  with  the  bankrupt  in  good  faith, 
he  is  unaffected  by  any  fraud  on  the  part  of  the  defendant.  And 
it  was  held  in  England,  where  the  time  expired  on  the  filing  of 
the  petition,  that  in  computing  this  time,  the  day  on  which  the 
transaction  took  place,  or  the  day  on  which  the  petition  was 
filed,  must  be  excluded,  (d)  And  the  very  hours  when  the 
events  take  place  are  to  be  regarded,  at  least  in  some  cases, 
as  fractions  of  days  are  considered  by  the  court.  This  last  rule 
was  adopted  by  Story,  J.,  but  denied  in  Vermont,  (e) 


(c)  The  clause  of  the  late  National 
Bankrupt  Law  was  :  "Provided  that  all 
dealings  and  transactions  by  and  with  any 
bankrupt  bond  Jide  made  and  entered 
into  more  than  two  months  before  the 
petition  filed  against  him  shall  not  be  in- 
validated or  affected  by  this  act."  A  simi- 
lar provision  will  be  found  incorporated 
into  the  English  statute,  12  &  13  Vict. 
c.  106. 

((/)  Cowie  V.  Harris,  1  Moody  &  M. 
141.  In  this  case  the  commission  in  bank- 
ruptcy was  issued  on  the  1 4th  of  May, 
1825.  Goods  of  the  bankrupt  had  been 
deposited  with  a  pawnbroker,  on  the  14tla 
of  March,  182.5.  The  attorney-general, 
for  the  plaintiffs,  did  not  contend  that 
they  were  deposited  within  the  two  months, 
and  Lord  Tenterden,  C.  J.,  said  :  "  With 
respect  to  the  goods  deposited  on  the  14th, 
the  right  of  the  plaintiff's  will  depend  upon 
the  validitj'  of  the  transaction  as  between 
the  bankrupt  and  the  creditor ;  for  both 
days  cannot  bo  reckoned  inclusively  so 
as  to  make  March  the  14th  not  more 
than  two  calendar  months  before  May  the 
14th,  tlie  date  of  the  commission."  S.P., 
Ex  parte  Farquhar,  1  Mont.  &  McA.  7. 

(e)  Thomas,  assignee  of  Houlbrooke  v. 
Desanges,  2  B.  &  Aid.  586.  In  this  case, 
the  facts  wei"e,  that  the  bankrupt  was  sur- 
rendered in  discharge  of  his  bail  on  June 
1st,  1818,  between  six  and  eight  o'clock 
in  the  evening,  and  on  the  same  day,  be- 
tween one  and  two  o'clock  in  tlie  "after- 
noon a  writ  of  fieri  facias  was  delivered 
to  the  defendants,  who,  by  their  officer, 
entered  into  the  bankrupt's  premises,  and 
seized  the  goods.     The  bankrupt  lay  in 

VOL.  II.  58 


prison  more  than  two  months  afterwards. 
The  plaintiffs  insisted  that  the  act  of 
bankruptcy  having  been  committed  on 
the  same  day  that  the  goods  were  taken 
in  execution,  the  plaintiffs  must  in  law  be 
considered  as  having  the  property  of  the 
goods  vested  in  them  during  the  wliole  of 
that  day,  because  there  can  be  no  fraction 
of  a  day.  Abbott,  C.  J.,  thought  that  the 
court  might  notice  the  fraction  of  a  day  in 
this  case,  and  nonsuited  the  plaintiffs,  and 
a  rule  to  set  aside  the  nonsuit  was  refused. 
In  the  mattei'  of  Eichardson,  2  Story,  571, 
Story,  J.,  said:  "I  am  aware  that  it  is 
often  laid  down  that  in  law  tlicre  is  no 
fraction  of  a  day.  But  this  doctrine  is 
true  only  sub  modo  and  in  a  limited  sense, 
where  it  will  promote  the  right  and  justice 
of  the  case.  It  is  a  mere  legal  fiction, 
and  therefore  like  all  other  legal  fictions, 
is  never  allowed  to  operate  against  the 
right  and  justice  of  the  case."  S.  P.,  Sad- 
ler V.  Leigh,  4  Camp.  197  ;  Ex  parte  Far- 
quhar, 1  Mont.  &  McA.  7 ;  Ex  parte 
D'Obree,  8  Ves.  82;  Wydown's  Case,  14 
id.  87.  V^e  are  aware  of  no  cases  where 
the  technical  rule  of  the  law,  that  no  frac- 
tion of  a  day  can  be  allowed,  has  been 
adliered  to  in  bankruptcj^  save  In  the 
matter  of  David  Howes,  6  Law  Keporter, 
297 ;  and  In  the  matter  of  Welman,  7  id. 
25,  where  the  doctrine  laid  down  in  the 
first  case  is  maintained  and  defended. 
The  authorities  are  reviewed  in  the  opin- 
ion of  the  court  at  some  length,  and  the 
views  of  the  judge,  though  savoring  of 
technicality,  are  ably  sustained.  The 
doctrine  of  the  majority  of  the  eases  seems 
to  be  a  wholesome  one,  and  which  may 

[C8o] 


660 


THE   LAW   OF   CONTRACTS. 


[part  II. 


It  may  be  added,  that  if  fraud  of  any  kind  is  attempted  by 
the  bankrupt  at  any  time,  the  transaction  is  void  so  far  as  re- 
lates to  him  ;  and  also  so  far  as  relates  to  any  parties  dealing 
with  him,  with  a  knowledge  that  the  transaction  is  fraudulent 
on  his  part.  (/) 


SECTION    XI. 

WHAT  DEBTS   ARE   PROVABLE   AGAINST   THE   ESTATE. 

In  genera],  it  may  be  said,  all  debts  and  claims  whatever,  (g) 
They  may  be  due  and  payable  at  the  time,  or  not  payable  until 
later.  (A)     They  may  be  payable   only  on  contingency,  if  the 


well  be  maintained  on  the  reasoning  of 
Mr.  Justice  Story. 

(/)  See  the  cases  cited  in  sect.  8,  note 
(;)),  to  the  point  that  the  assignees  may- 
sue  for  and  recover  any  goods  fraudulently 
conveyed  by  the  bankrupt. 

{g)  Archbold  on  Bankruptcy,  Deacon 
on  Bankruptcy,  Eden  on  the  Bankrupt 
Law,  tit.  Proof  of  Debts.  In  Downer  v. 
Brackett,  5  Law  Rep.  392,  Prentiss,  J., 
said :  "  All  the  property  then  owned  by 
the  bankrupt  passes  to  and  vests  in  the 
assignee,  and  consequently  all  debts  exist- 
ing before  and  at  the  date  of  the  decree 
are  provable  under  the  bankruptcy,  and  all 
debts  up  to  that  time  passed  by  the  bank- 
rupt's certificate  of  discharge."  Spalding 
V,  Dixon,  21  Vt.  4.5,  14  Law  lleportcr, 
88;  Harrington  v.  McNaughton,  20  Vt. 
293.  The  exceptions  to  this  general  rule 
occur  in  the  next  section  of  this  work. 
And  in  a  recent  case  in  New  York  it  was 
said  tliat  the  (jucstion,  what  debts  are 
])rovable,  is  one  of  mixed  law  and  fact; 
but  tlie  question,  wliuthcr  tlie  debts  duo 
at  the  time  of  the  bankruptcy  are  dis- 
ciuirged,  is  one  jiurely  of  law,  and  for  tlie 
decision  of  the  court,  on  production  and 
examination  of  the  papers  before  the 
court  of  insolvency,  and  the  ctertilicate. 
Dresser  v.  Brooks,  .'}  Barb.  429. 

(It)  J'arslowe  v.  Dearlove,  4  East,  438. 
This  was  an  action  of  assumpsit  by  a 
Hchoolmaster,  for  tlio  education,  &c.  of 
defendant's  chibhen.  Defendant  jilciulcd 
iion-asHunijisit  and  his  baiikrupti'v,  and 
certificate.     At  tiie  trial  it  appearcil  tliat 

[C8G] 


the  school  money  had  been  payable  half 
yearly ;  that  the  half  year  for  which  the 
plaintiff  now  sought  to  recover,  ended  on 
the  26th  of  June  last,  when  the  holidays 
commenced ;  but  that  the  defendant  had 
taken  his  children  home  for  the  holidays, 
on  the  18th  of  June,  and  became  a  bank- 
rupt on  the  20th.  The  question  was, 
whether  this  was  a  debt  provable  under 
the  commission.  On  this  a  verdict  was 
taken  for  the  plaintiff ;  a  rule  to  set  aside 
the  verdict  was  refused.  Lord  Ellenho- 
roinjh  said  :  "  The  question  then  is,  whether 
this  can  be  considered  as  a  debt  due  at  the 
time  of  the  bankruptcy  :  in  other  words, 
whether,  under  a  contract  to  pay  a  cer- 
tain sum  half  yearly,  the  money  can  be 
said  to  be  due  before  the  end  of  the  half 
year  1  This  is  nothing  like  a  dehitum  in 
pncsenli.  It  would  depend  upon  the  due 
performance  of  the  engagement  on  the 
part  of  the  schoolmaster.  It  was  a  sub- 
sisting contract  at  the  time  of  the  bank- 
ruptcy; the  children  were  not  taken  away 
from  the  school,  but  went  home  for  the 
holidays."  It  was  admitted  on  the  argu- 
ment, and  by  the  court,  that  had  the  debt 
been  fidly  due,  though  not  ])ayable,  it 
could  have  been  jiroved,  and  would  have 
been  barred  i)y  the  certificate.  In  Eng- 
land, before  tiie  statute  4!)  Geo.  HI.,  c. 
121,  if  a  creditor  had  no  security  for  his 
debt  in  u,ritin</,  and  it  was  not  payable 
till  after  his  debtor  became  bankrupt,  as 
ill  tlu!  caseforinstanreof  goods  sold  to  the 
bankrwi)t  on  a  certain  credit,  tlie  creditor 
was  not  allowed  to  prove  his  debt  under 


CII.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


661 


contingency  be  rational  and  real,  or  if  the  uncertainty  be  not 
excessive,  (i)     Thils  a  surety,  or  an  indorser  for  the  insolvent. 


the  commission.  £.r /jarfe  East  India  Co. 
2  P.  Wms.  395 ;  Hosliins  v.  Duperoy,  9 
East,  498.  By  that  section,  all  debts 
contracted  before  the  act  of  bankruptcy, 
though  not  due  till  afterwards,  can  be 
proved,  whether  there  is  written  security 
or  not,  subject  to  a  deduction  of  .£5  per 
cent,  interest.  The  same  provision,  with 
little  modification,  has  been  adopted  in  the 
later  English  statutes,  and  in  most  of  the 
recent  insolvent  laws.  See  further.  Utter- 
son  V.  Vernon,  4  T.  R.  570 ;  Ex  parte 
Minet,  14  Ves.  189;  Hammond  v.  Toul- 
min,  7  T.  R.  612;  Ex  parte  Gronie,  1 
Atk.  115;  Ex  parte  Mare,  8  Ves.  335; 
Ex  parte  King,  id.  334 ;  Ex  parte  Win- 
chester, 1  Atk.  116;  Ex  parte  Dowman, 
2  Glvn  &  J.  241  ;  Ex  parte  Elgar,  id.  1 ; 
Clajnton  v.  Gosling,  5  B.  &  C.  360.  And 
in  such  case  the  amount  to  be  proved  is 
the  full  amount  of  the  debt  itself  witliout 
the  deduction  of  interest.  That  rebate  will 
be  made  when  the  dividend  is  computed. 
Ex  parte  Hill,  2  Deacon,  249  ;  Cothay  v. 
Murray,  1  Camp.  335 ;  Ex  parte  Elgar, 
above  cited  ;  Ex  parte  Dowman,  id. 

(i)  Provisions  relating  to  the  proof  of 
contingent  claims  occur  in  the  English 
statute  of  Bankruptcy,  12  &  13  Vict.  c. 
106,  in  the  late  National  Bankrupt  Act, 
and  in  most  of  the  statutes  of  the  States, 
in  insolvency.  The  distinction  on  this 
subject  is  well  settled  between  subsisting 
debts,  which  are  payable  on  a  contingency, 
and  contingent  liabilities  which  may  never 
become  debts;  and  it  is  held  that  the  for- 
mer only  can  be  proved  under  a  commis- 
sion in  bankruptcy.  In  Ex  parte  Mar- 
shall, 3  Deacon  &  Ch.  120,  Erskine,  C.  J., 
said :  "  In  my  judgment,  in  Ex  parte 
Myers  (cited  below),  I  have  not  suffi- 
ciently marked  the  distinction  between 
contingent  liabilities  which  may  never  be- 
come debts,  and  contingent  debts  that 
may  never  become  payable.  Upon  the 
fullest  consideration  of' all  the  reported 
decisions,  I  am  satisfied  that  claims  under 
the  first  class,  upon  which  no  debt  has 
arisen  until  after  the  bankruptcy,  cannot 
be  proved  under  the  56th  section ;  but 
that  all  claims  falling  within  the  latter 
class,  that  are  either  capable  of  valuation 
before  the  contingency  happens,  or  have 
become  payable  by  the  happening  of  the 
contingency  after  the  bankruptcy  and  be- 
fore proof  is  tendered,  may  be  admitted." 
The  case  of  Ex  parte  Thompson,  2  Dea- 


con &  Ch.  126,  1  Mont.  &  B.  219,  is  an 
example  of  the  first  class.  Here  there 
was  no  debt  due  from  any  one  till  after 
the  bankruptcy.  Ex  parte  Myers,  2  Dea- 
con &  Ch.  251,  1  Mont.  &  B.  229,  is  an 
example  of  the  last  class.  In  this  case,  a 
debt  had  been  clearly  contracted  with  the 
holders  of  the  bills  before  the  bankruptcy, 
for  a  specific  sum,  which  the  bankrupt  had 
engaged  to  pay,  unless  he  should  be  re- 
leased from  his  obligation  by  the  drawer 
taking  up  the  bills.  In  Ex  parte  Tindal, 
1  Deacon  &  Ch.  291,  a  bankrupt  had  cov- 
enanted by  marriage  settlement  tliat  his 
heirs,  &c.  should,  after  his  decease,  pay 
.£4,000  to  trustees  upon  trust,  to  pay  the 
interest  to  his  intended  wife  for  her  life  ; 
and  after  her  death,  then  to  pay  the  prin- 
cipal sum  to  the  children  of  the  marriage  ; 
and  if  no  children,  to  the  wife,  if  she  sur- 
vived her  husband  ;  but  if  not,  then  to  the 
executors  of  the  husband.  Proof  of  this 
in  bankruptcy  was  rejected  by  the  com- 
missioners as  no  debt,  but  a  contingent 
liability,  which  might  become  one.  Sir 
Launcelot  ShadweU,  reversed  the  decision. 
1  Mont.  &  M.  415.  Lord  Lyndhurst  re- 
versed his  decision,  on  appeal.  Id.  422. 
Lord  Brougham,  assisted  by  Tindal,  C.  J., 
and  Littledale,  J.,  reversed  his  decision,  on 
a  rehearing  ;  and  held  that  this  covenant 
constituted  a  debt,  contracted  by  the  bank- 
rupt, payable  on  a  contingency,  and  capa- 
ble of  valuation,  and  therefore  provable. 
Utterson  v.  Vernon,  4  T.  R.  570.  The 
following  cases  set  forth  the  same  distinc- 
tion, and  what  debts  are  provable  under 
the  head  of  contingent  claims.  Abbott  v. 
Hicks,  5  Bing.  N.  C.  578;  Hinton  v. 
Acraman,  2  C.  B.  367  ;  Ex  parte  Harri- 
son, 3  Mont.  D.  &  De  G.  350 ;  Ex  parte 
Marshall,  2  Deacon  &  Ch.  589,  s.  c.  1 
Mont.  &  B.  242  ;  Ex  parte  Tindal,  1  Moore 
&  S.  607,  Mont.  375,  462,  8  Bing.  402; 
Atwood  V.  Partridge,  12  J.  B.  Moore, 
431,  4  Bing.  209;  Boorman  v.  Nash,  9 
B.  &  C.  145  ;  Green  v.  Bicknell,  8  A.  &  E. 
701  ;  Ex  parte  Lancaster  Canal  Co.,  Mont. 
27  ;  Ex  parte  Fairlie,  id.  17  ;  Ex  parte 
Myers,  Mont.  &  B.  229,  2  Deacon  & 
Ch.  251 ;  Abbott  v.  Hicks,  7  Scott,  715  ; 
Hope  V.  Booth,  1  B.  &  Ad.  498  ;  Ex  parte 
Simpson,  1  Mont.  &  A.  541  ;  2  Deacon 
&.  Ch.  792 ;  Woodard  v.  Herbert,  24 
Maine,  358  ;  Hancock  v.  Entwisle,  3  T. 
R.  435.  So  when  the  debt  is  due,  but 
may  be  defeated  on  the  happening  of  any 

[687] 


662 


*HE  LAW   OF   CONTRACTS. 


[part  II. 


on  a  debt  or  note  not  due,  will  undoubtedly  be  called  upon,  as 
the  insolvency  of  the  principal  is  the  vdry  circumstance  to 
render  him  liable ;  nor  would  a  surety  who  had  another  surety 
before  him,  or  a  second  or  third  indorser,  be  prevented  from 
guarding  against  the  contingency  of  his  liability,  by  proving 
his  claims,  (j)     All  rent  due  is  provable ;  and  as  we  have  seen, 


given  event,  it  may  still  be  proved,  liable 
to  a  withholding  of  the  dividend,  unless 
the  contingencv  occur.  Staines  v.  Plank, 
8  T.  R.  389  ;  Yallop  v.  Ebers,  1  B.  &  Ad. 
698  ;  Filbej^  v.  Lawford,  4  Scott,  N.  R. 
206  ;  Ex  parte  Eyre,  1  Phillips,  227  ; 
Lane  v.  Burghart,  1  Q.  B.  933,  1  Gale 
&  D.  311  ;  Lane  v.  Burghart,  4  Scott, 
N.  II.  287,  3  Man.  &  G.  .597  ;  Ex  parte 
Lhtlcjohn,  3  Mont.  D.  &  De  G.  182; 
Ex  parte  Hope,  id.  720;  Taylor  v. 
Young,  3  B.  &  Aid.  521  ;  Ex  parte  Hoop- 
er, 3  Deacon  &  Ch.  655  ;  Ex  jmrte  Tur- 
pin,  1  id.  120;  Lvde  v.  Mynn,  1  Mvlne  & 
K.  683.  In  re  Willis,  19  Law  J.,'Exch. 
30;  In  re  Foster,  19  Law  J.,  C.  P.  274. 
See  1  Cooke's  Bankrupt  Law,  190;  Owen 
on  Bankruptcy,  179;  Stat.  12  &  13  Vict. 
c.  106,  ^  77,  78;  Act  of  Congress,  1841, 
§  5  ;  Roosevelt  v.  Mark,  6  Johns.  Ch. 
266. 

(j)  Van  Sandau  v.  Crosbie,  3  B.  & 
Aid.  13  ;  Young  v.  Taylor,  2  J.  B.  Moore, 
326,  8  Taunt.  315.  It  is  said  in  1  Cooke's 
Bankrupt  Law,  210,  that  "  the  surety  is 
held  to  have  an  equitable  right  to  stand  in 
the  place  of  the  original  creditor,  and 
receive  dividends  upon  his  proof."  Ex 
parte  Findon,  Cooke,  170  ;  Ex  parte 
Brown,  id.  (cited  in  Owen  on  Bank- 
ruptcy, 180) ;  Toussaint  v.  Martinnant,  2 
T.  R.  100;  Martin  v.  Brecknell,  2  M.  & 
S.  39.  It  seems  that  in  England,  prior  to 
the  Statute  of  49  Geo.  3,  c.  121,  §  8,  the 
surety  had  no  power  to  come  in  and  prove 
his  claim  against  the  estate  of  liis  bank- 
rupt principal,  unless  he  had  himself  been 
called  on  to  ]iay  the  debt  before  the  bank- 
ruptcy. See  Cooke's  Bankrupt  Law, 
above  cited,  and  /tassim  ;  Eden  on  Bank- 
ruptcy, 158,  177,  and  the  cases  cited 
ahovc,  of  an  earlier  date  than  1808.  But 
the  provision  tlien  enacted  has  been  con- 
tinued, witli  more  or  less  of  modilicaiion, 
to  tlie  jiresent  day,  and  may  be  consid- 
ered part  of  the  common  law  of  baiik- 
ruptcy  in  lliis  country.  Ex  /larlr.  Young, 
in  tlie  niMtIrr  of  Slancy,  2  liosc,  -Kt  ; 
Aflalo  r.  iM)unlriMier,  6  JJing.  .'iOO  ;  Wood 
V.   LoilgsoM,    2    M.   &   S.    195.     Jjdijiiij, 

[  688  ] 


J.,  in  delivering  his  opinion  said,  with 
reference  to  this  point  :  "  The  intention 
of  the  legislature  at  the  same  time  that 
they  relieved  the  bankrupt  was,  to  confer 
a  benefit  also  on  the  surety  or  person  who 
was  liable  for  the  debt  of  the  bankrupt. 
The  principal  creditor  might  have  proved 
under  the  commission,  or  might  have  re- 
sorted to  the  surety  without  proving  under 
the  commission  ;  therefore,  before  the  act 
he  might  liave  compelled  the  surety  to 
pay  the  whole  amount  without  the  surety's 
having  any  benefit  under  the  commission. 
This  clause,  therefore,  was  intended  to 
remove  that  inconvenience  and  to  give  to 
the  surety  the  power  of  obtaining  a  divi- 
dend in  respect  of  his  debt."  The  Su- 
preme Court  of  the  United  States,  in  the 
construction  of  the  similar  section  of  the 
late  National  Bankrupt  Law,  unhesitat- 
ingly adopted  the  same  view.  Mr.  Jus- 
tice McLean,  delivering  the  opinion  of 
the  court,  said  :  "  Wells,  as  surety,  was 
within  this  section,  and  might  have 
proved  his  demand  against  the  bankrupt. 
He  had  not  paid  the  last  note,  but  he 
was  liable  to  pay  it  as  surety,  and  that 
gave  him  a  right  to  prove  the  claim  under 
the  fifth  section.  And  the  fourth  section 
declares,  that  from  all  such  demands  the 
bankrupt  sliall  be  discharged.  This  is 
the  whole  case.  It  seems  to  be  clear  of 
doubt.  The  judgment  of  the  State  court 
is  reversed."  Mace  ik  Wells,  7  How.  272. 
The  judgment  of  the  Supreme  Court  of 
Vermont  in  this  case  will  be  found.  Wells 
V.  Mace,  17  Vt.  503.  Tiie  view  of  tlie 
later  English  cases,  and  of  tlic  Supreme 
Court  of  the  United  States  will  be  found 
adopted  in  Morse  v.  Ilovcy,  1  Sandf. 
Ch.  187  ;  Butcher  v.  Forman,  6  Hill, 
583  ;  Crafts  r.  Mott,  4  Comst.  603,  de- 
cided as  late  as  1851  ;  Dunn  v.  Sparks, 
1  Carter,  Ind.  397  ;  and  recognized  in 
Ilolbrook  V.  Foss,  27 'Maine,  441  ;  Pike 
V.  McDonald,  32  id.  418  ;  Leighton  v. 
Atkins,  35  ici.  118.  The.sc  were  cases 
wiicre  the  foundiition  of  the  ])laintiff's 
chvims  was  ))aynu'nt  of  certain  jiKli/iiimts 
recovered  against  the  defendants  and  their 


en.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


663 


the  insolvency  does  not  necessarily  terminate  the  lease,  unless 
it  contain  a  provision  to  that  effect,  or  the  assignee  declines 


assummg 


it.  (k) 


None  which  rest  upon  an  illegal  or  immoral  contract  or  con- 
sideration can  be  proved.  (/)     And  the  assignees  may  not  only 


sureties  (of  wliich  number  were  tlie  plain- 
tiffs), a/ie?'  the  discharge  of  the  dcfeiuhints, 
which  judgments,  therefore,  were  not 
provable  in  bankruptcy.  The  distinction 
taken  by  the  court,  admitting  the  author- 
ity of  Mace  v.  Wells,  &c.,  was,  as  laid 
down  by  Shepley,  J.,  in  one  of  the  cases, 
that  the  contract  upon  which  a  judgment 
at  law  has  been  recovered,  is  merged  in 
and  extinguished  by  the  judgment,  wliich 
constitutes  a  new  debt,  having  its  first 
existence  at  the  time  of  its  recovery.  So 
that  where  a  judgment  had  been  recovered 
on  a  promissory  note  (27  Me.  441),  the 
note,  by  virtue  of  which  it  had  been 
recovered,  no  longer  continued  to  be  a  debt 
due  from  the  defendant  to  the  plaintiff. 
The  judgment  not  being  a  debt  due  from 
the  defendant  at  the  time  when  his  peti- 
tion was  tiled,  could  not  have  been  proved 
in  bankruptcy  against  him.  Comfort  v. 
Eisenbcis,  11  Penn.  State,  13.  See  fur- 
ther on  this  subject,  Goddard  v.  Van- 
derheyden,  3  Wilson,  262,  2  W.  Bl.  794  ; 
Young  V.  Hockley,  3  Wilson,  346  ;  Taylor 
V.  Mills,  Cowp.  525  ;  Paul  v.  Jones,  1  T. 
R.  599;  Snaith  v.  Gale,  7  id.  364  ;  Frost 
V.  Carter,  1  Johns.  Cas.  73;  Buel  v.  Gor- 
don, 6  Johns.  126  ;  Lansing  v.  Prender- 
gast,  9  id.  127  ;  Mechanics  and  Farmers 
Bank  v.  Capron,  15  id.  467  ;  Roosevelt  v. 
Mark,  6  Johns.  Ch.  266  ;  Selfridge  v. 
Gill,  4  Mass.  95 ;  Page  v.  Bussell,  2  M. 
&  S.  551  ;  Welsh  v.  Welsh,  4  id.  333; 
Haddon  v.  Chambers,  1  Yeates,  529 ; 
Deacon  on  Bankruptcy,  285,  etseq. ;  Horn 
V.  Nason,  23  Me.  101  ;  Craggin  v.  Bailey, 
id.  104;  Farnham  v.  Gilman,  24  id.  250; 
Pollock  V.  Pratt,  2  Wash.  C.  C.  490.  A 
case  of  great  instruction,  establishing  the 
right  of  the  surety  to  prove  his  contingent 
claim  is  Crafts  v.  Motts,  5  Barb.  305; 
Morse  v.  Hovey,  1  Sandf.  Ch.  187. 

(k)  McDougal  v.  Baton,  8  Taunt.  584 ; 
Ex  paiie  Minet,  14  Ves.  189  ;  Russell  v. 
Doty,  4  Cowen,  576  ;  Peters  v.  Newkirk, 
6  id.  103  ;  Hagard  ?'.  Raymond,  2  Johns. 
478;  Ex  parte  Descharms,  1  Atk.  103; 
Lansing  v.  Prendergast,  9  Johns.  127, 
and  cases  cited.  In  Stinemets  v.  Ainslie, 
4  Denio,  573,  the  fticts  were,  that  on  the 
8th  of  April,  1842,  the  plaintiff  demised 

58* 


to  the  defendant  certain  premises  in  the 
city  of  New  York,  for  the  term  of  one 
year  from  the  first  day  of  May  then  next, 
rent  payable  quarterly.  Defendant  en- 
tered and  occupied  the  entire  year,  end- 
ing May  1,  1843.  Under  tlie  agreement, 
plaintiff'  claimed  to  recover  the  last  quar- 
ter's rent,  from  February  first  to  May  first, 
1843.  Defence,  bankruptcy.  Defend- 
ant's petition  was  filed  December  12, 
1842.  On  the  11th  of  March  following, 
he  was  declared  a  bankrupt ;  and  on  the 
7th  of  August  thereafter,  he  was  dis- 
charged. The  court  held  that  the  dis- 
charge was  not  a  bar,  and  there  was 
judgment  for  the  plaintiff.  On  error 
brought,  this  judgment  was  affirmed. 
Bvonson,  C.  J.  :  "  The  discharge  only 
goes  to  such  debts  as  the  defendant  owed 
at  the  time  of  presenting  his  petition,  and 
the  rent  which  the  plaintiff'  seeks  to  re- 
cover accrued  subsequent  to  that  time. 
Although  the  agreement  to  pay  rent  was 
made  prior  to  the  bankruptcy,  it  is  settled 
that  the  discharge  does  not  bar  an  action 
on  the  agreement  for  rent  accruing  subse- 
quent to  the  bankruptcy." 

(/)  Ex  parte  Cottrell,  Cowp.  742.  But 
where  a  bond  was  given  for  the  payment 
of  a  sum  of  money  by  the  bankrupt, 
in  consideration  that  the  obligee  would 
marry  a  servant  of  the  bankrupt  and 
maintain  a  bastard  which  the  bankrupt 
had  by  her,  and  the  marriage  took  effect, 
tliis  was  held  not  to  be  an  illegal  consid- 
eration, and  the  obligee  was  entitled  to 
prove  the  bond.  And  in  Ex  parte  Mum- 
ford,  15  Ves.  289,  where  promissory  notes 
were  given  for  liquidated  damages  in 
compromising  an  action  for  the  seduc- 
tion of  the  plaintiff's  daughter,  pe?-  quod 
servithim  anu'sit,  the  notes  were  permitted 
fo  be  proved  under  a  commission  against 
the  maker.  But  where  a  bond  is  given, 
strictly  turpi  causa,  or  as  prcemium  pnidoris- 
(for  the  distinction  between  an  instrument 
of  this  character  and  those  above  alluded 
to,  see  Franco  v.  Bolton,  3  Ves.  368,  and 
cases  cited),  it  cannot  be  proved  if  the 
maker  become  bankrupt.  Gilliam  v. 
Locke,  9  Ves.  614 ;  Ex  parte  Ward,  be- 
fore Lord  Camden,  1768,  cited  in  15  Ves. 

[689] 


664 


THE   LAW    OF   CONTRACTS. 


[part  II. 


make  any  defence  of  this  kind  which  the  insolvent  could,  as 
usury,  but  those  which  he  could  not  on  the  ground  that  he 
could  not  rest  his  defence  on  his  own  fraud ;  for  the  assignees 
defend  for  the  benefit  of  the  creditors,  who  are  not  in  fault,  and 
the  insolvent  has  no  interest.  (?«)  It  may  be  stated  as  a  general 
rule  that  debts  cannot  be  proved  which  spring  from  an  implied 
promise  only,  and  not  from  a  transfer  or  sale  of  property  or  a  sim- 
ilar consideration.  Nor  a  claim  for  merely  unliquidated  dam- 
ages ;  for  the  amount  should,  generally  at  least,  be  ascertain- 
able without  the  intervention  of  a  jury,  (n)     And  this  brings  us 


290 ;  Turner  r.  Vaughan,  2  Wilson,  340. 
So  where  the  debt  was  void  by  reason  of 
usury.  Lowe  v.  Waller,  Doug.  736  ;  Ex 
parte  Thompson,  1  Atk.  125  ;  Ex  parte 
Skip,  2  Vcs.  Sr.  489  ;  Benfield  v.  Solo- 
mons, 9  id.  84  ;  Ex  parte  Bangla}',  1  Rose, 
168.  But  it  has  been  said  that  where  it 
is  allowed  by  the  custom  of  the  trade,  for 
a  commission  to  be  taken  in  addition  to 
legal  interest,  tliis,  though  sounding  in 
usury,  will  yet  be  held  not  to  prevent  the 
proving  of  tlie  bond.  Ex  parte  Jones,  17 
Ves.  332  ;  Carstairs  v.  Stein,  4  M.  &  S. 
192  ;  Winch  r.  Fenn,  2  T.  R.  52,  note  ; 
Ex  parte  Henson,  1  Madd.  112;  Deacon 
on  Bankruptcy,  302,  and  cases  cited. 
See  other  cases  of  illegal  contracts,  proof 
of  which  was  refused,  Ex  parte  Moggride, 
I  Cooke's  Bank.  L.  185;  Ex  parte  Dan- 
iels, 14  Vcs.  \^\;  Ex  parte  Bell,  1  Maule 
&  S.  751 ;  Ex  parte  Dyster,  2  Rose,  256  ; 
Ex  parte  Schmaling,  Buck,  93  ;  Ex  parte 
Boussmaker,  13  Ves.  71. 

(m)  Tills  subject  is  considered  in  the 
cases  cited  ante,  on  the  assignee's  right 
over  goods  fraudulently  conveyed,  sect.  8, 
n.  (/)),  and  on  the  right  and  liability  of 
tlie  assigni-cs  to  the  same  C(|uity  as  the 
bankrupt  himself,  sect.  6,  n.  (c). 

(n)  Green  v.  Bucknell,  8  A.  &  E.  701. 
Tliis  was  an  action  of  assumpsit  on  a 
special  contract,  tliat  whereas  by  such 
contract  between  15.  and  G.,  G.  had 
agreed  to  sell  to  B.  all  the  oil  wliich 
should  arrive  by  a  certain  ship  which  15. 
was  to  receive,  witiiin  fourteen  days  after 
the  landing  of  the  cargo,  and  i)ay  for  at 
the  expiration  of  fiiat  time  liy  bills  or 
money  at  a  specilied  price  per  ton,  wiih 
customary  allowance.  The  ileclaration 
set  forth  that  the  ship  arrived,  and  the. 
cargo  was  landed,  ami  G.  tendered  the  oil 
to  B.  at  till'  end  of  the  fourteen  days  ;  that 

[  G'JO  J 


the  quantity  of  oil  after  allowances,  etc., 
was  a  certain  number  of  tons  ;  that  at  the 
time  of  the  tender,  the  market  price  of  oil 
was  lower  than  the  contract  price  by  an 
amount  stated ;  that  B.,  on  the  tender 
being  made,  refused  to  accept,  and  that 
the  difference  of  prices  was  within  "the 
knowledge  of  the  parties.  On  this  state 
of  facts  it  was  held,  that  B.  having  be- 
come bankrupt  after  the  refusal,  G.  could 
not  prove  for  this  breach  of  contract,  under 
the  commission ;  for,  that  although  G.'s 
claim  would  be  measured  by  the  differ- 
ence between  the  contract  and  the  market 
prices  at  the  time  when  B.  should  have 
fulfilled  his  contract;  yet  the  case  did  not 
show  that  the  data  on  which  the  calcula- 
tion must  proceed,  were  so  settled  as  to 
admit  of  no  dispute,  and  render  the  inter- 
vention of  a  jury  unnecessary  ;  so  that 
G.'s  claim  was  not  a  debt  but  for  dam- 
ages, and  could  not  be  proved.  Good- 
title  I'.  North,  Doug.  584.  In  this  case, 
Lord  Mansfield  said  :  "  The  fonn  of  the 
action  is  decisive.  The  plaintiff  goes  for 
the  whole  damages  occasioned  by  the  tort, 
and  when  damages  are  uncertain,  they 
cannot  be  proved  under  a  commission  of 
l)ankruptcy."  This  was  an  action  for 
trespass  for  mesne  profits.  Barker  v. 
Norton,  6  T.  R.  695  ;  I'arker  v.  Crole, 
5  Bing.  63,  2  Moore  &  V.  1.50,  Shoe- 
maker ?>.  Keely,  2  Dall.  213,  1  Yeatcs, 
245  ;  Williamson  r.  Dickens,  5  Ired.  259; 
Conistock  r.  (Jrout,  17  Vt.  512;  (.)vcr- 
seers  of  St.  Martin  r.  Warren,  1  B.  & 
Aid.  491  ;  Whitmarsh's  Bankrupt  Law, 
]).  266;  llammond  r.  Toulmin,  7  T.  R. 
()12;  .lolmson  v.  Spiller,  /liil/cr,  J.,  note 
to  Also])  V.  I'rice,  1  Doug.  168 ;  Taylor  v. 
Young,  3  B.  &  Aid.  521  ;  Utter.son  v. 
Vernon,  3  T.  R.  539,  4  id.  570.  Sec 
Boorman  v.  Nash,  9  B.  &  C.  145;   Ex 


en.  X.] 


BANKRUPTCY   AND    INSOLVENCY. 


665 


again  to  the  great  distinction  between  claims  for  tort,  and  those 
founded  on  contract.  As  a  general  rule,  as  has  been  said,  no 
claims  for  tort  are  ever  provable.  Certainly  not  those  for  bodily- 
injury,  as  for  assault  and  battery  ;  nor  for  slander  or  libel.  But 
as  we  go  further  there  seems  to  be  some  uncertainty.  Thus,  a 
claim  sounding  in  contract,  but  recoverable  only  as  damages ; 
as  that  of  one  who  had  contracted  to  buy  of  another  what  that 
other  failed  to  make  title  to,  and  by  that  failure  gave  the  pro- 
posed buyer  a  claim  for  damages,  which  claim  and  action  do 
not  pass  to  the  assignee.  But  while  a  vendee  has  generally 
no  provable  claim  on  his  right  of  action  for  non-delivery,  yet  if 
he  lias  paid  the  price,  he  has,  it  is  said,  a  definite  claim  for  so 
much  money,  which  he  may  prove,  (j)) 

The  claim  must  rest  on  a  valuable  consideration.  For  the 
assignee  may  defend  against  a  merely  good  consideration,  al- 
though the  insolvent  himself   might   not.  (q)      Of   course  the 


parte  Day,  7  Ves.  301  ;  Ex  parte  Kinjx,  8 
id.  334  ;  Forster  v.  Surtees,  12  East,  605  ; 
De  Tastet  v.  Sharpe,  3  Madd.  51  ;  Gulli- 
ver V.  Drinkwater,  2  T.  R.  261.  A  claim 
for  damages  for  a  trespass  is  not  provable. 
Kellogfr  r.  Schuyler,  2  Denio,  73. 

{p)  Utterson  v.  Vernon,  3  T.  R.  539  ; 
Parker  i\  Norton,  6  id.  695,  are  cases  of 
this  class.  There  seems  no  inconsistency 
in  these  classes  of  cases.  The  same  prin- 
ciple governs  both.  If  the  claim  sounds 
merely  in  damages  it  cannot  be  proved, 
for  damages,  strictly  speaking,  are  for  the 
jury  to  determine.  But  if,  though  nomi- 
nally sounding  in  damages,  as  is  the  alle- 
gation in  every  ordinary  action  of  assump- 
sit, the  claim  be  in  substance  for  a  distinct 
and  liquidated  sum,  it  may  be  proved  in 
bankruptcy.  Asharst,  J.,  in  delivering  his 
opinion  in  Hammond  v.  Toulmin,  said : 
"  I  have  always  understood  that  when  the 
plaintiff's  demand  rested  in  damages,  and 
could  not  be  ascertained  without  the  inter- 
vention of  a  jury,  it  could  not  be  proved 
under  the  defendant's  commission  ;  now 
here  was  no  precise  sum  due  to  the  plain- 
tiffs at  the  time  of  the  defendant's  bank- 
ruptcy." Such  was  the  view  of  the  Court 
of  Appeals  in  New  York  in  a  recent  case, 
where  it  was  held  that  a  claim  for  liqui- 
dated damages  for  the  breach  of  an  agree- 
ment might  be  proved  in  bankruptcy. 
Boyd  V.  Vanderkemp,  1  Barb.  Ch.  274. 
And  on  the  same  principle,  a  claim  against 


a  common  carrier  for  goods  lost.  Camp- 
bell V.  Perkins,  4  Seld.  430.  As  to  the 
effect  of  a  judgment  recovered  for  a  tort 
previously  to  the  bankruptcy,  see  uifra. 

(q)  Gardiner  v.  Shannon,  2  Sch.  &  L. 
228.  Gardiner,  in  1799,  entered  into  co- 
partnership with  H.,  and  previous  to  the 
execution  of  the  partnership  articles,  exe- 
cuted to  the  defendant  a  bond  in  £1,000, 
conditioned  to  pay  £500  on  a  day  since 
passed.  A  deed  of  the  same  date  was 
executed  between  Gardiner  and  Shannon, 
reciting  the  marriage  of  Gardiner,  and 
that  he  had  made  no  settlement  on  his 
wife  previous  to  the  marriage  ;  also  recit- 
ing the  bond,  and  that  Gardiner  was 
about  to  enter  into  said  copartnership  — 
declaring  the  trust  of  the  bond  to  be  that 
the  wife  should  receive  the  interest  of  the 
said  sum  of  500/.  from  the  death,  failure 
in  trade,  or  bankruptcy  of  Gardiner,  and 
that  in  such  case  she  should  have  power 
of  appointment,  etc.  A  commission  in 
bankruptcy  soon  issued  against  Gardiner 
and  II.,  under  which  defendant  proved 
the  bond  ;  a  dividend  was  ordered,  but  the 
order  for  payment  being  resisted  by  the 
partnership  creditors,  a  bill  was  filed  im- 
peaching the  bond  as  voluntary,  and  the 
Lord  Chancellor  (Redesdale)  said:  "  This 
is  a  mere  volunt;iry  bond ;  an  act  which 
the  bankrupt  was  not  under  an  obligation 
to  do ;  and  when  a  man  does  such  an  act 
it  must  be  taken  to  have  been  done  in  or- 

[691] 


666 


THE   LAW   OF   CONTRACTS. 


[part  II. 


assignee  may  defeat  any  claim  which  the  insolvent  himself 
might,  as  where  it  is  barred  by  a  statute  of  limitation  or  the 
statute  of  frauds,  or  the  like,  (r)  The  question  of  time  also 
comes  in  here.  For  no  debt  is  provable  against  the  funds,  that 
is,  against  the  creditors,  which  did  not  accrue  before  the  bank- 
ruptcy. The  reason  of  the  case  is  obviously  this.  Up  to  a 
certain  point  of  time  all  the  property  previously  coming  to  the 
insolvent,  and  all  the  debts  previously  due  to  him  pass  to  the 
assignee,  for  the  benefit  of  certain  creditors ;  and  these  must  be 
creditors  whose  claims  against  the  insolvent  accrued  to  them 
before  the  same  point  of  time.  If,  on  the  one  hand,  a  debtor 
to  the  insolvent  who  became  his  debtor  after  a  certain  moment, 
must  pay  to  him,  and  not  to  the  assignee,  so  on  the  other,  one 
becoming  his  creditor  after  the  same  time,  must  look  to  him  for 
payment,  and  not  to  the  assignee. 

Interest  is  always  cast  on  debts  in  this  country ;  and  sub- 
'stantially  so  in  England  at  present,  although  different  rules  have 
prevailed,  (s)     To   put  all  the  creditors  on  an  equality,  interest 


der  to  deprive  his  creditors  of  the  remedy 
they  would  otherwise  have  against  his 
effects.  .  .  .  Suppose  that  Gardiner,  in- 
stead of  becoming  a  trader,  had  died, 
could  his  executors  have  paid  this  as 
against  his  creditors?  Though  it  might 
be  recovered  at  law,  it  would  be  post- 
poned in  eciuity  as  a  voluntary  bond.  [See 
Jones  I'.  Powell,  1  Eq.  Cas.  Abr.  84  ; 
Lechmere  r.  Carlisle,  3  P.  Wms.  222. 
The  Lady  Cox's  case,  id.  341.]  The 
proper  order  to  make  in  case  of  a  volun- 
tary bond  is  not  to  expunge  it;  but  that 
it  shall  not  be  set  against  the  creditors  ; 
but  if  there  be  a  surplus  after  payment  of 
all  joint  and  separate  debts,  the  party 
shall  be  allowed  to  come  in." 

(;•)  Kx  parte  Dcwdney,  15  Ves.  479; 
Ex  parte  Seaman,  id.  ;  Ex  parte  lloffey, 
2  Kos?,  24.'). 

(.s)  In  Kngland,  tlio  doctrine  on  this 
subject  formerly  was,  that  tlic  debt  must 
have  (trrrui'd  lic/'on-  the  ad  of  lianLriqitrij  m 
order  to  enable  the  creditor  to  prove  it. 
Bamford  r.  IJurrell,  2  15.  &  J*.  1  ;  O'Brien 
V.  Greirson,  2  Hall  &  H.  .'{.'14.  Subs((|uently 
the  provision  of  the  statute  41)  (ico.  .'?,  c. 
IS.*),  8.  2,  which  was  incorporated  into  the 
6  Geo.  4,  c.  ;i8,  s.  47,  and  which  is  sub- 
stantially rei-nacted  in  12  &  13  Viet.  c. 

[  092  ] 


106,  s.  165,  et  seq.  allowed  any  person 
with  whom  the  bankrupt  shall  have  really 
and  bond  Jide  contracted  any  debt  or  de- 
mand before  the  issuing  of  the  commis- 
sion to  come  in,  notwithstanding  any  prior 
act  of  bankruptcy  committed  by  the  bank- 
rupt, and  prove  the  same  provided  he  had 
not  at  the  time  it  was  contracted,  notice  of 
such  act  of  bankruptcy.  It  has  been  held 
that  the  act  of  bankruptcy  meant  in  this 
section  is  the  act  of  bankruptcy  on  which 
the  commission  issues.  So  that  if  the  debt 
is  contracted  before  the  act  of  bankruptcy 
on  which  the  commission  is  issued,  though 
after  notice  of  prior  act  of  bankruptcy,  it 
may  nevertheless  be  proved  under  the 
commission.  Axpar/eBowncss,  2  Maulo 
&  S.  479  ;  E.r  parte  Sharpc,  3  Mont.  D.  & 
])e  G.  490  ;  E.r  parte  Birkctt,  2  Rose,  71. 
In  Brown  ik  Lamb,  6  IMct.  2().'{,  the  rules 
on  this  subject  were  laid  down  compre- 
hensively, as  follows  :  that  "  On  all  debts 
where  interest  is  reserved  by  the  contract, 
interest  is  to  be  paid  according  to  the  eon- 
tract.  On  all  debts  where  interest  is  not 
recovered  by  the  contract  if  the  debt  be- 
came due  bef(U"e  the  (irst  pul)lication  of  the 
Wiirrant  to  the  messenger,  interest  is  to  be 
])aid  from  the  time  of  such  ])ublication  ; 
but  if  the  debt   become  due  after  such 


CH.  X.] 


BANKRUPTCY  AND   INSOLVENCY. 


667 


is  cast  to  the  time  of  the  decree  on  all  debts  due  from  the 
insolvent  and  payable  before  that  time,  and  is  discounted  from 
all  those  payable  at  a  later  period.  If  a  debt  is  payable  on 
demand,  and  only  on  demand,  as  by  a  note  on  demand,  for  ex- 
ample, the  insolvency  itself  acts  as  a  demand  to  sustain  the 
claim;  but  if  there  had  been  no  previous  demaiid,  interest  would 
not  generally  be  allowed.  After  the  amounts  are  made  up  to 
the  time  of  the  decree,  interest  is  cast  on  none  ;  for  if  it  were  cast 
on  all,  it  would  come  to  the  same  thing.  If  any  creditors  hold 
security,  the  statutes  usually  provide  for  their  surrendering  it 
to  the  assignees  if  they  please,  or  retaining  it  and  not  proving- 
their  debts,  or  realizing  it  or  having  it  valued,  and  thus  ascer- 
taining the  balance  of  debt  due  to  them,  and  proving  that,  (t) 


publication,  interest  is  to  be  paid  from 
the  maturity  of  the  debt ;  and  if  the  debt 
■were  payable  on  demand,  then  interest  is 
to  be  paid  from  the  time  of  tlie  earliest 
demand  shown,  and  if  no  special  demand 
be  shown,  then  interest  is  to  be  paid  from 
the  time  of  such  first  publication.  And 
when  an  appeal  is  taken  from  an  order  of 
a  master  directing  interest  to  be  so  paid, 
and  that  order  is  confirmed,  tlie  interest  is 
to  be  paid  up  to  the  time  of  the  final  or- 
der of  the  appellate  court."  This  rule  is 
founded  on  the  Massachusetts  statute  of 
1838,  and  it  will  be  seen  that  questions  of 
interest  are  governed,  to  a  greater  extent 
than  many  questions  in  bankruptcy,  by 
the  express  statute  provisions.  The  gen- 
eral principles  however  arc  laid  down  in 
Broomley  v.  Goodere,  1  Atk.  75 ;  Ex 
parte  Koch,  1  Ves.  &  B.  342 ;  Eden  on 
Bankruptcy,  391 ;  Archbold  on  Bank- 
ruptcy, tit.  Interest,  and  cases  cited  there. 
Eyre  v.  Bank  of  England,  1  Bligh,  582 ; 
Ex  parte  Greenway,  13uck,  412  ;  Ex  parte 
Martin,  1  Rose,  87  ;  Deacon  on  Bank- 
ruptcy, 2G3,  2G9,  ct  seg. ;  Bower  v.  Marris, 
Craig  &  Ph.  351 ;  iS'.r  parte  Higginbottom, 
2  Glyn  &  J.  123.  The  instructive  opinion 
of  Hubbard,  J.,  in  Brown  t" .  Lamb,  above 
cited ;  Ex  parte  Williams,  1  Rose,  399 ; 
Ex  parte  Champion,  3  Bro.  C.  C.  436, 
and  cases  cited. 

(t)  In  the  matter  of  Grant,  5  Law  Rep. 
303,  tills  point  came  before  Stori/,  J.  The 
American  Bank  held  certain  collateral  se- 
curities which  they  desired  to  apply  to  the 
amount  of  tlieir  debt,  so  far  as  they  would 
go,  and  prove  against  Grant's  estate  for 
the  balance.     The  court  said  :  "  What  is 


to  be  done  in  cases  where  a  creditor  who 
proves  a  debt  holds  collateral  security 
therefor  ?  Are  these  securities  in  all  cases 
to  be  sold  and  the  creditor  to  be  permit- 
ted to  prove  for  the  residue  of  his  debts  1 
Or  may  the  creditor  under  the  direction 
and  sanction  of  the  court,  be  permitted  to 
take  the  securities  at  their  true  value,  that 
value  being  ascertained  under  the  direc- 
tion of  the  court,  and  to  prove  for  the' 
residue  of  his  debt  ?  Upon  these  ques- 
tions, I  do  not  profess  to  feel  any  real 
difficulty.  .  .  .  There  can  be  no  doubt 
that  a  creditor  holding  securities  is  en- 
abled to  prove  his  debt  upon  his  oiler  to 
surrender  and  actually  surrendering  those 
securities  to  be  disposed  of  according  to 
the  order  and  direction  of  the  court,  and 
that  he  is  entitled  to  prove  his  debt, 
deducting  the  true  value  of  the  securities 
therefrom,  that  true  value  when  ascertain- 
ed, being  paid  or  applied  by  the  court  for 
the  exclusive  benefit  of  such  creditor. 
How  then  is  such  value  to  be  ascertained 
by  the  court  1  Must  it  be  ascertained  by 
a  sale  of  the  securities  by  tlie  court  in  all 
cases'?  Or  may  it  be  ascertained  by  an 
appraisement,  or  by  allowing  the  cred- 
itor to  take  tlie  same  at  tlie  nominal  value, 
or  in  any  other  manner  wiiich  the  court 
may  deem  for  the  true  interest  and  benefit 
of  all  concerned  in  the  estate,  if  there  be 
no  objection  by  the  bankrupt,  or  any  of 
the  other  creditors,  or  any  other  party  in 
interest ;  or  in  case  of  objection,  if,  upon 
full  notice  and  hearing  of  all  parties,  the 
court  in  the  exercise  of  a  sound  discretion, 
deem  the  one  or  the  other  course  most 
for  the  benefit  of  all  concerned  in  the 
[G93] 


668 


THE   LAW   OF   CONTRACTS. 


[part  II. 


If  any  persons,  creditors  of  course,  have  attached  the  property 
of  the  insolvent,  the  attachment  is  dissolved  at  once  by  the 
insolvency.  (?/)  But  in  some  States,  the  assignee  has  power  to 
continue  the  attachment  and  the  suit  for  the  benefit  of  the  cred- 
itors, (v)     As,  for  example,   where   a   dissolution   of  the   first 


estate?"  It  was  held,  that  the  court 
might  in  the  exercise  of  a  sound  discre- 
tion adopt  either  of  these  courses,  and  at 
all  events,  that  the  full  value  of  the  secu- 
rities shall  be  secured  to  the  ci-editor. 
Amory  v.  Francis,  16  Mass.  308;  Lanck- 
ton  V.  Wolcott,  6  Met.  30.5.  It  seems  that 
in  England,  the  usage  has  been  for  the 
court  to  direct  a  sale,  and  the  creditor 
was  allowed  to  hold  the  amount  realized 
therefrom,  and  prove  for  the  residue. 
Eden  on  Bankruptcy,  104,  et  seq. ;  Dea- 
con on  Bankruptcy,  178  ;  Ex  parte  Good- 
man, 3  Madd.  373 ;  Ex  parte  Parr,  1 
Rose,  76,  18  Ves.  65 ;  Ex  parte  Bennet, 
2  Atk.  527  ;  Ex  parte  Wildman,  1  id.  109 ; 
Ex  parte  De  Tasted,  1  Rose,  324,  declare 
the  doctrine,  that  where  the  creditor  holds 
the  security  of  a  third  person  merely,  or 
the  joint  security  of  the  bankrupt  and  a 
third  person,  the  creditor  may  prove  for 
the  whole  amount,  and  retain  his  security 
at  the  same  time  to  recover  what  he  can 
upon  it,  provided  that  he  receives  in  tlie 
whole  no  more  than  twenty  shillings  to  the 
pound.  Ex  parte  Iledderley,  2  Mont.  D. 
&  De  G.  487  ;  Ex  parte  Shepherd,  id.  204. 
See  also,  Ex  parte  Prescott,  4  Deacon 
&  Ch.  23 ;  Ex  parte  Dickson,  2  Mont.  & 
A.  99  ;  Ex  parte  Rufford,  I  Glyn  &  J.  41  ; 
Ward  V.  Dalton,  7  C.  B.  643.  But  it  was 
held  as  above,  that  securities  from  the 
bankrupt  alone  must  be  given  up  before 
proof.  Ex  parte  Bloxham,  6  Ves.  449, 
600  ;  Ex  parte  Barclay,  1  Glyn  &  J.  272  ; 
Ex  parte  Smitli,  3  Bro.  C.  0.46 ;  Ex  parte 
Dick.son,  2  Mont.  &  A.  99.  See  also,  on 
the  same  point,  Ex  parte  Baker,  8  Law  R. 
461,  and  Eastman  v.  Foster,  8  Met.  19. 

((/)  And  it  lias  been  held  that  wbere  a 
statute  provided  that  an  assignment  in 
insolvency  should  operate  a  dissolution  of 
ail  attadiments  on  tiic  property,  this  siiould 
api)ly  to  ail  attat  liinciit  made  on  tlie  ])ro])- 
erty  after  tbe  statute  went  into  ojjeration, 
for  the  jiurposc  of  securing  a  deiit  incurred 
before  its  enactment,  tlie  debtor  anil  cred- 
itor being  citizens  of  tlio  State  wliere  tiie 
assignment  was  made,  and  tiio  cause  of 
action  having,'  aeerueil  on  a  contract  to  lie 
performed  in  tliis  Stale,  on  the  ground 
tiiat  sucii  a  jirovisioa  aifects  not  the  right 

[  G'J4  ] 


but  the  remedy.  Bigelow  v.  Pritchard, 
21  Pick.  169.  But  not  an  attachment 
made  before  the  passage  of  the  act.  Kil- 
born  V.  Lyman,  6  Met.  299.  This  matter 
is  further  considered  in  another  part  of 
this  chapter,  in  connection  with  the  topic 
of  liens. 

(v)  In  this  connection,  it  may  be  proper 
to  allude  to  the  second  section  of  the  Na- 
tional Bankrupt  Act  of  1841,  which  pro- 
vided that  it  should  in  nowise  impair 
"  any  liens,  mortgages,  or  other  securities 
on  property,  real  or  personal,  which  might 
be  valid  by  the  laws  respectively."  A 
diversity  of  opinion  had  existed  in  the 
various  State  courts,  as  to  what  constituted 
a  lien.  That  a  judgment  was  properly  a 
lien  seems  to  have  been  generally  admit- 
ted by  the  courts.  In  the  matter  of  Cook, 
2  Story,  380,  Judge  >SVor^  said :  "I  have 
never  doubted  that  the  lien  of  a  judgment 
at  the  common  law  upon  real  estate  since 
the  statute  of  Westminster,  13  Edw.  1, 
Stat.  1,  e.  18,  which  has  been  adopted  in 
many  States  of  the  Union,  is  within  the 
proviso  of  the  second  section  of  the  Bank- 
rupt Act  of  1841,  and  sacred  thereby, 
and  is  wholly  unaffected  by  the  proceed- 
ings in  bankruptcy  where  it  has  been  ob- 
tained in  the  regular  course  before  any 
petition  or  decree  or  discharge  in  bank- 
ruptcy." This  view  is  adopted  in  Buck- 
ingham V.  McLean,  13  How.  151;  Pol- 
lard V.  Cocke,  19  Ala.  188;  Talbert  v. 
Melton,  9  Smedcs  &  M.  9  ;  Byers  v.  Fow- 
ler, 7  Eng.  218;  Towner  v.  Wells,  8 
Ohio,  136 ;  Roads  v.  Symmes,  1  id. 
140  ;  Mut.  Ass.  Soc.  v.  Stanard,  4  Munf. 
539;  Coutts  v.  Walker,  2  Leigh,  268; 
Moliere  v.  Noe,  4  Dall.  450 ;  Codwise  v. 
Gelston,  10  Johns.  507  ;  Kerpcr  v.  Iloch, 
1  Watts,  9 ;  Cathcart  v.  Potterfield,  5. 
id.  163;  Porter  v.  Cocke,  Peck,  130; 
United  States  v.  Morrison,  4  Pet.  124; 
C^onard  v.  Atlantic  Ins.  Co.  1  id.  386  ; 
Ridge  V.  Pratlier,  1  Blackf.  401 ;  Van 
Rennselaer  v.  Sheriff  of  Albany,  1  Cow- 
en,  501.  Some  courts  liave  even  said, 
that  an  action  commenced  operates  a  lien. 
Newdigail  r.  Lee,  9  Dana,  17;  Watson 
V.  Wilson,  2  id.  406;  Robertson  r.  Stew- 
art, 2  B.  Mou.  321 ;  llodges  v.  Holeman, 


en.  X.] 


BANKRUPTCY"   AND   INSOLVENCY. 


669 


attachment  would  leave  the  property  under  a  second  attachment 
made  by  a  citizen  of  another  State,  and  such  as  the  insolvency 
would  not  discharge  or  control,  (iv) 


1  Dana,  50.  See  Storm  v.  ■Waddell,  2 
Sandf.  Ch.  494.  In  otlier  States  an  at- 
tachment has  been  considered  a  lien  ;  Car- 
ter y.  Champion,  8  Conn.  549;  Dunkleo 
V.  Fales,  5  N.  H.  528  ;  Kittredge  v.  Bel- 
lows, 7  id.  427  ;  Wheeler  v.  Fish,  3  Fairf. 
241  ;  Robinson  v.  Mansfield,  13  Pick. 
139  ;  Pomroy  v.  Kingsley,  1  Tyler,  294  ; 
Fettyplace  v.  Dutch,  13  Pick." 392;  Ar- 
nold i\  Brown,  24  id.  95 ;  Grosvenor  v. 
Gold,  9  Mass.  210.  But  Stoij,  J.,  denied 
that  an  attachment  was  now  a  lien,  within 
the  meaning  of  the  bankrupt  law,  even  in 
those  States  which  had  always  treated  it 
as  such.  Ex  parte  Foster,  2  Story,  132, 
5  Law  Reporter,  55.  This  case  was 
cited  and  considered  in  Kittredge  v.  War- 
ren, 14  N.  11.  509,  and  an  opposite  opinion 
on  this  point  was  reached  by  the  court. 
It  was  held  that  an  attachment  of  prop- 
erty upon  mesne  process,  boiui  fide  made 
before  any  act  of  bankruptcy,  was  a  lien  or 
security  upon  propei'ty,  valid  by  the  laws 
of  New  Hampshire,  and  within  the  pro- 
viso of  the  second  section  of  the  Bank- 
rupt Act.  In  the  matter  of  Bellows  & 
Peck,  7  Law  Reporter,  119,  this  matter 
came  again  before  the  Circuit  Court, 
Judge  Story  presiding,  and  the  authorities, 
and  especially  Kittredge  v.  Warren,  were 
considered  at  length.  The  opinion  of  the 
■  court  in  Ex  parte  Foster  was  reaffirmed  ; 
and  going  further,  it  was  held,  that  where 
an  attacliment  on  mesne  process  was 
made  and  the  defendant  subsequently  ob- 
tained his  discharge  in  bankruptcy,  and  a 
State  court  where  the  case  was  pending 
should,  as  in  Kittredge  v.  Warren,  hold 
that  the  attachment  prevailed  as  against 
the  subsequent  proceedings,  and  the  dis- 
charge, invalid,  as  against  creditors  who 
had  secured  their  rights  by  such  attach- 
ment, it  would  be  the  duty  of  the  District 
Court  to  grant  an  injunction  against  the 
creditor,  his  agent  and  attorneys,  and  the 
sheriff  who  had  charge  of  the  property 
attached,  to  restrain  the  creditor  from 
proceeding  to  judgment,  or  if  the  suit  had 
been  prosecuted  to  judgment,  to  restrain 
him  from  levying  his  execution  on  the 
property  attached,  or  if  the  property  had 
been  sold  under  the  execution,  to  compel 
the  sheritf  to  bring  the  money  into  court. 
In  Kittredge  v.  Emerson,  15  N.  H.  227, 
which  came   before  the    court    of   New 


Hampshire  subsequent  to  the  decision  in 
Bellows  &  Peck,  the  doctrines  of  that  case 
were  assailed,  and  that  of  Kittredge  v. 
Warren  affinned  with  conspicuous  ability, 
by  Mr.  Chief  Justice  Parher,  in  an  opin- 
ion of  great  lengtli,  in  which  the  cases  are 
reviewed,  both  with  regard  to  the  matter 
of  attachment,  and  tlie  power  of  the 
courts  of  the  United  States  to  grant  in- 
junctions to  restrain  plaintiffs  in  the  State 
courts  from  pursuing  their  rights  and 
remedies  in  those  tribunals.  And  deny- 
ing this  power,  in  order  to  be  clearly 
understood,  the  court  say  that  if  such 
plaintiffs  shall  ask  their  interference,  it 
will  be  their  duty  to  enjoin  and  prohibit 
any  person  from  attempting  to  procure 
any  process,  from  any  court  not  acting 
under  the  autliority  of  the  State  of  New 
Hampshire  with  a  view  to  prevent  the 
entry  of  judgments  in  such  suits,  or  to 
prevent  the  execution  of  ih&  final  process 
issued  upon  those  judgments,  where  ob- 
tained. This  matter  is  considered  also  by 
Prentiss,  J.,  in  the  District  Court  of  Ver- 
mont. Downer  v.  Brackett,  5  Law  Re- 
porter, 392,  where  a  view  is  adopted  like 
that  of  the  court  of  New  Hampshire, 
above  cited.  Haughton  ?>.  Eustis,  5  Law 
R.  505.  The  case  of  Bellows  &  Peck 
was  taken  to  the  Supreme  Court  of  the 
United  States  on  writ  of  error  and  the  de- 
cision of  Parker,  C.  J.,  sustained.  Peck 
V.  Jenness,  7  How.  612.  The  view  adopt- 
ed by  Mr.  Justice  Story  was  concurred  in 
by  ConckUiif],  J.,  in  the  matter  of  Allen,  5 
Law  Reporter,  362.  The  following  cases 
seem  to  sustain  the  view  adopted  by  Par- 
ker, C.  J. :  Trzell  v.  Rountree,  1  McLean, 
95,  7  Pet.  464  ;  Wallace  v.  McConnell, 
13  Pet.  151  ;  Beaston  v.  Farmers  Bank 
of  Delaware,  12  Pet.  128;  Savage  v. 
Best,  3  How.  Ill;  Colby  v.  Ledden, 
id.  626 ;  Shawhan  v.  Wherritt,  id.  627  ; 
Downer  v.  Brackett,  21  Vt.  599  ;  Shaffer 
V.  McMakin,  1  Smith,  Ind.  148,  1  Carter, 
274;  Langford'v.  Raiford,  20  Ala.  532; 
Kilborn  v.  Lyman,  6  Met.  299  ;  Hubbard 
V.  Hamilton  "Bank,  7  Met.  340;  Daven- 
port V.  Tilton,  10  Met.  320. 

{w)  Thus,  in  the  Massachusetts  Act  of 
1841,  c.  124,  s.  5,  it  was  provided  that, 
"  Should  it  appear  to  the  Judge  of  Pro- 
bate or  Master  in  Chancery,  that  a  disso- 
lution of  any  attachment  pursuant  to  the 

[  695  ] 


670 


THE   LAW   OF   CONTRACTS. 


[part  II. 


The  law  of  set-ofF,  in  insolvency,  to  which  we  have  already 
alluded,  is  a  little  peculiar.  It  is  indeed  far  wider  in  its  reach 
than  the  common  law  or  statutory  provisions  for  set-off  not  in 
insolvency.  It  covers  all  mutual  claims  or  debts  of  every  kind. 
A  creditor  of  the  insolvent  who  is  also  his  debtor  in  any  way, 
gets  the  whole  benefit  of  all  his  debt  to  the  insolvent.  If  he 
paid  it  in  money,  this  would  go  to  the  fund.  But  he  may  pay 
it  by  set-off;  and  if  this  equals  or  exceeds  his  debt  to  the  insol- 
vent, his  whole  debt  is  paid,  (x)  But  an  administrator  has  not 
been  permitted  to  set  off  a  debt  due  to  him  in  his  own  right 
against  a  claim  by  the  assignee  of  a  distributive  share  belonging 
to  the  insolvent.  (?/) 

A  verdict  in  favor  of  a  creditor,  which  might  be  decisive 


provisions  of  the  fifth  section  of  the  act  to 
whicli  this  is  an  addition  (1838,  c.  163) 
would  prevent  said  attached  property 
from  passing  to  tlie  assignees,  the  attach- 
ment upon  his  order  shall  survive,  not- 
withstanding the  provisions  of  such  sec- 
tion, and  the  assignee  shall  have  power, 
with  the  permission  of  the  court  to  which 
such  writ  is  returnable,  to  proceed  with 
the  suit  against  the  insolvent  to  final 
judgment  and  execution  and  the  amount 
recovered,-exclusive  of  costs,  shall  vest  in 
the  assignees." 

(r)  In  addition  to  our  remarks  and  cita- 
tions on  the  law  of  set-oiF  in  note  (n),  to 
section  8,  p.  034,  we  would  say  that 
in  Giijson  v.  Bell,  1  Bing.  N.  C.  743, 
Tindal,  C.  J.,  set  forth  with  accuracy  the 
progress  of  the  English  law  on  tliis  sub- 
ject. See  p.  7.53,  et  seq. ;  Bolland  v.  Narl), 
8  B.  &  C.  105  ;  Ex  parte  Deeze,  1  Atk. 
228  ;  Ex  parte  Prcscot,  id.  230  ;  Boyd  v. 
Mangles,  1-6  M.  &  W.  337.  Tiic  credits, 
it  is  said,  must  have  been  given  before 
the  bankrnptcv.  llcrrison  v.  Guthrie,  3 
Scott,  2;)8  ;  ifusscll  V.  Boll,  1  ])o\vI.  N. 
S.  107  ;  Iluime  r.  Migglcston,  3  M.  & 
W.  30;  Young  v.  Bank  of  Bengal,  1 
])cacon,  G22;  Ex  parte  Hale,  3  Vcs.  304. 
In  order  to  come  witliin  the  purview  of 
the  doctrine,  tiie  del)ts  to  ^e  set  off  must 
1)0  due  ill  the  same  right.  (iroom  v. 
Mcalcv,  2  Bing.  N.  C.  138;  Staiiiforth 
V.  Fcilowes,  I  Marsh.  184;  Yalcs  r. 
Sberriiigton,  11  M.  &  W.  42,  12  M.  & 
W.  8.').5;  Bdclicr  v.  Blovd,  10  Bing.  .310  ; 
Forstcr  v.  Wilson,  I2"lVl.  &  W.  I'll; 
Clarke  v.  Fell,  I  Nev.  &  M.  244  ;  French 
V.    Andradf,    fi    T.'  B.    582 ;    Cherry  v. 

[C9C] 


Boultbee,  4  Mylne  &  C.  442  ;  West  i'. 
Pryce,  2  Bing.  455  ;  Ex  parte  Pearce,  2 
Mont.  D.  &  De  G.  142  ;  Ex  parte  Blagden, 
2  Eose,  249  ;  Addis  v.  Knight,  2  Meriv. 
117  ;  Ex  parte  Ross,  Buck,  125  ;  Fair  v. 
M'lver,  16  East,  130;  Slipper  v.  Stid- 
stone,  5  T.  R.  493.  The  credits  must  be 
such  as  will  in  their  nature  terminate  in 
debts  ;  Rose  v.  Hart,  above  cited,  2 
Smith,  L.  C.  179;  Rose  v.  Sims,  1  B, 
&  Ad.  521  ;  Russell  v.  Bell,  1  Dowl.  N. 
S.  107;  Abbott  v.  Hicks,  7  Scott,  715; 
Groom  r.  West,  8  A.  &  E.  758  ;  Tamp- 
lin  V.  Diggins,  2  Camp.  312;  Ridout  v. 
Brougli,  Cowp.  133.  So  it  has  been  said 
that  if  a  banker  receives  and  pays  money 
on  account  of  a  bankrupt,  after  notice  of 
his  bankruptcy,  he  cannot  set  off  the  pay- 
ments against  the  receipts,  as  against  the 
assignees.  Vernon  v.  Hankcy,  2  T.  R. 
113,  3  Bro.  313 ;  in  Raphael  v.  Birdwood, 
5  Price,  593 ;  Atkinson  v.  I<:iliott,  7  T. 
R.  378;  Ex  parte  Boyle,  Cooke's  Bank. 
L.  571  (8th  ed.),  and  in  tliis  last  case,  it 
was  held  that  if  a  bankrupt  be  indebted 
to  a  creditor  in  two  sums,  for  one  of 
which  the  creditor  may  prove,  for  the 
other  not,  and  the  creditor  be  indebted  to 
the  l)ankrupt,  lie  may  set  off  his  debt 
against  the  debt  he  cannot  prove,  and 
prove  for  the  other.  See  cases  cited, 
anl(\  sect.  8,  note  («),  p.  634. 

(//)  Davis  r.  Newton,  6  Met.  537.  The 
same  ])rinciple  was  applied  in  this  case  as 
ill  the  cases  cited  in  the  ])reccding  note, 
to  th(!  point,  that  in  order  to  give  the  right 
to  set-off,  the  debts  must  be  due  in  tho 
same  right. 


en.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


671 


against  the  insolvent  himself,  is  not  necessarily  so  against  an 
assignee.  Any  other  creditor  may,  for  good  reason,  ask  that 
the  verdict  be  inquired  into  and  impeached  ;  and  the  assignee 
not  only  may,  but  must  do  this,  if  he  can,  supposing  sufficient 
reason  to  be  shown,  (z) 

A  judgment  is  stronger  than  a  verdict.  It  is  indeed  the 
highest  evidence  of  debt ;  and  as  between  the  parties  it  is  con- 
clusive at  common  law.  But  it  is  not  conclusive  in  insolvency. 
Courts  have  declared  that  proof  of  a  debt  is  not  made  out  by 
suit,  verdict,  and  judgment,  however  formal  and  accurate,  if  the 
court  can  see  clearly,  by  means  of  competent  evidence,  that  the 
debt  itself  is  not  actually  due  to  the  creditor  in  good  faith,  (a) 
The  court  or  commissioner  may  certainly  inquire  into  the  con- 
sideration of  a  judgment  debt. 

A  judgment  may  have  the  effect  of  making  a  claim  provable, 
which  of  itself  would  not  lie.  Thus,  if  one  brought  his  action 
even  for  assault,  or  slander,  no  claims  for  which  would,  as  we 
have  seen,  be  provable,  and  his  action  ripens  to  judgment 
before  the  insolvency,  there  is  no  more  reason  why  he  may  not 
prove  this  judgment  debt,  than  why  he  should  not  prove  a 
promissory  note  given  for  the  same  cause,  (b)  A  mere  award 
of  referees  does  not  change  the  nature  of  the  claim,  (ba) 


(z)  Ex  parte  Rashleigh,  Ex  parte  Biit- 
terfill,  1  Rose,  192.  In  this  case  it  was 
attempted  by  counsel  to  show  that  the 
commissioners  were  bound  by  a  verdict 
rendered.  Lord  Chancellor  Eldon  said  : 
"  I  am  quite  clear  that  the  commissioners 
are  not  bound  by  the  verdict,  if  circum- 
stances present  themselves  in  a  credible 
shape,  leading  them  to  doubt  the  propri- 
ety of  it  ;  and  the  judgment,  after  the 
commission  is  just  nothing  at  all.  Their 
jurisdiction  like  the  Chancellor's  is  both 
legal  and  equitable,  and  if  there  are  equi- 
table grounds,  upon  which  the  verdict 
cannot  stand,  they  are  not  only  author- 
ized, but  it  is  their  duty  to  inquire  into 
them,  and  the  verdict  will  not  conclude 
either  the  bankrupt  or  the  creditors.  It  is 
competent  to  any  creditor  of  the  bankrupt, 
or  to  the  bankrupt  himself,  to  impeach 
the  verdict,  which,  before  it  is  matured 


into  a  judgment  or  execution,  is  only 
prima  facie  evidence  of  a  debt."  Deacon 
on  Bankruptcy,  197. 

(a)  "Proof  upon  a  judgment  will  not 
stand  merely  upon  that,  if  there  is  not  a 
debt  due  in  '  truth  and  reality,'  for  which 
the  consideration  must  be  looked  to." 
Lord  Eldon,  in  Ex  parte  Bryant,  1  Ves. 
&  B.  211.  "The  commissioners  clearly 
may  inquire  into  the  consideration  for  a 
judgment  debt."  Ex  parte  Marson,  3 
Mont.  &  A.  155.  And  it  has  been  held 
that  a  judgment,  to  be  provable,  must 
have  been  signed,  actually,  or  by  relation, 
before  the  commission  issued.  Moggridge 
V.  Davis,  Wightw.  16  ;  Buss  v.  Gilbert,  2 
M.  &  S.  70;  Robinson  v.  Vale,  2  B.  &  C. 
762  ;  Ex  parte  Birch,  4  id.  880. 

{b)  This  matter  has  been  already  com- 
mented upon,  with  reference  to  the  right 
to  prove  claims  for  unliquidated  damages, 


VOL.  II. 


(ha)  In  the  matter  of  Comstock,  5  Law  Rep.  163. 

59  [  G97  ] 


672 


THE   LAW   OF   CONTRACTS. 


[part  II. 


SECTION    XII. 

OF   THE   PROOFS    OF   DEBTS,   AND    OF   DIVIDENDS. 

Under  this  head  we  may  consider  first,  who  may  prove  debts 
and  against  whom  thei^  may  be  proved ;  and  second,  the  man- 
ner of  proof. 

All  persons  who  have  distinct  claims  against  the  insolvent, 
may  prove  them  against  his  estate,  whatever  be  their  personal 
relations  to  him.  Thus,  a  wife,  who  has  a  distinct  estate  of 
her  own,  may  have  and  prove  a  debt  due  to  her  from  the  estate 
of  her  husband,  (c)  A  trustee  may  prove  for  his  cestui  que 
trust,  (d)  An  infant  may  prove  by  his  guardian ;  and  courts 
having  cognizance  of  bankruptcy  matters  may  generally  ap- 
point a  guardian  for  the  purpose.  The  assignee  of  a  bond  or 
simple  contract  may  prove  in  his  own  name.  The  assignee  of 
another  insolvent  may  prove  his  claim.  Corporations  may 
prove  by  their  duly  authorized  attorney,  (e)     In  all  these  cases, 


which  see.  The  reason  of  the  doctrine  of 
the  text  is  obvious.  The  claim,  while  in 
its  unliquidated  state,  is  for  no  distinct  sum, 
as  soon  as  the  jury  have  passed  upon  it,  it 
becomes  a  claim  for  a  definite  amount. 
The  question  then  comes,  as  in  the  case 
of  a  promissory  note,  is  tlie  claim,  taken 
as  a  whole,  valid.  No  question  of  greater 
or  less  amount  of  damages  is  left  for  a 
jury.  That  tlic  judijment  changes  the 
character  of  the  demand  from  what  may 
be  termed  a  mere  claim  to  a  debt,  see 
Crouch  V.  Gridlcy,  C  Hill,  2.'30;  see  also, 
Thompson  v.  Hewitt,  id.  254.  So  with  a 
decree  of  a  court  of  clianccry  for  the  pay- 
ment of  a  debt.  Johnson  v.  I'itzhugh,  3 
Barb.  CIi.  30O. 

(r)  Thus  it  is  said,  that  if  a  bond  or 
covenant  is  given  by  the  husl)and,  to  pay 
the  wife,  or  her  trustees,  during  his  life,  a 
sum  of  money  for  the  benefit  of  the  wife 
or  issue  after  liis  death,  sucli  a  l)()iid  may 
1)C  proved  in  hiiiikruptcy  agaiii.st  iiis  estate. 
Kx  parte  Winchester,  1  Atk.  IIG;  F.x 
parte  Dicken,  Buck,  11.');  J\x  jiaiie 
Camplicli,  Hi   \'cs.  244;  Jj^x  parte  (jurd- 

[  G'J8  ] 


ner,  11  id.  40;  Ex  parte  Brown,  Cooke, 
231;  Ex  parte  Granger,  10  Ves.  349; 
Montefiori  v.  Montetiori,  1  W.  Bl.  363  ; 
Shaw  V.  Jakeman,  4  East,  201.  See  also, 
Ex  parte  Smith,  Cooke,  237  ;  Brandon 
V.  Brandon,  2  Wils.  Ch.  14 ;  Ex  parte 
Elder,  2  Madd.  282  ;  Ex  parte  Brench- 
ley,  2  Glyn  &  J.  174.  But  it  is  said  that 
a  bond  given  by  the  husband  to  pay 
money  for  the  use  of  the  wife,  with  a  con- 
dition, by  way  of  defeasance,  that  the 
bond  shall  not  be  enforced  unless  upon 
the  bankruptcy  of  the  obligor,  will  be  void 
as  a  fraud  upon  the  creditors  of  the  hus- 
band, and  cannot  be  proved  against  his 
estate.  Lockyer  v.  Savage,  2  Stra.  947  ; 
Iliginliotham  v.  Holme,  19  Ves.  88; 
StniUun  V.  Hale,  2  Bro.  Ch.  490,  s.  c. 
Buck,  179;  Ex  parte  Hodgson,  19  Ves. 
200  ;  A'.r  jiarte  Young,  3  Madd.  124  ;  Ex 
parte  Hill,  Cooke,  232  ;  Ex  parte  Bennett, 
id.  233. 

((/)  Ex  parte  Dubois,  1  Cox,  310.  As 
to  the  joinder  of  cestui  que  trust  in  the 
proof,  sec  infra. 

(e)  Tliis  is  provided  for  by  statute,  and 


en.  X.] 


BANKRUPTCY   AND    INSOLVENCY. 


673 


as  indeed  in  all  cases,  precautions  are  used  to  ascertain  the 
truth,  which  may  best  be  considered  under  the  next  topic,  the 
method  of  proof. 

In  all  cases,  the  other  creditors  are  entitled  to  the  oath  of  the 
party  in  interest,  and  to  the  benefit  and  protection  derivable  from 
his  examination  ;  and  either  of  them  may  have  any  question  of 
this  kind,  determined  by  a  jury.  (/)  The  provisions  for  this 
purpose  differ  considerably,  both  in  the  statutes  and  in  the  prac- 
tice of  the  different  States.  Generally,  however,  there  must  be, 
in  most  of  the  cases  mentioned  above,  the  oath  of  the  party 
represented  and  actually  interested,  as  well  as  of  him  who  has 
the  legal  interest  and  acts  as  owner.  Thus,  the  cestui  que  trust 
should  join  with  the  trustee,  [g)  the  infant  with  the  guardian  ; 
and  some  officer  of  a  corporation  should  present  the  claim  of 


it  may  be  added  that  all  these  matters  of 
form  in  proof,  &c.  are  made  the  subject  of 
strict  statute  regulation.  In  Albany  Ex- 
change Bank  v.  Johnson,  5  Law  Rep.  313, 
Conckling,  J.,  said,  after  stating  that  the 
statute  requirement  must  be  fully  com- 
plied with  :  "  Indeed  independently  of  the 
above  recited  provision  of  the  act,  it  may 
well  be  doubted  whether  a  petition  of  this 
nature  in  behalf  of  a  corporation  could 
properly  be  received  without  proof  that 
the  persons  by  whom  it  was  signed  and 
verified  were,  in  fact,  the  official  organs  or 
the  authorized  agents  of  the  corporation." 
1  Cooke,  Bankrupt  Law,  124  ;  Deacon  on 
Bankruptcy,  194;  is.rparfe  Bank  of  Eng- 
land, 18  Ves.  228,  1  Rose,  142,  which  last 
report  seems  to  be  somewhat  deficient. 
E.r  parte  Bank  of  England,  1  Wils.  Ch. 
295,  1  Swanst.  10. 

(/)  In  the  case  of  Foster  v.  Remick,  5 
Law  Rep.  406,  which  arose  under  the  late 
National  Bankrupt  Act,  Story,  J.,  said : 
"And  after  having  provided  that  'all 
proof  of  debts  or  other  claims  of  creditors 
entitled  to  prove  the  same  by  this  act,  shall 
be  under  oath  or  solemn  affirmation,  &c.,' 
[the  statute]  proceeds  to  declare,  '  but  all 
such  proofs  of  debts  and  other  claims 
shall  be  open  to  contestation  in  the  proper 
court  having  jurisdiction  in  bankruptcy, 
and  as  well  the  assignee  as  the  creditor, 
shall  have  a  right  to  a  trial  by  jury,  upon 
an  ij^sue  to  be  directed  by  such  court  ^ 
ascertain  the  validity  and  amount  of  such 
debt  or  claims.'  Now,  certainly,  there  is 
some  difficulty  in  avoiding  the  conclusion, 


that  this  clause  of  the  seventh  section 
does  apply  to  every  case,  where  the  credi- 
tor seeks  to  have  the  fact  ascertained  by  a 
jury,  of  the  validity  and  amount  of  his 
claim,  whatever  may  be  the  case  of  the 
debtor,  wliere  no  assignee  has,  as  yet,  been 
appointed.  It  strikes  me,  therefore,  that 
if  the  creditors  in  the  present  case  should 
desire  a  trial  by  jury,  it  ought  to  be 
granted  ;  but  if  not  desired,  then  the  court 
may  proceed  to  decide  the  case  of  itself, 
as  a  summary  proceeding  in  equity." 

(g)  In  Ex  parte  Dubois,  1  Cox,  310, 
the  language  of  the  Lord  Chancellor  was  : 
"  The  reason  why  a  trustee  is  not  per- 
mitted to  prove  the  debt  alone  under  the 
commission  is,  that  he  must  swear  to  the 
debt  being  due  to  him  ;  now  the  debt 
being  only  due  to  him  in  trust  for  another, 
it  is  rather  too  great  a  refinement  for  him 
to  take  such  an  oath  ;  and  if  he  swear  the 
debt  is  due  to  him  as  trustee  only,  that  is 
not  sufficient,  for  it  does  not  appear  with 
certainty  that  the  debt  has  not  iDcen  paid 
to  the  cestui  que  trust.  The  cestui  qtie  trust 
must,  therefore,  join  the  tnistee  in  swearing 
that  no  part  of  the  debt  has  been  paid  or 
secured."  And  it  seems  that  the  same 
reason  will  apply  to  the  case  of  proof  by  a 
guardian,  provided,  of  course,  that  he 
could  have  a  knowledge  of  the  existence 
of  his  debt.  Ex  parte  Belton,  1  Atk.  251. 
So  if  cestui  que  trust  be  a  lunatic,  his  oath 
■will  not,  as  matter  of  course,  be  required. 
Ex  parte  Maltby,  in  the  matter  of  Sim- 
mons, 1  Rose,  387. 

[699] 


674 


THE   LAW   OF  CONTRACTS. 


[part  ir. 


the  corporation,  who  was  so  conversant  of  its  business  as  to  be 
able  to  testify  concerning  it.  So  too,  if  an  assignee  proves  a 
debt,  his  insolvent  should  be  sworn,  {h)  The  general  reason 
for  all  this  is,  that  the  creditors  may  have  all  the  assurance  they 
can  from  the  oaths  of  those  actually  interested,  that  the  whole 
amount  claimed  is  due,  and  that  no  part  has  been  paid,  or 
allowed  for,  or  in  any  manner  settled  or  met  by  a  counter- 
claim which  should  reduce  it.  The  reason  of  the  rule  shows 
its  limit.  If  the  party  represented  can  know  nothing  of  this, 
as  an  actual  infant,  or  an  insane  person,  his  oath  is  not  called 
for.  (0 

In  all  of  these  matters,  commissioners  and  courts  have  con- 
siderable discretion.  The  examination  is  usually  rigorous  and 
searching  if  there  be  any  reason  to  suppose  fraud  or  collusion. 
And  beside  the  oath  of  the  creditor,  which  would  not  be 
received  at  common  law,  and  of  the  insolvent,  which  would 
be  receivable,  all  kinds  of  evidence,  admissible  at  law,  may 
be  offered  on  the  one  side,  or  demanded  on  the  other,  in  order 
to  submit  every  claim  to  thorough  and  effectual  investiga- 
tion. (;■) 


(A)  Owen  on  Bankruptcy,  195,  Cooke, 
153.  It  has  already  appeared,  that  the 
right  of  the  assignees  to  sue  on  debts  due 
the  bankrupt's  estate,  with  or  without 
naming  tliemselves  assignees,  depends 
upon  the  time  of  accrual  of  the  debt  or 
right  of  action.  In  certain  cases  (see 
ayitc)  the  assignees  may  treat  the  debt  as 
due  themselves,  and  make  no  allegation 
in  their  declaration  of  the  fiict,  that  they 
arc  assignees  of  such  an  insolvent.  Now, 
in  cases  where  they  may  sue,  if  the  debtor 
against  vvliom  they  hold  the  claim  is 
solvent,  it  seems  tliat  it  might  well  l)e  held 
in  case  of  th(i  insolvency  of  the  debtor, 
that  they  can  jjrove  against  his  estate, 
without  tlie  necessity  of  the  oath  of  the 
creditor  himself.  This  is  a  matter  now 
within  their  personal  knowledge.  Otlier- 
wise,  when  the  debt  accrued  at  such  a 
time  tliiit  they  couhl  have  no  such  knowl- 
edge. In  ])ractice,  the  oath  of  tlie  creditor 
himself  is  ustu»liy  taken,  in  Iwtth  classes 
of  ca.ses,  and  there  is  certainly  nothing 
objcctionuI)le  in  tiiis  mode  of  jiroccdure. 
JJut  it  is  submitted,  that  the  validity  of 
the  proce('ding,  when  the  oath  of  the 
creditor   has  not  been  taken,  in  cases  of 

[  700  ] 


the  class  above  alluded  to,  might  well 
be  maintained,  notwithstanding  the  omis- 
sion. 

((■)  Ex  parte  Lloyd,  In  the  matter  of 
Lloyd,  1  Kose,  4 ;  Fortescue  v.  Hennah, 
19  Ves.  67;  Ex  parte  Symes,  11  Ves. 
521. 

{j)  And  moreover,  as  to  debts  due  and 
the  disposition  of  his  property,  the  bank- 
ru])t  may  be  examined,  in  accordance 
with  the  principles  of  equity  jurisprudence. 
But  the  court  will  guard  him  against  an- 
swering any  ([ucstions  which  shall  tend  to 
render  hiin  liable  to  a  criminal  prosecu- 
tion, unless  the  disclosure  is  absolutely  es- 
sential to  the  interests  of  the  creditors. 
Archbold  on  Bankruptcy,  277  ;  Ex  parte 
Cossens,  in  the  matter  of  Worrall,  Buck, 
531.  This  rule  may,  liowcver,  require 
some  (lualitication  ;  for  in  the  case  above 
cited  it  is  said  iiy  J.,ord  Chancellor  El- 
don:  "I  conceive  that  there  is  no  doubt 
tliat  it  is  one  of  the  most  sacred  i)rincii)lcs 
in  the  law  of  this  country,  that  no  man 
0n  bo  called  on  to  (•riminate  himself,  if 
he  choos(5  to  object  to  it ;  but  I  have  al- 
ways understood  that  proposition  to  ad- 
mit of  a  ijualilicatiou  with  respect  to  the 


CII.  X.] 


BANKRUPTCY   AND    INSOLVENCY. 


675 


A  bankrupt  who  holds  property  in  a  fiduciary  capacity,  and 
has  a  debt  or  balance  from  his  own  assets  in  favor  of  the  prop- 
erty so  held  by  him  in  trust,  may  prove  the  debt  against  his 
own  estate,  (k) 

Some  of  the  most  difficult  questions  which  occur  in  bank- 


jurisdiction  in  bankruptcy,  because  a 
banlirupt  cannot  refuse  to  discover  bis 
estate  and  effects,  and  tbe  particuhirs  re- 
lating to  tbem,  tbough  in  the  course  of 
giving  information  to  his  creditors  or  as- 
signees of  what  liis  property  consists,  that 
information  may  tend  to  show  he  has 
property  which  he  has  not  got  according 
to  law  ;  as  in  the  case  of  smuggling,  and 
tlie  case  of  a  clergyman  carrying  on  a 
farm,  which  he  could  not  do  according  to 
the  act  of  parliament,  except  under  the 
limitation  of  the  late  act ;  and  the  case  of 
persons  having  the  possession  of  gun- 
powder in  unlicensed  places  whereby  they 
become  liable  to  great  penalties,  whether 
the  crown  takes  advantage  of  the  forfeit- 
ures or  not :  in  all  these  cases  the  parties 
are  bound  to  tell  their  assignees,  by  tbe 
examination  of  the  commissioners,  what 
their  projierty  is,  and  where  it  is,  in  order 
that  it  may  be  laid  hold  of  for  the  pur- 
poses of  the  creditors."  And  in  E.r  parte 
Oliver,  1  Rose,  407,  seven  years  be- 
fore the  case  in  Buck  was  decided,  it 
was  held  by  Lord  Eldon,  that  the  court 
had  power  to  punish  a  bankrupt  for  con- 
tempt, who  refused  to  answer  any  ques- 
tions regarding  his  estate,  even  though 
the  answer  would  criminate  himself.  S. 
C.  2  Ves.  &  B.  244.  In  Pratt's  case,  i 
Glyn  &  J.  58,  and  Mont.  &  B.  203,  the 
doctrine  was  broadly  stated,  that  the 
bankrupt  was  bound  to  disclose  all  cir- 
cumstances respecting  his  property,  be 
the  consequences  what  they  might.  And 
see  Ex  parte  Meymot,  1  Atk.  200 ;  Ex 
parte  Nowlan,  11  Ves.  514.  But  m  Ex 
parte  Kirby,  1  Mont.  &  McA.  229,  Lord 
Lyndhurst  was  unwilling  to  admit  that 
tlie  commissioners  could  dispense  with  the 
general  rule  of  law,  that  no  person  can 
be  compelled  to  criminate  himself.  The 
rule,  however,  in  view  of  later  cases 
which  went  to  a  great  extent  upon  the 
opinion  of  Lord  Eldon,  above  quoted,  we 
think  may  be  stated  as  follows :  The 
bankrupt  may  be  compelled  to  answer 
any  question  relating  to  the  disjiosltion  of 
his  property,  even  though  the  answer  may 
tend  to  criminate  him.  The  principle  of 
the  rule  is  well  illustrated  in  the  case  put 

59* 


by  ErsJcine,  C.  J.,  in  2  Deacon  &  Ch. 
214,  In  re  Heath.  "Now  with  respect  to 
the  proposition  put  by  Mr.  Montague,  I 
agree  with  him,  that  you  could  not  ask  a 
man  whether  he  had  not  robbed  another 
of  a  sum  of  money;  because  if  he  had  so 
robbed,  the  money  would  not  be  the 
property  of  the  assignees  but  of  the  party 
robbed ;  it  would  be,  in  fact,  no  discovery 
of  the  estate  of  the  bankrupt.  But  I  can 
see  no  objection  to  tliis  question  (unless 
it  might  be  regarded  as  a  chain  in  evi- 
dence to  convict  the  party  of  robbery), 
namely,  '  Had  you  not  on  such  a  day, 
and  at  such  a  place,  100/.? '  And  accord- 
ing to  the  answer  you  might  then  interro- 
gate what  he  had  done  with  it.  In  the 
present  case  the  question  is,  '  What  have 
you  done  with  this  property  ? '  not,  'How 
did  you  obtain  it  1 '  And  I  think  all  the 
cases  have  been  decided  in  that  way  of 
looking  at  the  question."  The  courts 
may  enforce  answers  to  their  questions  by 
committing  for  contempt.  Kimball  v. 
Morris,  2  Met.  575  ;  Archbold,  278. 

(/.•)  Ex  parte  Shaw,  1  Glyn  &  J.  127  ; 
Ex  parte  Watson,  2  Ves.  &  B.  414  ;  Ex 
parte  Marsh,  1  Atk.  158,  s.  C.  Cooke, 
408;  £.r  parte  Richardson,  3  Madd.  138, 
Buck,  202.  But  it  has  been  also  held, 
that,  when  such  debts  are  proved  by  the 
bankrupt,  and  the  dividend  paid,  the 
amount  shall  not  go  into  the  hands  of  the 
bankrupt  himself,  but  be  deposited  to  the 
account  of  the  estate,  or  paid  into  court. 
Ex  parte  Brookes,  Cooke,  137  ;  Ex  parte 
Leeke,  2  Bro.  Ch.  596.  In  this  case,  and 
on  this  point,  the  Lord  Chancellor  said : 
"I  apprehend,  in  strictness,  the  bankrupt 
ought  to  be  admitted  a  creditor  for  that 
which  he  has  as  executor,  against  his  own 
estate  ;  but  it  would  be  evidently  improp- 
er to  suffer  the  money  to  come  into  the 
hands  of  the  bankrupt.  In  the  jiresent 
case,  there  is  nothing  but  money  in  the 
hands  of  the  assignees,  and  the  creditor 
has  such  an  interest  in  it  as  to  entitle  him 
to  have  it  retained  in  court."  And  see 
Ex  parte  Llewellvn,  Cooke,  B.  L.  135; 
Ex  parte  Ellis,  1  Atk.  101  ;  Ex  parte 
Shakeshaft,  3  Bro.  Ch.  198  ;  Ex  parte- 
Moody,  2  Rose,  413. ' 

[  701  ] 


676  THE  LAW  OF  CONTRACTS.  [PART  II. 

ruptcy  or  insolvency  arise  where  partnerships  are  concerned. 
It  is  a  very  simple  thing  for  a  partnership  to  prove  a  debt,  or  to 
go  into  insolvency.  But  the  different  and  clashing  rights  of  the 
creditors  of  the  firm,  and  the  creditors  of  the  several  members 
of  it,  of  which  we  have  treated  in  our  chapter  on  Partnership, 
often  create  difficulty,  (l)  It  is,  however,  one  of  fact  rather  than 
law.  The  whole  property  may  pass  in  the  usual  way  through 
the  hands  of  one  assignee,  by  one  insolvency  ;  or  of  one  assignee 
chosen  under  distinct  applications  for  insolvency,  the  partner- 
ship indebtedness  and  the  several  indebtedness  being  separated  ; 
or  they  may  be  entirely  distinct  insolvencies.  This  must  depend 
upon  the  law  or  the  practice  of  each  State.  Generally,  we 
should  say  that  one  insolvency,  and  one  assignee,  could  settle 
all  the  questions  to  most  advantage,  (m) 

These  difficulties  are  very  much  increased  and  complicated, 
when  two  or  more  insolvent  firms  are  connected  in  business, 
and  still  more  when  one  or  more  persons  belong  to  all  the  firms, 
in  each  of  which,  however,  there  are  other  persons.  And  not 
unfrequently  in  such  cases,  the  connection  in  business  leads  to 
a  mode  of  keeping  the  accounts,  or  of  making  charges  and 
entering  credits  in  one  or  all  of  the  firms,  which  makes  the  dif- 
ficulty still  greater.  It  would,  however,  be  difficult  in  any  work, 
and  impossible  in  a  single  chapter  like  this,  to  present  any 
rules  of  law  which  would  help  to  disentangle  such  cases. 
And  indeed  the  rules  and  principles  applicable  to  them  do  not 
belong  peculiarly  to  insolvency,  but  to  partnership,  sale,  agency, 
or  other  branches  of  the  law  of  contracts. 

The  dividends  are  declared  at  meetings  called  for  that  pur- 
pose. And  it  is  the  duty  of  the  assignee  to  settle  questions, 
arrange  his  accounts,  collect  the  assets,  and  do  what  else  is 
necessary  without  any  unnecessary  delay,  so  that  the  funds  of 
the  insolvent  may  pass  info  the  hands  of  the  creditors,  to  whom 
they  belong,  as  soon  as  uiuy  be.     And  delay  for  which  no  good 


(/)  Sw;  Vol.  I.  of  tliis  work,  j).  124,  *<  ncrsliip,  Story   on   Partnersliip,  Gow  on 

se,/.  rartiirrsliip,  Watson  on   I'artiu'rsliip,  and 

(ill)  For  an  clahoratc  examination  of  lli(!  liissct  on  I'artnfrsliij),  under  the  titles  of 

Hul)jcct  of  liankrnptcy,  witii  rcfereiHT  toils  lJankrui)tcy  and  Insolvency. 
eirc(;t(jn  parlncrsliips,  see  Cullycron  J'art- 

[702] 


en.  X.]  BANKRUPTCY   AND    INSOLVENCY.  677 

cause  exists,  would  be  a  strong  reason  for  removal  of  the  as- 
signee, (n) 

A  debt  may  be  proved  at  any  meeting.  The  reason  is,  that 
it  would  be  unjust  wholly  to  exclude  an  actual  and  honest  cred- 
itor merely  for  not  presenting  his  claim  at  an  earlier  period,  (o) 
But  it  is  also  provided  in  our  statutes  generally,  that  the  former 
dividends  are  not  to 'be  disturbed.  That  is,  no  one  coming  in 
after  a  dividend  has  been  declared  and  become  payable,  can 
take  from  creditors  what  they  have  received,  or  from  the  funds 
what  is  necessary  to  pay  the  dividends  due  to  others ;  but  the 
new-comer  may  receive  not  only  the  further  dividends,  but  the 
past  dividends,  if  the  assignee  has  new  and  unappropriated 
funds  which  can  pay  them. 


SECTION    XIII. 


OF   THE   DISCHARGE. 

Whether  a  discharge  operates  as  a  complete  satisfaction  of 
the  debt,  or  releases  the  insolvent  from  imprisonment,  or  leaves 
him  and  his  future  property  as  open  to  all  process  of  arrest  or 
attachment  as  before,  depends  upon  the  statutory  provisions. 
The  prevailing  effect  in  this  country,  is  an  entire  discharge  of 
the  debt.  (^?)     But  all  the  statutes,  or  nearly  all,  contain  pro- 

(n)  The  decisions  of  the  courts  in  rela-  The  statutes  of  Arkansas,   New  Jersey, 

tion  to  dechiration  of  dividends,  &c.,  are  North  Carolina,  Mississippi,   Tennessee, 

found  to  be  based  so  exclusively  on  statute  Illinois,   Georgia,  Missouri,  Connecticut, 

provisions,  that  it  is  deemed  inexpedient  Pennsylvania,  and  Ohio,  exempt  only  the 

to  go  into  the  citation  or  discrimination  of  person  of  the  debtor  from  imprisonment, 

authorities.     It  becomes  necessary,  in  all  Stat,  of  N.  J.  1847,  tit.  9,  ch.  4;  Rev. 

matters  of  form  and  order  of  this  charac-  Stat,  of  Arkansas,  18.37;  Stat,  of  Conn, 

ter,  to  consult  strictly  the  directions  of  the  1838,  p.  270;  Ohio  Rev.  Stat.  ;  Code  of 

insolvent  laws.     The  statement  of  the  law  North  Carolina  ;  Statute  Laws  of  Tennes- 

in  the  text,  will  be  found  to  conform  with  see.      The  statutes  of  California,  Michi- 

the  usual  statute  provisions.    See  stat.  12  gan,  Mississippi,  and  Massachusetts,  and 

&   13    Vict.    c.    106  ;    the   late   National  in  the  majority  of  the  States  at  this  day 

Bankrupt  Law  of  the  United  States  ;  the  provide  for  the  discharge  of  the  insolvent 

insolvent  laws  of  the  various  States.  from  liability  for  the  debt  itself,  if  his  prop- 

(o)  Minot    V.    Thayer,    7    Met.    348;  erty  be  assigned  and  distributed  among  his 

Fletcher  v.  Davis,  id.  142.  creditors.     Laws  of  Cal.  18.50-.'j3,  ch.  80; 

(  /()  The  provisions  relating  to  the  effect  Rev.  Stat,  of  Michigan,  1 8.37,  tit.  7,  ch.  3  ; 

of  the  discharge  vary  in  ditferent  States.  Massachusetts   Insolvent  Laws   of  1838. 

[703] 


678 


THE   LAW   OF   CONTRACTS. 


[part  II. 


visions  intended  to  prevent  a  fraudulent  insolvent  from  getting 
this  relief;  and  the  general  way  is,  by  requiring  an  assent  to 
his  discharge  from  a  certain  number,  or  proportion  in  value  or 
number,  or  both  of  his  creditors ;  and  it  is  usually  a  majority 
in  number  and  value. 

This  discharge  must  be  declared  at  a  meeting  called  for  the 
purpose.  There  any  creditor  may  object* to  it;  and  may  prove 
any  facts  or  urge  any  objections  which  would  prevent  it.  These 
resolve  themselves  into  the  misconduct  of  the  insolvent;  and 
are  mainly  his  generally  fraudulent  acts,  or  specifically  his  con- 
cealment of  effects,  or  preference  in  contemplation  of  insol- 
vency, (q) 


The  laws  of  New  York  upon  this  subject 
differ  in  important  respects  from  those  of 
many  of  the  States.  We  give  a  few  of  its 
provisions,  as  abridged  from  the  statutes 
by  Chancellor  Kent:  "  The  insolvent 
laws  of  New  York  enable  the  debtor,  with 
the  assent  of  two  thirds  in  value  of  his 
creditors,  and  on  tiie  due  disclosure  and 
surrender  of  his  property,  to  be  discharged 
from  all  his  debts  contracted  within  the 
State,  subsequently  to  the  passing  of  the 
insolvent  act,  and  due  at  the  time  of  the 
assignment  of  his  property,  or  contracted 
before  that  time,  though  payable  after- 
wards. The  creditor  who  raises  objec- 
tions to  tlie  insolvent's  discharge  is  enti- 
tled to  have  his  allegations  heard  and  de- 
termined by  a  jury.  The  insolvent  is  de- 
prived of  the  benefit  of  a  discharge,  if, 
knowing  of  his  insolvcnc}',  or  in  contem- 
plation of  it,  he  lias  made  any  assignment, 
sale,  or  transfer,  cither  absolute  or  condi- 
tional, of  any  jiart  of  his  estate,  or  lias 
confessed  judgment,  or  given  any  security 
with  a  view  to  give  a  preference  for  an 
antecedent  debt  to  any  creditor.  The  dis- 
ciiarge  a|)pli('s  to  all  debts  founded  upon 
contracts  made  witliin  flie  State,  or  to  be 
executed  witiiiii  it;  and  for  debts  due  to 
jiersons  resident  within  tiie  State  at  the 
time  of  tiie  publication  of  notice  of  the 
application  for  a  discliarge ;  or  to  per- 
sons not  residing  within  the  State,  but 
who  united  in  the  petition  for  bis  dis- 
charge, or  who  accept  a  dividend  from  liis 
estate."  Tor  the  construction  of  tin;  New 
York  statute,  on  ibis  subject,  see  Stanton 
V.  Ellis,  2  Kern.  .'iT.').  See  1  J-aw  lUji. 
273. 

(7)  The    grounds  oil   which   the  bank- 

[701] 


rupt's  certificate  and  discharge  may  be  dis- 
allowed are  various.  Those  which  were 
adopted  in  the  late  national  act,  are  sub- 
stantially the  same  with  those  which  oc- 
cur in  the  statutes  in  general.  The  dis- 
charge may  be  disallowed  :  —  1 .  When  a 
majority  of  creditors,  in  number  and  value, 
who  proved  their  debts,  file  their  written 
dissent  to  the  granting  the  certificate. 
2.  When  the  bankrupt  has  been  guilty  of 
any  fraud,  or  wilful  concealment  of  his 
property  or  rights  of  property.  3.  Or 
shall  have  preferred  any  of  his  creditors 
contrary  to  the  provisions  of  the  statute. 
4.  Or  shall  have  wilfully  omitted  or  re- 
fused to  comply  with  any  orders  or  direc- 
tion of  the  court,  or  conform  with  any 
other  requisition  of  the  act.  5.  Or  shall 
in  the  proceedings  under  the  act,  have  ad- 
mitted a  false  or  fictitious  debt  against  his 
estate.  6.  Or  (being  a  merchant,  banker, 
factor,  broker,  underwriter,  or  marine  in- 
surer) shall  not  have  kept  proper  books  of 
accounts   after    the   passing  of   the   act. 

7.  Or  shall  have  applied  trust  funds  to  his 
own    use   since   the   passing   of  the   act. 

8.  Or  (the  application  being  voluntary) 
shall  after  the  first  of  January,  1841,  or  at 
any  other  time  in  contemplation  of  the 
passage  of  a  bankrujit  law,  by  assignment 
or  otherwise,  have  given  or  secured  any 
preference  to  one  creditor  over  another. 
In  the  matter  of  Alonzo  Pcarce,  G  Law  R. 
201,  was  a  case  in  which  Judge  Prentiss 
learnedly  discussed  the  objections  to  a  dis- 
cliarge. See  also,  the  cases  citid  on  the 
subjects  of  conveyances  in  contemplation 
of  bankruptcy,  and  fraudulent  preferences, 
dull'.  In  the  matter  of  Wilson,  6  Law 
Kcp.  272.     If  the  debtor  give  a  creditor  a 


CH.  X.] 


BANKRUPTCY   AND   INSOLVENCY. 


679 


In  former  parts  of  this  book  we  have  stated  as  a  general  rule, 
that  no  creditor  is  permitted  to  obtain  an  undue  advantage  over 
another.  If  one  is  promised  any  advantage  if  he  will  sign,  in 
order  that  his  signature  may  bring  in  others,  this  promise  is 
illegal  and  void.  And  in  general  any  act  of  the  insolvent  or  the 
assignee,  which  secures  to  any  one  or  more  creditors  advantages 
over  the  rest,  would  not  only  be  ineflectual  at  law,  but  would, 
if  the  insolvent  were  in  fault,  prevent  him  having  a  discharge,  (r) 

The  statutes  sometimes  specify  with  great  minuteness  what 
the  discharge  shall  do ;  and  against  what  creditors  or  claims  it 
shall  be  effectual.  Aside  from  these  provisions,  it  may  be  con- 
sidered as  a  universal  rule,  that  this  discharge,  or  certificate, 
operates  fully  against  all  creditors  whose  debts  were  actually 
proved.  It  is  as  certain,  perhaps,  that  it  does  not  affect  debts 
which  were  not  proved,  because  they  could  not  be  proved  from 
their  own  nature.  Q)     The  law  may  not  be  so  certain  as  to 


note,  to  induce  him  to  withdraw  opposi- 
tion to  his  discharge,  the  discharge  will 
be  avoided.  Bell  v.  Leggett,  3  Seld.  176 ; 
Ruckman  v.  Cowell,  1  Comst.  505.  But 
it  will  not  be  avoided  because  the  debtor 
paid  money  to  counsel  for  advice,  though 
the  debtor  neglected  to  publish  the  fact. 
Lyon  V.  Marshall,  1 1  Barb.  241 .  Nor,  it 
has  been  held  in  New  York,  by  payments 
in  contemplation  of  bankruptcy  in  fraud 
of  the  bankrupt  law,  after  certificate  grant- 
ed. Caryl  v.  Russell,  18  Barb.  429  ;  N. 
A.  Fire  Ins.  Co.  v.  Graham,  5  Sandf. 
197  ;  but  see  Breton  o.  Hull,  1  Denio,  75  ; 
Chamberlin  v.  Griggs,  3  Denio,  9.  As  to 
how  the  validity  of  such  discharges  may 
be  contested  in  chancery,  see  Penniman  v. 
Norton,  1  Barb.  Ch.  246  ;  Alcott  y.  Avery, 
id.  347. 

(r)  In  addition  to  the  cases  cited  supra, 
see  also.  Rice  v.  Maxwell,  13  Smedes  & 
M.  289 ;  Wells  v.  Girling,  1  Brod.  &  B. 
447 ;  Stock  v.  Mawson,  1  B.  &  P.  286 ; 
Thomas  v.  Courtnay,  1  B.  &  Aid.  1  ; 
Cecil  V.  Plaistow,  1  Anst.  202  ;  Howden 
V.  Haigh,  11  A.  &  E.  1033;  Wilson  v. 
Ray,  10  id.  82  ;  Took  v.  Tuck,  4  Bing. 
224  ;  Knight  v.  Hunt,  5  Bing.  432  ;  Brit- 
ten V.  Hughes,  id.  460  ;  Leicester  y.  Rose, 
4  East,  372 ;  Cockshott  v.  Bennett,  2  T. 
R.  763  ;  Jackson  v.  Duchaire,  3  id.  551  ; 
Jackson  i'.  Lomas,  4  id.  166  ;  Holmer  v. 
Viner,  1  Esp.  131  ;  Butler  v.  Rhodes,  id. 
236;  Steinman  v.  Magnus,  11  East,  390; 


Feise  v.  Randall,  6  T.  R.  146  ;  Hawley  v. 
Beverley,  6  Man.  &  G.  221  ;  Gibson  v. 
Bruce,  5  id.  399.  And  in  an  action  against 
a  defendant,  to  recover  moneys  alleged  to 
have  been  paid  him  by  the  bankrupt,  in 
fraud  of  the  bankrupt  laws,  &c.,  the  judge 
assuming  that  there  was  importunity  and 
pressure  on  the  part  of  the  defendant,  left 
it  to  the  jury  to  say  whether  the  bankrupt 
had  made  these  payments  in  consequence 
of  such  importunity  and  pressure,  or  with 
a  view  of  giving  defendant  a  fraudulent 
preference  in  contemplation  of  bankruptcy, 
it  was  held,  that  the  defendant  had  no 
right  to  complain  of  this  direction.  Cook 
V.  Pritchard,  5  Man.  &  G.  329  ;  Bryant  v. 
Christie,  1  Stark.  329. 

(s)  Where  an  action  had  been  brought 
upon  a  debt,  and  before  judgment,  the 
debtor  took  advantage  of  the  insolvent  law, 
and  afterwards  the  creditor  proceeded  to 
judgment,  it  was  held  that  the  original 
debt  was  not  provable  under  the  insol- 
vency, because  merged  in  the  judgment, 
and  that  the  judgment  was  not  prova- 
ble, because  not  in  existence  at  the  time 
of  the  publication  of  the  notice  of  issuing 
the  warrant,  but  that  the  judgment  debt, 
being  thus  in  its  nature  incapable  of  proof, 
would  be  a  valid,  and  subsisting  claim 
against  the  insolvent.  Sampson  r.  Clark, 
2  Cush.  173.  See  for  the  English  doc- 
trine on  this  point.  Ex  parte  Birch,  4  B.  & 
C.  880 ;  Greenway  v.  Fisher,  7  id.  436 ; 

[705] 


680 


THE  LAW   OF   CONTRACTS. 


[part  II. 


those  of  a  third  class  ;  those  which  might  have  been  proved, 
but  were  not  so  in  fact.  We  hold,  however,  that  the  better 
reasons  and  the  weightier  authority  lead  strongly  to  the  conclu- 
sion that  all  such  debts  are  barred,  (t)  And  that  the  statutes  of 
insolvency  may  have  their  full  beneficial  effect  as  statutes  of 
repose,  we  should  extend  them  even  to  debts  which  were  not 
proved  by  reason  of  some  personal  hinderance  or  ignorance  of 
the  creditor,  but  which  were  in  their  own  nature  provable,  (m) 

If  the  certificate  was  granted  when  it  ought  not  to  have 
been,  or  if  it  can  be  impeached  on  other  grounds,  and  such  a 
certificate  is  offered  in  bar  to  a  suit  by  a  creditor,  the  plaintiff" 
will  not  be  prevented  from  impeaching  it  by  the  mere  fact  that 
he  had  proved  his  debt,  (v) 


Kellogg  V.  Schuyler,  2  Denio,  73  ;  Thomp- 
son V.  Hewitt,  6  Hill,  254 ;  Buss  v.  Gil- 
bert, 2  M.  &  S.  70 ;  Ex  parte  Charles, 
16  Ves.  256;  May  v.  Harvey,  14  East, 
197  ;  Crouch  v.  Gridlcy,  6  Hill,  252  ;  Hen- 
dricks V.  Judah,  2  Caines,  25  ;  Bosler  v. 
Kuhn,  8  Watts  &  S.  183;  Savory  v. 
Stocking,  4  Cush.  607. 

(t)  "  The  enactments  of  the  bankrupt 
law  treat  the  bankrupt  as  the  legal  owner 
of  the  property  up  to  the  issuing  of  the  de- 
cree, and  tie  down  the  title  of  the  assignee 
to  that  time,  so  as  to  preclude  its  relation 
back.  All  the  property  then  owned  by 
the  bankrupt  passes  to  and  vests  in  the 
assignee,  and  consequently  all  debts  ex- 
isting before  and  at  tiic  date  of  the  decree 
are  provable  under  the  bankruptcy,  and 
all  debts  up  to  that  time  barred  by  the 
bankrupt's  certificate  of  discharge."  Pren- 
tiss, J.,  in  Downer  v.  Brackctt,  5  Law 
Kep.  392,  399  ;  Fisher  v.  Currier,  7  Met. 
424 ;  Graham  v.  Pierson,  6  Hill,  247 ; 
Davis  V.  Shaidcy,  1  B.  &  Ad.  54  ;  Fox  v. 
AVoodruir,  9  15arb.  498  ;  llubbell  v.  Cramp, 
11  I'aige,  .'ilO;  Jemison  r.  Blowers,  5 
Barb.  686,  where  it  was  held  that  a  cove- 
nant in  a  deed  for  (piict  enjoyment,  was 
provable  in  its  ciuiracter,  and  tliereforo 
Ijarrcd.  But  not  a  tine  imposed  liy  the 
Court  of  Cliaticcry  f(jr  violation  of  an  in- 
junction. Spalding  v.  The  I'coplc,  7  Hill, 
301.  It  seems  that  a  fiduciary  debt, 
which  is  ex(c|)ted  from  the  operation  of 
the  lja)ikni|)t  law,  may  be  proved  or  not 
at  the  option  of  tlie  creditor.  If  it  is 
proved,  it  is  barred.  If  not,  the  certificate 
of  discharge  has  no  effect  wiiatevcr  on  tlie 

[700] 


existence  of  the  debt.  In  the  matter  of 
Tebbetts,  5  Law  Rep.  259 ;  Morse  v. 
Lowell,  7  Met.  152;  Chapman  v.  Forsyth, 
2  How.  202. 

(u)  As  to  the  effect  of  an  election  to 
prove,  by  a  creditor  residing  in  another 
State,  see  ante,  sect.  2,  note  (j),  p.  591, 
where  the  cases  are  fully  cited. 

((')  "  The  creditors  of  an  insolvent  may 
well  prove  their  claims  and  receive  their 
dividends,  upon  the  assumption  that  the 
insolvent  has  in  all  respects  truly  con- 
formed to  the  requisites  of  the  laws,  that 
he  has  concealed  no  effects,  and  made 
no  conveyances  for  the  purpose  of  giving 
preferences,  nor  in  any  way  violated  the 
principles  of  a  full  and  equal  distribution 
of  his  effects.  Acting  upon  this  assump- 
tion, the  creditor  may  prove  his  claim, 
and  receive  his  dividend,  without  preju- 
dice to  his  rigiit  to  avoid  the  discharge  of 
tiie  insolvent,  if  future  developments  shall 
show  the  commission  of  tliose  acts,  or  the 
neglect  of  those  duties,  on  the  part  of  the 
debtor,  by  reason  of  which  his  discharge 
is  rendered  invalid.  It  is  no  part  of  the 
duty  of  the  creditor  to  assume  in  advance 
tiuu  the  debtor  has  been  guilty  of  fraudu- 
Icnts  acts,  in  violation  of  tlie  insolvent 
laws,  and  to  regulate  his  conduct  by  such 
))rcsumption.  He  may,  tlierefore,  prove 
his  claim  and  receive  a  dividend,  without 
comproniitting  his  furtiier  right  to  enforce 
payment  of  the  residue  of  his  demand,  if 
tiie  debtor  has  obtaiiUMl  his  discbarge 
under  such  circumstances  as  to  render  it 
invalid  in  law."  JJaccij,  J.,  in  Morse  v. 
Reed,  13  Met.  62. 


CH.  X.]  BANKRUPTCY   AND   INSOLVENCY.  681 


SECTION     XIV. 

OF   PRIVILEGED    OR   PREFERRED   DEBTS. 

While  the  whole  purpose  of  the  insolvent  law  is  to  put  all 
the  creditors  upon  exactly  the  same  footing,  there  are  still  some 
debts  or  claims  which  are  preferred  by  law,  and  paid  in  full. 
These  vary  in  the  different  States.  Generally  they  may  be 
said  to  be,  all  amounts  due  to  the  United  States  ;  (w)  all  that 
are  due  to  the  State  in  which  the  insolvent  resides,  and  the  in- 
solvency takes  place ;  and  a  certain  limited  amount  due  for 
labor  or  personal  service  rendered  within  a  brief  period  before 
the  insolvency.  To  these  are  sometimes  added  the  costs  of 
attachments,  or  other  costs  which  have  been  terminated  by  the 
insolvency. 


It  has  been  found  peculiarly  difficult  to  collect  and  arrange 
the  cases  on  the  subject  of  bankruptcy  and  insolvency  in  a  sat- 
isfactory manner.  The  decisions  are,  to  so  great  an  extent, 
founded  on  the  special  provisions  of  statutes,  that  it  has  seldom 
been  easy  to  extract  from  them  what  might  properly  be  termed 
a  general  principle.  Hundreds  of  cases  have  been  examined, 
which  have  proved  wholly  useless  for  the  general  purposes  of  a 
text-book,  for  it  has  been  our  aim  to  insert  such  and  such  only, 
as  should  elucidate  in  some  measure  the  principles  relating  to 
this  subject. 

It  will  be  seen  that  a  majority  of  cases  cited  are  from  the 
English  books.     The  reason  is,  that  the  American  cases  rest  to 

(iv)  United  States  v.  King,  J.  B.  Wal-  debtor,  his  lands  and  effects,  present  and 

lace,  13.     TUghman,  C.  J. :    "  Upon  the  future,  are  liable  to  actions  and  remedies 

best  consideration  which  the  circumstances  for  their  recovery,  as  before  the  passing 

will  permit  us  to  bestow  on  the  point,  we  of  that  act."     United  States  v.  Hewes,  2 

are   of   opinion,   that  debts   due   to   the  Law  Rep.  329  ;  United  States  v.  Wilson, 

United  States  are  not  within  the  provis-  8  Wheat.  253. 
ions  of  the  bankrupt  law ;  but  that  the 

[707] 


682  THE  LAW  OF  CONTRACTS.  [PART  II. 

a  much  greater  extent  than  the  English,  on  the  special  provision 
of  the  statutes.  Few  statutes  have  been  cited,  but  the  English 
Consolidated  Bankrupt  Act,  12  &  13  Vict.  c.  106,  and  the  late 
United  States  Bankrupt  Act  have  been  often  referred  to.  The 
one  presents  very  strongly  and  clearly  the  present  English  doc- 
trine on  this  subject ;  and  the  other  may  be  said  to  be  the  best 
illustration  which  any  one  American  statute  affords,  of  the  leg- 
islation on  this  side  the  Atlantic. 

[  708  ]  • 


CII.  XI.]  CONSTITUTION   OF   THE   UNITED    STATES.  6S3 


CHAPTER    XL 


THE  CONSTITUTION  OF  THE  UNITED  STATES. 

Sect.  1.  —  What  are  Contracts,  luithin  the  clause  respecting  the 
obligation  of  them  ? 

In  the  tenth  section  of  the  first  article  of  the  Constitution  of 
the  United  States,  it  is  provided  that  "  no  State  shall  .  .  pass 
any  .  .  law  impairing  the  obligation  of  contracts."  {x)  Under 
this  clause  two  questions  of  great  importance  have  been  agi- 
tated. One  is,  what  is  a  contract  within  the  meaning  of  this 
section  ?  [ij)  The  second  is,  what  operation  upon  or  interfer- 
ence with  a  contract,  is  to  be  considered  as  impairing  the  obli- 
gation thereof?  Neither  question  has  received  a  positive  and 
universal  answer,  settling  by  definition  all  the  subordinate  ques- 
tions which  may  arise  under  it.  But  we  have  authoritative  and 
instructive  adjudication  upon  both. 

It  seems  to  be  settled  conclusively,  that  a  grant  is  a  contract ; 
executed,  it  is  true,  but  still  a  contract ;  and  that  it  comes  within 
the  scope  of  this  provision  ;  [z)  and  therefore  if  there  be  a  grant, 

{x)  This  clause  docs  not  apply  to  laws  powered  to  make  it,  cannot  be  revoked  by 

enacted  by  the  States  before  the  first  Wed-  its  successor.     See   Fletcher  v.   Peck,  6 

nesday  of 'March,  1789 — the  day  when  the  Cranch,  87,  136.     Marshall,  G.  J.:  "A 

constitution  of  the  United  Stares  went  into  contract  is  a  compact  between  two  or  more 

operation.     Owin^s  v.  Speed,  .5  Wiieat.  parties,  and  is  either  executory  or  execu- 

420.     Nor   does   it   affect  the   powers  of  ted.     An   executory   contract   is   one   in 

Congress.      Evans  v.  Eaton,  Pet.  C.  C.  which  a  party  binds  himself  to  do,  or  not 

322.  to  do,  a  particular  thing ;  such  was  the  law 

(y)  "The  provision  of  the  constitution  under  which  the  conveyance  was  made  by 

never  has   been   understood   to   embrace  the  governor.     A  contract  executed  is  one 

other  contracts  than  those  which  respect  in  which  the  object  of  the  contract  is  per- 

propertj/,  or  some  object  of  value,  and  confer  formed  ;  and  this,  says  Blackstone,  differs 

rights  which  may  be  asserted  in  a  court  in  nothing  from  a  grant.      The  contract 

of  justice."    Dartmouth  College  v.  Wood-  between  Georgia  and  the  purchasers  was 

ward,  4  Wheat.  518;  per  Marshall,  C.  J.,  executed  by  the  grant.     A  contract  exe- 

629.  cuted,  as  well  as  one  which  is  executory, 

{z)  Therefoi-e  the  grant  of  lands  by  the  contains  obligations  binding  on  the  paV- 

legislature  of  a  State,  constitutionally  em-  ties.     A.  grant,  iu  its  own  nature,  amounts 

VOL.  II.  6)  [709] 


684 


THE   LAW    OF   CONTRACTS. 


[part  II. 


in  itself  valid,  any  law  which  is,  or  permits,  a  direct  interference 
with  the  enjoyment  of  the  things  granted,  or  a  diminution  of 
their  value,  or  any  deprivation  of  the  things  granted,  or  of  the 
rights  or  interests  belonging  to  them,  by  the  grantor,  impairs 
the  obligation  of  the  contract,  (a) 

This  must  be  true,  in  general ;  but  it  must  also  be  subject  to 
some  important  qualifications.  For  the  exercise  of  the  ordi- 
nary powers  of  government,  which  it  could  not  have  been 
intended  to  take  away  or  control  by  this  provision,  may  often 
have  the  effect  of  diminishing  the  value  of  things  previously 
granted.  Thus,  if  a  State  sold  a  piece  of  land  for  two  dollars 
an  acre,  and  soon  after  sold  similar  and  adjoining  land,  differ- 
ing in  no  respect  from  the  first,  for  one  dollar  an  acre,  and  an- 
nounced this  as  its  price,  the  market  value  of  the  lands  first  sold 
would  fall,  perhaps,  one  half;  yet  no  one  could  doubt  that  the 
State  had  a  right  to  make  this  second  sale.     But  it  is  easy  to 


to  an  extinguishment  of  the  right  of  the 
grantor,  and  implies  a  contract  not  to  re- 
assert tliat  right.  A  party  is,  therefore, 
always  estopped  by  his  own  grant.  Since, 
then,  in  fact,  a  grant  is  a  contract  execu- 
ted, the  obligation  of  which  still  continues; 
and  since  the  constitution  uses  the  general 
term  contract,  without  distinguishing  be- 
tween those  which  are  executory  and 
those  which  are  executed,  it  must  be  con- 
strued to  comprehend  the  latter  as  well 
as  the  former.  A  law  annulling  convey- 
ances between  individuals,  and  declar- 
ing that  the  grantors  should  stand  seised 
of  their  former  estates,  notwitlistanding 
those  grants,  would  be  as  repugnant  to 
the  constitution  as  a  law  discharging  the 
vendors  of  property  from  the  obligation 
of  executing  their  contracts  by  convey- 
ances. It  would  be  strange  if  a  contract 
to  convey  was  secured  i)y  the  constitution, 
while  an  al)S()lute  conveyance  remained 
unprotected.  If,  under  a  fair  construction 
of  the  constitution,  grants  are  compre- 
hended under  the  term  contracts,  is  a 
grant  from  the  State  excluded  from  the 
oi)eration  of  this  provision  ?  Is  the  clause 
to  be  considered  as  iiibibiling  tlie  State 
from  impairing  the  obligation  of  contracts 
between  two  individuals,  iiut  as  excluding 
from  that  inhildtion  contracts  made  with 
itself?  The  words  themselves  contain 
no  such  distinction.  They  are  general, 
and   are  applical)lc  to  c(mtracts  of  aviivy 


description.  If  contracts  made  with  the 
State  are  to  be  exempted  from  their  oper- 
ation, the  exception  must  arise  from  the 
character  of  the  contracting  party,  not 
from  the  words  which  are  employed. 
Whatever  respect  might  have  been  felt 
for  tlie  State  sovereignties,  it  is  not  to  be 
disguised  that  the  framers  of  the  constitu- 
tion viewed,  with  some  apprehension,  the 
violent  acts  which  might  grow  out  of  the 
feelings  of  the  moment;  and  that  the  peo- 
ple of  the  United  States,  in  adopting  that 
instrument,  have  manifested  a  determina- 
tion to  shield  tliemselves  and  their  prop- 
erty from  the  effects  of  those  sudden  and 
strong  passions  to  which  men  are  exposed. 
The  restrictions  on  the  legislative  power  of 
the  States  arc  ol)viously  founded  in  this  sen- 
timent ;  and  the  constitution  of  the  United 
States  contains  what  nnty  be  deemed  a 
bill  of  rights  for  the  people  of  each  State." 
Dartmouth  College  r.  Woodward,  4 
Wiieat.  650,  per  Waslmigton,  J. ;  Reho- 
both  V.  Hunt,  1  Pick.  224 ;  Lowry  v. 
Francis,  2  Yerg.  .534  ;  Butler  v.  Chariton 
County  Court,  1.'5  Mo.  112.  So  where 
the  grant  is  to  a  corporation  the  State 
cannot  revoke  it ;  Terrett  v.  Taylor,  9 
Cranch,  4.3  ;  Wilkinson  v.  Leland,  2  I'et. 
C)?.  See  Den  d.  University  of  North 
Carolina  v.  Foy,  1  Murph.  58. 

(n)  Winter    v.   Jones,     10    Ga.     190; 
I'lantcrs  Baidc  v.  Sharp,  G  How.  301,  327. 


[710] 


CH.  XI.]  CONSTITUTION    OF   THE   UNITED    STATES.  685 

proceed  from  this  question,  to  which  the  answer  is  obvious,  to 
others  in  which  it  is  more  difficult.  And  all  we  can  say,  on 
authority,  upon  the  general  question,  what  limits  are  imposed 
upon  the  operation  of  the  clause  under  consideration,  by  the  ne- 
cessity of  leaving  unimpaired  all  the  functions  of  government 
and  the  control  by  the  public  of  all  public  interests,  would  seem 
to  be  this:  we  may  say,  that  the  clause  is  not  intended  to  apply 
to  public  property,  to  the  discharge  of  public  duties,  to  the  pos- 
session or  exercise  of  public  rights,  nor  to  any  changes  or  quali- 
fications in  any  of  these,  which  the  legislature  of  a  State  may  at 
any  time  deem  expedient,  (b)  This  rule  seems  to  spring  from 
an  obvious  necessity;  but  it  rests  also  upon  an  obvious  and 
sufficient  reason.  This  is,  that  in  relation  to  public  property, 
there  is  no  grant;  no  contract  whatever,  executed  or  executory. 
By  such  an  act,  the  public,  by  the  legislature,  which  is  its 
agent,  gives  something  of  its  own,  to  somebody  else  who  is  also 
its  agent.  Nothing  then,  in  fact,  is  given  ;  for  nothing  goes 
forth  from  the  public.  The  whole  transaction  amounts  to  no 
more  than  a  change  made  by  the  public,  in  the  manner  in 
which,  or  the  agents  by  whom,  it  shall  continue  to  hold  and  use 
a  certain  portion  of  its  property  or  interests.  The  very  essence 
of  a  contract  —  two  parties,  with  mutual  obligations  —  is  want- 
ing ;  and  it  is  therefore  no  contract  at  all.  Therefore  all  politi- 
cal powers  conferred  by  the  legislature  on  a  municipal  corpora- 
tion may  be  revoked,  (c)  But  on  the  other  hand,  if  private 
property  or  franchises  are  granted  to  a  municipal  corporation, 
this  grant  cannot  be  revoked,  nor  the  property  or  rights  con- 
ferred by  it  in  any  way  devested  by  the  State,  (d)  Nevertheless, 
the  State  does  not  lose  its  right  of  making  laws  concerning 

(/))  Dartmouth  College    v.  Woodward,  325 ;  Marietta  v.  Fearing,  4  Ohio,  427 ; 

4   Wheat.    518,    629.     Marshall,   C.  J.:  Terrett  v.  Taylor,  9  Cranch,  43  ;  Bradford 

"  That  the  frarners  of  the  constitution  did  v.   Gary,    5    Greenl.   339,   342 ;    Bush   v. 

not   intend  to  restrain  the  States  in  the  Shipman,    4    Scam.     186;    Trustees    of 

regulation  of  their  civil  institutions,  adopt-  Schools  r.  Tatman,   13  111.  27;  Mills  v. 

ed  for  internal  government,  and  that  the  Williams,  11  Ired.  558. 
instrument  they  have  given  us  is  not  to         (d)  Terrett  i'.  Taylor,  supra;  Town  of 

be  so  construed,  may  be  admitted."     Phil-  Pawlet  v.   Clark,  9  Cranch,    292;   Dart- 

ips  V.  Bury,  2  T.  11.  352 ;  Knoup  v.  The  mouth  College  i\  Woodward,  4   Wheat. 

Piqua   Bank,    1    Ohio    State,   603,  609;  518;  Bailey  d.  The  Mavor  of  New  York, 

Toledo  Bank  v.  BonJ,  1  Ohio  State,  657,  3  Hill,  531  ;  Hazen  v.  The  Union  Bank 

per  Bartley,  C.  J.  of  Tennessee,  1  Sneed,  115. 


(c)  The  People  v.  Morris,  13   Wend. 


[711] 


686 


THE   LAW    OP   CONTRACTS. 


[part  II. 


the  things  granted,  so  far  as  they  remain  publlci  juris,  or  so 
far  as  it  sees  fit  to  provide  for  the  due  exercise  of  the  rights 
granted,  or  the  proper  use  of  the  property  granted,  for  the  public 
benefit  and  safety,  (e)  So  the  salary  and  tenure  of  an  office 
prescribed  by  law,  do  not  constitute  a  contract  which  is  pro- 
tected by  this  clause  in  the  constitution ;  and  they  may  there- 
fore be  modified  or  reduced  unless  this  is  prohibited  by  the  con- 
stitution of  the  State.  (/) 


(e)  In  Benson  v.  The  Mayor,  &c.  of 
New  York,  10  Barb.  223,  it  was  held  that 
feiTy  franchises  may  be  held  by  a  munici- 
pal corporation,  without  losing  their  char- 
acter as  private  property,  and  when  ac- 
cepted and  acted  upon  they  cannot  be 
resumed  by  the  State  ;  but  that  the  State 
is  not  excluded  from  legislation  touchinp; 
them,  so  far  as  they  are  puhlici  juris,  and 
may  pass  laws  to  secure  the  safety  of  pas- 
sengers and  protect  them  from  imposition, 
&c.  In  East  Hartford  v.  Hartford  Bridge 
Co.  10  How.  511,  s.  c.  17  Conn.  79, 
the  reasoning  of  Woodbury,  J.,  delivering 
the  opinion  of  the  court,  indicates  the 
opinion  that  ferry  franchises,  when  granted 
to  municipal  corporations,  are  public  priv- 
ileges, in  the  nature  rather  of  public  laws, 
than  of  contracts  to  be  modified  or  abol- 
ished by  the  legislature,  as  the  public  in- 
terests demand  ;  but  the  circumstances  of 
the  case  did  not  call  for  the  opinion,  as 
in  that  case  the  ferry  right  was  in  express 
terms  to  be  held  during  the  pleasure  of 
the  General  Assembly. 

(/)  Warner  v.  The  People,  2  Denio, 
272;  Conner  I'.  The  City  of  New  York,  2 
Sandf.  ."iS.'),  1  Selden,  28.5 ;  Knoup  v. 
The  Pirpia  Bank,  1  Uliio  State,  616,  per 
Convln,  J.  ;  Toledo  Bank  v.  Bond,  id. 
656  ;  Coinmonwealtii  v.  Bacon,  6  S.  &  II. 
322  ;  Commonwealth  v.  Mann,  5  Watts  & 
S.  418  ;  Barker  v.  Pittsburg,  4  Barr,  51  ; 
The  West  Jiivcr  Bridge  Co.  v.  l)ix,  6 
How.  548  ;  Butler  v.  I'ennsylvania,  10  id. 
402.  In  IS.'iO,  the  State  ofPennsylvania 
passed  a  law  directing  canal  commission- 
ers to  lie  a))p(jinted  annually  i)y  tiie  gov- 
ernor, and  tiiat  their  term  ofottice  should 
commi'iice  on  the  first  of  I'^clirunry  in 
every  year.  The  [)av  was  lixcd  liy  llic  law 
at  four  iIoMars  /xr  dinii.  In  April,  184."!, 
certain  jicisons  I)cing  then  in  otlico  as 
commissioners,  the  Icgislalnn;  passed  an- 
other law,  providing  amongst  otlier  tilings 
that  the  jur  (linn  should  lie  only  three  dol- 
lars ;  the    reiluction   to   take    ellect   u]M)n 

[7121 


the  passage  of  the  law ;  and  that  in  the 
following  October,  commissioners  should 
be  elected  by  the  people.  The  commis- 
sioners claimed  the  full  allowance,  during 
the  entire  year,  upon  the  ground  that  the 
State  had  no  right  to  pass  a  law  impair- 
ing the  obligation  of  a  contract.  It  was 
held  that  there  was  no  contract  between 
the  State  and  the  commissioners,  within 
the  meaning  of  the  constitution  of  the 
United  States.  Daniel,  J.:  "The' con- 
tracts designed  to  be  protected  by  the 
10th  section  of  the  first  article  of  that  in- 
strument, are  contracts  by  which  perfect 
rights,  certain  definite,  fixed,  private  rights 
of  property,  are  vested.  These  are  clearly 
distinguishable  from  measures  or  engage- 
ments adopted  or  undertaken  by  the  body 
politic  or  State  government,  for  the  bene- 
fit of  all,  and  from  the  necessity  of  the 
case,  and  according  to  universal  under- 
standing, to  be  varied  or  discontinued  as 
the  public  good  shall  require.  The  selec- 
tion of  officers  who  are  nothing  more  than 
agents  for  the  effectuating  of  such  public 
purposes,  is  matter  of  public  convenience 
or  necessity,  and  so  too  are  the  periods 
for  the  appointment  of  such  agents ;  but 
neither  the  one  nor  the  other  of  these  ar- 
rangements can  constitute  any  obligation 
to  continue  such  agents,  or  to  reappoint 
them,  after  the  measures  which  brought 
them  into  being  shall  have  been  found 
useless,  shall  have  been  fulfilled,  or  shall 
have  iieen  abrogated  as  even  detrimental 
to  the  well-being  of  the  public.  The 
promised  compensation  for  services  actu- 
ally performed  and  accejited,  during  the 
continuance  of  the  jiarticular  agency,  may 
undoubtedly  be  claimed,  both  u|Hin  ]>rin- 
ciplcs  of  couiiiact  and  of  e(|uily  ;  but  to 
insist  beyond  this  on  the  perpetuation  of 
n  public  policy  either  useless  or  detrimen- 
tal, and  upon  a  reward  for  acts  neither 
desired  nor  jierformed,  would  appear  to 
be  reconcilable  with  neither  common  jus- 
tice nor  common  sense.     The  establish- 


CH.  XI.]       CONSTITUTION  OF  THE  UNITED  STATES.  687 

The  reason  for  the  difference,  as  to  the  operation  of  this  sec- 
tion upon  public  and  upon  private  property,  will  also  help  us  to 
answer  the  next  question :  What  is  private  property,  in  this 
sense  and  for  this  purpose  ?  The  answer  is,  any  thing  and 
every  thing  which  has  gone  out  of  the  public,  by  its  grant  or  its 
sanction.  To  determine  any  particular  case,  therefore,  we 
should  take  the  instrument  referring  to  the  property,  whether  it 
be  a  statute  or  any  thing  else,  and  ask  whether,  if  read  ration- 
ally and  honestly,  it  leaves  the  usufruct  of  the  property  and  in- 
terests substantially  in  the  possession,  or  the  management 
thereof  within  the  control  of  the  public,  by  such  agents  as  it  may 
appoint,  or  not.  If  it  does,  then  it  is  public  property,  and  this 
clause  does  not  attach  ;  if  it  does  not,  then  it  is  private  property, 
and  this  clause  does  attach. 

Thus,  it  has  been  very  solemnly  and  we  hope  authoritatively 
decided,  that  a  corporation  is  a  person  who  may  take  a  grant 
as  well  as  any  individual;  that  a  corporation,  created  by  the 
legislature,  or  adopted  by  the  legislature,  and  endowed  with 
certain  powers  and  functions  and  property,  the  legislature  re- 
serving no  interest  in  what  is  given  them,  and  no  control  over 
the  succession  of  persons  who  form  the  corporation,  or  over  the 
exercise  of  their  functions,  —  such  a  corporation  is  a  private 
corporation,  to  whom  a  franchise  has  been  given,  by  a  grant, 
which  is  an  executed  contract,  and  that  any  deprivation  of  their 
property,  or  any  disturbance  or  denial  of  their  rights  and  func- 
tions, impairs  the  obligation  of  the  contract.  And  if  the  legis- 
lature have  reserved  to  themselves  rights  in  the  creation  of  such 

ment  of  such   a  principle   would   arrest  competent  government,  there  must  exist 

necessarily  every  thing  like   progress   or  a  general  power  to  enact  and  to  repeal 

improvement  in  government ;   or  if  such  laws ;  and  to  create,  and  change  or  dis- 

changes   should    be   ventured   upon,  the  continue,   the   agents  designated  for  the 

government  would  have  to  become  one  execution  of  those  laws.     Such  a  power 

great  pension  establishment  on  which  to  is  indispensable  for  the  preservation  of  the 

quarter   a  host  of  sinecures.      It  would  body  politic,  and  for  the  safety  of  the  in- 

especially  be  difficult,  if  not  impracticable,  dividuals  of  the  community."     See  Allen 

in  this  view,  ever  to  remodel  the  organic  v.  McKeen,  1  Sumner,  276.     See  also,  in 

law  of  a  State,  as  constitutional  ordinances  Whillington  t;.  Polk,  1  Harris  &  J.  2.36; 

must  be  of  higher  authority  and  more  im-  a  strange  case  in   which   Luther  Martin 

mutable  than  common    legislative  enact-  brought  an  action  on  an  assize  sur  novel 

ments,  and  there  could  not  exist  conflict-  disseisin,  to  maintain  the  right  of  a  judge 

ing   constitutional  ordinances  under  one  to  his  seat,  after  the  court  had  been  de- 

and  the  same  system.     It  follows,  then,  stroyed  by  a  statute  repealing  that  under 

upon  principle,  that  in  every  perfect  or  which  the  judge  was  appointed. 

60*  [713] 


688 


THE   LAW   OP   CONTRACTS. 


[part  II. 


corporation,  or  in  any  grant  to  them,  these  reservations  are  to 
be  strictly  followed  ;  whatever  lies  without  them  being  as  if 
there  were  no  reservations  whatever,  (g-) 

That  the  charters  of  private  civil  corporations,  —  of  which 
banks,  or  insurance,  turnpike,  and  railroad  companies,  are  lead- 
ing instances,  —  are  contracts,  protected  by  this  clause  in  the 
constitution  of  the  United  States,  seems  to  be  well  settled,  (/i) 


(r/)  Dartmouth  College  r.  Woodward, 
4  Wheat.  519.  The  law  of  this  case  is, 
that  an  eleemosynary  corporation,  founded 
by  private  contributions  for  the  distribu- 
tion of  a  general  charity,  is  not  an  instru- 
ment of  government  whose  officers  are 
public  officers,  but  a  private  corporation 
whose  charter  is  a  contract  between  the 
donors,  the  trustees,  and  the  government, 
founded  on  the  consideration  of  public 
benefit  to  be  derived  from  the  corporation, 
which  cannot  be  altered,  amended,  or 
modified  l)y  the  State,  without  the  consent 
of  the  corporation.  It  also  decides  that 
the  charters,  granted  by  the  crown  before 
the  Revolution,  are  within  this  principle, 
except  so  far  as  they  were  affected  by  the 
legislation  of  parliament  or  of  the  colonies, 
before  the  adoption  of  the  U.  S.  Constitu- 
tion ;  and  the  doctrine  that  civil  rights 
were  not  destroyed  by  the  Revolution,  is 
well  established.  Dawson  v.  Godfrey,  4 
Cranch,  323 ;  Terrett  v.  Taylor,  9  id.  43  ; 
Society,  &c.  v.  New  Haven,  8  Wheat.  464. 
The  case  of  Dartmouth  College  v.  Wood- 
ward has  been  often  affirmed,  both  in  the 
State  and  Federal  courts,  and  cited  as  an 
unquestionable  authority.  Trustees  of 
Vinccnnes  University  v.  Indiana,  14  How. 
268 ;  Norris  v.  Tlie  Trustees  of  Abingdon 
Academy,  7  Gill  &  J.  7  ;  Grammar  Soliool 
V.  Burt,'n  Vt.  C32  ;  Brown  v.  Hummel, 
f)  Barr,  86 ;  Tiie  State  v.  Heyward,  3 
Rich.  38'J.  It  is  insisted,  in  Toledo  Bank 
V.  Bond,  I  Oliio  State.  670-679,  that 
the  case  of  Dartmouth  College  v.  Wood- 
ward did  not  decide  t\iC  franchise  or  charter 
of  a  corporation  to  be  a  contract,  but  only 
that  tiie  ciriiiiiistarici'f;  of  the  rase  constituted 
a  cotitriirt  between  the  donors  and  the  cor- 
porators, for  the  conveyance  and  ]>erpetual 
application  of  jirivalc  property,  for  tiic 
purposes  of  tlic  trust  under  tlie  charter, 
and  tliat  lliis  contract  was  impaired  by  the 
State  laws,  which  did  not  merely  interfere 
witli  tlie  charter,  iuit  also  tiaiisCencd  the 
private  properly  held  by  the  liiistees  to 
another   corjioratiou  in    violation    of  the 

[714] 


terms  of  the  contract  by  which  the  trust 
had  been  created  and  tlie  property  in- 
vested. 

(h)  Thus  if  a  bank  has  by  its  charter  an 
express  or  implied  power  to  sell  and  trans- 
fer negotiable  paper,  a  law  taking  away 
this  power  impairs  the  obligation  of  a  con- 
tract, and  is  void.  Planters  Bank  v. 
Sharp,  6  How.  301 ;  The  People  v.  Man- 
hattan Co.  9  Wend.  351.  See  also.  Prov- 
idence Bank  v.  Billings,  4  Pet.  560 ; 
Turnpike  Co.  v.  Phillips,  2  Penn.  184; 
Claghorn  v.  Cullen,  13  Penn.  St.  133; 
Com.  Bank  of  Natchez  v.  The  State  of 
Mississippi,  6  Smedcs  &  M.  599  ;  Backus 
i\  Lebanon,  11  N.  H.  19;  Michigan  State 
Bank  v.  Hastings,  I  Doug.  225 ;  IMiners 
Bank  v.  United  States,  1  Greene,  Iowa, 
553 ;  Bank  of  the  State  v.  Bank  of  Cape 
Fear,  13  Ired.  75.  It  has  recently  l)een 
held  in  Ohio,  that  a  charter  is  a  legislative 
enactment,  subject  to  amendment  or  re- 
peal, possessing  the  form  and  essential 
elements  of  a  law,  and  not  those  of  a  con- 
tract, and  that  an  incorporated  banking 
institution  is  a  public  corporation  ap- 
pointed for  public  purposes,  subject  to  the 
control  of  the  public,  the  charter  of  which 
is  held  at  the  pleasure  of  the  sovereign 
power.  Mechanics  and  Traders  Bank 
?'.  Debolt,  1  Ohio  State,  591  ;  Toledo 
Bank  v.  Bond,  id.  622;  Knoup  r.  The 
I'iqua  Bank,  id.  603,  609.  Per  Coririn, 
J.:  "I  maintain  that  a  banking  institution 
is  A  public  institution,  appointed  for  public 
purposes ;  never  legitimately  created  for 
private  purposes,  its  creation  proceeding 
solely  upon  the  idea  of  piiblic  necessity  or 
public  eonvenicnee,  and  that,  being  ap- 
pointed by  the  public,  solely  for  public 
uses,  all  its  ojjcrations  are  subject  to  the 
control  of  that  public,  who  may,  from  time 
to  time,  as  the  public  good  may  rcipiirc, 
enlarge,  restrain,  limit,  modify  its  })owers 
and  duties,  and,  at  ])leasure,  disi)ense  with 
its  benelits.  The  agency,  dining  its  con- 
tinuance, is  C(iiially  independent,  within 
its  sphere,  and  upon  a  niodilicatiou  of  its 


CII.  XL]  CONSTITUTION    OF   THE   UNITED    STATES.  689 

But  any  charter  may  contain  within  it  an  express  reservation  to 
all  future  legislatures,  of  repeal  or  modification;  and  this  right 
may  be  secured,  as  to  all  subsequent  charters,  by  a  general  stat- 
ute relating  to  any  specified  class  of  corporations.  (?') 


SECTION    II. 

WHAT   RIGHTS   ARE   IMPLIED   BY   A    GRANT. 

It  is  an  important  question,  what  are  the  rights  or  interests 
which  are,  by  implicalion,  a  part  of  an  expressed  grant,  so  that 
interference  with  them  is  prohibited  by  this  clause.  One  answer 
would  be,  that  every  grant  must  be  construed  with  absolute 
strictness ;  and  nothing  whatever  be  added,  by  implication  or 
construction,  to  that  which  is  expressly  given.  Another,  that 
every  thing  which  is  requisite  for  the  full  enjoyment  and  most 
beneficial  use  of  the  thing  granted,  must  be  supposed  to  be  given 
with  the  grant,  or  be  contained  in  it;  for  it  shall  be  construed 
strictly  against  the  grantor,  and  the  grantee  has  a  right  to  the 
enjoyment,  in  fact,  of  the  whole  benefit  of  all  that  was  given. 
But  the  true  rule  would  permit  some  extension  of  the  grant  by 

terms  unsuited  to  its  pleasure,  the  agency  legislature,  without  the  consent  of  the 
itself  may  be  renounced  and  surrendered,  corporation.  Washington  Bridge  Co.  v. 
So  the  ri'ghts  of  the  agent  to  the  profits  The  State,  18  Conn.  53.  In  Massachu- 
and  emoluments  of  the  agency,  as  they  setts  there  are  statutes  as  to  banking  cor- 
may,  from  time  to  time,  be  prescribed,  porations,  others  as  to  manufacturing  cor- 
will  bo  sacredly  regarded  and  enforced  by  porations,  and  others  as  to  other  corpora- 
the  courts  of  justice  ;  but  like  every  other  tions,  which  would  certainly  operate  upon 
agency,  it  is  revocable  at  the  will  of  the  any  particular  charter,  as  if  a  part  of 
principal."  A  doctrine  not  wholly  unlike  it.  In  Stanley  v.  Stanley,  2G  Me.  191,  it 
this,  is  implied,  or  indeed  asserted,  in  But-  was  held  that  a  statute  making  the  stock- 
ier V.  Palmer,  I  Hill,  324.  There,  an  act  holders  liable  for  the  debts  of  the  corpora- 
passed  May  12,  1837,  gave  the  assignee  of  tion,  was  valid  in  respect  to  debts  subse- 
a  mortgagor  one  year  to  redeem  after  a  quently  contracted,  and  was  binding  on 
sale.  An  act  passed  April  18,  1838,  re-  one  who  became  a  member  of  the  corpo- 
pealcd  the  former  act,  the  repeal  to  take  ration  after  the  passage  of  the  act.  In 
effect  after  Nov.  1,  1838.  An  assignee  of  Williams  i-.  Planters  Bank,  12  Rob.  La. 
a  mortgagor,  on  Nov.  3,  but  within  one  125,  and  Payne  v.  Baldwin,  3  Smcdes  & 
year  from  the  sale  to  him,  offered  to  re-  M.  661,  it  is  held  that  banks  may  be  re- 
deem. But  it  was  held  that  he  was  barred  quired  to  receive  their  own  bank-notes  in 
by  the  repeal  of  the  first  act.  payment  of  debts  due  to  them,  although 

(i)  No  reservations  but  those  expressed  under  par  in  the  market. 
in   the  charter  can  be  introduced  by  the 

[715] 


690  THE   LAW   OF   CONTRACTS.  [PART  II. 

implication,  or  rather  would  construe  it  to  include  beside  all 
that  is  expressly  given,  whatever  else  is  strictly  necessary  to  any 
beneficial  use  of  the  thing  given,  and  would  stop  there.  It 
would  not  be  satisfied  with  a  merely  literal  fulfilment  of  the 
contract,  if  this  was  in  fact  no  actual  discharge  of  it  whatever, 
but  a  mere  evasion  of  its  provisions.  But  if  the  literal  construc- 
tion gave  some  beneficial  use  of  the  property  or  franchise,  the 
grantor  would  not  be  held  to  have,  bound  himself  by  implication 
from  such  further  action  as  might  prevent  this  use  from  being 
beneficial  to  the  extent  which  might  otherwise  have  been  at- 
tained, and  was  originally  expected,  (j) 

It  is  this  view  which  the  courts  seem  to  have  adopted.  And 
the  difficulties,  or  even  errors,  in  fact,  which  may  attend  the 
application  of  such  a  rule  to  the  circumstances  of  various  cases, 
are  not  sufficient  to  justify  a  denial  of  the  principle  itself,  which 
seems  to  be  rational  and  just.  For  if  the  grantee  wished  to 
secure  to  himself  all  possible,  or  even  probable  and  natural 
advantages,  it  was  his  business  to  ask  for  them.  And  if  he  did 
not,  it  was  his  neglect,  or  else  he  forbore  to  ask  lest  he  should 
be  denied,  preferring  to  rest  upon  construction  ;  and  this  con- 
duct would  certainly  be  entitled  to  no  favor.  And  it  is,  there- 
fore, not  too  much  to  say,  that  a  legislative  grant  shall  not  be 
held  to  intend  exclusive  privileges,  as  appurtenant  to  a  franchise 
expressly  given,  {k) 

(j)  United  States  r.  Arredondo,  6  any  power  of  the  State  is  said  to  be  sur- 
Pet.  736;  Bcaty  v.  Knowler,  4  id.  152;  rendered  or  diminished,  wlietlicr  it  be  the 
Providence  Banlc  v.  Billings,  id.  514;  taxing  power  or  any  other  affecting  the 
Jackson  v.  Lamphire,  3  id.  289  ;  Charles  public  interest,  the  same  principle  applies, 
River  Bridge  v.  Warren  Bridge,  1 1  id.  and  the  rule  of  construction  must  be  the 
.548.  Taneif,  C.  J.:  "The  continued  c.k-  same."  The  Ivichmond  R.  R.  Co.  r.  The 
istencc  of  a  government  would  be  of  no  Louisa  R.  R.  Co.  13  How.  81.  Per 
great  value  if,  by  implications  and  pre-  Grier,  J.:  "It  is  a  settled  rule  of  con- 
sumptions, it  was  disarmed  of  the  powers  struction  adopted  by  this  court  that  public 
necessary  to  accomplish  the  ends  of  its  grants  are  to  be  construed  strictly.  This 
creation  ;  and  the  functions  it  was  designed  act  contains  the  grant  of  certain  privileges 
to  (lorform,  transferred  to  the  hands  of  by  the  juiblic  to  a  private  corjjoration, 
piivilcgcd  corporations.  The  rule  of  con-  and  in  a  matter  where  the  public  interest 
Ktrui-tion  announced  tty  the  court  (referring  is  concerned  ;  and  the  rule  of  construction 
to  Providence;  15ank  v.  Billings),  was  not  in  all  siu-li  cases  is  now  fully  established 
confined  to  tin;  taxing  )>ower  ;  nor  is  it  so  to  be  this,  —  that  any  ambiguity  in  the 
limited  in  the  opinion  delivered.  On  the  terms  of  the  contract  must  operate  against 
contrarv,  it  was  distinctly  placed  on  tiic  the  corporation  and  in  favor  of  the  public; 
grouixl  that  the  interests  of  the  community  and  the  corporation  can  claim  nothing  but 
were  coneenii-d  in  preserving undiniiMisiied  what  is  clearly  given  by  the  act." 
the  jiower  then  ill  (juestion;  and  whenever  (Ic)  Charles   River  Bridge  v.  Warren 

[710] 


en.  XI.] 


CONSTITUTION   OF   THE   UNITED    STATES. 


691 


SECTION    III. 

OF   AN   EXPRESS    GRANT   OP   EXCLUSIVE   PRIVILEGES. 

We  thus  reach  another  question.     If  these  exclusive  privi- 
leges are  expressly  given,  how  does  this  clause  of  the  constitu- 


Bridge,  11  Pet.  420,  6  Pick.  376,  7  id. 
344.  In  this,  the  leading  case  on  this 
topic  of  constitutional  law,  the  legisla- 
ture of  Massachusetts,  in  1785,  granted 
a  charter  to  a  company  for  the  building 
of  a  bridge  over  Charles  River,  from 
Boston  to  Charlestown,  under  the  name 
of  the  Charles  Kiver  Bridge,  and  Taking 
tolls  of  persons  passing  over  it,  for  the 
term  of  forty  years,  extended  by  a  sub- 
sequent act  to  seventy  years.  In  1828, 
before  the  expiration  of  the  charter,  an  act 
was  passed  authorizing  the  erection  of  the 
Warren  Bridge  a  few  rods  from  the  former, 
■which  was  to  become  free  in  six  years. 
The  tolls  of  the  Charles  River  Bridge  were 
thereby  reduced  to  a  very  small  amount. 
It  was  held  that  the  grant  of  franchises  by 
the  public,  in  matters  where  the  public 
interests  are  concerned,  as  exemption  from 
taxation  and  the  right  of  the  State  to  open 
new  roads  and  construct  new  bridges,  are 
to  be  construed  strictly  ;  that  nothing 
passes  by  implication,  and  no  rights  are 
taken  from  the  public,  or  given  to  the  cor- 
poration, beyond  those  which  the  words 
of  the  charter,  by  their  natural  and  proper 
construction,  convey;  and  that  as  the 
charter,  in  its  terms,  granted  no  exclusive 
rights  above  and  below  the  bridge,  and 
contained  no  stipulation,  on  the  part  of 
the  State,  not  to  authorize  anotlier  bridge 
above  or  below  it,  no  such  exclusive  right 
of  the  plaintiff  company  could  be  implied. 
Taney,  C.  J.:  "It  may,  perhaps,  be  said, 
that  in  the  case  of  the  Providence  Bank, 
this  court  were  speaking  of  the  taxing 
power,  which  is  of  vital  importance  to  the 
very  existence  of  every  government.  But 
the  object  and  end  of  all  government  is  to 
promote  the  happiness  and  prosperity  of 
the  community  !)y  which  it  is  establislied  ; 
and  it  can  never  be  assumed  that  the 
government  intended  to  diminish  its  power 
of  accomplishing  the  end  for  which  it  was 
created.     And  in  a  country  like  ours,  free, 


active,  and  enterprising,  continually  ad- 
vancing in  numbers  and  wealth,  new 
channels  of  communication  are  daily  found 
necessary  both  for  travel  and  trade,  and 
are  essential  to  the  comfort,  convenience, 
and  prosperity  of  the  people.  A  State 
ought  never  to  be  presumed  to  surrender 
this  power,  because,  like  the  taxing  power, 
the  whole  community  iiave  an  interest  in 
preserving  it  undiminished.  And  when  a 
corporation  alleges  that  a  State  has  sur- 
rendered, for  seventy  years,  its  power  of 
improvement  and  public  accommodation, 
in  a  great  and  important  line  of  travel, 
along  which  a  vast  number  of  its  citizens 
must  daily  pass,  the  community  have  a 
right  to  insist,  in  the  language  of  this  court, 
above  quoted,  '  that  its  abandonment 
ought  not  to  be  presumed  in  a  case  in 
which  the  deliberate  purpose  of  the  State 
to  abandon  it  docs  not  appear.'  The  con- 
tinued existence  of  a  government  would 
be  of  no  great  value,  if,  by  implications 
and  presumptions,  it  was  disarmed  of  the 
powers  necessary  to  accomplish  the  ends 
of  its  creation,  and  the  functions  it  was 
designed  to  perform  transferred  to  the 
hands  of  privileged  corporations."  pp. 
547,  548.  Storjj,  J.,  in  a  dissenting  opinion 
of  great  length,  maintained  that  the  grant 
to  the  Charles  l^iver  Bridge  should  receive 
a  liberal  instead  of  a  strict  construction, 
and  that  there  was  necessarily  implied  in 
the  charter  of  that  company  a  stipulation 
that  the  legislature  would  charter  no  other 
bridge  between  Charlestown  and  Boston 
so  near  as  to  injure  the  former's  franchise 
or  diminish  its  toll,  in  a  positive  and 
essential  degree.  "  To  sum  up,  then," 
said  he,  "the  whole  argument  on  this  head, 
I  maintain,  that  njion  the  principles  of 
common  reason  and  legal  interpretation, 
the  present  grant  carries  with  it  a  neces- 
sary implication  that  the  legislature  should 
do  no  act  to  destroy  or  essentially  to  im- 
pair the  franchise;    that    (as   one  of  the 

[717] 


692 


THE   LAW   OF   CONTRACTS. 


[part  II. 


tion  operate  on  them  ?  If  it  makes  them  irrevocable,  and 
forever  forbids  any  repeal  or  withdrawal  of  them,  or  any  inter- 
ference with  or  modification  of  them,  does  it  not  destroy  the 
power  of  the  legislature  to  give  them,  on  the  ground  that  they 
are  the  agents  of  the  public  only  for  the  present,  and  not  for  the 
future;  and  have  no  authority,  expressly  given,  or  implied  from 
their  function  and  duty  as  a  legislature,  to  deprive  the  public  of 
a  future  exercise  of  the  power  which  the  legislature  now  aban- 
dons ?  Thus,  to  put  the  question  in  the  simplest  form  :  If  a 
State  sells  a  square  mile  of  land,  expressly  covenanting  by  its 
authorized  deed,  and  expressly  enacting  by  a  confirmatory  stat- 
ute, that  the  land  shall  forever  be  exempt  from  taxation,  is  this 


learned  judges  of  the  State  court  expressed 
it),  there  is  an  implied  agreement  of  the 
State  to.grant  the  undisturbed  use  of  the 
bridge  and  its  tolls,  so  far  as  respects  any 
acts  of  its  own,  or  of  any  persons  acting 
under  its  authority.  In  other  words,  tiie 
State,  impliedly,  contracts  not  to  resume 
its  grant,  or  to  do  any  act  to  the  prejudice 
or  destruction  of  its  grant.  I  maintain 
that  there  is  no  authority  or  principle 
established  in  relation  to  the  construction 
of  crown  grants,  or  legislative  grants, 
which  docs  not  concede  and  justify  this 
doctrine.  Where  the  thing  is  given,  the 
incidents  without  whicii  it  cannot  be  en- 
joyed are  also  given,  ut  res  mac/is  vnleat 
qiiam  pereat.  I  maintain  that  a  different 
doctrine  is  utterly  repugnant  to  all  the 
principles  of  the  common  law,  applicable 
to  all  franchises  of  a  like  nature  ;  and  that 
we  must  overturn  some  of  the  best  securi- 
ties of  the  rights  of  property,  before  it  can 
be  established.  I  mnintain  that  the  com- 
mon law  is  the  birthright  of  every  citizen 
of  Massacliusetts,  and  that  he  holds  the 
title-deeds  of  his  property,  corporeal  and 
incorporeal,  under  it.  I  maintain  that 
under  the  principles  of  the  common  law, 
there  exists  no  more  right  in  the  legisla- 
ture of  Massachusetts  to  erect  the  Warren 
I'ridgc,  to  till'  ruin  of  the  franchise  of  the 
Ciiarles  RivcV  l{ri<lge,  than  exists  to  trans- 
fer tlie  latter  to  the  former,  or  to  authorize 
the  former  to  demolish  the  latter.  If  the 
legislature  docs  not  mean  in  its  grant  to 
give  any  exclusive  ri;;litK,  let  it  say  so  ex- 
pressly, directly,  and  in  terms  admitting 
of  no  miseoiistriielion.  The  grantees  will 
then  take  at  their  |)cril,  and  must  abide 
the  results  of  their  overweening  conti<lcnee, 
iudiscrelion,    and    zeal."    j)p.    047,    048. 

[718] 


In  the  State  court,  7  Pick.  344,  the  judges 
were  equally  divided  on  the  question 
whether  the  Charles  River  Bridge  had  any 
exclusive  rights  beyond  its  own  limits. 
Morton,  J.  (pp.  461,464),  and  Wilde,  3. 
(pp.  468,  469),  holding  against  such  a 
right ;  and  Putnam,  J.  (p.  477),  and  Par- 
ker, C.  J.  (p.  506),  in  favor  of  such  ex- 
clusive right  beyond  its  limits.  The  doc- 
trine of  the  case  of  Charles  River  Bridge 
V.  Warren  Bridge,  has  been  repeatedly 
confirmed.  The  West  River  Bridge  v. 
Dix,  6  How.  532,  16  Vt.  446  ;  The  Mo- 
hawk Bridge  v.  The  Utica  &  Schenectady 
R.  R.  Co.  6  Paice,  554  ;  The  Oswego 
Falls  Bridge  v.  Fish,  1  Barb.  Ch.  547  ; 
Thompson  v.  The  New  York  &  Harlem 
R.  R.  Co.  3  Sandf.  Ch.  625;  Tuckahoe 
Canal  Co.  v.  Tuckahoe  R.  R.  Co.  11 
Leigh,  42 ;  Washington  &  Baltimore 
Turnpike  Co.  v.  Baltimore  &  Oiiio  R.  R. 
Co.  10  Gill  &  J.  392  ;  Harrison  v.  Young, 
9  Ga.  359;  McLeod  r.  Burroughs,  id. 
213;  Shorter  v.  Smith,  id.  517;  White 
River  Turnpike  Co.  v.  Vt.  Central  R.  R. 
Co.  21  Vt.  590  ;  Enfield  Toll  Bridge  Co. 
V.  Hartford  &  N.  II.  R.  R.  Co.  17  Conn. 
40,  454  ;  Miners  Bank  v.  United  States, 
1  Greene,  Iowa,  553  ;  Grecnl.  Cruise,  tit. 
XXVII.  §  29.  Of  the  Charles  River 
Bridge  case,  it  is  said  by  liarmlo,  ,].,  tliat, 
"  to  say  tlic  least  of  it,  it  stands  upon  the 
extreme  verge  of  the  law,  and  perhaps, 
reaelies  a  little  beyond  justice  and  good 
faith."  Benson  c.  The  Mavor,  &c.  of 
New  York,  10  Barb.  243.  "Where  the 
right  to  build  a  bridge  is  given,  it  is  cx- 
elusivc!  within  its  own  limits.  Piscataqua 
ISiiilge  r.  New  Hampshire  Bridge,  7  N.  H. 
35. 


en.  XI,]  CONSTITUTION    OF    THE    UNITED    STATES.  693 

covenant  binding  upon  the   State,  that  is,  upon  future  legisla- 
tures ?  (I) 

An  answer  to  this  question  would  require  some  consideration 
of  the  nature  and  extent  of  the  rights  of  supreme  sovereignty, 
and  especially  of  eminent  domain  ;  and  of  the  authority  of  the 
legislature  in  relation  to  them.  Undoubtedly  the  feudal  system 
forms  no  part  of,  and  no  foundation  for,  our  system  of  legisla- 
tion, in  one  sense  ;  but  in  another,  it  is  true  that  some  of  its 
important  principles  remain  as  valid  with  us  at  this  moment 
as  ever  anywhere.  One  of  these  is,  that  all  property  is  held 
from  the  sovereign.  We  hold  that  the  theory  of  our  law  goes 
even  further  on  this  point  than  the  feudal  system,  because  it 
extends  this  principle  to  personal  as  well  as  real  property.  And 
upon  this  principle  rests  the  law  of  eminent  domain  ;  for  domin- 
ium, from  which  this  phrase  comes,  bears,  as  its  legal  sense, 
property,  and  not  power.  We  think  that  every  thing,  whatever, 
that  a  citizen  of  this  country  owns,  he  holds  in  the  same  way 
as  if  he  could  trace  his  title  back  to  an  original  grant  from  the 
sovereign ;  and  as  if  this  grant  contained  an  expressed  reserva- 
tion of  a  right  by  the  public  or  the  State,  which  is  the  sov- 
ereign, to  resume  the  property  or  any  part  of  it,  whenever  it 
shall  be  wanted  for  the  use  of  the  sovereign  ;  payment  or  com- 
pensation being  made,  or  adequately  provided  for  by  law,  for 
all  that  is  thus  resumed.  And  this  is  what  we  understand  to 
be,  in  this  country,  the  law,  or  the  right,  of  eminent  domain,  (m) 


(Z)  See  next  note.    In  Richmond  R.  R.  dain.     It  can  re^  on  no  other  foundation, 

Co.  V.  The  Louisa  R.  R.  Co.  13  How.  can  have  no  other  guaranty.     It  is  owing 

71,  Curtis,  J.,  maintained  that  the  State  to  these  characteristics  only,  in  the  original 

may  grant  an  exclusive  right  to  a  railroad  nature  of  the  tenure,  that  appeals  can  be 

within  certain  limits,  and  pledge  itself  not  made  to  the  laws,  either  for  the  protection 

to  allow  another  to  be  constructed  within  or   assertion    of  the   rights   of  property, 

these  limits.     Sec  Piscataqua  Bridge   v.  Upon   any  other  hypothesis,   the  law  of 

N.   H.  Bridge,  7  N.  H.  35,  per  Parker,  property  would  be  simply  the  law  of  force. 

C.  J.  Now  it  is  undeniable,  that  the  investment 

(in)  Beckman  v.  Saratoga  &  Schenec-  of  propert)' in  the  citizen  by  the  govern- 
tady  R.  R.  Co.  3  Paige,  72,  73 ;  The  ment,  whether  made  for  a  pecuniary  con- 
West  River  Bridge  Co.  v.  Dix,  6  How.  sideration,  or  founded  on  conditions  of 
532,  .533.  Daniel,  J.:  "Under  every  civil  or  political  duty,  is  a  contract  between 
established  government,  the  tenure  of  the  State,  or  the  government  acting  as  its 
property  is  derived,  mediately  or  imme-  agent,  and  the  grantee  ;  and  both  tlie  par- 
diately,  from  the  sovereign  power  of  the  ties  thereto  are  bound  in  good  faith  to 
political  body,  organized  in  such  mode  or  fulfil  it.  But  into  all  contracts,  whether 
exerted  in  such  a  way  as  the  community  made  between  States  and  individuals,  or 
or  State  may  have  thought  proper  to  or-  between  individuals  only,  there  enter  con- 

[719] 


694 


THE   LAW    OF   CONTRACTS. 


[part  II. 


This  is  then  a  right  reserved  and  possessed  by  the  public, 
and  a  right  which  extends  over  all  property.  And  one  question 
is,  whether  the  people  themselves  can  give  away  this  right,  or 
grant  })ropcrty  witnout  this  reservation.  To  this  it  might  be 
answered  that  the  people,  by  their  constitutions,  bind  themselves 
to  act  only  constitutionally,  and  that  no  way  is  provided  for 
such  transfer  or  relinquishment.  But,  without  now  denying 
that  the  public  might,  by  some  sufficient  act,  divest  themselves 
of  the  right  of  eminent  domain,  we  proceed  to  the  next  question, 


ditions  wliicli  arise  not  out  of  the  literal 
terms  of  tlie  contract  itself;  they  are  su- 
perinduced Ijy  the  preexisting  and  higher 
authority  of  tiie  laws  of  nature,  of  nations, 
or  of  the  community  to  which  the  ]iartics 
belong ;  they  are  always  presumed,  and 
must  be  presumed,  to  be  known  and  rec- 
ognized jiy  all,  are  binding  upon  all,  and 
need  never,  therefore,  be  carried  into  ex- 
press stipulation,  for  this  could  add  nothing 
to  their  force.  Every  contract  is  made  in 
subordination  to  them,  and  must  yield  to 
their  control,  as  conditions  inherent  and 
paramount,  wlienever  a  necessity  for  their 
execution  shall  occur.  Such  a  condition 
is  the  right  of  eminent  domain.  This 
right  does  not  ojjerate  to  impair  the  con- 
tract effected  i)y  it,  but  recognizes  its  obli- 
gation in  the  fullest  extent,  claiming  only 
the  fulfilment  of  an  essential  and  insepa- 
rable condition.  Thus,  in  claiming  the 
resumption  or  qualification  of  an  investi- 
ture, it  insists  merely  on  the  true  nature 
and  I'haracter  of  the  right  invested.  The 
impairing  of  contracts  inhibited  liy  the 
constitution,  can  scarcely,  by  the  greatest 
violence  of  construction,  be  made  appli- 
cable to  the  enforcing  of  the  terms  or 
necessary  imjiort  of  a  contract;  the  lan- 
guage and  meaning  of  the  inhibition  were 
designed  to  c^nihrace  jjroceedings  attempt- 
ing the  interpohition  of  some  new  term  or 
condition  foreign  to  the  original  agree- 
ment, and  tiierefore  inconsistent  with  and 
violative  thereof.  It,  then,  being  clear 
that  the  j)Ower  in  (piestion  7i()t  being 
wiliiin  the  |)urview  of  the  restriction  im- 
posed by  (lie  tenth  section  of  the  first 
uriicle  of  tlu;  constitution,  it  remains  with 
the  States  to  the  full  extent  in  which  it 
inliercs  in  every  sovereign  govermnent,  to 
be  exercised  by  them  in  that  degree-  that 
siiall  by  them  bi;  deemed  commensurate 
with  public  necessity.  So  long  as  they 
Khali  steer  clear  (jf  the  single  predicament 
denounced  by  the  constitution,  shall  uvoid 

[720] 


interference  with  the  obligation  of  con- 
tracts, the  wisdom,  the  modes,  the  policy, 
the  hardship  of  any  exertion  of  this  power 
are  subjects  not  within  the  proper  cogni- 
zance of  this  court.  This  is,  in  truth, 
purely  a  question  of  power;  and,  conced- 
ing the  power  to  reside  in  the  State  gov- 
ernment, this  concession  would  seem  to 
close  the  door  upon  all  further. controversy 
in  connection  with  it.  The  instances  of 
the  exertion  of  this  power,  in  some  mode 
or  other,  from  the  very  foundation  of  civil 
government,  have  been  so  numerous  and 
familiar,  that  it  seems  somewhat  strange, 
at  this  day,  to  raise  a  doubt  or  question 
concerning  it.  In  fact,  the  whole  policy 
of  the  country  relative  to  roads,  mills, 
bridges,  and  canals,  rests  upon  this  single 
power,  under  which  lands  have  been 
always  condemned  ;  without  the  exertion 
of  this  power,  not  one  of  the  improvements 
just  mentioned  could  be  constructed.  In 
our  country,  it  is  believed  tiiat  the  power 
was  never,  or,  at  any  rate,  rarely,  ques- 
tioned, until  the  opinion  seems  to  have 
obtained,  that  the  right  of  property  in  a 
chartered  corporation  was  more  sacred 
and  intangil)le  than  the  same  right  could 
possilily  be  in  the  person  of  the  citizen  ; 
an  oi)inion  which  must  be  without  any 
groutids  to  rest  upon,  until  it  can  be  de- 
monstrated either  that  the  ideal  creature 
is  more  than  a  person,  or  the  corporeal 
being  is  less.  For,  as  a  question  of  the 
])Ower  to  appropriate  to  public  uses  the 
jiroperty  of  jirivate  persons,  resting  upon 
the  ordinary  Ibmnlations  of  jirivate  right, 
tlicre  would  seem  to  be  room  neither  for 
doubt  nor  difliculty."  'I'liat  the  right  of 
emim^nt  domain  is  sometimes  fouinled  on 
sovereignty,  ]iublic  necessity,  or  imjdied 
comjiaet,  see  I'^nlield  Toll  IJridLie  Co.  ?'. 
Hartford  &  N.  11.  ]{.  1{.  Co.  17  Conn.  61  ; 
West  Iviver  Bridge  Co.  v.  Dix,  G  How. 
5.')'.),  i)er  W'oodbnrjj,  J, 


en.  XI.] 


CONSTITUTION    OF    THE   UNITED    STATES. 


695 


which  is,  what  is   the   power   and  authority  delegated  to   the 
legislature  over  or  in  regard  to  this  right  of  eminent  domain  ? 

We  have  no  doubt  whatever,  that  the  true  answer  to  this 
question  is,  that  the  legislature  derives,  in  part  from  the  lan- 
guage common  to  all  our  constitutions,  in  part  from  implica- 
tions from  their  expressions,  and  in  part  from  the  very  nature 
of  its  functions,  full  authority  to  exercise  an  unlimited  power 
as  to  the  management,  employment,  and  use  of  the  eminent 
domain  of  the  State,  and  to  make  all  the  provisions  consequent 
upon,  or  necessary  to  the  exercise  of  this  right  or  power;  but 
no  authority  whatever  to  give  this  away,  or  take  it  out  of  the 
people  directly  or  indirectly.  Assuming  this  to  be  a  true  prin- 
ciple, let  us  see  how  it  applies.  Let  it  be  certain  that  the  leg- 
islature can  give  to  any  parties  the  right  to  build  a  bridge  over 
any  stream,  and  between  any  termini ;  and  as  certain,  that 
when  the  bridg-e  is  built  they  may  destroy  it  for  public  pur- 
poses, on  paying  or  providing  for  compensation,  (w)     But  can 


(n)  West  Kiver  Bridge  Co.  v.  Dix,  6 
How.  507.  In  1795  the  legislature  of 
Vermont  granted  a  charter  to  the  plain- 
tiffs for  the  term  of  one  hundred  years, 
which  invested  them  with  the  exclusive 
privilege  of  erecting  a  bridge  over  West 
Iviver,  within  four  miles  of  its  mouth,  and 
with  tlie  right  of  taking  tolls  for  passing 
the  same.  Under  the  authority  of  a  sub- 
sequent act  of  the  legislature,  a  public 
road  was  extended  and  established  be- 
tween certain  termini,  passing  over  the 
plaintiff's  bridge,  converting  it  into  a  pub- 
lic highway,  for  which  compensation  was 
awarded.  The  new  highway  was  laid 
out  for  two  miles  on  one  side,  and  one 
mile  on  the  other,  over  a  public  highway, 
existing  where  the  bridge  was  built,  and 
of  which  it  formed  a  part.  It  was  held 
that  the  act  appropriating  the  franchise  of 
the  bridge  for  the  new  public  highway, 
compensation  being  made,  was  constitu- 
tional. Daniel,  J.,  delivering  the  opin- 
ion of  the  court,  said :  "  A  distinction 
has  been  attempted,  in  argument,  between 
the  power  of  a  government  to  appropriate 
for  public  uses  property  which  is  corpo- 
real, or  may  be  said  to  be  in  being,  and 
the  like  power  in  the  government  to  re- 
sume or  extinguish  a  franchise.  The 
distinction  thus  attempted  we  regard  as  a 
refinement  which  has   no   foundation   in 

VOL.  II.  61 


reason,  and  one  that,  in  truth,  avoids  the 
true  legal  or  constitutional  question  in 
these  causes,  namely,  that  of  the  right  in 
private  persons  in  the  use  or  enjoyment 
of  their  private  property,  to  control  and 
actually  to  prohibit  the  power  and  duty 
of  the  government  to  advance  and  pro- 
tect the  general  good.  We  are  aware 
of  nothing  peculiar  to  a  franchise  which 
can  class  it  higher,  or  render  it  more  sa- 
cred, than  other  property.  A  franchise  is 
property,  and  nothing  more  ;  it  is  incor- 
poreal property,  and  is  so  defined  by  Jus- 
tice Blaclslone,  when  treating,  in  his  sec- 
ond volume,  chap.  3,  page  20,  of  the 
Rights  of  Things.  It  is  its  character  of 
property  only  which  imparts  to  it  value, 
and  alone  authorizes  in  individuals  a 
right  of  action  for  invasions  or  disturb- 
ances of  its  enjoyment.  Vide  Bl.  Comm. 
vol.  3,  chap.  16,  p.  236,  as  to  injuries  to 
this  description  of  private  property,  and 
the  remedies  given  for  redressing  them. 
A  franchise,  therefore,  to  erect  a  bridge, 
to  construct  a  road,  to  keep  a  ferry,  and 
to  collect  tolls  upon  them,  granted  by  the 
authority  of  the  State,  we  regard  as  occu- 
pying the  same  position,  with  respect  to 
the  paramount  power  and  dutj-  of  the 
State  to  promote  and  protect  the  public 
good,  as  does  the  right  of  the  citizen  to 
the  possession  and  enjoyment  of  his  land 

[721], 


696 


THE   LAW   OP  CONTRACTS. 


[part  II. 


they  not  only  authorize  a  party  to  make  a  bridge,  but  give  to 
the  same  party,  in  express  terms,  the  exclusive  right  to  build 
a  bridge  within  distant  termini,  on  the  one  side  and  the  other? 
This  seems  to  be  well  settled ;  nor  does  it  interfere  with  the 
eminent  domain  of  the  State,  for  this  exclusive  right  would  be 
a  franchise,  and  this  is  a  property,  and  it  can  therefore  be  taken 
for  public  purposes,  that  is,  another  bridge  may  be  authorized 
within  these  same  limits,  on  making  compensation,  (o) 

But  let  us  suppose  the  grant  not  to  be  in  terms  of  any  exclu- 
sive right ;  but  simply  a  right  to  build  a  bridge  from  one  spot 
to  another ;  and  that  this  grant  contains  a  clause,  promising  on 
the  part  of  the  State,  that  no  party  shall  ever  be  authorized  to 
build  another  bridge  within  five  miles,  in  either  direction,  from 
either  terminus.  Would  this  promise  be  bijiding  on  future 
legislatures  ?  {]))     We  confess  that  we  think  the  question  is  one 


under  his  patent  or  contract  with  the 
State  ;  and  it  can  no  more  interpose  any 
obstruction  in  the  way  of  their  just  ex- 
ertion. Such  exertion,  we  hold  to  be  not 
within  the  inhibition  of  the  constitution, 
and  no  violation  of  a  contract.  The 
power  of  a  State,  in  the  exercise  of  emi- 
nent domain,  to  extinguish  immediately  a 
franchise  it  had  granted,  appears  never  to 
have  been  directly  brought  here  for  adju- 
dication, and  consequently  has  not  been 
heretofore  formally  propounded  from  this 
court.  But  in  England,  this  power  to  the 
fullest  extent,  was  recognized  in  the  case 
of  the  Governor  and  Company  of  the 
Cast-Plate  Manufacturer  v.  Meredith,  4 
Term  lleports,  794  ;  and  Lord  Kernjon, 
especially,  in  tliat  case,  founded  solely 
upon  this  power  the  entire  policy  and  au- 
thority of  all  tiie  road  and  canal  laws  of 
the  kingdom."  jip.  .5.'3.'5,  .'534.  Woodbnrji, 
J.,  in  a  concurring  opinion,  limited  the 
power  of  eminent  dornain  over  tlie  fran- 
chise of  a  corporation  to  ca.ses  where  "  tlic 
further  exercise  of  the  franchise,  as  a  cor- 
{(oration,  is  inconsistent  or  incompatible 
witli  the  highway  to  be  laid  out,"  and 
where  also  "a  dear  intent  is  manifested 
in  the  laws  that  one  corporation  and  its 
uses  shall  yieiil  to  another,  or  another 
public,  use,  under  the  supposed  superiority 
of  tiio  latter,  and  the  necessity  of  the 
case."  ]ip.  .'il.'i,  .'J44,  .')4().  The  doctrine 
of  the  West  L'ivcr  IJridge  (,'o.  v.  ])ix, 
that  the  francliis(;  of  a  corporation  may  be 

[722] 


taken  by  the  State  for  public  uses,  or  that 
the  power  to  take  it  for  public  uses  may 
be  delegated  by  the  State  to  another  coi'- 
poration,  on  providing  compensation,  is 
confirmed  by  numerous  authorities,  s.  c. 
16  Vt.  446;  The  Kichmond,  &c.  R.  R. 
Co.  V.  The  Louisa  R.  R.  Co.  13  How. 
71  ;  Boston  Water  Power  Co.  v.  Boston 
and  Worcester  R.  R.  Co.  23  Pick.  360 ; 
Armington  v.  Barnet,  15  Vt.  745;  White 
River  Turnpike  Co.  v.  Vt.  Central  R. 
R.  Co.  21  id.  .590;  Enfield  Toll  Bridge 
Co.  V.  Hartford  &  N.  H.  R.  R.  Co.  17 
Conn.  41,  454  ;  Barber  v.  Andover,  8  N. 
H.  398;  Peirce  v.  Somersworth,  10  id. 
369;  Backus  v.  Lebanon,  11  id.  19; 
Northern  Railroad  v.  Concord  and  Clare- 
mont  Railroad,  7  Foster,  183;  Rogers  v. 
Bradshaw,  20  Johns.  735  ;  Beekman  v. 
Saratoga  &  Schenectady  R.  R.  Co.  3 
I*aige,  45  ;  Lexington  and  Ohio  R.  R. 
Co.  r.  Applegate,  8  Dana,  289  ;  Shorter  t\ 
Smiti),  9  Ga.  517.  And  the  legislature 
in  delegating  this  power  to  a  railroad 
company,  need  not  designate  the  specific 
land  to  be  taken.  Boston  Water  Power 
Co.  V.  ]5oston  and  Worcester  R.  R.  Co. 
23  Pick.  360. 

(n)  West  River  Bridge  Co.  v.  Dix,  6 
How.  .507  ;  Shorter  v.  Smith,  9  Ga.  529. 
The  exclusive  right  is  a  jjart  of  the  fran- 
chise, wiiicii  nniy  itself  be  taken.  Pisca- 
taipia  Bridge  v.  N.  H.  Bridge,  7  N. 
II.  35. 

[}>)  In  the  Richmond,  &c.  R.  R.  Co.  v. 


OIL  XI.]  CONSTITUTION    OF   THE    UNITED    STATES.  697 

of  some  difficulty.  If  no  future  legislature  can  authorize  an- 
other bridge  within  the  five  miles  on  payment  of  compensation, 
it  must  be  because  this  legislature  has  granted  away  from  the 
public,  for  all  time,  this  right  of  eminent  domain.  We  are 
clear  they  cannot  do  this.  And  if  it  be  the  certain  effect  of 
this  promise  that  no  such  other  bridge  can  hereafter  be  author- 
ized on  any  terms,  then  we  say  the  promise  is  void,  because 
the  legislature,  as  an  agent,  had  made  a  contract  which  they 
had  no  authority  whatever  to  make.  But  why  may  not  a 
future  legislature  authorize  another  bridge,  with  compensation, 
in  this  case,  as  well  as  if  an  exclusive  right  had  been  given  ? 
The  answer  may  be,  that  here  no  property  whatever  is  given, 
and  no  franchise  whatever ;  and  nothing  but  a  bare  promise 
made.  The  bridge  itself  may  be  taken,  for  it  is  property,  or 
the  right  to  build  the  bridge  may  be  taken,  for  this  is  a  fran- 
chise, and  a  franchise  is  property,  but  no  property  passes  by  a 
mere  promise  that  no  other  bridge  shall  be  built;  and  if  no 
property  passes,  there  is  nothing  which  can  be  taken  in  making 
compensation,  and  then  there  is  no  way  of  exercising  this  right 
of  eminent  domain,  or,  which  is  the  same  thing,  this  right  of 
eminent  domain  has  been  transferred  or  destroyed,  which,  as 
we  have  seen,  cannot  legally  be  done.  Such  might  be  the 
argument,  and  although  technical,  we  do  not  deny  its  force ; 
nor  shall  w-e  be  able  to  answer  this  question  with  certainty, 
until  it  is  settled  by  further  adjudication.  But  at  present  we 
regard  it  as  a  question  between  a  technical  view  of  the  subject 
and  a  substantial  view  of  it,  and  we  are  inclined  to  believe  that 
the  courts  will  construe  such  a  grant  with  such  a  promise,  as  in 
fact  a  grant  of  an  exclusive  right,  and  will  apply  to  it  the  same 
rule  of  law,  permitting  them  to  take  this  right  away  on  making 
compensation,  (q) 


The  Louisa  R.  R.  Co.  13  How.   71,  90,  {^ranted   in  1798,   for   the  building  of  a 

Curtis,  J.,  contended  for  the  power  of  the  bridge  over  Connecticut  River,  between 

legislature  to  make  such  a  contract,  but  Enfield  and  Suffield,  it  was  provided  that 

the  court  declined  to  pass  upon  the  ques-  no  person  or  persons  should  have  liberty 

tion.     See   Piscataqua  Bridge  v.   N.    H.  to    build  another  bridge  over   that  river, 

Bridge,  7  N.  H.  35,  69.  between  the  north  line  of  Entield  and  the 

('/)  The    Enfield   Toll  Bridge  Co.    r.  south  line  of  Windsor,  during  the  con- 

The   Hartford   &   N.  H.   R.  R.    Co.    17  tinuance  of  the  charter.     The  legislature, 

Conn.  40,  454.     In  the  plaintiff's  charter,  in  183.5,  granted  a  charter  to  the  defend- 

[723] 


698 


THE   LAW   OF   CONTRACTS. 


[part  II. 


It  must  be  remembered  that  the  right  of  eminent  domain 
authorizes  the  taking  of  private  property  by  the  sovereign,  first, 
for  public  purposes ;  and  second,  on  making  or  providing  for 
compensation.  But  one  of  these  conditions  is  as  essential  as 
the  other  ;  and  it  is  only  when  both  are  regarded,  that  private 
property  can  lawfully  be  taken.  It  follows,  therefore,  that  if 
there  be  no  public  necessity,  there  is  no  public  right;  and  that 
land  taken  by  the  sovereign,  without  such  necessity,  although 
for  compensation,  is  unlawfully  taken,  (r) 

Let  us  now  recur  to  the  question  we  first  asked,  whether  a 
grant  with  a  covenant  that  the  property  or  franchise  granted 


ants  to  construct  a  railroad  from  Hartford 
to  the  north  line  of  the  State  and  thence 
to  Springfield,  Mass.,  and  to  build  a 
bridge  across  the  Connecticut  for  the  pur- 
poses of  a  railroad  track  exclusively  ;  and 
it  was  also  ]irovided  in  the  charter  that 
nothing  therein  contained  should  be  con- 
strued to  prejudice  or  impair  the  rights 
then  vested  in  the  plaintiffs.  The  railroad 
was  laid  out  in  the  most  direct  and  feasi- 
ble route,  and  the  company  proceeded  to 
construct  a  bridge  for  railroad  purposes 
only,  within  the  exclusive  limits  of  the 
Eniicld  Toll  Bridge.  It  was  held  that  a 
railroad,  though  belonging  to  a  "private 
corijoraiion,"  is  a  "  public  use  ;  "  and  the 
franchise  of  a  toll-bridge  "  private  prop- 
erty," within  the  meaning  of  the  constitu- 
tion ;  that  the  franchise  of  a  toll-bridge 
may  be  taken  for  the  purposes  of  a  rail- 
road, by  granting  compensation  ;  that  the 
covenant  in  this  case  was  a  ]iart  of  the 
contract  creating  the  corporation,  and  was 
a  part  of  the  franchise  itself,  and  subject 
to  the  same  laws ;  that  the  reservation 
in  the  defendant's  charter,  that  notiiing 
therein  should  be  construed  to  impair  the 
plaiulilf's  rights,  did  not  protect  them 
fnjm  tin;  exercise  of  the  ])Ower  of  eminent 
donniin,  l)Ut  oidy  secured  them  equal 
riglits  ;  the  right  to  demand  coni])ensa- 
tion,  if  their  franchise  should  be  impaired 
by  the  construction  of  the  road.  The 
case  of  the  IJoston  &  Lowell  IJailroad  Co. 
V.  The  Sah.'m  &  Lowell,  tlie  IJostoii  & 
Maine,  and  the  Lowell  &  Lawrence  Kail- 
road  ("oinpanics,  2  Gray,  1,  turned  iijion 
a  question  (luile  similar  to  that  considered 
in  the  text.  In  I8:j()  the  plaintills  were 
incorporati'd,  to  make  a  raibnad  fioni 
Boston  to  Lowell.  The  twelfth  seciidn 
of  their  charti'r  enacted,  "That  no  other 

[721] 


railroad  shall,  within  thirty  years,  be  au- 
thorized to  be  made  from  Boston,  Cam- 
bridge, or  Charlestown,  to  Lowell,  or  to 
any  place  vithin  five  miles  from  the 
northern  termination  of  the  Boston  and 
Lowell  Railroad."  Afterwards  the  three 
defendant  comi)anies  were  successively  in- 
corporated ;  and  by  their  junction  and 
intersection,  there  was  a  direct  railroad 
route  from  Lowell  to  Boston.  And  this 
action  was  a  suit  in  equity,  praying  for  an 
injunction  against  the  defendants.  The 
court  did  not  decide  that  the  acts  incor- 
porating the  three  defendant  railroad 
companies  were  unconstitutional,  for  this 
oiivious  reason,  that  substantial  use  might 
be  made  of  all  these  railroads  without  in- 
terfering with  the  plaintiff's ;  and  no  use 
of  them,  in  terms,  infringed  upon  the 
charter  of  the  plaintiffs.  But  the  court 
held  that  the  charter  of  the  Lowell  Rail- 
road was,  in  all  its  jn'ovisions  constitu- 
tional, and  legal,  and  that  the  three  de- 
fendant railroads,  by  their  conjunction, 
interfered  with  the  rights  secured  by  the 
charter  of  the  Lowell  Railroad,  and 'on 
thatgroutid  granted  the  injunction  prayed 
for. 

(?)  That  if  the  public  interest  does  not 
require  it,  private  property  cannot  be 
taken  for  public  uses,  although  compensa- 
tion 1)0  provided,  see  Beekman  i'.  The 
Saratoga  &  Schenectady  R.  R.  Co.  3 
I'aige,  4.5 ;  AVest  River  Bridge  Co.  v. 
Dix,  (•)  How.  .54;5,  .544,  540.  Per  Wood- 
hurt/,  J.:  "The  franchise  of  an  existing 
highway  caimot  be  taken  for  a  new  high- 
way of  the  same  character,  laid  out  upon 
the  old  one  ;  for  that  would  be  essentially 
transferring  A's  pro))crty  to  B."  Boston 
Water  Tower  ('o.  r.  Boston  &  Worcester 
Railroad  Corporation,  23  Rick.  393. 


Cil.  XI.]       CONSTITUTION  OF  THE  UNITED  STATES.  699 

should  be  for  ever  free  from  taxation,  can  be  supported.  Again, 
we  admit  that  no  certain  answer  can  now  be  given  to  this 
question.  But,  as  before,  we  say  that  if  this  covenant  prevents 
all  future  taxation,  in  fact  it  must  be  void ;  because  every  leg- 
islature has  the  right  to  determine  what  property  shall  be  taxed, 
without  regard  to  what  may  have  been  done  by  a  preceding 
legislature,  and  without  the  power  of  binding  a  subsequent 
legislature.  But  this  covenant  or  promise  may  be  supported, 
and  no  such  consequence  follow  ;  for  the  property  thus  exempted 
may  be  taxed,  and  compensation  made.  It  might  be  said  that 
it  involves  an  absurdity  to  suppose  a  legislature  laying  a  tax  of 
an  hundred  dollars,  and  voting  the  same  sum  to  be  paid  to  the 
taxed  party ;  and  it  must  be  precisely  that  sum,  or  it  would  not 
be  compensation.  And  the  effect  would  be  only  to  put  the 
State  to  the  trouble  and  expense,  first  of  collecting  the  tax  and 
then  of  paying  the  money.  But,  while  it  may  be  true  that  if 
money  be  paid  in  compensation,  it  must  be  the  same  sum  that 
is  taken,  it  is  not  true  that  the  compensation  must  necessarily 
be  made  in  money.  It  is  at  least  supposable,  that  there  may 
be  other  modes  of  compensation  equally  just,  satisfactory,  and 
expedient.  And  then  the  whole  case  might  be  brought,  by 
construction,  within  the  principle  of  something  given,  which 
may  be  resumed  upon  compensation.  The  argument,  that  if 
the  legislature  are  permitted  to  have  this  power,  they  might 
carry  it  to  an  excess  which  would  seriously  impair  the  re- 
sources of  the  public,  applies  as  well  to  many  of  their  impor- 
tant and  unquestionable  powers,  of  which  the  abuse  is  easy 
and  might  be  very  injurious.  Moreover,  if  the  exercise  of  this 
power,  and  in  this  way,  was  carried  to  an  extreme,  the  grant 
or  contract  might  perhaps  be  annulled,  as  a  constructive 
fraud,  (s)  For  in  such  a  case,  it  might  be  inferred,  not  only 
that  the  agent  of  the  public  is  opposed  to  the  will  and  injures 
the  interests  of  his  principal,  but  that  this  misconduct  must  have 
been  obvious  to  the  party  benefited  by  it ;  and  the  general 
principles  of  agency  and  of  contracts  would  avoid  such  a  trans- 
action. (/) 

(s)  Piscataqua  Bridge  v.  N.  H.  Bridge,         (/)  In  the  State  of  New  Jersey  r.  Wil- 
7  N.  H.  63,  64.  son,  7  Cranch,  164,  it  was  held  that  an 

61  *  [  725  ] 


700 


THE   LAW   OF   CONTRACTS. 


[part  ir. 


It  is  now  well    settled,   and    on    obvious  grounds,   that  the 
abandonment  of  the  taxing  power  is  not  to  be  presumed,  where 


act  of  the  legislature  of  New  Jersey,  giv- 
ing effect  to  an  agreement  between  the 
tribe  of  the  Delaware  Indians  and  tlie 
commissioners  of  New  Jersey,  for  an  ex- 
change of  lands,  and  declaring  that  the 
lands  to  be  purchased  for  the  Indians 
"  shall  not  hereafter  be  subject  to  any 
tax,"  by  virtue  of  which  the  proposed  ex- 
change was  subsequently  effected,  consti- 
tuted a  contract  —  and  a  law,  repealing 
the  section  exempting  the  lands  purchased 
from  taxation,  was  held  unconstitutional 
—  although  the  Indians  had,  after  the  ex- 
change, obtained  a  legislative  act  author- 
izing a  sale  of  the  lands,  and  when  taxed 
they  were  owned  by  their  vendees.  Mar- 
shall, C.  J.  :  "Every  requisite  to  the  form- 
ation of  a  contract  is  found  in  the  pro- 
ceedings between  the  colony  of  New  Jer- 
sey and  the  Indians.  The  subject  was  a 
purchase  on  tiie  part  of  the  government, 
of  extensive  claims  of  the  Indians,  the 
extinguishment  of  which  would  quiet  the 
title  to  a  large  portion  of  the  province. 
A  proposition  to  this  effect  is  made,  the 
terms  stipulated,  the  consideration  agreed 
upon ;  which  is  a  tract  of  land  with  the 
privilege  of  exemption  from  taxation ; 
and  then,  in  consideration  of  the  arrange- 
ment previously  made,  one  of  which  this 
act  of  assembly  is  stated  to  be,  the  In- 
dians execute  tlieir  deed  of  cession.  This 
is  certainly  a  contract,  clothed  in  forms 
of  unusual  solemnity.  The  privilege, 
though  for  the  benefit  of  the  Indians,  is 
annexed,  by  the  terms  wliich  create  it,  to 
tlie  land  itself,  not  to  their  persons.  It  is 
for  their  advantage  tiiat  it  should  be  an- 
nexed to  the  land,  because,  in  tiie  event 
of  a  sale,  on  wiiich  alone  the  question 
could  become  material,  the  value  would 
be  enhanced  by  it.  Of  tliis  case  it  has 
been  observed  that  there  was  no  restric- 
tion on  the  colonial  government  —  that 
the  ligiit  of  the  legislature  to  surrender  or 
limit  the  taxing  power  so  as  to  bind  its 
successor,  was  not  raised — and  that  it 
may  be  sustained  on  the  ground  tiiat  it 
was  in  the  nature  of  a  trmli/  with  the  In- 
-dians."  IJrewster  )'.  Hough,  10  N.  II. 
143;  ]>ebolt  ?».  Tlic  Ohio  ]>ife  Insurance 
&  Trust  Co.  1  Oliio  State,  .589.  In  (ior- 
doM  V.  Appeal  Tax  Court,  .'J  IIow.  l.'J.'J, 
the  Slate  of  Maryland  had  passed  acts 
jjledgiiig  the  faith  of  the  State  not  to  im- 
pose  any  further  tax  on   certain  baid;s, 

[720] 


upon  their  accepting  and  complying  with 
certain  conditions,  as  subscribing  for  the 
construction  of  a  road,  which  were  duly 
accepted  and  complied  with.  It  was  held 
that  the  individual  stockholders  were 
thereby  exempted  from  taxation  for  shares 
in  the  stock  of  the  banks,  and  a  law  im- 
posing such  a  tax  was  unconstitutional, 
as  impairing  the  obligation  of  a  contract. 
The  construction  of  the  statute  exempting 
the  banks,  was  the  only  question  raised 
by  the  defendant's  counsel,  wiio  maintain- 
ed that  it  exempted  merely  the  corporate 
franchise,  and  not  the  property  of  the 
banks,  or  the  shares  of  the  individual 
stockholders  in  the  stock.  This  question 
of  construction  is  the  only  one  to  which 
the  opinion  of  the  court  is  directed.  In 
Providence  Bank  v.  Billings,  4  Pet.  561, 
Marshall,  C.  J.,  speaking  of  the  taxing 
power,  said :  "  We  will  not  say  that  a 
State  may  not  relinquish  it ;  that  a  con- 
sideration sufficiently  valuable  to  induce 
a  partial  release  of  it  may  not  exist."  In 
Philadelphia  &  Wilmington  R.  E.  Co.  v. 
Maryland,  10  How.  394,  the  court  forbore 
to  express  an  opinion  on  the  question. 
The  case  of  New  Jersey  v.  AVilson,  has 
been  followed  in  Connecticut.  Atwater 
V.  Woodbridge,  6  Conn.  223  ;  Osborne  i\ 
Humphrey,  7  id.  335  ;  Parker  v.  Redfield, 

10  id.  495;  Landon  v.  Litchfield,  11  id. 
251;  Armington  v.  Barnet,  15  Vt.  751; 
Herrick  v.  Randolph,  13  Vt.  525.  On 
the  other  hand  the  Supreme  Court  of 
New  Hampshire  has  strongly  intimated 
an  opinion  that  the  taxing  jiower  is  an 
essential  attribute  of  sovereignty,  inherent 
in  the  people  under  a  republican  govern- 
ment, and  that  the  legislature  cannot  ex- 
empt land  from  taxation,  so  as  to  bind 
future  legislation,  without  an  express  au- 
thority for  that  purpose  in  the  constitution, 
or  in  some  other  way  directly  from  the 
peojile  themselves.  Piscataqua  Bridge  v. 
N.  H.  Bridge,  7  N.  II.  09;  Brewster  v. 
Hougli,  10  id.  138;  Backus  v.  Lebanon, 

11  ill.  24.  The  Su])reme  Court  of  Oliio, 
in  clabornte  opinions,  has  recently  held 
that  the  taxing  power  is  a  sovereign  right 
of  the  State,  essential  to  its  existence, 
delegated  by  the  pcojilc  to  the  (iencral 
Assembly,  to  be  used  as  a  means  to  secure 
the  ends  of  government,  and  that  among 
the  powers  delegated  to  that  body,  there 
is  none  to  surrender  or  limit  this  right  so 


CH.  XI.] 


CONSTITUTION  OF  THE  UNITED  STATES. 


701 


the  deliberate  purpose  of  the  State  to  relinquish  it  does  not 
distinctly  appear.  (?/)  And,  on  the  other  hand,  if  the  constitu- 
tion of  a  State  exempts  property  from  taxation,  the  legislature 
cannot  authorize  its  assessment,  (v) 


SECTION    IV. 

OF   THE  RELATION   OF    THIS   CLAUSE    TO   MARRIAGE   AND    DIVORCE. 

The  effect  of  this  clause  upon  the  subject  of  marriage,  or 
rather  of  divorce,  has  also  been  considered;  but  not  yet  fully 
ascertained  and  defined  by  adjudication.  It  has  been  con- 
tended that  marriage  is  not  a  contract  which  comes  within 
the  scope  of  this  clause ;  but  it  may  be  considered  that  it  has 
been  settled,  that  this  clause  mat/  operate  on  the  contract  of 


as  to  abridge  the  control  of  future  legisla- 
tion over  it ;  that  it  has  ])o\vcr  to  exercise 
it  for  the  purposes  for  whicii  it  was  grant- 
ed, but  no  power  over  the  right  itself.  De- 
bolt  V.  Ohio  Life  Insurance  &  Trust  Co. 
1  Ohio  State,  563;  Mechanics  and  Tra- 
ders Banlv  V.  Debolt,  id.  591  ;  Knoup  v. 
The  Piqua  Bank,  id.  603  ;  Toledo  Bank 
V.  Bond,  id.  622;  Milan  &  R.  Plank 
Road  Co.  V.  Husted,  3  Ohio  State,  578. 
But  see  Piqua  Bank  v.  Knoup,  16  How. 
369,  in  which  the  judgment  of  the  State 
court  in  the  three  first  cases  was  reversed. 
((()  A  bank  charter  does  not  carry  with 
it  by  implication  an  exemption  from  tax- 
ation. Providence  Bank  i\  Billings,  4 
Pet.  514,  561.  Marshall,  C.  J.:  "That 
the  taxing  power  is  of  vital  importance, 
that  it  is  essential  to  the  existence  of  gov- 
ernment, are  truths  whicli  it  cannot  be 
necessary  to  reaffirm.  Tiiey  are  acknowl- 
edged and  asserted  by  all.  It  would 
seem  that  the  relinquishment  of  such  a 
power  is  never  to  be  assumed.  We  will 
not  say  that  a  State  may  not  relinquish 
it ;  that  a  consideration  sufficiently  valua- 
ble to  induce  a  partial  release  of  it  may 
not  exist;  but  as  the  whole  community 
is  interested  in  retaining  it  undiminished, 
that  community  has  a  right  to  insist  that 
its  abandonment  ought  not  to  bo  pre- 
sumed, in  a  case  in  which  the  deliberate 
purpose  of  the  State  to  abandon  it  does 


not  appear."  The  Philadelphia  &  Wil- 
mington R.  R.  Co.  V.  Maryland,  10  How. 
376.  Tfiney,  C.  J.  :  "  This  court,  on  sev- 
eral occasions,  has  held  that  the  taxing 
power  of  a  State  is  never  presumed  to  be 
relinquished,  unless  the  intention  to  re- 
linquish is  declared  in  clear  and  unam- 
biguous terms."  Portland  Bank  v.  Ap- 
thorp,  12  Mass.  252  ;  Bankof  Watcrtown 
V.  Assessors  of  Watcrtown,  25  Wend. 
686,  1  Hill,  616,  2  id.  353;  Brewster  v. 
Hough,  ION.  H.  138;  Gordon  v.  Balti- 
more, 5  Gill,  231 ;  Herrick  v.  Randolph, 
13  Vt.  525.  Accordingly  it  has  been  held 
that  where  a  charter  prescribes  the  pay- 
ment of  a  certain  per  cent,  on  the  divi- 
dends of  the  corporation,  as  a  tax,  that  is 
a  temporary  rule  of  taxation,  which  may 
afterwards  be  increased.  Easton  Bank  i'. 
Commonwealth,  10  Barr,  442  ;  Debolt  v. 
Ohio  Life  Insurance  and  Trust  Co.  1 
Ohio  State,  563,  16  How.  416.  The  leg- 
islature may  exempt  property  from  taxa- 
tion for  the  time  being,  and  a  town  can- 
not levy  a  tax  upon  it  until  the  law  ex- 
empting it  is  repealed.  Brewster  v. 
Hough,  10  N.  H.  142;  Capen  v.  Glover, 
4  Mass.  305.  But  a  town  cannot,  by  a 
grant  or  stipulation  in  a  conveyance,  ex- 
empt property  tliereafter  from  taxation. 
Mack  V.  Jones,  I  Foster,  393. 
'  (r)  Hardv  v.  AValtham,  7  Pick.  108; 
Brewster  i-.  "Hough,  10  N.  H.  144. 

[727] 


702 


THE   LAW   OF   CONTRACTS. 


[part  II. 


marriage ;  leaving  only  the  question  as  to  what  is  the  effect 
and  operation  of  the  clause.  It  might  seem,  on  general  prin- 
ciples, that  if  it  be  applicable  at  all,  it  must  go  so  far  as  to 
prevent  any  divorce  for  reasons  which  were  not  sufficient 
ground  for  divorce  when  the  marriage  was  contracted.  Or,  in 
other  words,  that  a  legislature  might  pass  what  law  it  would  as 
to  divorce,  limiting  its  effect  to  marriages  which  should  take 
place  after  the  law  was  enacted  ;  but  that  any  law  creating 
new  grounds  or  new  facilities  for  the  divorce  of  parties  married 
before  the  law  was  passed,  would  impair  the  obligation  of  the 
marriage  contract,  and  therefore  be  void.  We  have  not,  how- 
ever, sufficient  adjudication  for  positively  asserting  this  as 
law.  (ic)  And  in  one  very  important  case,  in  which,  however, 
it  is  true  that  whatever  touches  marriage  is  spoken  altogether 
obiter,  it  is  implied  that  any  divorce  is  valid  which  is  granted 
for  any  cause  which  may  be  regarded  as  a  breach  of  the  mar- 
riage contract ;  for  if  this  contract  be  broken,  there  is  no  obliga- 
tion left  to  be  impaired,  (x)     If  this  be  so,  the  operation  of  this 


{w)  It  was  held  in  Clark  v.  Clark,  10 
N.  H.  380,  that  a  general  law  providing 
for  the  dissolution  of  existing  marriages, 
for  transactions  occurring  subserjuent  to 
its  passage,  which  were  not  grounds  of 
divorce  when  the  marriage  waS  contracted, 
is  not  within  the  prohibition  of  this  clause 
of  the  constitution. 

(x)  Dartmouth  College  v.  Woodward, 
4  Wheat.  518.  Marshall,  C.  J.:  "The 
provision  of  the  constitution  never  has 
been  understood  to  embrace  other  con- 
tracts than  tliosc  which  respect  property, 
or  some  otijcct  of  value,  and  confer  rigiits 
whicli  may  be  asserted  in  a  court  of  Jus- 
tice. It  never  has  been  understood  to  re- 
strict tlic  general  right  of  the  legislature 
to  Icgishvtc  on  the  subject  of  divorces." 
Story,  J.,  pp.  C9.')-G97  :  "As  to  tlic  case 
of  the  contract  of  marriage,  which  the  ar- 
gument siijiposes  not  to  be  within  the 
readi  of  tbi-  probibitory  clause,  because  it 
is  a  matter  of  civil  institutitjii,  1  profess 
not  to  feel  the  wciglit  of  tlie  reason  as- 
signed f<jr  tiic  exception.  In  a  legal 
sense,  all  contracts  recognized  as  valid  in 
any  country,  may  be  proj)erly  said  to  lie 
matters  uf  civil  institution,  since  tlicy  ob- 
tain their  ol)li;,Mii(jn  and  cniistniction  /tin: 
loci  contraclits.     Titles  to  land,  constitut- 

[728] 


ing  part  of  the  public  domain,  acquired 
by  grants  under  the  provisions  of  existing 
laws,  by  private  persons,  are  certainly 
contracts  of  civil  institution.  Yet  no  one 
ever  supposed,  that  when  acquired  bond 
fide,  they  were  not  beyond  the  reach  of 
legislative  revocation.  And  so,  certainly, 
is  the  established  doctrine  of  this  court. 
...  A  general  law  regulating  divorces 
from  the  contract  of  marriage,  like  a  law 
regulating  remedies  in  other  cases  of 
breaches  of  contracts,  is  not  necessarily  a 
law  impairing  the  obligation  of  such  a  con- 
tract. Holmes  V.  Lansing,  3  Johns.  Cas. 
73.  It  may  be  the  only  effectual  mode  of 
enforcing  the  obligations  of  the  contract 
on  both  sides.  A  law  punishing  a  breach 
of  a  contract,  by  imposing  a  forfeiture  of 
the  rights  acquired  under  it,  or  dissolving 
it  because  the  mutual  obligations  were  no 
longer  observed,  is  in  no  correct  sense  a 
law  imjiairing  the  obligations  of  the  con- 
tract. Could  a  law,  compelling  a  spe- 
cific ))erformance,  by  giving  a  new  remedy, 
be  justly  deemed  an  excess  of  legislative 
])ower ''.  Thus  far  the  contract  of  mar- 
riage has  been  considered  with  reference 
to  general  laws  regulating  divorces,  upon 
breaches  of  that  contnict.  15ut  if  the  ar- 
gument means  to  assert,  that  the  Icgisla- 


en.  XI.] 


CONSTITUTION    OF   THE    UNITED    STATES. 


703 


clause  upon  the  contract  of  marriage  would  be  confined  to  pre- 
venting a  divorce  at  the  will  of  one  party,  against  the  will  of 
the  other  party,  and  for  no  cause.  It  should  be  added  that  there 
is,  at  least,  one  judicial  decision;  that  marriage  is  not  only  a 
contract,  but  much  more  than  a  contract,  and  so  much  more 
that  it  is  not  to  be  considered  as  within  the  scope  or  intention 
of  the  clause  of  the  constitution,  (y) 


tive  power  to  dissolve  such  a  contract, 
■without  any  breach  on  either  side,  against 
the  wishes  of  the  parties,  and  without  any 
judicial  inquiry  to  ascertain  a  breach,  I 
certainly  am  not  prepared  to  admit  sucli 
a  power,  or  that  its  exercise  would  not 
entrench  upon  the  prohibition  of  tlie  con- 
stitution. If,  under  the  faith  of  existing 
laws,  a  contract  of  marriage  be  duly  sol- 
emnized, or  a  marriage  settlement  be 
made  (and  marriage  is  always  in  law  a 
valuable  consideration  for  a  contract),  it 
is  not  easy  to  perceive  why  a  dissolution 
of  its  obligations,  without  any  default  or 
assent  of  the  parties,  may  not  as  well  fall 
■within  the  prohibition,  as  any  other  con- 
tract for  a  valuable  consideration.  A 
man  has  quite  as  good  a  right  to  his  wife 
as  to  the  properti/  acquired  under  a  mar- 
riage contract.  He  lias  a  legal  right  to 
her  society  and  her  fortune  ;  and  to  divert 
such  riglit  without  his  default,  and  against 
his  will,  would  be  as  flagrant  a  violation 
of  the  principles  of  justice,  as  the  confisca- 
tion of  his  own  estate.  I  leave  this  case, 
however,  to  be  settled  when  it  shall  arise. 
I  have  gone  into  it,  because  it  was  urged 
with  great  earnestness  upon  us,  and  re- 
quired a  reply.  It  is  sufficient  now  to 
say,  that  as  at  present  advised,  the  argu- 
ment derived  from  this  source  does  not 
impress  my  mind  with  any  new  and  insur- 
mountable difficulty."  The  dicta  of  Stori/, 
J.,  are  ratified  in  Ponder  v.  Graham,  4 
Fla.  23.  lu  Holmes  v.  Holmes,  4  Barb. 
29.'),  it  was  held  that  as  respects  prop- 
erty, tlic  contract  of  marriage  must  stand 
upon  the  same  footing  as  other  contracts, 
and  that  where  the  husband,  by  virtue  of 
tlie  marriage  relation  or  as  incident  thereto, 
becomes  entitled  to  the  property  of  the 
■wife,  a  law  passed  subsequent  to  their 
marriage,  and  vesting  her  property  solely 
in  herself,  as  her  own  sole  and  separate 
property,  is  void  as  impairing  the  obliga- 
tion of  a  contract. 

{y)  Maguirc  v.  Maguire,  7  Dana,  183, 
184.      Per  Robertson,  C.  J.:   "Marriage, 


though  in  one  sense  a  contract,  because, 
being  both  stipulatory  and  consensual,  it 
cannot  be  valid  without  the  spontaneous 
concurrence  of  two  competent  minds,  is 
nevertheless,  sui  generis,  and  unlike  ordi- 
nary or  commercial  contracts,  is  publici 
juris,  because  it  establishes  fundamental 
and  most  important  domestic  relations. 
And,  therefore,  as  every  well  organized 
society  is  essentially  interested  in  the  ex- 
istence and  harmony  and  decorum  of  all 
its  social  relations,  marriage,  the  most 
elementary  and  useful  of  them  all,  is  reg- 
ulated and  controlled  by  the  sovereign 
power  of  the  State,  and  cannot,  like  mere 
contracts,  be  dissolved  by  tlie  mutual  con- 
sent only  of  the  contracting  parties,  but 
may  be  abrogated  by  the  sovereign  will, 
either  with  or  without  the  consent  of  both 
parties,  whenever  the  public  good,  or  jus- 
tice to  both  or  citiier  of  the  parties,  will 
be  thereby  subserved.  Such  a  remedial 
and  conservative  power  is  inherent  in 
every  independent  nation,  and  cannot  be 
surrendered  or  subjected  to  political  re- 
straint or  foreign  control,  consistently 
witli  the  public  welfare.  And,  therefore, 
marriage,  being  much  more  than  a  con- 
tract, and  depending  essentially  on  the 
sovereign  will,  is  not,  as  we  presume,  em- 
braced by  the  constitutional  interdiction 
of  legislative  acts  iinpairing  the  obligation 
of  contracts.  The  obligation  is  created 
by  the  public  law,  suiijeet  to  the  public 
will,  and  not  to  that  of  the  parlies.  So 
far  as  a  dissolution  of  a  marriage,  by  pub- 
lic autliority,  may  be  for  tiie  public  good, 
it  may  be  the  exercise  of  a  legislative 
function;  but  so  far  as  it  may  be  for  the 
benefit  of  one  of  the  parties,  in  conse- 
quence of  a  breach  of  a  contract  by  the 
other,  it  is  undoubtedly  judicial."  In 
White  V.  White,  5  Barb.  474,  Mason,  J., 
held  that  marriage  is  not  a  contract,  in 
the  common  law  or  popular  sense  of  the 
term,  and  that  the  relation  of  husband 
and  wife  is  not  within  the  prohibition  of 
the  constitution  respecting  contracts,  and 

[729] 


704 


THE   LAW   OF   CONTRACTS. 


[part  II. 


SECTION   V. 

OF   THE  RELATION   OF   THIS   CLAUSE   TO   BANKRUPTCY   AND 
INSOLVENCY. 

This  subject  has  already  been  considered,  to  some  extent,  in 
the  preceding  chapter.  We  add,  that  the  language  of  this 
clause  is  exceedingly  general.  It  comprehends  all  contracts ; 
and  whatever  may  have  been  in  the  minds  of  the  framers  of 
the  constitution  (z)  —  and  arguments  have  been  strongly  urged 
on  this  ground,  to  limit  the  operation  of  this  clause  —  it  is  now 
quite  settled  that  the  clause  is  to  be  construed  by  itself,  so  far, 
at  least,  that  there  is  no  contract  which  a  State  law  can  affect, 
which  is  not  within  the  prohibition.  Hence  a  contract  between 
two  States  is  a  contract  in  this  sense  and  for  this  purpose,  (a) 


came  to  a  conclusion  adverse  to  that  inti- 
mated by  Story,  J.,  in  Dartmouth  College 
V.  Woodward.  In  Londonderry  v.  Ches- 
ter, 2  N.  H.  268,  per  Woodbury,  J.,  mar- 
riage was  held  to  be  a  mere  civil  contract. 
{z)  Dartmouth  College  v.  Woodward, 
4  Wheat.  518,  G44,  per  Marshall,  C.  J.: 
"It  is  more  than  ])ossibIe,  that  the  pres- 
ervation of  rights  of  this  description  was 
not  particularly  in  the  view  of  the  framers 
of  the  constitution,  when  the  clause  under 
consideration  was  introduced  into  that  in- 
strument. It  is  ]M'obable,  that  interferen- 
ces of  more  fre(|uent  occurrence  to  which 
the  temptation  was  stronger,  and  of  which 
the  mischief  was  more  extensive,  consti- 
tuted the  great  motive  for  imposing  this 
restriction  on  the  State  legislatures.  But 
although  a  particular  and  a  rare  case  may 
not,  in  itself,  be  of  sufiicient  magnitude  to 
induce  a  rule,  yet  it  must  be  governed  by 
the  rule  when  cstai)li,shcd,  unless  some 
plain  and  strong  reason  for  excluding  it 
can  be  given.  It  is  not  cnougli  to  say, 
that  tlii-i  particular  case  was  not  in  the 
mind  of  the  convention,  when  the  article 
was  framed,  nor  of  tiie  American  people 
when  it  was  adopted.  It  is  necessary  to 
go  further,  and  to  say  tliiit,  had  this  )iar- 
ticulur  been  suggested,  the  language'  would 
have  been  so  varied,  as  to  exclude  it,  or  it 

[  7.'30  ] 


would  have  been  made  a  special  excep- 
tion. The  ease  being  within  the  words  of 
the  rule,  must  be  within  its  o])eration  like- 
wise, unless  there  be  something  in  the 
literal  construction  so  obviously  absurd, 
or  mischievous,  or  repugnant  to  the  gen- 
eral spirit  of  the  instrument,  as  to  justify 
those  who  expound  the  constitution  in 
making  it  an  exception." 

(a)  Green  v.  Biddle,  8  Wheat.  1 ;  Haw- 
kins r.  Barney,  5  Pet.  457.  A  contract 
of  a  State  with  an  individual,  whether  it 
assumes  the  form  of  a  grant  or  not,  is  a 
contract  within  the  prohibition  of  the  con- 
stitution. New  Jersey  v.  Wilson,  7  Cranch, 
1 64 ;  Fletcher  v.  Peck,  6  id.  87.  Marshall, 
C.  J. :  "When,  then,  a  law  is  in  its  nature 
a  contract;  when  absolute  rights  have 
vested  under  the  contract ;  a  repeal  of  the 
law  cannot  divest  those  rights;  and  the 
act  ofannidling  them,  if  legitimate,  is  ren- 
dered so  by  a  power  ai)plicai)le  to  the  case 
of  every  individual  in  the  community." 
Winter  v.  Jones,  10  Ga.  190;  Adams  u. 
Ilackctt,  7  Foster,  21)4  ;  Providence  Bank 
1'.  Hillings,  4  I'et.  5G0.  In  Woodruff  v. 
Trapnali,  10  IIow.  190,  the  State  of  Ar- 
kansas chartered  a  bank  of  which  it  owned 
all  the  stock,  and  provided  in  the  charter 
that  the  bills  of  the  bank  should  be  re- 
ceived ill  payment  of  debts  duo  the  State ; 


en.  XI.]       CONSTITUTION  OF  THE  UNITED  STATES.  705 

This  clause  leaves  no  room  for  any  question  as  to  the  degree 
in  which  the  obligation  of  a  contract  is  impaired,  in  order  to 
come  within  the  prohibition.  Any  change  which  bears  injuri- 
ously upon  the  obligation,  is  fatal,  and  avoids  the  law  which 
makes  this  change. 

The  constitution  gives  to  Congress  the  power  of  making  a 
bankrupt  law.  But  it  seems  to  be  settled  that  this  power  is 
not  exclusive;  because  the  several  States  may  also  make  dis- 
tinct bankrupt  laws,  each  State  for  itself,  {b)  In  fact,  however, 
no  State  has  enacted  a  bankruptcy  law  under  that  name ;  but 
all  or  nearly  all,  have  insolvent  laws,  or  at  least  laws  making 
provision  of  some  sort  of  cases  of  insolvency;  and  some  of 
these  insolvent  laws  seem  to  contain  all  the  elements  and 
characteristics  which  should  entitle  them  to  the  name  of  bank- 
rupt laws,  (c)  But,  on  the  one  hand,  our  several  States  are  dis- 
tinct and  independent  sovereignties,  and  in  some  respects  for- 
eign to  each  other.  Yet,  on  the  other,  the  intercourse  between 
the  citizens  of  the  several  States,  and  the  intimacy  of  their 
social  and  business  relations,  is  as  close  and  constant  as  be- 
tween fellow-citizens  of  the  same  government  or  the  same 
city.  From  this  circumstance  there  arises  one  very  great  dif- 
ficulty in  regard  to  the  operation  of  these  insolvent  laws ;  and 
this  is  much  increased  when  it  is  complicated  with  those  which 
spring  from  the  application  of  this  prohibitory  clause  of  the 
constitution.  And  such  has  been  the  singular  character  of  the 
adjudication  upon  this  subject ;  the  same  courts  presenting,  in 
different  cases,  very  different  views  of  the  same  question ;  few 
of  them  of  leading  importance  being  decided  with  unanimity ; 


it  was  held  that  a  contract  suhsistcd  he-  so  far  as  the  interpretation  of  this  pro- 

twecn  the   State  and  the  holders  of  the  vision   of  the   constitution   is  concerned, 

notes,  and  that  a  repeal  of  that  provision  Sturges  v.  Crowninshield,  4  Wheat.  122. 

could  not  affect  notes  in  circulation  at  the  Marshall,   C.  J. :    "The  difficulty  of  dis- 

time  of  the  repeal,  with  which  the  holder  criminating  with   any  accuracy  between 

might  discharge  any  debt  due  from  him  to  insolvent  and  bankrupt  laws  should  lead 

the  "State.  to  the  opinion  that  a  bankrupt  law  may 

{b)  Sturges  V.  Crowninshield,  4  Wheat,  contain  those  regulations  which  are  gen- 

122;    Ogden   v.    Saunders,    12   id.    213;  erally  found  in  insolvent  laws;  and  that 

Blanchard  v.  Eussell,  13  Mass.  1.     Con-  an  insolvent  law  may  contain  those  which 

tra,    Golden  v.   PrinceV  3   Wash.  C.  C.  are  common  to  a  bankrupt  law."     Both 

313.  of  these  subjects  have  been  considered  in 

(c)  There  seems  to  be  no   distinction  the  preceding  chapter, 
between  a  bankrupt  and  an  insolvent  law, 

[731] 


706  THE  LAW  OF  CONTRACTS.  [pART  II. 

and  in  some  instances,  different  judges  being  led  to  identical 
conclusions  by  reasons  which  seem  to  be  antagonistic;  that  we 
are  hardly  prepared  to  say  that  any  one  of  these  questions  is  as 
yet  finally  and  positively  settled. 

Thus,  the  distinction  is  taken  between  the  obligation  and  the 
remedy,  both  in  the  courts  of  the  United  States,  and  in  those 
of  the  States.  But,  as  we  have  remarked  in  the  preceding 
chapter,  in  which  this  topic  has  been  somewhat  considered, 
we  can  hardly  say  what  it  means.  If  applied  only  to  impris- 
onment of  the  person,  there  is  at  least  no  difficulty  in  under- 
standing it;  and  then  we  begin  with  saying  that  a  State  may 
pass  a  valid  act  lessening  or  abolishing  imprisonment  for  a 
debt  contracted  before  the  act;(c:)  and  from  this  we  may  go 
on  to  sustain  an  insolvent  law,  which  provides  that  there  shall 
be  no  arrest  of  the  person  (for,  if  no  imprisonment,  it  would  be 
absurd  to  arrest),  for  any  debt  of  one  who  comes  under  the  pro- 
tection of  the  law.  This  would  suggest  as  the  next  question, 
whether  every  thing  of  process  as  well  as  imprisonment,  comes 
under  the  head  of  remedy,  and  not  of  obligation.  It  is  not  easy 
to  draw,  on  principle,  a  distinct  and  unquestionable  line  here. 
Imprisonment  is  the  last  and  most  effectual  remedy ;  but  it  is 
only  the  last  of  many  successive  steps,  which  are  linked 
together  in  unbroken  series.  The  first  step  may  be  arrest  of 
the  person,  or  attachment  of  the  goods,  or  only  the  summons  or 
a  command  to  pay  the  debt,  like  the  old  original  writ.  What- 
ever it  may  be,  it  is  not  easy  to  see  why  it  is  not  of  the  same 
nature,  and  under  the  same  category,  as  the  last  step  to  which 
it  leads.  In  other  words,  is  not  all  resort  to  law  used  for  the 
purpose  of  obtaining  the  remedies  of  the  law ;  and  are  not 
civil  processes  parts  of  these  remedies,  differing  only  as  they 
belong  to  different  stages  of  the  process,  and  to  difi'erent  degrees 
in  the  recusancy  of  the  debtor?  If  so,  every  State  has  perfect 
power  over  all  its  processes ;  and  therefore  it  may  provide  as 
to   any  debt,  that  no  process  shall  ever  after  issue,  by  which 


(2)  Rtm-Kcs  V.  rVowninsliidd,  4  Wlioiit.  Chip.  257  ;    Tislicr  v.  Lacky,  G   Blackf. 

122;  Mason  /'.  Ilailc,  12  iil.  .'i7() ;  Hccrs  .'i7.'( ;  Woodfin  r.  Hooper,  4  JIuni])h.  13; 

V.  Ilorion,  !i  IVt.  .'SfjO ;  Gray  v.  Miinroc,  IJronson  i;.  Newberry,  2  Doug.  38. 
1  McLean,  .'J2H ;  Starr  v.  Robinson,  1  D. 

[732] 


CII   XI.] 


COXSTITUTION   OF   THE   UNITED    STATES. 


707 


any  thing  of  compulsion  shall  be  exerted  upon  the  debtor,  and 
it  shall  be  left  entirely  to  his  own  discretion  and  pleasure  as  to 
the  payment  of  the  debt;  and  this  law  is  protected  by  this  view 
of  the  constitution  of  the  United  States,  because  it  does  not 
impair  the  obligation  of  that  debt.  It  is  at  least  equally  difficult 
to  deny  that  the  courts  have  made  and  perhaps  established 
this  distinction  between  the  remedy  and  the  obligation,  or  to 
avoid  these  conclusions,  as  logical  if  not  legal.  But  a  dis- 
tinction is  taken  here,  and  on  so  much  authority,  that  it  may 
be  regarded  as  established.  It  is,  that  while  exemption  from 
arrest,  or  from  imprisonment,  affects  only  remedy,  an  exemp- 
tion of  the  property  from  attachment,  or  a  subjection  of  it  to  a 
stay-law,  or  appraisement  law,  impairs  the  obligation  of  the 
contract.  And  such  a  statute  can  be  enforced  only  as  to  con- 
tracts made  subsequently  to  the  law.  (a)     At  the  same  time, 


(a)  There  has  of  late  been  a  tendency 
in  the  courts  of  the  United  States,  to  ren- 
der the  distinction  between  the  ohlir/nfion 
and  the  remed;/  to  a  great  extent  inojiera- 
tive,  by  regarding  the  remedy  to  be  so  coji- 
nccted  with  the  obHgation,  as  in  many 
respects  to  be  a  part  of  it,  and  holding 
unconstitutional  such  legislation  on  rem- 
edies existing  at  the  time  the  contract 
was  made,  as,  by  a  change  of  the  remedy, 
takes  away  or  materially  impairs  the 
creditor's  rights.  Bronson  v.  Kinzie,  1 
How.  311.  See  Green  v.  Biddle,  8  Wheat. 
1,  75.  Thus  a  law  of  the  State  of  Illi- 
nois, providing  that  a  sale  shall  not  be 
made  of  property  levied  on  under  an  ex- 
ecution, unless  it  would  bring  two  thirds 
of  its  valuation  according  to  the  appraise- 
ment of  three  householders,  was  held,  as 
regards  contracts  made  prior  to  its  pas- 
sage, unconstitutional.  McCracken  v. 
Hayward,  2  How.  COS,  612.  Per  Bald- 
tvin,  J. :  "  In  placing  the  obligation  of 
contracts  under  the  protection  of  the  con- 
stitution, its  framers  looked  to  the  essen- 
tials of  the  contract,  more  than  to  the 
forms  and  modes  of  proceeding  by  which 
it  was  to  be  carried  into  execution  ;  aniuil- 
ling  all  State  legislation  which  impaired 
the  obligation,  it  was  left  to  the  States  to 
prescribe  and  shape  the  remedy  to  enforce 
it.  The  obligation  of  a  contract  consists 
in  its  binding  force  on  the  party  who 
makes  it.  This  depends  on  the  laws  in 
existence  when  it  is  made  ;  these  are  noc- 

VOL.  II.  G2 


essarily  refeiTcd  to  in  all  contracts,  and 
forming  a  part  of  them  as  the  measure  of 
the  obligation  to  perform  them  by  the  one 
party,  and  the  right  acquired  by  the  other. 
There  can  be  no  other  standard  by  wiiich 
to  ascertain  the  extent  of  either,  than  that 
which  tlie  terms  of  the  contract  indicate, 
according  to  their  settled  legal  meaning  ; 
when  it  becomes  consummated,  the  law 
defines  the  duty  and  the  right,  compels 
one  party  to  perform  the  thing  contracted 
for,  and  gives  the  other  the  right  to  en- 
force the  performance  by  the  remedies 
then  in  force.  If  any  subsequent  law 
affect  to  diminish  the  duty,  or  im]^air  the 
right,  it  necessarily  bears  on  the  obligation 
of  tlie  contract,  in  favor  of  one  party,  to 
the  injury  of  the  other;  hence  any  law 
which  in  its  operation  amounts  to  a  denial 
or  obstraction  of  the  rights  accruing  by  a 
contract,  though  professing  to  act  onlj'  on 
the  remedy,  is  directly  obnoxious  to  the 
prohibition  of  the  constitution."  And 
again,  61.3,  614  :  "The  obligation  of  the 
contract  between  the  parties  in  this  case, 
was  to  perform  the  promises  and  under- 
takings contained  therein ;  the  right  of 
the  pjlaintiff  was  to  damages  for  the  breach 
thereof,  to  bring  suit  and  obtain  a  judg- 
ment, to  take  out  and  prosecute  an  exe- 
cution against  the  defendant,  till  the  judg- 
ment was  satisfied,  pursuant  to  the  exist- 
ing laws  of  Illinois.  These  laws  giving 
these  rights  were  as  perfectly  binding  on 
the  defendant  and  as  nuxch  a  ])art  of  the 

[733  J 


708 


THE   LAW   OP   CONTRACTS. 


[part  il 


however,  it  is  admitted  that  a  State  may  make  partial  exemp- 
tions of  property,  as  of  furniture,  food,  apparel,  or  even  a  home- 
stead, (b) 

It  is  to  be  observed  that,  as  to  the  retncdy,  there  can  be  no  dif- 
ference between  a  debt  existing  before  and  one  contracted  after 
the  law  is  made.  There  may  be  a  difference  as  to  the  propriety 
or  expediency  of  the  law,  but  none  as  to  the  right  of  the  State 
to  pass  the  law ;  for  this  right  is  perfect,  except  so  far  as  it  is 
controlled  by  this  clause  in  the  constitution.  And  on  this 
ground  it  has  been  held  that  nothing  in  the  constitution  of  the 
United  States  prevented  a  State  from  passing  a  valid  law  to 
divest  rights  which  had  been  vested  by  law  in  an  individual, 
because  this  was  not  a  contract,  (c) 

We  have,  therefore,  to  inquire  which  of  these  insolvent  laws 
affect  only  the  remedy,  and  which  go  further  and  discharge  the 


contract  as  if  they  had  been  set  forth  in 
its  stipulations  in  the  very  words  of  the 
law  rehiting  to  judi^nients  and  executions. 
If  the  defendant  lias  made  such  an  agree- 
ment as  to  authorize  a  sale  of  his  property 
which  should  he  levied  on  by  the  sheritf, 
for  such  price  as  should  be  bid  for  it  at  a 
fair  public  sale,  on  reasonable  notice,  it 
would  have  conferred  a  right  on  the 
plaintiff,  which  the  constitution  made  in- 
violable ;  and  it  can  make  no  difference 
whether  such  right  is  conferred  by  the 
terms  or  law  of  the  contract.  Any  sub- 
sequent law  which  denies,  obstructs,  or 
impairs  this  rigiit,  by  superadding  a  con- 
dition that  there  shall  be  no  sale  for  any 
sum  less  than  the  value  of  the  property 
levied  on,  to  be  ascertained  by  appraise- 
ment, or  any  other  mode  of  valuation  than 
a  pulilic  sale,  affects  the  obligation  of  the 
contract,  as  much  in  tlie  one  case  as  the 
other,  for  it  can  be  enforced  only  l)y  a  sale 
of  the  defcndcnt's  pro])erty,  and  the  pre- 
vention of  such  sale  is  tiie  denial  of  a 
right.  The  same  i)ower  in  a  State  legis- 
lature may  be  carried  to  any  extent,  if  it 
exists  at  all  ;  it  itiay  proiiiiiit  a  sale  for  less 
than  the  wliole  appraised  vahie,  or  for 
tiiree  fourths,  or  nine  tciitlis,  as  well  as  for 
two  tiiirds  ;  for  if  the  jiowcr  can  i)e  exer- 
cised to  any  extent,  its  exercise  must  be  a 
matter  of  uncontrollable  discretion,  in 
passing  laws  relating  to  the  rcinc(]y,  which 
are  regardless  of  the  effect  on  the  riglit  of 
the  plainlilf.     These  cases  have  been  the 

[734] 


subject   of  much  comment   in  the   State 
courts."     See  cases  cited  in  the  next  note. 

(b)  It  has  lately  been  held  in  New  York 
(overruling  Quackenbush  v.  Danks,  1 
Denio,  128,3  id.  594,  1  Comst.  129),  that 
a  law  exempting  property  of  the  debtor 
from  execution,  which  was  liable  to  exe- 
cution when  the  debt  was  contracted, 
merely  modifies  the  remedy  for  enforcing 
contracts,  and  does  not  destroy  or  sub- 
stantially modify  its  efficiency,  and  is 
therefore  constitutional.  Morse  r.  Gould, 
1  Kern.  281.  So  it  is  held  in  Michigan, 
that  property  may  be  exempted  from  exe- 
cution for  debts  contracted  Before  the  law 
of  exemjjtion  was  enacted.  Rockwell  v. 
Hubbell,  2  Doug.  197.  See  Bronson  v. 
NewbeiTv,  2  id.  38;  Evans  v.  Montgom- 
ery, 4  Watts  &  S.  218;  Bumgardner  v. 
The  Circuit  Court,  4  Mo.  50 ;  Tarplcy  v. 
llamcr,  9  Smedes  &  M.  310. 

(c)  Calder  v.  Bull,  3  Dall.  386  ;  Sat- 
terleo  v.  Mathewson,  2  Pet.  412;  Wat- 
son V.  Mercer,  8  id.  89  ;  Charles  River 
Bridge  v.  ^Varren  Bridge,  11  Pet.  540, 
549;  Baltimore  and  Suscpiehaiinah  R.  R. 
Co.  V.  Neshit,  10  How.  395;  White  v. 
White,  5  Barb.  474;  Baugher  v.  Nelson, 
9  (iill,  299.  So  in  Wilson  v.  Ilardesty,  1 
Md.,  Ch.  CO,  it  was  /iM  that  a  law  which 
limited  the  defence  to  a  usurious  contract 
to  the  excessive  interest,  was  valid,  al- 
thongh  at  ihc  time  tlie  contract  was  made 
there  was  a  law  declaring  such  a  contract 
absolutely  void. 


CH.  XI.]  CONSTITUTION   OF   THE   UNITED    STATES.  709 

debt.     It  may  be  found  that  most  are  in  the  nature,  or  use  the 
language,  of  a  cessio  bunorum,  leaving  the  debt  still  existing ; 
some,  however,  discharge  it  altogether.     And  perhaps  it  may  be 
gathered  from  the  adjudications,  up  to  this  time,  that  an  insol- 
vent law  of  a  State,  which  discharges  the  debt,  is  valid  only  as 
it  refers  to  contracts  made  after  the  law^  was  passed  ;  and  that 
if  an  insolvent  law   makes   no   distinction   in  this  respect,  it 
would  be  construed  as  intended  only  to  apply  to  subsequent 
debts,  and  therefore  as  valid ;  but  if  it  purports  expressly  to  dis- 
■  charge  existing  and  antecedent  debts,  it  is  for  this  reason  void 
and  of  no  effect  whatever,  [d)     And  if  it  does  not  discharge  the 
debt,  but  only  exempts  the  person  from   imprisonment,  if  he 
surrenders  all  his  property  for  all  his  debts,  this  is  valid,  because 
it  affects  only  the  remedy  ;  and  it  would  seem  to  be  valid  equally 
whether  it  applies  to  all  existing  debts  or  only  to  subsequent 
debts,  (e)      On  the  other  hand,  if  it  not  only  exempts  the  person 
from  imprisonment,  but  also  the  property  from  attachment  on 
mesne  process  and  on  execution,  this   would  be  held  void  as 
against  the  constitution,  because  it  impaired  the  obligation  of 
the  contract.     But  as  we  have  already  intimated,  we  say  this 
on  authority,  without  undertaking  either  to  maintain  or  to  de- 
fine this  distinction,  on  reason  or  on  principle,  any  further  than 
to  remark,  that  a  doctrine  which  would  go  far  to  reconcile  the 
cases,  and  which  may  have  a  practical  value  though  not  much 
logical  precision,  would  be  this :   legislation  on  the  remedies  of 
prior  contracts  would  be  constitutional,  provided  its  modifica- 
tion  of  these   remedies   still   leaves    substantial    and    efficient 
means  of  enforcing  them.  (/) 

From  our  statements  on  this  subject  in  the  preceding  chapter, 
and  the  authorities  there  cited,  it  will  be  inferred,  that  a  State 
insolvent  law  operates  in  favor  of  its  citizens  who  are  insolvent 


[d)  Sturges  v.  Crowninshield,  4  Wheat,  v.  Cook,  9  Conn.  314  ;  Smith  v.  Parsons, 

122  ;  M'MiUan  v.  M'Neill,  4  id.  209  ;  Og-  1  Ohio,  107. 

den  V.   Saunders,   12  id.  213  ;    Boyle  v.  (e)  See  cases  cited  ante,  note  (z). 

Zacharic,  6  Pet.  348;  Planters    Bank  v.  { f)  Sturgesy.  Crowninshield,  4  Wheat. 

Sharp,  6  How.  328;  Mather  v.  Bush,  16  122;  James  r.  Stull,  9  Barb.  482;  Bruce 

Johns.  233;  Hicks  v.  Hotchkiss,  7  Johns,  v.  Schuyler,  4  Oilman,  221,  227  ;  Stock- 

Ch.  297  ;  Blanchard  v.  Russell,  13  Mass.  ing  v.  Hunt,  3   Denio,  274 ;    Howard  v. 

1 ;  Kimberly  v.  Ely,  6  Pick.  440  ;  Norton  Kentucky  &  Louisville  M.  Ins.  Co.  13  B. 

Mon,  285. 

[735] 


710 


THE   LAW   OF   CONTRACTS. 


[part  II. 


—  whether  as  to  remedy  or  as  to  obligation  —  only  as  to  other 
citizens  of  the  same  State ;  (")  and  not  against  citizens  of  other 
States,  who  have  not  assented  to  the  relief  or  discharge  of  the 
debtor,  expressly  or  by  some  equivalent  act,  as  becoming  a  party 
to  the  process  against  him  under  the  law,  taking  a  dividend, 
and  the  like,  (h)  Such  has  been  the  ruling  of  the  courts  of  the 
United  States.  But  in  Massachusetts  it  has  been  held  that  a 
certificate  of  discharge  under  the  insolvent  laws  of  that  State  is 
a  bar  to  an  action  on  a  contract  made  with  a  citizen  of  another 
State,  although  the  latter  has  not  proved  his  claim  under  these 
laws,  if  the  contract  was  by  its  express  terms  to  be  performed 
in  that  State,  {i)  This  distinction  has  however  been  repudi- 
ated in  New  York,  Maryland,  and  in  the  United  States  Circuit 
Court  for  the  first  Circuit,  (ta). 


SECTION    VI. 

OF   THE   MEANING   OF   THE   WORD    "  OBLIGATION "    IN   THIS    CLAUSE. 

A  question,  not  the  same  with  those  we  have  considered,  yet 
closely  akin   to  them,  has  been  much  discussed.     It  is,  what 


(<7)  M'Millan  r.  M'Ncill,  4  "Wheat.  209  ; 
Os'den  v.  Saunders,  12  id.  21.3;  Cook  v. 
Moffat,  5  How.  295;  Van  Reimsdyk  v. 
Kane,  1  Gallis.  371  ;  Hinklcy  v.  Marcan, 
3  Mason,  88;  Bakery.  Wheaton,  5  Mass. 
509  ;  Watson  v.  Uoiirne,  10  id.  337  ;  Brad- 
ford V.  Farrand,  13  id.  18;  Walsh  v.  Far- 
rand,  id.  r.);  Hicks  v.  Ilotchkiss,  7  Johns. 
Ch.  297  ;  Norton  v.  Cook,  9  Conn.  314.  But 
a  discliiirj^c  hy  the  hankriipt  law  of  a  State 
within  which  the  contract  was  made,  and 
of  which  the  debtor  was  a  citizen  wlu-n  it 
was  made,  is  n  j^ood  har  to  an  action 
broufjiit  in  another  State.  Blanchard  r. 
Kussell,  13  Mass.  1.  So  also  where  the 
(liHchar^e  was  granted  in  a  State  where 
tho  contract  was  made  hctween  the  citi- 
zens of  fliat  State,  and  tiic  action  was 
broiif^ht  in  anoth(!r  State.  Piif,'h  v.  Bus- 
Hcll,  2  BJMckf.  3(1G.  See  May  v.  Breed, 
7  (,'iish.  15  ;  wiicrc  it  wjis  Ik  Id  thiit  a  dis- 
cliar;^'e  nmlcr  the  Imij^IIsIi  liaiiknijit  law,  of 
u  inercliiuit  ri'siiliiig  in  jMij^lanil,  from  u 

[730] 


debt  to  a  citizen  of  Massachusetts,  con- 
tracted and  payable  in  England,  is  a  bar 
to  a  subsetiucnt  action  on  the  debt  in  that 
State,  whether  the  debtor  proved  his  debt 
nnder  the  English  commission  of  bank- 
ruptcy or  not. 

(//)  Clay  r.  Smith,  3  Pet.  411.  But 
see  as  to  assent,  Kiniberly  v.  Ely,  6  Pick. 
440;  Aft-new  v.  Piatt,  1.5'id.  417. 

(/)  Scribner  v.  Fisher,  2  Gray,  43,  Met- 
calf,  J.,  dissenting.  This  case  was  af- 
firmed in  Burrall  v.  Bice,  5  Cray,  539; 
Capron  v.  Johnson,  id.  note.  This  excep- 
tion to  the, general  rule  however,  only  ap- 
plies when  tiie  contract  is  cxpnssly  made 
pay:il)Ie  in  tlie  Slate  under  llie  laws  of 
which  the  defendant  claims  a  discharge. 
Dinsmore?'.  Hradley,5  (Tray,4  87  ;  Hough- 
ton r.  Mavnard,  5  Cray,  552. 

(id)  l)()imelly  v.  Clark,  3  Seld.  500; 
Poe  ;•.  Duck,  .5  Md.  1  ;  Demeritt  v.  Ex- 
change I'.ank,  11.  S.  C.  C,  Mass.,  1857, 
20  liaw  Beporter,  006. 


en.  XI.] 


CONSTITUTION    OF    THE    UNITED    STATES. 


711 


does  the  term  "obligation"  in  this  clause,  include  ?  The  im- 
portance of  the  question  rests  mainly  on  the  distinction  which 
has  been  drawn  between  the  laws  of  a  State  which  were  in 
force  at  the  tiiyie  the  contract  was  made,  and  those  which  are 
subsequently  enacted.  The  latter  may  certainly  impair  this 
"  obligation,"  while  the  former,  as  it  is  contended,  certainly 
cannot,  because  all  existing  laws  enter  into  contracts  made 
under  them,  and  define  and  determine  that  contract.  Upon 
this  principle,  the  insolvent  laws  of  a  State,  which  on  certain 
terms  discharged  all  remedies  on  contracts  made  after  its  pas- 
sage, between  the  citizens  of  the  State,  have  been  held  to  be 
constitutional.  Those  who  hold  to  the  distinction  maintain 
that  the  "  obligation  "  of  the  contract  consists  in  the  municipal 
law  existing  at  the  time  the  contract  is  made,  (j)  or  perhaps  in 
a  combination  of  the  moral,  natural,  and  municipal  law,  {k) 
while  those  who  deny  the  distinction,  insist  that  the  "  obliga- 


{j)  "A  contract  is  an  agreement  in 
which  a  party  undertakes  to  do  or  not  to 
do  a  particuhir  thing.  The  hiw  binds 
him  to  perform  his  undertaking,  and  this  is, 
of  course,  the  obligation  of  his  contract." 
Sturges  V.  Crowninshield,  4  Wheat.  122. 
Marshall,  C.  J. :  "What  is  it,  tiien,  which 
constitutes  the  obhgation  of  a  contract  ■? 
The  answer  is  given  by  the  ciiief  justice, 
in  the  case  of  Sturges  r.  Crowninshield, 
to  which  I  readily  assent  now,  as  I  did 
then  ;  it  is  the  law  which  binds  the  parties 
to  perform  their  agreement.  The  law, 
then,  which  has  this  binding  obligation, 
must  govern  and  control  the  contract,  in 
ever}'  shape  in  whicli  it  is  intended  to  bear 
upon  it,  whether  it  affects  its  validity, 
construction,  or  discharge.  It  is,  then, 
the  municipal  law  of  the  State,  whether 
that  be  written  or  unwritten,  which  is  em- 
phatically the  law  of  the  contract  made 
within  the  State,  and  must  govern  it 
throughout,  wherever  its  performance  is 
sought  to  be  enforced."  Ogden  v.  Saun- 
ders, 12  Wheat.  257,  259,  per  Washington, 
J.,  Thompson,  J.,  p.  302,  citing  the  extract 
from  Sturges  v.  Crowninshield,  said : 
"  That  is,  as  I  understand  it,  the  law  of 
the  contract  forms  its  obligation  ;  and  if  so, 
the  contract  is  fulfilled  and  its  obligation 
discharged  by  complying  with  whatever 
the  existing  law  required  in  relation  to 
such  contract ;  and  it  would  seem  to  me 
to  follow,  that  if  the  law,  looking  to  the 
contingency  of  the  debtor's  becoming  un- 
able to  pay  the  whole  debt,  should  pro- 

62* 


vide  for  his  discharge  on  payment  of  a 
part,  this  would  enter  into  the  law  of  the 
contract,  and  the  obligation  to  pay  would, 
of  course,  be  subject  to  such  contingency." 
And  per  Trimble,  J.,  p.  318  :  "From  these 
authorities,  and  many  more  might  be 
cited,  it  may  be  fairly  concluded,  that  the 
obligation  of  the  contract  consists  in  the 
power  and  efficacy  of  the  law  which  applies 
to  and  enforces  performance  of  the  con- 
tracts, or  the  payment  of  an  equivalent 
for  non-performance.  The  obligation  does 
not  inhere  and  subsist  in  the  contract  it- 
self, proprio  vigore,  but  in  the  law  applica- 
ble to  the  contract.  This  is  the  sense,  I 
think,  in  which  the  constitution  uses  the 
term  obligation." 

[k)  "  Eight  and  obligation  are  considered 
by  all  ethical  writers  as  correlative  terms. 
Whatever  I  by  my  contract  give  another 
a  right  to  require  of  me,  I  by  that  act  lay 
myself  under  an  obligation  to  bestow. 
The  obligation  of  every  contract  will  then 
consist  of  that  right  or  power  over  my 
will  or  actions,  which  I,  by  my  contract, 
confer  on  another.  And  that  right  and 
power  will  be  found  to  be  measured, 
neither  by  moral  law  alone,  nor  univer- 
sal law  alone,  nor  by  the  laws  of  society 
alone,  but  by  a  combination  of  the  three, 
—  an  operation  in  which  the  moral  law  is 
explained  and  applied  by  the  law  of  na- 
ture, and  both  modified  and  adapted  to 
the  exigencies  of  society  by  positive  law." 
12  Wheat.  281,  per  Johnson,  J. 

[737] 


712  '  THE  LAW  OF  CONTRACTS.  [PART  II. 

tion  "  consists  in  the  universal  law  of  contracts,  which  is  unaf- 
fected by  municipal  law,  and  is  not  itself  conferred  or  created 
by  positive  law,  but  derived  from  the  agreement  of  the  par- 
ties. (/) 

The  question  has  also  been  raised,  whether  this  clause  of  the 
constitution  limits  or  aflects  the  power  of  the  State  to  enact 
general  police  regulations  for  the  preservation  of  the  public 
health  and  morals.  Thus,  if  a  legislature  grant  a  charter  to  a 
corporation  to  hold  land  for  the  purpose  of  burying  the  dead 
within  the  limits  of  a  city ;  can  a  subsequent  legislature,  for 
the  purpQse  of  preserving  the  health  of  the  city,  prohibit  all  per- 
sons from  burying  the  dead  within  the  limits  of  the  city,  and 
by  this  prohibition  render  their  former  grant  useless  and  inoper- 
ative ?  Or  can  a  legislature,  having  authorized  an  individual 
or  a  company  to  raise  a  certain  sum  of  money  by  lotteries,  or 
after  having  licensed  individuals  to  sell  spirituous  liquors  for  a 
certain  period,  afterwards,  for  the  purpose  of  preserving  the 
public  morals,  recall  such  authority  or  license,  by  a  general  law, 
prohibiting  lotteries,  or  the  sale  of  spirituous  liquors  ?  And  if 
this  can  be  where  the  grant  or  license  was  gratuitous,  can  it 
also  be  done  if  a  certain  price  or  premium  was  paid  for  it? 
While  the  authorities  are  not  uniform,  we  consider  the  prevail- 
ing adjudication  of  this  country  to  favor  the  rule,  that  such 
general  laws  are  not,  in  either  case,  within  the  purview  or  pro- 
hibition of  the  constitution,  (m)  If  nothing  is  paid  for  the 
license  or  the  authority,  the  authorities  are  quite  uniform  that  it 
may  be  taken  away  by  such  general  law.  But  where  a  fee  or 
premium  has  been  paid,  there  arc  cases  which  hold  this  to  con- 
stitute a  contract  that  is  binding  on  both  parties,  (w) 


{/)  "Contracts   have   consequently   an  Plialen  r.  Virginia,  8  IIovv.  163;  Hirn  w. 

intrinsic  oliliy;ntion.  ...  No   State  shall  The   State  of  Ohio,    1    Ohio  State,   15; 

'pass  any  law  impairing  the  ohligation  of  Baker  v.  Boston,  12  Pick.  194  ;  Vandcr- 

dontracts.'     'J'hese  words  seem    to   lis  to  hilt  i\  Adams,  7  Cowcn,   .'549  ;  Coatcs  v. 

imfiort  that   th(!    ohligation    is    intrinsic;  IMie   Mayor,  &c.  of  New  York,  id.  585; 

that  it  is  cr(;atcd  liy  the  contract  itself,  not  see  24  Am.  .Jurist,  279,  280. 
that  it  is  dependent  on  th(!  laws  madt;  to         (ii)  State  of  Missouri  v.   nawthorn,  9 

enforce    it."      Ogden    v.    Saunders,     12  Mo.    :w.).     See    Frelcigh    r.    Tlie    State, 

Wheat.  .'ir>(»,  ;i5;i,  per  ilA//-.s7»///,  O.  .1.  8    id.  (iOO  ;     State    v.    Sterling,    id.    G97  ; 

{in)   J'halen's   case,  1   liol).  Va.    71.'3;  State  y.  I'lialen,  ;J  Hairing.  Del.  441. 

[7.'38] 


CU.  XI.] 


CONSTITUTION   OF   THE   UNITED    STATES. 


713 


It  is  certain  that  a  State  may  pass  an  act  limiting  the  time 
within  which  existing  rights  of  action  shall  be  barred.  But  a 
reasonable  time  must  be  given  after  its  passage,  within  which 
these  rights  may  be  enforced,  (o) 

Cases  have  also  arisen  under  the  clause  of  the  constitution  of 
the  United  States,  which  relates  to  the  regulation  of  commerce 
by  Congress.  In  these  cases  the  supreme  court  appear  to  recog- 
nize the  validity  of  police  regulations  or  statutes  which  indi- 
rectly affect  the  exercise  of  powers,  which,  by  the  constitution, 
belong  exclusively  to  congress,  (p)  We  do  not  refer  to  these 
questions,  however,  particularly,  as  they  do  not  seem  to  come 
within  the  scope  of  the  Law  of  Contracts. 


(o)  Sturges  v.  Crowninshield,  4  Wheat. 
122,  207.  Marshall,  C.  J. :  "  If  in  a  State 
where  six  years  may  be  pleaded  in  bar  to 
an  action  of  assumpsit,  a  law  should  pass 
declaring  that  contracts  already  in  exist- 
ence not  barred  by  the  statute  should  he 
construed  to  be  within  it,  there  could  be 
little  dount  of  its  unconstitutionality." 
Jackson  v.  Lamphire,  3  Pet.  290  ;  Bron- 
son  V.  Kinzie,  1  How.  311  ;  McCracken 
V.  Hayward,  2  id.  608;  Society,  &c.  v. 
Wheeler,  2  Gallis.  141  ;  Call  v.  Hagger, 
8  Mass.  423 ;  Blackford  v.  Peltier,  1 
Blackf.  36  ;  Proprietors  of  Ken.  Purchase 
V.  Laborce,  2  Greenl.  293  ;  Beal  v.  Nason, 
14  Me.  344;  GriflSn  v.  McKcnzie,  7  Ga. 
163  ;  West  Feliciana  K.  li.  Co.  v.  Stock- 


ett,  13  Smedes  &  M.  39.5;  Butler  v.  Pal- 
mer, 1  Hill,  328  ;  Pearce  v.  Patton,  7  B. 
Mon.  1G2;  James  v.  Stull,  9  Barb.  482; 
see  Stori/,  Comm.  Const.  §  1379. 

(p)  Smith  V.  Turner,  7  How.  283,  as 
to  the  State  taxes  on  passengers.  Thur- 
low  V.  Massachusetts,  5  How.  504,  as  to 
the  laws  of  Massachusetts,  of  Ehode  Is- 
land, and  of  New  Hampshire,  prohibiting 
the  sale  of  spirituous  liquors.  New  York 
V.  Miln,  11  Pet.  102,  as  to  statute  of  New 
York  prescribing  sundry  regulations  as  to 
passengers  brought  to  that  State.  Cooley 
V.  The  Board  of  Wardens  of  the  Port  of 
Philadelphia,  12  How.  299,  as  to  State 
Pilotage  laws. 

[739] 


INDEX. 


When  notes  are  referred  to,  the  pages  on  which  they  commence  are  given. 


A. 

ABATEMENT, 

lis  pendens^  good  cause  of,  ii.  231-234. 
ACCEPTANCE, 

of  a  bill,  presentment  for,  I.  221. 

when  and  bow  made,  i.  222. 
must  conform  to  tlie  bill,  i.  222. 
of  offers,  i.  403-408. 

{See  Assent,  Ixdoksemext.) 
of  bids  at  auction  sales,  i.  403. 
of  a  guaranty,  i.  3  75,  401,  500-502. 

by  the  owners  of  goods  delivered  to  a  carrier  before  reacliing  tlieir  des- 
tination, i.  674,  675.] 
required  by  the  Statute  of  Frauds,  ii.  319-325. 

rights  of  buyer,  when  after  acceptance  the  article  proves  deficient  in 
quantity  or  quality,  ii.  325-327. 
ACCEPTOR, 

{See  Indorsement,  Bills  and  Notes,  Acceptance.) 
ACCESSION, 

title  by,  i.  613. 
of  goods,  ii.  474,  475. 
ACCOMMODATION  BILLS  AND  NOTES, 

rights  and  liabilities  of  parties  to,  i.  215,  216. 
ACCORD  AND  SATISFACTION, 

with  one  joint  party  a  discharge  of  the  others,  i.  25,  29. 
definition  of,  ii.  193. 
must  be  complete  and  perfect,  ii.  193. 

when  the  acceptance  of  a  new  promise,  equivalent  to,  ii.  194,  195. 
revival   of   the    original    cause    of  action,   when   the    new   executory 
promise  is  broken,  ii.  195,  196. 


742  INDEX. 

ACCORD  AND  SATISFACTION— Con^inwe^. 

acceptance  of  negotiable  paper  as  a  new  promise,  effect  of,  il.  196. 
evidence  of  simultaneous  parol  agreement  for,  admissible  to  bar  suit 

upon  -written  contract,  ii.  196. 
compromises  of  mutual  claims  or  suits,  ii.  130,  197. 

when  effective  only  as  a  suspension  of  the  original  cause  of  action,  ii. 
196,  197. 
agreement  to  suspend  not  to  be  inferred  from  merely  giving  col- 
lateral security  with  power  to  sell  upon  condition,  ii.  197. 
acceptance,  as  satisfaction,  necessary  to,  ii.  197. 

fact  of,  question  for  the  jury,  ii.  197,  n.  (d). 
must  be  beneficial  to  the  creditor,  and  have  a  consideration,  ii.  198,  199. 
when  defeated  by  the  default  of  the  debtor,  ii.  199. 
whether  release  of  equity  of  redemption  is  good  as,  ii.  199. 
literal  performance  of  the  accord  not  sufficient,  ii.  199. 
analogy  between  and  award,  ii.  200. 

made  by  a  third  person,  and  ratified  by  the  parties,  ii.  200. 
made  before  a  breach,  not  a  bar,  ii.  200. 
ACCOUNT, 

required  of  an  agent,  i.  76. 

of  a  partnership,  equity  governed  by  the  last  settled,  i.  173. 
ACCOUNTS, 

mutual,  effect  of  the  charge  of  a  new  item  in,  ii.  351-353. 

effect  of  striking  balance  of  in  reviving  debt  barred  by  the 
statute  of  limitations,  ii.  356. 
between  merchants  excepted  from  the  statute  of  limitations,  ii.  366-370. 
ACKNOWLEDGMENT, 

what  sufficient  to  revive  a  debt  barred  by  the  statute  of  limitations, 
ii.  343,  n.  (y),  345,  n.  (c),  34  7-353. 
ACQUETS  OR  GAINS, 

community  of,  in  Louisiana,  i.-  306,  note. 
ACT  OF  GOD, 

common  carrier  excused  for  losses  occasioned  by,  i.  634-637. 
action  on  a  replevin  bond  defeated  by  the  destruction  of  the  property 
by,  ii.  478. 
ACTION, 

surety  need  not  wait  for,  i.  33. 

right  of,  under  a  contract,  whether  belonging  to  principal  or  agent,  i.  53. 

against  principal  or  agent,  i.  53,  54. 
against  an  agent  to  determine  the  right  of  the  principal,  i.  67. 
right  of,  between  partners,  i.  IIVJ. 

compromise  of,  a  valid  consideration,  i.  363-365. 
forbearance  of,  i.  366-369. 
assignment  of,  i.  370. 
when  barred,  ii.  231-234. 


INDEX.  743 

ACTIOlii  —  Continued. 

pendency  ofaiTother,  defence  of,  ii.  231-234. 

(See  Pendency  of  another  Suit.) 
for  part  of  claim,  as  for  interest  -witliout  principal,  effect  of,  ii.  132,  147, 

463,  464. 
payment  of  debt  and  costs  upon  one  action  -will  not  defeat  action  for 
nominal  damages  against  another  party  for  same  cause  of  action,  ii. 
130,  n.  (w). 
award  of  discontinuance  of,  and  of  nonsuit,  ii.  209. 
upon  claim  submitted  to  arbitration  revokes  submission,  ii.  219  b. 
(See  Limitations,  Statute  of.) 
AD  DAMNUM, 

damages  not  to  exceed,  ii.  442. 
ADVANCES, 

factor's  right  to  sell  to  repay,  ii.  466. 
ADEQUACY, 

of  consideration,  i.  362,  363,  414. 
ADMINISTKATION, 

(See  Executors  and  Administrators.) 
ADMINISTRATORS, 

(See  Executors  and  Administrators.) 
ADMISSIONS, 

of  a  partner,  when  binding  on  the  firm,  i.  146,  and  n.  (?h),  152. 

of  a  party  asserting  his  freedom,  i.  331. 

of  debts  barred  by  the  statute  of  limitations. 

(See  Acknowledgment.) 
ADVERTISEMENTS  AND  CIRCULARS, 

(See  Warranty,  i.  470,  and  Assent,  i.  400.) 
^S  ALIENUM, 

of  the  civil  law,  ii.  584. 
AGENCY, 

in  general,  i.  38-42. 
what  the  term  includes,  i.  39,  n.  (c). 
fundamental  principles  of,  i.  38,  39. 
AGENTS, 

In  general,  i.  38-42. 

two  controlling  principles  in  regard  to,  i.  38. 
division  of  into  general  and  particular,  i.  39. 

authority  of  each  limited,  of  particular  agents  by  the  special  power 
given,  of  general  agents  by  the  usual  extent  of  the 
general  employment,  i.  40,  41,  42,  49. 
but  unaffected  in  either  case,  by  private  instructions  not 
to  be  communicated  to  parties  dealing  with  the  agent, 
i.  40,  n.  (d),  42. 
must  be  strictly  pursued,  i.  41,  n.  (/). 


744  INDEX. 

AGENTS  —  Continued. 

autliorized  to  settle  claims  cannot  commute  them,  i.  41. 
limited   by   instructions   known   to   parties    dealing  with 
tliem,  i.  41,  n.  (/). 
of  general  agent,  continues  till  notice  of  its  revocation,  i.  42. 
if  injury  is  to  result  to  one  from  neglect  or  omission  of  another's  agent, 

i.  42,  n.  {g). 
principal  liable  for  omission  or  neglect  of  agent,  i.  41,  n.  (^). 
distinction  between  authority  and  appearance  of  authority,  i.  42. 
principal  bound  by  authority  which  he  really  gives,  or  which  he  appears 

to  give,  i.  42. 
but  not  by  appearance  of  authority  which  agent  assumes,  i.  42. 
In  ichat  manner  authority  may  he  given  to  an  agent,  i.  42-44. 

expressly,  by  parol  to  do  any  thing  not  requiring  a  sealed  instrument, 
i.  42. 
but  not  to  execute  contract  under  seal,  i.  42,  n.  (i). 
receipt  of  agent  is  the  receipt  of  pi-incipal,  i.  42,  n.  (/). 
tender  to  the  agent  is  tender  to  the  principal,  i.  42,  n.  ((). 
by  implication,  as  to  an  auctioneer,  wife,  son,  clerk,  insurance  agent, 
i.  43,  249,  252,  287,  289,  304,  392,  393. 
to  indorse  negotiable  paper,  i.  43,  n.  (o),  44,  n.  ((/). 
to  buy  on  credit,  i.  43,  n.  (m). 
Subsequent  confirmation,  i.  44-47. 

expressly  and  by  implication,  i.  44,  45,  46,  n.  («),  47,  n.  (lo). 

•when  agent  may  ratify  acts  of  sub-agent,  i.  47. 

in  cases  of  marine  insurance,  i.  45,  n.  (/<). 

in  cases  of  notices  to  quit,  i.  45,  n.  (//). 

by  neglect  to  disavow  agent's  deeds,  i.  46. 

of  part  of  the  agency  confirms  the  whole,  i.  46. 

once  made  cannot  be  disaflirmed,  i.  46,  n.  (li). 

by  principal  unknown  when  the  contract  Avas  made,  i.  44,  and  n.  (//), 

4  7,  n.  («vy). 
oral,  of  a  parol  contract  suflicient,  i.  47. 

of  a  contract  required  to  be  in  writing  by  statute,  i.  47. 
parol,  of  a  deed  not  sufficient,  i.  47. 

unless  tlic  seal  was  unnecessary  to  its  validity,  i.  47. 
■when  the  ])rincipal  may  ratify  an  nnautliorized  act,  i.  45,  n.  (tl'). 
of  a  trespass,  i.  45,  u.  (^0-  46,  n.  (//),  4  7,  n.  {wy). 
to  bind  tlic  piiucipal,  must  1)0  with  a  full  knowledge  of  the  facts,  i.  46, 

n.  (u). 
by  a  state,  wliat  amounts  to,  i.  4  0,  n.  (m),  4  7,  n.  ("•//). 
where  the  agent  contracted  as  principal,  i.  48,  notes  {a),  (li). 
Signature  by  an  agent,  4  7-4  9. 

what  is  sudiclent  to  make  tlic  jjrincipal  a  party,  i.  4  7,  48. 
•wlicthcr  signature  of  agent  or  princiiial,  to  be  determined  by  the  inten- 
tion, i.  4  7. 


INDEX.  745 

AGENTS— Con/mwed 

whetber  principal  can  sue  or  be  sued  on  a  written  parol  contract  in 

whicli  liis  name  does  not  appear,  i.  48,  notes  (a),  (b),  49. 
signature  by  an  agent  adding  official  designation,  i.  49. 
to  collect  debts  for  government  may  give  reasonable  indulgence  to  debt- 
ors, i.  49. 
no  officer  of  government  can  submit  claim  of  or  against  government  to 

arbitrator,  i.  49. 
Duration  and  extent  of  authority,  49-52. 
how  limited,  i.  49,  50. 
restricted  to  acts  necessary  and  usually  incident  to  the  authorized  act, 

i.  49,  50,  51,  52. 
to  sell,  carries  with  it  no  power  to  sell  on  credit,  i.  50. 

to  barter  or  pledge,  i.  50,  n.  (^). 
except  under  statute,  i.  50,  n.  ((/). 
acts  in  reference  to  negotiable  paper  require  specific  authority,  i.  52. 
to  transfer  negotiable  paper  intrusted  to  them,  i.  52,  211. 
power  to  indorse  implies  no  power  to  receive  notice  of  dishonor,  i.  52. 
when  derived  from  written  instruments  must  be  strictly  pursued,  i.  51, 

52,  96. 
to  warrant,  when  it  is  given,  i.  51,  52. 
effect  of  unauthorized  exercise  of,  to  warrant,  i.  51,  52. 
to  borrow  money,  i.  41,  n.  (/). 

measured  by  usage  when  it  is  oral,  but  not  when  it  is  tvritten,  i.  52. 
efiect  of  the  agent's  concealments  and  misrepresentations  in  avoiding  a 

contract,  i.  52,  n.  (?•). 
The  right  of  action  under  a  contract,  i.  53,  418. 
when  an  undisclosed  principal  may  sue  and  be  sued,  i.  53,  54. 
parol  evidence  admissible  to  charge  unnamed  principal,  i.  49. 
when  the  agent  of  an  undisclosed  principal  may  sue  and  be  sued,  I.  55, 

n.  (J),  418. 
Liahility  of  an  agent,  I.  54-58. 
in  what  cases  liable,  i.  50,  54. 
when  he  himself  Is  the  real  principal,  I.  55. 
when  he  transcends  his  authority,  I.  50,  51,  55. 
not  responsible  to  third  parties  for  mere  neglect  or  omission,  I.  55. 
not  liable  on  covenants  expressly  those  of  principal,  i.  55. 
agent's  acts,  construed  to  bind  the  principal,  i.  55. 
principal  discharged  if  the  agent's  note  be  taken,  i.  55. 
notwithstanding  subsequent  confirmation  by  principal,  I.  55,  n.  (d). 
liable  for  the  entire  contract,  when  he  exceeds  his  authority  in  part,  i- 

58. 
whether  liable  when  acting  londfde  without  authority,  I.  55,  56. 
In  what  form  of  action  liable,  I.  57,  58. 

VOL.  II.  63 


746  INDEX.  ■ 

AGENTS  —  Continued. 

Revocation  of  autliorUy,  i.  58-62. 

failure  of  principal  to  notify  agent  of  his  dissent,  i.  46. 

his  authority  revocable  by  principal,  i.  58. 

unless  coupled  with  an  interest,  or  given  for  valuable  consideration,  i. 

58,  n.  (/i),  61,  85. 

"when  authority  is  coupled  with  an  interest,  i.  61. 

whether  that  of  factor  to  sell  is  revocable  after  advances  by  him,  i.  58, 

n-  W-  ,  .         .  .    • 

continues  as  regards  third  persons  until  notice  of  its  revocation,  i.  41,  42, 

59,  60. 

method  in  which  notice  of  should  be  given,  i.  59,  60. 

revocable  by  death  unless  coupled  with  an  interest,  i.  60,  61,  and  n. 

("0- 

by  lunacy,  i.  60,  n.  (/). 
by  bankruptcy,  i.  60,  n.  (Z). 
by  marriage  oifeme  sole,  i.  60,  n.  (J). 
How  the  principal  is  affected  hy  the  misconduct  of  his  agent,  i.  62,  63. 
principal  liable  for  fraud  and  false  representations  of  his  agent,  i.  63. 
although  no  actual  fraud  is  proved,  i.  63. 
Of  notice  to  an  agent,  i.  63-66. 
when  equivalent  to  notice  to  the  principal,  i.  63,  65,  ii.  184. 
when  notice  to  an  attorney  is  notice  to  his  client,  i.  64. 
when  notice  to  the  principal  is  notice  to  his  agents,  i.  65. 
whether  knowledge  of  the  principal  is  knowledge  of  the  agent,  i.  65. 
what  notice  affects  a  corporation,  i.  65,  66. 
Of  shipmasters,  i.  66,  67. 

their  extraordinary  powers  under  peculiar  exigencies,  i.  66,  67. 
Of  an  action  against  an  agent  to  determine  the  right  of  a  principal,  i.  67,  68. 
agent  not  liable  to  suit  for  money  paid  to  him  to  which  principal  has 

color  of  right,  i.  6  7. 
unless  notice  not  to  pay  over  has  been  given,  or  the  payment  is  void  ah 
initio,  i.  67,  n.  (i). 
The  rights  and  obligations  of  j^rincipals  and  agents  as  to  each  other,  i.  69-77. 
agents  bound  to  follow  the  instructions  of  principal,  i.  69. 
whctlier,  when  and  how  far  principal  is  bound  by  a  partial  execution  of 

authority  by  agent,  i.  71. 
if  he  has  none,  is  bound  to  follow  custom  and  usage,  i.  69,  73. 
what  is  such  usage,  i.  73. 

and  usage  will  not  justify  a  disregard  of  instructions,  i.  69. 
how  each  is  affected  by  the  principal's  ratification  of  the  agent's  contracts 

and  torts,  i.  69,  70. 
j)riiicipul  must  reject  agent's  unauthorized  act  at  once  or  he  ratifies  it, 
i.  71. 


INDEX.  747 

AGE'NTS— Continued. 

■when  agent's  act  may  be  partly  void,  i.  70,  n.  (n). 

■when  the  agent  can  delegate  his  authority,  i.  71,  72. 

whose  agent  the  substitute  is,  i.  72,  73,  76.    . 

agent  bound  to  use  proper  care,  diligence,  and  skill,  i.  73. 

to  what  extent  liable  when  acting  gratuitously,  i.  73,  notes  (to),  (2). 

or  in  a  professional  capacity,  i.  73,  notes  (iv), 

responsible  for  misconduct  and  deviation  from  instructions,  i.  74. 
must  not  hold  a  position  adverse  to  that  of  principal,  i.  74. 
when  employed  to  buy  or  sell,  cannot  buy  of  or  sell  to  himself,  i.  74,  75. 
and  need  not  be  proved  to  have  taken  undue  advantage  of  his  position, 

i.  75. 
bound  to  account  with  proper  frequency,  i.  76. 
when  chargeable  with  interest  on  balance  in  his  hands,  i.  77. 
to  whom  mixed  property  of  principal  and  agent  belongs,  i.  77. 
agent's  claims  on  principal  when  principal  refuses  or  neglects  to  adopt 

his  acts,  i.  77. 
when  liable  as  partners,  i.  134-137. 

whether  appointment  of  agent  by  an  infant  is  void  or  voidable,  i.  243. 
when  the  wife  is  agent  of  the  husband,  i.  255,  286-306. 
when  and  how  far  banks  are  responsible  for  acts  of,  i.  586. 
who  are,  of  a  common  carrier,  i.  651,  655-657,  685,  699. 
a  slave  may  be  an  agent,  i.  333. 
remission  of  money  by,  ii.  49,  n.  (z). 
payment  to,  payment  to  the  principal,  ii.  126,  127. 
of  the  debtor,  payment  to,  ii.  126. 
tender  to,  and  by,  ii.  151,  160. 
set-ofF,  by  and  against,  ii.  248-251. 
fraud  of,  responsibility  of  the  principal  for,  ii.  277. 
signing  by,  under  the  statute  of  frauds,  ii.  291,  292. 

in  equity,  ii.  546,  n.  (w). 
when  agent  may  write  his  own  signature,  ii.  291,  292. 
how  agent  may  be  authorized,  ii.  291,  n.  (ni),  (n),  292,  n.  (q),  293,  294. 
who  may  be,  for  purpose  of  signing,  ii.  292. 
carrier,  when  an  agent,  by  the  statute  of  frauds,  ii.  327-330. 
written  acknowledgment  by,  whether  sufficient  to  revive  a  debt  barred 

by  the  statute  of  limitations,  ii.  357-359. 
of  the  creditor,  promise  to,  revives  the  debt,  ii.  365. 
when  interest  allowed  in  an  action  by  the  principal  against,  ii.  382. 
damages  in  an  action  against,  ii.  465-468. 
in  an  action  by,  ii.  468. 

nominal,  when  recoverable  against,  ii.  493,  n.  (17). 
when  assignees  in  insolvency  may  employ,  ii.  624. 
(^See  Attorney,  Auctioneer.) 


748  INDEX. 

AGIO, 

meaning  when  used  as  a  term  in  contracts,  ii.  8. 
AGREEMENT, 

use  of  the  term,  i.  6. 

words  of  recital  in  deed  constituting,  ii.  22,  23. 
■when  equivalent  to  covenant,  ii.  13,  n.  (r),  14,  15. 
(See  Assent,  Contracts,  &c.) 
ALIENS, 

definition  of,  by  the  common  law,  i.  323. 
what  persons,  born  abroad,  are  citizens  bj'  statute,  i.  323. 
rights  of,  as  to  real  property,  i.  323,  324. 
as  to  personal  property,  i.  324. 
suits  by  and  against,  i.  324,  325. 
general  rights  and  duties  of,  i.  324,  325. 

rights  and  liabilities  of,  how  affected  by  the  lex  loci,  ii.  81,  100. 
may  avail  themselves  of  courts  in  like  manner  as  citizens,  ii.  100. 
(See  Place,  Law  of.) 
ALTERATION, 

effect  of,  when  made  by  a  stranger,  ii.  223. 
when  made  by  a  party,  ii.  223-227. 
upon  bonds,  ii.  226,  notes  (r)  and  (?<). 

on  deeds,  bills  of  exchange,  and  awards,  ii.  223,  n.  (q),  228, 
and  n.  («). 
material  and  immaterial,  ii.  226. 
whether  material,  a  question  of  law,  ii.  226. 
by  adding,  or  tearing  off  a  seal,  ii.  227,  228. 
by  filling  blanks,  ii.  229. 
when  obvious,  whether  presumed  to  have  been  made  before  or  after 

execution,  ii.  228,  and  n.  (o). 
in  a  deed,  after  the  vesting  of  the  estate  —  the  estate  not  divested  by, 

ii.  223,  n.  (q),  230,  231. 
of  covenants,  ii.  231. 
ALTERNATIVE, 

contract  in  the,  how  pci'fbrmed,  ii.  163,  169,  170. 
when  one  l)ranc]i  of  the,  becomes  impossible,  ii.  1 70. 
AMBIGUITIES, 

latent  and  pntent,  ii.  69-75. 
AMBIGUOUS  WORDS,  ii.  50,  51,  and  n.  (h),  55,  and  n.  (/). 
ANNUITIES, 

purchase  of,  not  usurious,  ii.  388,  n.  (<?),  416,  417. 
agreenicnts  concerning,  how  enforced,  ii.  527,  528,  532. 
ANTENUFTLVL  CONTRACTS, 

(^See  MAiua.VGK  Skttlkmknts.) 
AITORTIONMENT, 

of  pric(!,  cflcct  of,  on  entirely  of  a  contract,  ii.  29-31. 
of  contracts,  defined,  ii.  32. 


INDEX.  749 

APPORTIONMENT—  Continued. 

compensation  foi-  service  under  a  contract  not  apportionable,  dependent 

on  its  entii'e  performance,  ii.  32,  33,  172. 
when  contracts  are  apportionable,  ii.  33,  170-173. 
remedy  of  a  party  for  part-performance  of  a  contract,  not  apportion- 
able when  the  failure  is  not  his  fault,  ii.  34,  35,  and  n.  (d). 
when  compensation  for  part-performance  may  be  set  off,  ii.  246. 
APPRENTICES, 

law  governing  the  relation  of,  how  it  arose,  i.  532. 
liabihty  of,  i.  262,  276,  277,  533. 
contract  must  be  in  writing,  i.  533.  • 

rights  and  obligations  of  master  towards,  i.  533,  534. 
liability  of  parties  covenanting  for  good  behavior  of,  i.  534, 
rights  of  master  against  persons  seducing  or  harboring,  i.  535. 
ancienF  law  in  England,  probable  ground  of  considering  contracts  in 
restraint  of  trade  illegal,  ii.  254-257,  259. 
APPROPRIATION, 

of  payments,  ii.  140-147,  356. 
ARBITRAMENT, 

{See  Award.) 
ARBITRATION, 

submission  to,  a  valid  consideration,  i.  364-366. 
clause  in  contracts,  agreeing  to  submit  future  questions  to,  ii.  219. 
{See  Award.) 
ARBITRATOR, 

compensation  of,  i.  538. 

{See  Award.) 
ARRANGEMENT, 

of  words,  how  affecting  construction,  ii.  25. 
ARREST, 

right  of,  whether  governed  by  the  lex  loci  contractus,  ii.  101,  102. 
laws  exempting  from,  Avhen  constitutional,  ii.  702-705. 
ART, 

words  of,  how  construed,  ii.  4,  n.  (6),  5. 
ASSENT,  of  the  parties,  i.  399-408. 
What  the  assent  must  be,  i.  399-403. 
must  be  mutually  obligatory,  i.  373-376,  359. 
the  acceptance  must  not  vary  from  the  proposition,  i.  400,  401. 
certain  terms  published  accepted  by  being  silently  acted  upon,  i.  400. 
acceptance  of  an  offer  of  guaranty,  i.  375,  401,  402,  500-503. 
of  bids  at  sales  by  auction,  i.  403,  418. 
of  an  offer  of  marriage,  i.  544,  545,  546. 
Contracts  on  time,  i.  403,  408. 
acceptance  of  offers,  when  no  time  for  acceptance  is  expressed,  i.  404- 
406. 

63* 


750  INDEX.  • 

ASSENT  —  Continued. 

acceptance  of  offers,  when  time  for  acceptance  is  expressly  fixed,  i. 
404,  405. 
when  both  the  offer  and  acceptance  are  made  by 
letter,  i.  40G-408. 
ASSIGNEES, 

joint  payment  to  one  of,  ii.  128. 
in  bankruptcy  or  insolvency, 

(^e  Bankruptcy  and  Insolvency.) 
who  may  be,  ii.  618-627. 
what  real  property  passes  to,  ii.  628-634. 
what  personal  property,  ii.  634-652. 
what  interests  or  property  do  not  pass,  ii.  652-656. 
inaccuracy  in  the  use  of  the  word,  ii.  636,  645. 
considered  as  agent  for  insolvent,  ii.  636.  * 

trustee,  not  granted,  ii.  620,  621,  645. 
powei's  and  duties  of,  ii.  645,  n.  (^). 
ASSIGNMENT, 

of  all  the  partnership  property  by  a  partner,  I.  154-156. 
of  a  partner's  interest  in  the  firm,  effect  of,  i.  131,  171. 
of  the  shares  of  a  joint-stock  company,  i.  121. 
Of  assignment  of  clioses  in  action^  i.  192-197. 
choses  in  action,  what  are,  i.  192. 

when  they  may  be  enforced  in  equity  by  the  assignee, 

i.  193. 
when  assignee  sues  in  his  own  name,  i.  198. 
what  are  and  what  are  not  assignable,  i.  194-197. 
how  protected  at  law,  i.  195. 
when  a  consideration,  i.  370. 
{See  Novation.) 
Of  the  manner  of  assignment,  i.  197,  198. 

whether  it  must  be  in  writing,  i.  197,  n.  (e). 
Of  the  equitable  defences,  i.  198,  199. 

respective  I'ights  of  the  assignee  and  debtor,  i.  198,  199. 
Covenants  annexed  to  land,  i.  199-201. 
right  to  sue  on,  possessed  by  an  assignee  having  the  same  estate  as  the 

covenantee,  i.  199. 
what  covenants  run  with  the  land,  i.  199-201. 
of  a  debt,  elfect  of,  ii.  137,  138. 
in  bankruptcy  or  insolvency,  and  fraudulent, 

(.See  Bankuui'tcy  and  Insolvency.) 
vohinlary, 

(See  Gil' IS.) 
ATTACH  MKNT, 

foreign,  wiien  a  bar,  ii.  1 18,  232,  233. 


•  INDEX.  751 

ATTACHMENT—  Continued. 

property  exempt  from,  ii.  652. 

laws  exempting  property  from,  whether  constitutional,  ii.  703-705. 
whether   assignment  in  bankruptcy  or  insolvency  transfers  personal 
property  in  foreign    state,  to  assignee,  as   against  foreign  attaching 
creditors, 

{See  Bankruptcy  and  Insolvency.) 
effect  of  upon  covenants  in  a  deed  against  incumbrances, 
{See  Incumbrances.) 
ATTAINDER, 

consequences  of,  i.  348. 
ATTAINTED  PERSONS,  i.  348,  349. 
ATTESTATION, 

after  execution,  effect  of,  ii.  226,  n.  (m),  227,  n.  (y). 
ATTORNEYS, 

classes  of,  i.  94. 

authority  to  make  a  contract  or  deed  must  comply  with  the  formalities 

required  by  statute  for  the  instrument  itself,  i.  94. 
how  it  must  be  executed,  i.  95,  96. 
attorney  at  law,  how  his  authority  must  appear,  i.  9  7. 
when  personally  liable  for  his  client's  money,  i.  97. 
duties  to  clients,  i.  97,  98,  588,  n.  (r). 
when  personally  liable  on  agreements  in  his  own  name  for  his  client's 

benefit,  i.  99. 
compensation  for  services  of,  i.  98,  538,  539. 
cannot  recover  compensation  if  services  are  worthless,  i.  98,  99. 
evidence  required  of  attorney's  retainer,  i.  98. 
attorney's  power  to  bind  client  by  arrangements  about  suits,  i.  99. 

submit  to  arbitration,  limited  to  existing  suit,  i.  99. 
lien  of,  i.  98,  540,  n.  (z). 
notice  to,  when  notice  to  the  client,  i.  64. 
may  not  take  a  gift  from  a  client,  i.  75. 
payment  to,  ii.  126, 
tender  to,  ii.  151,  n.  (r). 

charge  of,  for  writing  letter,  need  not  be  tendered,  ii.  151,  n.  (?•). 
lien  of,  on  an  award,  ii.  213. 

set-off,  how  affected  by,  ii.  242. 
claim  of,  for  professional  services,  when  the  statute  of  limitations  begins 

to  run  on,  ii.  373. 
fees  of,  when  recoverable  as  damages,  ii.  441,  442,  487-489. 
damages  in  an  action  against,  ii.  465-468. 

agreement  to  sell  the  business  of,  how  enforced,  ii.  526,  n.  (^). 
when  assignees  in  insolvency  may  employ,  ii.  624. 
AUCTION, 

an  agent  authorized  to  sell  at,  cannot  sell  at  private  sale,  i.  50,  n.  {g). 


752  INDEX.  • 

AUCTION  —  Continued. 

how  the  purchaser  at,  is  bound  by  memorandum  of  auctioneer,  i.  96, 

n-  {(jg)- 
bids  at,  i.  403,  418. 

bid  for  a  thing  by  mistake,  when  binding,  i.  416. 
sales  at,  effect  of  misdescription,  i.  415-417,  451. 

in  separate  lots,  i.  417.  • 

"when  avoided  by  by-bidding,  i.  417. 
agreement  that  one  purchaser  shall  bid  for  all,  effect  of,  i.  418. 
conditions  of  sale  at,  450,  451. 
AUCTIONEER, 

implied  authority  of,  i.  43. 

cannot  sell  at  private  sale,  i.  51,  n.  (^).  • 

liability  of,  when  selling  in  his  own  name,  i.  54,  n.  (J), 
powers  and  liabilities  of,  i.  418-420. 
no  authority  to  rescind  a  sale,  i.  418. 
selling  stolen  goods,  when  answerable,  i.  436. 
payment  to,  ii.  127. 
duty  of,  as  stakeholder,  ii.  139. 

sales  by,  whether  within  the  statute  of  frauds,  ii.  292,  n.  (r). 
an  agent  for  vendor  and  vendee,  ii.  292,  and  n.  (?•). 
AUTHORITY, 

of  an  or/ent,  how  measured,  i.  38-42. 

how  conferred,  i.  42-44. 

how  ratified,  i.  44-47. 

how  executed  in  signing  a  written  instrument,  i.  47-49. 

duration  and  extent  of,  i.  49-52. 

to  sue,  i.  53. 

how  terminated,  i.  58-62,  85. 

when  principal  liable  for  agents'  misconduct,  i.  62. 

upon  notice  received  by  agent,  i.  64-66. 
to  delegate  his  authority,  i.  71. 
to  sell  his  principal's  property  to  himself,  i.  75. 
to  transfer  negotiable  paper  intrusted  to  him,  i.  211. 
to  bind  a  corporation,  how  conferred,  i.  117,  118. 
how  executed,  i.  118-120. 
of  shipmasters,  i.  66,  67. 
of  a  partner,  i.  151-168. 

to  sue  on  paper  of  the  firm  after  decease  of  copartner,  i.  21,  n.  (c). 
to  indorse  tlic  paper  of  tlic  firm  in  its  name  after  dissolution,  i.  44,  n.  (7). 
to  sign  tJK!  firm's  name  to  a  imlc  witliout  more,  i.  96,  n.  ((J(/). 
to  bind  tiic-  firm  l)y  his  aihiilssions,  i.  1 16,  n.  (7/;),  152. 

liy  liis  contracts,  i.  151-168. 

by  liis  torts,  i.  160,  161",  n.  (h). 

by  a  submission  to  arbitration,  i.  168. 


•  INDEX.  753 

AUTHORITY  —  Continued. 

how  terminated,  i.  170-173. 
of  a  majority  of  partners,  i.  156,  168,  169. 

of  a  child  to  render  the  parent  liable  for  necessaries  furnished  to  him, 
i.  247-260. 

(^ee  Infants.) 
of  a  married  icoman,  to  render  her  husband  liable  for  her  contracts  and 
necessaries  furnished  to  her,  i.  286-306. 

{See  Married  Women.) 
AVERAGE, 

meaning  when  used  as  a  term  in  contracts,  ii.  8. 
AVOIDANCE, 

of  contracts,  ii.  9,  10,  12,  33. 
AWARD, 

analogy  between,  and  accord  and  satisfaction,  ii.  20O. 

and  a  judgment,  ii.  213. 
must  conform  to  the  submission,  ii.  201. 
cannot  affect  strangers,  ii.  201. 
bad  for  directing  qui  tarn  action  to  cease,  ii.  201,  n.  (o). 

third  person  to  give  bond  as  security,  id. 
party's  wife  and  son  to  convey,  id. 
action  by  party  and  icife  to  cease,  id. 
servant  of  party  to  pay,  id. 
party  to  hecome  bound  with  sureties,  id. 
surety  on  submission  bond  to  pay,  id. 
party  to  cause  a  stranger  to  act,  ii.  201,  n.  (o). 
party  to  erect  stile  on  another's  land,  id. 
parties  to  pay  stranger,  unless  agent  for  the   other 
party,  and  when  this  is  to  be  presumed,  ii.  201,  202. 
parties  to  marry  each  other,  ii.  207. 
effect  of  strangers'  acquiescing  in  the  award,  ii.  201,  n.  (o). 
matters  to  be  embraced  in,  ii.  202-204. 
severable  award,  ii.  202. 
must  be  certain,  ii.  204-206. 
possible,  ii.  206. 
lawful,  ii.  207. 
reasonable,  ii.  207. 
mutuality  in,  ii.  207,  208. 
must  be  final  and  conclusive,  ii.  208,  209. 
of  nonsuit,  ii.  208,  209. 
of  discontinuance  of  suit,  ii.  209. 
upon  condition,  ii.  209. 

when,  although  defective  in  particulars,  may  be  sustained,  ii.  210,  211. 
construction  of,  favorable,  ii.  210,  211. 

when  words  of,  are  more  comprehensive  than  those  of  the  submission, 
or  less  so,  ii.  211. 


754  INDEX.  • 

AWARD—  Continued. 

of  a  submission  of  "  all  demands  and  questions,"  ii.  211. 

"future  questions,"  ii.  219. 
of  "  costs,"  "charges  and  expenses,"  effect  and  construction  of,  ii.  206, 

n.  (J),  (d),  208,  n.  (5),  211. 
of  releases,  power  of  arbitrators  to  order,  and  meaning  of,  ii.  208,  n. 

ip),  211,  212. 
arbitrators  have  no  power  to  direct  release  of  claiius,  "  to  the  time  of 

the  award,"  ii.  212. 
form  and  publication  of,  ii.  212. 
lien  of  attorney  upon,  for  his  fees,  ii.  213. 
when  relied  on  in  defence,  proof  of  submission,  or  execution  of  award, 

by  each  party  must  be  proved,  ii.  213. 
when  set  aside,  for  fraud  or  corruption  of  arbitrators,  or  irregularity  in 
conduct  or  proceedings,  ii.  213-219. 
for  mistake  of  arbitrators,  in  law  or  fact,  ii.  213-217. 
because   arbitrators   referred   questions  of  law  to  the 

court,  ii.  216. 
for  irregular  proceedings  as  to  notice  to  parties,  ii.  217. 

examination  of  witnesses, 

ii.  218. 
choice  of  umpire,  ii.  219. 
power  of  arbitrators,  ii.  216,  219  c. 
alteration  of,  ii.  223,  n.  (^). 

when  specifically  enforced,  ii.  514,  n.  (^j),  536,  n.  (a;),  554,  n.  (e). 
agreement  to  refer  when  specifically  ^enforced,  ii.  514,  n.  (p),  536,  n. 
(a;),  554,  n.  (e). 
Of  revocation  of  submission  to  arhitrators,  Ii.  219  ot-219  c. 
extent  and  limitation  of  power  of,  ii.  219  a. 
submission  made  by  order  of  court,  ii.  219  a. 
by  one  party,  entitles  the  other  to  damages,  ii.  219  &. 

measure  of  damages,  id. 
notice  of,  ii.  219  b. 
form  of,  ii.  219  h. 
implied,  ii.  219  b. 

by  suit  upon  claim  sid)mltted,  ii.  219  b. 

marriage  o^feme  sole,  party  to  submission,  id. 
lunacy  of  party,  id. 
destruction  of  subject-matter,  id. 
death  of  ])arty  to  the  submission,  ii.  219  c. 
<l('atli,  or  refusal,  or  inability  to  act,  of  arbitrator,  id. 
whether  by  bankruptcy  or  insolvency  of  party  to  the  submis- 
sion, ii.  249  h,  21!)  c 
power  of  parties  and  arbitrators  after  award  is  made,  ii.  219  c. 
firm  not  bound  by  a  partner's  submission,  without  special  authority,  i. 
1G8. 


INDEX.  755 

AWARD  —  Continued. 

administrators,  &c.,  ■when  bound,  i.  109. 

power  to  refer,  of  agent,  attorney,  or  officer  of  the  U.  S.,  ii.  200. 

submission  to  arbitration  by  insolvent  or  bankrupt  and  by  assignee,  ii. 

626,  n.  {k). 
submission  by  insolvent  does  not  bind  assignee,  ii.  626,  n.  (k). 
assignee  of  insolvent,  when  personally  liable  upon  submission,  il.  626, 

does  not  change  nature  of  claim  in  insolvency,  ii.  671. 
{See  Arbitration.     Indorsement.) 
AWAY-GOING  CROPS. 

rights  of.landlord  and  tenant  to,  i.  430  ;  ii.  49,  n.  (z)  ;  59,  n.  {q). 


B. 
BAGGAGE, 

liability  of  passenger  or  carriers  for,  i.  673. 
what  constitutes,  i.  720,  721,  722. 

testimony  of  owner,  admissible  to  prove  amount  of,  i.  722. 
BAILMENT, 

history  of  the  law  of,  i.  569. 
degrees  of  bailee's  responsibility,  i.  570. 
kinds  of,  i.  571,  572. 
Depositum,  i.  572-580. 

depositary's  liability,  measure  of,  i.  572-577. 
delivery  by  depositary,  i.  577,  578. 
property  of  depositary,  nature  of,  i.  578. 
when  persons  are  chargeable  as  depositaries,  i.  579. 
Mandatum,  i.  580-589. 

consideration  of,  I.  372,  373,  581. 

mandatary's  liability,  ground  of,  i.  372,  373,  580-585. 

measure  of,  i.  586,  589. 
distinction  between  liability  ex  contractu  and  ex  delicto,  i.  585,  586. 
Commodatum,  i.  590. 

liability  of  borrower,  i.  590, 
Pignus,  i.  591-602. 

pledgee's  liability,  measure  of,  i.  591,  592. 
property  in  the  pledge,  I.  592. 
damages  in  trover,  ii.  477. 
use  of,  i.  593. 

liability  to  account  for  the  profits  of,  i.  593. 
liability  for  the  theft  of,  i.  594. 
difference  between  a  pledge  and  a  mortgage,  i.  452,  n.  (xx),  594-599. 
pledge  of  stocks,  i.  594-599. 
rights  of  pledgee,  i.  592,  593,  600,  601,  602. 


756  INDEX. 

BAILMENT  —  Continued. 
sale  of  pledge,  i.  602. 

•whether  an  implied  warranty  in  a  sale  of,  i.  457,  n.  (/). 
termination  of,  i.  601,  602. 

of  a  bill  of  lading,  efiect  of,  on  the  consignor's  right  of  stoppage  in  tran- 
situ, i.  489. 
Locatio,  i.  602-722. 
Local io  rei,  i.  602-610. 

bailee  in,  measure  of  his  liability,  i.  602,  603. 

his  liability  for  injuries  to  the  thing  bailed,  by  the  negligence 
of  his  servants,  I.  604,  605. 

by  theft  or  robbery,  i.  605,  606. 
duty  of,  as  to  the  manner  of  using  the  thing  hired,  i.  608. 
as  to  the  time  of  surrendering  the  thing  hired,  i.  608. 
as  to  accounting  for  injury  to  the  thing  bailed,  i.  606. 
property  of,  in  the  thing  bailed,  I.  609. 
bailor  in,  bound  not  to  interfere  with  the  hirer's  use  of  the  thing,  i.  607, 
609. 
when  bound  to  repair,  i.  607,  608. 
compensation  of,  i.  609. 
contract  of  hire,  how  terminated,  i.  609. 
hirer  of  slaves,  responsibility  of,  i.  603,  n.  (r),  608,  n.  (l>). 
Locaiio  operis  faciendi,  i.  610-632. 

Mechanic  employed  in  the  manufacture  and  repair  of  an  article  hailed,  i. 
610-617. 
liability  of,  how  measured,  i.  610,  611. 
property  of,  in  the  article  bailed,  i.  611. 
right  of,  to  compensation  for  labor,  when  the  article  perishes  during  the 

bailment,  i.  611. 
when  liable  as  bailee,  or  absolutely  as  debtor,  i.  611-613. 
rights  and  liability  of,  in  case  of  a  deviation  from  the  contract,  i.  614- 

617. 
lien  of,  I.  617. 
Warehouse-men,  i.  618-621. 
liability  of,  how  measured,  I.  618. 

Avlien  extended   to   that  of  a  common  carrier,  I.  618-620, 
652-654. 
delivery  by,  when  the  title  Is  In  dispute,  I.  621,  677-679. 
lien  of,  I.  621. 
Wharfingers,  liability  of,  i.  621,  622. 
Postmasters,  liability  of,  i.  622. 
Innkeepers,  I.  623-632. 

persons  liable  as  such,  i.  623. 
Infants  not  liable  as  such,  I.  263. 
liability  of,  how  measured,  I.  623-625. 


INDEX.  757 

BAILMENT—  Continued. 

when  discharged  by  the  negligence  of  the  guest,  i.  625-627. 
■when  incurred  by  delivery  to,  i.  627,  628. 
duty  of,  to  receive  guest,  i.  627. 

to  admit  drivers  of  coaches,  i.  627. 
separate  compensation  for  keeping  the  guest's  goods  not  necessary  to 

render  the  innkeeper  liable,  i.  627. 
persons  entitled  to  the  legal  rights  of  guests,  i.  628-630. 
■when  goods  of  the  guest  are  within  the  custody  of  the  innkeeper,  so  as 

to  charge  him,  i.  626,  631. 
lien  of,  i.  632. 
Locatio  operis  mercium  vehendariim,  i.  633-722. 

private  carriers,  persons  liable  as  such,  i.  633,  634,  639,  n.  (?•). 
not  bound  to  receive  goods,  i.  648. 
special  property  of,  in  the  chattel,  i.  633. 
liability  of,  how  measured,  i.  633. 

extended  and  limited  by  special  contract,  i. 
634. 
Common  Carriers.     (See  Carriers,  Common.) 
BANKS, 

collection  of  negotiable  paper  by,  i.  586,  n.  (n). 
when  and  how  far  responsible  for  acts  of  agents,  i.  586. 
liability  of,  for  special  deposits,  i.  573,  n.  (s). 
effect  of  usage  on  the  business  of,  ii.  49,  n.  (2). 
payment  in  bills  of, 

(See  Bank-Bills.) 
stock  of, 

(See  Stock.) 
transactions  between,  not  within  the  exception  of  the  statute  of  limita- 
tions in  favor  of  accounts  between  merchants,  i.  368,  n.  (a), 
sale  of  notes  of,  when  usurious,  i.  386,  n.  (w). 
when  usury  committed  by,  in  the  calculation  of  interest,  i.  406,  407. 

in  the  discount  of  notes  and  bills,  i.  406-410. 
how  far  liable  for  negligence  as  to  notes  left  for  collection,  i.  586,  and 

n-("); 
have  a  lien  on  their  deposits,  i.  586. 

charters  of,  when  protected  by  the  United  States  constitution,  i.  684. 
checks  of,  payment  in,  i.  135. 
BANK-BILLS. 

notes  payable  in,  not  negotiable,  i.  209. 
payment  in,  ii.  133,  134. 

when  forged  or  of  a  broken  bank,  i.  218,  220,  ii.  134,  135. 
payment,  when  forged,  to  the  bank  itself,  ii.  134,  n.  (/),  (g). 

(See  Payment.) 
tender  of,  not  valid,  when  objected  to,  ii.  133,  15  7. 
VOL.  II.  64 


758  INDEX. 

BANK  CHECKS, 

when  to  be  presented,  i.  217,  218. 

when  forged  and  paid  by  the  bank,  the  loss  falls  on  the  bank,  i.  220. 
effect  of  usage  on  acceptance  of,  i.  229. 
not  entitled  to  days  of  grace,  i.  229. 
payment  in,  ii.  135. 
BANKRUPTCY  AND  INSOLVENCY, 

{See  IxsoLVEXT.) 
.  whether  assignment  in,  transfers  personal  property  in  foreign  state,  to 
assignees,  as  against  foreign  attaching  creditors,  ii.  83,  n.  (/),  607- 
610,  636. 
part  payment  by  on«  of  several  joint  debtors,  made  in  expectation  of, 

ii.  363. 
of  party  seeking  specific  performance,  when  ground  for  refusing,  ii.  570. 
whether  a  plea  in  real  actions,  ii.  495. 
laws  relative  to,  how  affected  by  the  constitution  of  the  United  States, 

ii.  705. 
of  party  to  submission,  effect  of,  in  revoking  submission,  ii.  219  5,  219  c. 
of  a  principal  revokes  the  agent's  authority,  i.  61,  and  n.  (I). 
of  a  partner  dissolves  the  partnership,  i.  173. 
The  general  purpose  of  Bankrupt  Laws,  ii.  579-587. 
no  imprisonment  for  debt  at  common  law,  ii.  579. 

forms  of  actions  used  at  common  law  to  enforce  payment  of  debts,  ii.  579. 
prcecipe,  ii.  579. 
pone,  ii.  579. 
distringas,  ii.  579. 
capias  ad  respondendum,  ii.  579. 
satisfaciendum,  ii.  579. 
insufficiency  of  common  law  to  meet  wants  of  commerce,  ii.  579-581. 
first  statutes  of  bankruptcy,  ii.  579,  580. 
derivation  of  word  bankruptcy,  ii.  579,  n.  (V). 
aversion  of  common  law  lawyers  to  the  bankrupt  laws,  ii.  580. 
their  necessity  attributable  to  growth  of  commercial  prosperity,  ii.  580. 
operation  of  common  law   can  only  affect  two  parties,  plaintiff  and 

defendant,  ii.  581. 
preference  among  creditors  permitted  by  common   law  in  two  ways: 
when  payment  made  directly  by  insolvent  to  the  creditor,  ii.  581,  and 

when  this  effected  through  medium  of  trustees,  by  assignment,  ii.  581 
and  n.  (<,). 

common  law  privilege  of  preference  Ibrbidden  in  most  States  by  statute, 
ii.  581,  n.  (e),  and  see  602. 

its  validity  maintained  in  many  cases  cited,  ii.  581,  n.  (e),  and  see  602. 

principle  of  preference  ()])posed  to  spirit  of  commerce  and  justice,  ii.  582. 

])ermittcd  in  New  York,  but  prevents  insolvent  from  obtaining  a  dis- 
charge, ii.  583. 


INDEX.  759 

BANKRUrTCY   AND   INSOLVENCY— Co/i/inuefL 

the  injustice  it  works,  by  giving  facilities  and  success  to  fraud,  ii.  583. 

how  the  principle  of  bankrupt  laws  is  to  obviate  these  evils,  ii.  584. 

its  similarity  to  Roman  aes  alienum,  ii.  584. 

cessio  honorum,  ii.  585. 

bankrupt  laws  of  England  proceeding  upon  assumption  that  bankruptcy 
is  a  crime,  and  bankrupt  a  criminal,  ii.  585. 

how  this  assumption  arose,  ii.  585. 

how  far  good,  when  a  distinction  existed  between  bankrupt  and  insol- 
vent laws,  ii.  585,  n.  (,/). 

distinction  between  a  bankrupt  and  an  insolvent  law,  i.  307. 

from  this  distinction  two  systems  of  law  arose,  one  bankrupt,  the  other 
insolvent,  ii.  586. 

distinction  less  positive  and  exact  than  formerly,  ii.  586. 
stated,  ii.  586. 

insolvency  and  bankruptcy  used  synonymously,  ii.  587. 

purpose  of  banki'upt  and  insolvent  laws  the  same,  ii.  587. 
divided  into  two  parts  : 

first,  to  secure  ratable  disposition  of  effects  to  creditors,  ii. 

587. 
second,  immunity  from  molestation  to  honest  debtor,  ii.  587. 
The  Hhtory  of  Amei'ican  Bankrupt  Laio,  ii.  587-605. 

colonists  did  not  adopt  English  laws  of  bankruptcy  and  insolvency,  ii.  587. 

power  to  make  such  laws  given  by  constitution,  ii.  587,  aiid  see  601. 

first  bankrupt  law  passed  in  1800,  ii.  588. 

second      "         "         "  1841,  ii.  588. 

ground  of  objection  to  such  a  law  stated,  ii.  588,  589  and  notes,  590. 

an  endeavor  to  avoid  these  objections  in  law  of  1841,  ii.  590. 

all  debtors,  by  it,  might  become  voluntarily  bankrupts,  ii.  590. 

two  exceptions,  public  defaulters  and  debtors  in  a  fiduciary  capacity,  ii. 
590. 

these,  and  no  others,  might  be  made  so  by  compulsion,  ii.  590. 

discharge  given  to  all,  ii.  590. 

necessity  of  a  national  bankrupt  law  at  that  time,  ii.  590. 

most  States  adopted  insolvent  laws,  ii.  590,  591. 

distinction  between  the  remedy  and  the  ricjlit,  adopted  by  Marshall,  C- 
J.,  Ii.  591. 

operation  of  State  law  upon  creditors  living  In  another  State,  ii.  591. 

frequent  occurrence  of  this  question,  ii.  592. 

diversity  of  decisions  of  courts  upon  It,  ii.  592. 

in  what  cases  the  distinction  between  remedy  and  right  has  been  ap- 
plied, Ii.  592,  and  n.  (/«). 

State  law,  whether  permitted  to  release  debtor  from  liability  of  subse- 
quently acquired  property,  ii.  594,  and  n.  (J),  595. 

former  conformity  of  State  insolvent  laws  to  those  of  England  as  to  this 
liability,  ii.  593. 


760  INDEX. 

BANKRUPTCY   AND   INSOLVENCY— Con/mwef/. 

State  law  removing  this  liability  affects  remedy  only,  and  does  not  im- 
pair obligation  of  contracts,  ii.  593,  and  n.  (j). 

law  of  place  where  contract  is  to  be  performed  part  of  contract,  ii.  595, 
596. 

(See  Place,  Law  of.) 

right  of  every  State  to  determine  for  its  own  citizens  in  respect  to  a 
contract  made  or  to  be  performed  within  its  sovereignty,  ii.  595. 

State  insolvent  laws  may  constitutionally  discharge  contracts  made  be- 
tween its  own  citizens  within  the  State,  ii.  595,  n.  (I). 

participation  in  proceedings  under   such  laws  by  citizens  of  another 
State,  an  assent  to  them,  and  binding,  ii.  595,  n.  (I). 

whether  State  laws  may  discharge  contracts  made  between  citizens  of 
different  States  doubtful,  ii.  595,  n.  (I). 

cases  relating  thereto  considered,  ii.  595,  n.  (/). 

State  laws  cannot  reach  contract,  not  to  be  performed  within  its  sover- 
eignty, ii.  596,  597. 

authorities  relating  thereto  examined,  ii.  597,  n.  (??;). 

how  discharge  in  one  State  bar  to  an  action  in  another,  ii.  599. 

hnperium  in  imperio  of  United  States  Courts,  ii.  600. 

operation  of  United  States  Courts  in  favor  of  creditors  residing  in  dif- 
ferent State  from  debtor,  ii.  600. 

its  injustice  obviated  by  a  statute,  ii.  600. 

docs  not  prevent  process  by  summons,  &c.,  ii.  601. 

execution  cannot  reach  property  distributed  or  in  hands  of  assignee,  ii. 
601. 

possibly  property  protected  if  first  step  taken  towards  legal  insolvency, 
ii.  601. 

decisions  of  coui-ts  conflicting  upon  above  points,  ii.  601. 

concurrent  right  of  the  United  States  and  of  the  several  States  to  enact 
bankrupt  and  insolvent  laws,  ii.  601,  and  see  587,  588. 

national  statute  introduces  a  uniform  system,  ii.  601. 

supersedes  and  suspends  State  law,  ii.  602. 
but  does  not  repeal  it,  ii.  602. 

State  law  revives  at  exjiiration  of  national,  ii.  602. 

whether  insolvent  law  avoids  voluntary  assignments,  ii.  602,  603,  ajid  see 
581,  n.  (<"). 

allowed  when  made  in  good  faith,  and  no  suspicion  attaches,  ii.  603. 

in  England  when  six  sevenths  of  creditors  approve  it,  ii.  603. 

hazard  attending  such  assignments,  ii.  603,  n.  (?/). 

slight  errors  of  fatal  consequence,  ii.  603,  n.  (w). 

bankruptcy,  assignment,  Avhat  circumstances  amount  to  fraud,  ii.  604. 

assent  of  creditors  necessary,  ii.  603,  n.  (?/). 

creditor  may  invalidate  whole  proceedings,  II.  603,  n.  (?(). 

while;  proceeding  wholly  i)i  puis,  ]iractlcc  allowed,  II.  603,  n.  (?/). 

wlicM  before  courts,  bound  by  statutes,  ii.  603,  n.  («). 


INDEX.  761 

BANKRUPTCY    AND   INSOLVENCY— Con/mwer/. 

three  descriptions  of  fraudulent  conveyances  which  bring  one  within 

operation  of  first  section  of  U.  S.  Bankrupt  Act,  ii.  603,  n.  (u). 
Of  insolvency  and  bankruptcy  under  foreign  laws,  ii.  605-612. 
several  States  foreign  to  each  other  as  to  bankrupt  laws,  ii.  605. 
effect  of  bankruptcies  or  insolvencies  under  laws  of  foreign  nations,  ii. 

605. 
under  our  own  law  upon  subjects 
of  foreign  governments,  ii.  605. 
validity  of  discharge  of  debt,  when  made  and  to  be  performed,  and  when 

not  made  nor  to  be  performed  within  the  State,  ii.  605. 
validity  when  made  in  one  State  to  be  performed  in  another,  ii.  605. 

between  citizens  of  two  States,  ii.  605. 
discharge  of  bankrupt  under  laws  of  this  country  no  discharge  against 

creditors  of  a  foreign  country,  ii.  605,  n.  (h). 
otherwise  in  England,  France,  and  Holland,  ii.  605,  n.  (b). 
in  this  country  discharge  considered  local,  ii.  605,  n.  (5). 
in  courts  of  Pennsylvania,  principles  of  comity  prevailing  in  courts  of 

England  adopted,  ii.  605,  n.  (b). 
a  discharge  binding  on  creditor  although  resident  here,  if  debt   both 

contracted  and  to  be  discharged  in  foreign  country,  ii.  605,  n.  (b). 
how  far  foreign  law  can  operate  to  sequestrate  insolvent's  property  at 

commencement  of  proceedings,  ii.  603,  83,  n.  (/"). 
bankrupt  laws  regarded  in  two  ways : 

one  merely  local  and  municipal,  ii.  607. 

the  other  as  making  branch  of  law  of  nations,  ii.  607. 
the  assumption  upon  which  this  latter  view  is  based,  ii.  607. 
sequestration  of  all  the  insolvent's  property  for  general  good   of  all 

creditors,  ii.  607. 
same  view  taken  by  courts  of  England,  France,  and  Holland,  il.  607. 
the  non-locality  of  personal  property,  but  follows  person  of  owner,  ii. 

607,  n.  (e),  83,  n.  (/). 
transfer  in  bankruptcy  in   above   countries   operates   as   a  voluntary 

assignment,  and  conveys  all  property  wherever  situated,  ii.  607. 
soundness  of  such  doctrine,  ii.  608,  609. 
based  upon  two  principles,  ii.  607,  n.  (e). 
reasons  for  uniformity  of  bankrupt  laws  between  the  States,  would  hold 

in  case  of  foreign  nations,  ii.  608,  609. 
in  this  country,  bankrupt  laws  strictly  municipal,  ii.  609. 
American  creditor  may  retain  any  property  against  foreign  assignee, 

ii.  010,  G36,  and  see  83,  n.  (/). 
grounds  upon  which  American  courts  deny  that  bankrupt  law  Is  inter- 
national, ii.  606,  n.  (/). 
if  foreign  assignee  has  obtained  possession  previously,  American  creditor 

cannot  hold,  ii.  611. 

64* 


762  INDEX. 

BANKRUPTCY   AND  INSOLVENCY— Con^mw«7. 

right  of  foreign  assignee  to  perfect  his  title  by  j^ossession  admitted  by 

our  courts,  ii.  611,  and  n.  (A), 
transfer  of  real  property  governed  by  lex  loci  rei  sitce,  ii.  Gil. 
land  seldom  treated  as  merchandise,  ii.  612. 
how  land  would  jiass  to  a  foreign  assignee,  Ii.  612. 
Of  the  tribunal  and  jurisdiction,  ii.  612-614. 
in  England  a  regular  court  of  bankruptcy,  ii.  612. 
judges  and  commissioners  may  sit  alone,  ii.  612. 
on  questions  of  fact  may  order  a  jury,  ii.  612. 
appeal  lies  to  Lord  Chancellor  and  House  of  Lords,  ii.  612. 
in  United  States,  district  judges  had  jurisdiction,  II.  612. 
in  each  district,  commissioners  appointed  to  take  the  preliminary  steps, 

ii.  613. 
State  Insolvent  laws  different,  ii.  613. 
judges  of  probate,  masters  in  chancery,  or  commissioners  of  insolvency, 

sit  as  a  court,  ii.  613. 
statutes  provide  for  resort  to  court,  ii.  614. 
Infrequency  of  appeals,  ii.  614. 
Who  may  be  bankrupts  or  insolce7its,  II.  614-618. 
all  persons  owing  debts  could  become  insolvents,  ii.  614. 
distinction   between   insolvents   and  bankrupts  maintained  in  the  late 

U.  S.  Bankrupt  Act,  ii.  615,  n.  (n). 
traders  could  be  compelled,  and  debtors  could  apply,  to  go  Into  insol- 
vency, ii.  614,  n.  (n). 
difficulty  of  defining  traders,  ii.  615. 
enumeration  of  such  by  English  statute,  ii.  615,  n.  (o). 
distinction  not  existing  in  State  Insolvent  laws,  II.  615. 
generally  In  this  country,  all  persons  may  become  insolvents,  ii.  616. 
where  State  statute  permits  process  in  invilum,  It  does  so  against  all 

kinds  of  debtors,  ii.  616. 
exceptions  to  this  rule,  ii.  616. 

one  wholly  and  always  a  lunatic  cannot  become  an  insolvent,  ii.  616. 
nor  au  infant,  i.  261,  ii.  617. 
when  an  infant  may,  ii.  617. 

nor  married  women,  unless  acting  as  sole,  ii.  617. 
as  to  an  infant  being  declared  so  on  his  own  petition,  ii.  617,  n.  (jf). 
Of  the  assifjncr,  ii.  618-627. 
in  this  country  never  official  persons,  ii.  618. 
appointed  by  creilitors,  ii.  618. 
cannot  ajjpoint  bankrupt  himself,  Ii.  618,  n.  (s). 

nor  solicitor  to   commissioner    or   his   partner,    II.    618, 
n.  (s). 
banker  receiving  money  under  the  bankruptcy  ouglit  not  to  be  assignee, 

ii.  618,  n.  (.S-). 


INDEX.  763 

BANKRUPTCY  AND  INSOLVENCY—  Continued. 
solvent  partner  may  be,  ii.  618,  n.  (*). 
when  creditors  fail  to  appoint,  court  may,  ii.  G18. 
•who  disqualified  from  being  appointed  assignee  by  the  court,  ii.  618, 

n.  (0- 
not  removable,  but  for  cause  shown,  ii.  618. 
proper  tribunal  bound  to  listen  to  applications  of  creditors  for  removal, 

ii.  619. 
if  cause  exist  may  remove,  ii.  619. 

judicially  known  to  them  may  remove  without  application,  ii. 
619. 
such  matters  regulated  by  statute,  ii.  619. 
when  new  choice  may  be  ordered,  ii.  619,  n.  («). 
upon  refusal  to  admit,  the  newly  chosen  assignee  may  appeal,  ii.  619, 

n.  (m). 
incompetency  ground  of  removal,  ii.  619,  n.  (h). 
fraud  in  procuring  appointment  also,  ii.  619,  n.  (w). 
so,  if  assignee  buy  in  the  estate  of  bankrupt,  ii.  619,  n.  (li). 
or  converts  to  his  own  use  bankrupt's  property,  ii.  619,  n.  (u). 
or  makes  exorbitant  charges,  ii.  619,  n.  (u). 
or   remove    beyond   the  jurisdiction   of  court   issuing  decree,  ii.  619, 

n.  («). 
or  from  the  State,  ii.  619,  n.  (w). 

assignee's  duties  and  powers  defined  by  statutes,  ii.  620. 
assignee's  trustees  of  each  and  all  the  creditors,  and  held  as  such,  ii. 

620. 
cannot  buy  in  insolvent's  property,  ii.  620. 
opinion  of  Lord  Hardwicke  in  one  case  contra^  ii.  621,  n.  (if), 
any  gain  made  by  them  belongs  to  assets,  ii.  621. 
compound  interest  may  be  exacted  for  negligence  and  refusal  for  a  long 

time,  ii.  621,  n.  (x). 
acting  in  obedience  to  majority  of  creditors  no  protection  to  assignee,  ii. 

621. 
where  will  of  majority  shall  prevail  provided  by  statute,  ii.  621. 
general  power  to  majority  would  defeat  purpose  of  insolvent  law,  ii.  622. 
assignee  must  take  possession  immediately,  ii.  622. 
for  faulty  delay  in  so  doing  personally  responsible,  ii.  622. 
as  also  for  injury  to  the  property,  ii.  622. 

to  take  possession  should  have  certified  copy  of  decree,  ii.  622,  n.  (z). 
not  bound  to  accept  a  damnosa  hereditas,  ii.  622. 
may  take  leasehold  property,  ii.  622. 

if  he  takes  it,  takes  it  cum  oncre,  and  liable  for  obligations,  ii.  622. 
other  parties  having  these  obligations  may  come  in  as  creditors,  ii.  622. 
if  he  elect  not  to  take,  property  remains  in  bankrupt,  ii.  622,  n.  (a). 
but  subject  to  be  pursued  by  any  creditor  who  had  not  proved  under 

the  bankruptcy,  ii.  622,  n.  (a). 


764  INDEX. 

BANKRUPTCY   AXD  INSOLVENCY— Con^/nueJ. 
allowed  reasonable  time  to  decide,  ii.  622,  n.  («). 
assignee's  liability  gone  with  tlie  possession,  ii.  622,  n.  (a). 
cannot  select  and  divide  wliat  is  entire  in  itself,  ii.  623. 
must  take  all  or  none,  ii.  623. 

represents  insolvent,  and  subject  to  all  equities  against  him,  ii.  623. 
liable  for  property  taken  to  which  another  has  a  better  title,  ii.  623,  624. 
assignees  must  act  jointly,  ii.  624. 
cannot  delegate  their  power,  ii.  624. 
nor  substitute  others,  ii.  624. 
when  may  employ  agents,  ii.  624. 
their  liability  determined  by  general  principles  of  agency,  ii.  624,  and 

when  they  may  sue  in  their  own  name,  ii.  624,  625,  and  n.  (A), 
when  they  must  declare  as  assignees,  and  when  not,  ii.  625,  n.  (Ji). 
when  they  may  transfer  notes  by  indorsement,  ii.  626. 
generally  insolvent  retains  power  of  indoi'sing,  ii.  626. 
may  do  whatsoever  trustees  may,  ii.  626,  627. 
compound  debts,  ii.  626. 
redeem  mortgages,  ii.  626,  632. 
compromise  claims  for  or  against  insolvent,  ii.  626. 
not  bound  by  bankrupt's  submission  to  arbitration,  ii.  626,  n.  (Jc). 
in  submission  to  arbitration  personally  liable,  as  in  case  of  executors 

and  administrators,  ii.  626,  n.  (A:), 
having  powers  of  trustees,  have  also  their  responsibilities,  ii.  627. 
are  trustees  and  agents  for  compensation,  ii.  627. 
in  what  way  liable  as  such,  ii.  627. 
What  real  pro  perl  y  insolvency  transfers  to  the  assignee,  ii.  628-634. 
theory  of  bankruptcy  system  to  pass  all  effects  into  assignee's  hands, 

Ii.  6  28. 
dlfliculty  of  settling  by  what  kind  of  transfer  land  passes,  ii.  628. 
rather  by  sequestration  or  forfeiture  than  by  grant  or  transfer,  ii.  628. 
no  deed  necessary  to  give  assignee  title,  ii.  628. 
becomes  his  by  the  judicial  record  and  appointment,  ii.  628,  629. 
inventory  or  schedule  not  essential,  ii.  629. 
land  or  interest  in  land  without  being  inventoried,  will  pass  none  the 

less,  ii.  62!),  and  n.  (7). 
in  Massachuselts,  if  this  not  observed,  dischai'ges  may  be  refused,  ii. 

629,  n.  (7). 
what  rights  or  interests  pass  to  assignee,  ii.  629. 
assignee  may  make  an  inchoate  riglit  complete,  ii.  630. 
when  devise  falls  to  insolvent  between  coniiucMccment  of  proceedings 

and  (liscliarg(!,  ii.  630,  615. 
consent  and  acce|)laiicc  of  devisee  essential,  ii.  630. 
if  l)ankruj)l  refused,  creditors  might  be  defrauded,  ii.  630. 


INDEX.  765 

BANKRUPTCY  AND  INSOLVENCY— Con^nwerf. 

if  plainly  for  bis  benefit,  law  will  presume  his  acceptance  and  pass  it  to 

assignee,  ii.  630. 
would  take  the  devise  cum  onere,  ii.  G31. 
interests  vested  merely,  pass  to  assignee,  ii.  631. 
so  if  they  rest  on  contingencies,  but  subject  to  such,  ii.  631. 
must  be  a  legal  contingency,  ii.  631. 
so  a  beneficial  contingency,  however  improbable,  ii.  631. 
any  interest  which  bankrupt  can  transmit  will  pass  to  assignee,  ii.  631, 

n.  (zt)),  633. 
where  assignee  could  not  claim  a  devise  falling  to  a  son  before  discharge 

obtained,  ii.  631. 
equities  of  redemption  pass,  ii.  632. 
may  also  sell  them,  ii.  632. 

to  do  so,  permission  sometimes  required,  ii.  632. 
effect  of  want  of  record,  ii.  632. 
where  required,  no  unrecorded  mortgage  available  by  mortgagee  or  his 

assigns  against  bond  fide  purchaser,  ii.  632. 
in  England,  where  no  law  of  recoi'd,  purchaser  would  hold  against 

assignees,  ii.  632. 
in  this  country,  requirement  of  record  is  peremptory,  II.  632.    « 
assignee  takes  property,  notwithstanding  insolvent's  unrecorded  mort- 
gage, ii.  632. 
equitable  mortgage  of  English  law,  created  by  delivery  of  title  deeds, 

scarcely  known  in  this  country,  Ii.  632. 
all  rights  of  action  of  insolvent  to  any  interest  in  land  pass  to  assignee, 

il.  633. 
also  any  Interest  of  Insolvent  In  wife's  land,  ii.  633. 
inability  of   husband  to  bring  or  defend  any  suit,  except  in  name  of 

assignee,  ii.  633. 
law  itself  passes  to  assignee  whatever  insolvent  could  transfer,  II.  633. 
property  held  in  a  fiduciary  relation  excepted,  II.  634. 
the  reason  thereof,  ii.  634. 
how  assignee  may  avail  himself  of  an  interest  Incumbered  with  a  charge, 

ii.  634. 
What  personal  properti/  insolvency  transfers  to  the  assignee^  II.  634-651. 
same  principles,  in  general,  applicable  to  personal,  as  to  real  property, 

ii.  634. 
all  property  vests  in  assignee,  ii.  634,  n.  (/). 
chattels  or  choses  in  action  held   in   a  fiduciary  capacity,  not,  ii.  634, 

635. 
any  severable  personal  benefit  of  Insolvent  in  such,  passes,  Ii.  635. 
contracts  relating  to  personalty  assumed  and  executed  by  assignee,  Ii. 

635. 
if  service  could  be  performed  by  insolvent  alone,  not,  ii.  635. 


766  INDEX. 

BANKRUPTCY   AND  INSOLVENCY— Cow<m«cd 

patent  right  passes,  ii.  G35,  n.  (/*). 

profits  of  daily  labor  do  not,  ii.  635,  n.  (/?). 

an  interest  in  policy  of  insurance  passes,  ii.  635,  n.  (/«). 

so  interest  in  improvements  on  government  lands,  ii.  635,  n.  (Zs). 

if  contract  forbid  assignment,  yet  assignee  takes,  ii.  635. 
as  in  fire  and  marine  policies,  ii.  635,  636. 

inaccuracy  in  the  use  of  word  "  assignee,"  ii.  636. 

Imv  and  not  owner  passes  property  in  insolvency,  ii.  636. 

process  of  transfer  rather  by  sequestration,  ii.  636. 

even  voluntary  assignment  in  trust  for  creditors,  held  not  to  avoid  the 
policy,  ii.  636. 

true  ground  of  such  doctrine,  ii.  636. 

assignee  considered  as  an  agent,  ii.  636. 

consent  of  insurers  usually  obtained,  ii.  636. 

assignee  takes  all  personal  property  abroad  with  quahfications  stated  on, 
ii.  636. 

assignee  takes  husband's  right  to  reduce  wife's  choses  in  action  to  pos- 
session, ii.  636. 

fraud  on  part  of  husband  to  attempt  to  put  them  beyond  reach  of  credi- 
tors, ii.  637. 

whether  insolvency  operates  a  reduction,  ii.  637. 

better  view  that  it  gives  only  a  right  to  reduce,  ii.  037. 

assignee  therefore  no  property  till  reduction,  ii.  637. 

equity  usually  compels  a  reasonable  provision  out  of  her  choses  in  action 
for  wife,  ii.  637,  n.  (/). 

money  of  insolvent  in  whosesoever  hands  taken  by  assignee,  ii.  638. 

assignee's  check,  after  notice,  for  same  valid,  and  insolvent's  not,  ii.  638. 

money  in  hands  of  factor's  assignees,  when  recovered  in  full,  when  in 
part,  by  consignors,  ii.  638,  n.  (ni). 

as  to  goods  in  hands  of  factor's  assignees,  ii.  638,  n.  (m). 

where  distinguishable,  consignor  may  take  them,  ii.  038,  n.  (m). 

so  if  money  deposited  to  particular  account  of  consignors,  ii.  638,  n.  (iii). 

same  rule  applies  to  bankrupt  executor,  ii.  638,  n.  (rn). 

where  mutual  claims,  assignee  takes  balance  due  insolvent,  ii.  638. 

creditor's  full  right  of  set-off,  ii.  638. 

did  not  oi"iginate  in  statutes,  ii.  638,  n.  (n). 

whatever  right  a  i)arty  has  against  insolvent  he  has  against  assignee,  ii. 
638,  O.'Jfi. 

insolvency  of  one  member  of  jiarlnersliip,  ii.  03L). 

if  insolvent  fraiKlulcntly  convey  projjcrly,  he  cannot  take  advantage  of 
his  own  framl  and  iccuver  it,  ii.  010. 

but  assignee  may,  ii.  0  10. 

what  is  fraud  in  tliis  sensi;  often  (pu'stion  of  fact,  ii.  Oil. 

usually  provided  for  by  statute,  ii.  Oil. 


INDEX.  767 

BANKRUPTCY   AND  INSOLVENCY— Cowimue^Z. 

transfer  must  be  wlien  party  was  insolvent,  or  in  contemplation  of  it, 

ii.  641. 
whether  a  sale  is  a  fraudulent  transfer  or  not,  ii.  641,  n.  (ry). 
meaning  of  the  clause,  "  in  contemplation  of  bankruptcy,"  ii.  641,  n.  (9). 
any  transfer  to  benefit  insolvent  illegally,  voidable  by  assignee,  ii.  641, 

642. 
when  assignee  not  barred  from  obtaining  any  of  insolvent's  property,  by 

his  act,  ii.  642. 
ships  in  port  pass  to  assignee,  ii.  642. 

at  sea,  not  certain,  ii.  642. 
general  rules  respecting  transfer  of  property  applicable,  ii.  642. 
as  to  transfer  of  ship  at  sea  by  bill  of  sale,  ii.  642. 
how  transfer  and  delivery  of  bills  of  lading  vest  property,  ii.  643. 
in  hands  of  insolvent  pass  to  assignee,  ii.  643. 
if  transferred  bondjide,  assignee  cannot  hold  goods,  ii.  643. 
mere  delivery  without  indorsement  not  sufficient,  ii.  643,  n.  (i;). 
nor  mere  delivery  of  a  shipping  note  or  delivery  order  instead  of  bill  of 

lading,  ii.  643,  n.  (y). 
delivery  order  lodged  with  the  ioliarfn(]er,  operates  a  transfer,  and  no 

interest  can  pass  to  assignees,  ii.  643,  n.  (i'). 
sale  and  transfer  of  bills  sent  to  consignee  pass  the  property,  if  no 

notice  of  consignor's  insolvency,  ii.  643,  644. 
if  notice  reached  factor,  so  that  sale  was  fraudulent,  doubtful  whether 

sale  would  be  void  against  insolvent  purchaser,  ii.  644. 
qualifications  and  restrictions  in  bills  prevail,  ii.  644. 
right  of  insolvent  to  stop  goods  in  ti'ansit,  accrues  to  assignee,  ii.  644. 
but  goods  consigned  to  bankrupt  with  right  of  stoppage  in  consignor,  do 

not  pass,  ii.  644,  n.  (a), 
assignees  may  take  insolvent's  lease,  ii.  644. 
whether  bound  to  take  lease,  ii.  644,  645,  n.  (a). 
as  to  acceptance  of  devise,  ii.  645,  622,  n.  (a),  632-635. 
difference  between  devise  and  lease,  ii.  645. 
presumption  that  grantee  accepts,  more  applicable  to  devise  than  to  a 

lease,  ii.  645. 
assignee  not  a  grantee,  ii.  645. 
inaccui'acy  of  term  assignee,  ii.  636,  645. 
trustee  for  creditors  generally,  ii.  645. 

all  parties  in  some  respects,  ii.  645. 
technically  at  common  law,  lessee  no  estate,  ii.  645. 
assignee  acquires  only  right  to  take  the  lease,  ii.  645. 
till  his  election,  lease  in  abeyance  or  insolvent,  ii.  645. 
and  free  from  all  claims  of  assignee  or  creditors,  ii.  645. 
so  of  all  property,  ii.  645,  646,  and  u.  (a), 
an  assignment  by  commissioners,  what,  ii.  645,  n.  (z). 
how  assignees  may  take  possession  of  leasehold  property,  ii.  646  and  n.  (i). 


768  INDEX. 

BANKRUPTCY   AND  INSOLVENCY— Co»^mueri. 

if  actual  possession,  presumption  that  it  is  as  assignees,  ii.  64G. 

any  advantage  received  from  leasehold  property,  a  taking  possession,  ii. 

646. 
mere  offering  for  sale,  not,  ii.  646. 

nor  mere  neglect  to  deliver  up  the  premises,  ii.  646,  n.  (c). 
nor  paying  rent  to  avoid  a  distress,  ii.  646,  n.  (c). 
nor  releasing  an  under-tenant,  ii.  646,  n.  (c). 
cannot  take  in  part,  and  reject  in  part,  ii.  646,  647. 
assignee  liable  for  rents  and  covenants  for  whole  term  if  he  elects  to 

take,  ii.  64  7. 
transferree  of  assignee  is  subrogated,  ii.  647. 
assignee  may  transfer  to  a  beggar,  ii.  647. 
how  law  sustains  this  doctrine,  ii.  647. 
lease  passes  to  assignee,  though  covenants,  upon  penalty  of  forfeiture, 

against  it,  ii.  648. 
landlord  may  look  to  lessee  and  all  subsequent  transferrees,  ii.  648. 
reason  thereof,  ii.  648. 

a  distinction  held  here  between  bankruptcy  and  insolvency,  ii.  648. 
process  against  bankrupt  is  in  invitum,  ii.  648. 
insolvent  moves  himself,  ii.  648. 

latter  voluntary  breach,  and  hence  works  forfeiture,  ii.  649. 
proviso  should  be  inserted  that  bankruptcy  or  Insolvency  should  deter- 
mine the  lease,  ii.  649. 
competent  for  grantor,  devisor,  or  lessor,  so  to  Insert,  Ii.  649,  n.  (/«). 
but  not  to  enter  into  agreement  for  any  subsequent  transfer  in  case  of 

his  own  insolvency,  ii.  649,  n.  (7i). 
as  to  his  wife,  ii.  649,  n.  (//). 

but  if  wife  brought  him  a  fortune,  she  may  so  restrain  it,  ii.  649,  n.  (A), 
all  commercial  paper  in  general  passes  to  assignees,  Ii.  649. 
his  title  not  dependent  upon  its  negotiability,  ii.  649.' 

made  by  sequestration  not  transfer  or  purchase,  ii.  649. 
title  and  equities  of  third  parties  depend  often  upon  Its  negotiability,  Ii. 

Gr,(). 
bankruptcy  overrides  commercial  law,  ii.  650. 
title  of  innocent  party  yields  to  assignee,  ii.  650. 
bankrupt's  transfer  by  bill  of  funds,  invalid  against  assignees,  ii.  650. 
bankrupt  may  do  any  act  not  affecting  rights  and  interests  of  assignee, 

ii.  650,  n.  (  /). 
if  bill  drawn  for  more  tlian  the  funds  and  accepted,  holder  can  recover 

excess,  ii.  650. 
true  only  when  some  act  of  l);uikrui)t  necessary  to  make  a  party's  title, 

ii.  650. 
paper  not  available  for  funds  of  assignment  docs  not  go  to  assignee,  ii. 
050. 


INDEX.  769 

BANKRUPTCY   AND   INSOLVENCY  —  Con^mueJ. 

paper  held  by  bankers  for  owners  does  not  pass  to  banker's  assignee,  ii.  651 . 

if,  however,  banker  has  discounted  it  or  has  a  lien  on  it,  assignee  takes, 
ii.  651. 

assignee  takes  benefit  of  promise  to  insolvent,  ii.  651. 

measure  of  damages  when  assignee  sues,  ii.  647,  651. 
What  property  or  interests  of  bankrupt  do  not  pass  to  assignee,  ii.  652-656. 

in  all  States  certain  property  exempt  from  attachment,  ii.  652. 

■where  amount  certain,  question  what  kind,  ii.  652. 

merchandise  usually  not  e.xempt,  ii.  652. 

no  right  of  action  for  personal  injury  passes,  ii.  652. 

for  breach  of  contract,  ii.  653,  654,  and  n.  (n). 

where  right  to  damages  passes  to  assignees,  ii.  654. 

insolvency  occurring,  pending  action  for  assault  and  battery ;  insolvent 
would  continue  action,  ii.  654. 

if  judgment  obtained  before  insolvency,  it  would  probably  pass,  ii.  654. 
satisfied        "  "  certainly  so,  ii.  654. 

property  secured  to  wife's  sepai'ate  use,  does  not  pass,  ii.  655. 

veearing  apparel  exempted,  ii.  655,  and  n.  (m). 

"when  jewelry  exempted,  and  when  not,  ii.  655,  656,  and  notes. 

as  to  money  deposited  by  married  woman  living  separate,  ii.  655,  n.  (<). 

where  husband  trustee  of  wife,  property  withheld  from  assignee,  —  Story, 
J.,  ii.  656. 

as  to  watch  given  after  marriage,  ii.  656. 

same  given  to  children,  ii.  656,  and  n.  (x). 
Of  question  of  time,  ii.  656-660. 

importance  in  two  ways,  ii.  656. 

first,  when  bankrupt  loses  his  power  over  his  effects,  ii.  656. 

after  this,  any  transfer  of  his  void,  ii.  657. 

in  England  lien  of  assignees  attaches  on  first  act  of  bankruptcy,  ii.  637. 

this  rule  confined  to  bankruptcy,  ii.  657. 

why  applicable  to  bankruptcy  and  not  to  insolvency,  ii.  657. 

wherein  the  reason  fails,  ii.  657. 

rule  in  this  country,  ii.  658. 

time  usually  settled  by  statute,  ii.  658. 

as  to  seizure  of  land  on  execution  before  publication,  ii.  658. 

second,  what  time  must  intervene  to  make  transfers  made  in  contem- 
plation of  bankruptcy  void,  ii.  658. 

different  by  different  statutes,  ii.  659. 

two  months  before  decree  in  bankrupt  law,  ii.  659. 

in  England,  day  of  transaction  excluded,  ii.  659. 

so  day  of  filing  petition,  ii.  659. 

fractions  of  days  considered,  ii.  659,  n.  (e). 

fraud  of  bankrupt  at  any  time  vitiates  transaction  as  to  him,  ii.  660. 

also  as  to  parties  with  knowledge,  ii.  660. 

VOL.  II.  65 


770  INDEX. 

BANKRUPTCY   AND  INSOLVENCY— Con^mwerf. 

TVhat  debts  are  provable  against  the  estate,  ii.  660-672. 

in  general  all  debts  and  claims  ivhatever,  ii.  660. 

whether  due  and  payable  at  the  time  or  not  payable  till  after,  ii.  660. 

or  payable  on  contingency,  if  the  uncertainty  not  excessive,  ii.  660. 

distinction  between  subsisting  debts  payable  on  contingency  and  con- 
tingent liabilities  which  may  never  become  debts,  ii.  661,  n.  (?'). 

former  alone  can  be  proved,  ii.  661,  li.  (i). 

debt  due  liable  to  be  defeated  may  be  proved,  ii.  661,  n.  («). 

surety  or  indorser  may  prove  his  claim,  ii.  661,  662,  and  n.  (j). 

aU  rent  due  provable,  ii.  662. 

discharge  no  bar  to  an  action  on  an  agreement  for  rent  accruing  subse- 
quent to  bankruptcy,  ii.  663,  n.  (k). 

no  debt  resting  on  illegal  or  immoral  contract  or  consideration  prov- 
able, ii.  663. 

custom  of  trade  as  to  usurious  interest,  ii.  663,  n.  (I). 

assignees  may  make  any  defence  insolvent  could,  ii.  664. 

where  insolvent  guilty  of  fraud,  assignee  may  make  defences  insolvent 
could  not,  ii.  664. 

debts  springing  from  an  implied  promise  not  provable,  ii.  664. 

nor  claim  for  unliquidated  damages,  ii.  664. 
for  torts,  ii.  665. 

claim  sounding,  in  contract,  but  recoverable  in  damages  doubtful,  ii.  665. 

generally,   vendee  no  provable  claim  on  right   of  action    for  non-de- 
livery, II.  665. 

if  he  has  paid,  otherwise  for  the  amount  paid,  ii.  665. 

claim  against  common  carrier  for  goods  lost  provable,  ii.  665,  n.  (p). 

valuable  consideration  must  be  basis  of  claim,  ii.  665. 

assignee  may  defend  against  a  merely  good  consideration,  though  insol- 
vent could  not,  ii.  665. 

may  defeat  any  claim  insolvent  could,  ii.  665. 

no  debt  provable  against  the  funds  not  accruing  before  bankruptcy,  ii. 
666. 

the  reason  thereof,  considered,  ii.  666. 

in  this  country  Interest  on  debts  always  cast,  ii.  666. 

usually  In  England,  ii.  666. 

when  interest  Is  added  and  when  discounted,  II.  667. 

when  upon  dcljt  payable  on  demand,  Insolvency  acts  as  a  demand  to 
sustain  claim  for  Interest,  II.  6G7. 

when  not,  il.  667. 

after  amounts  made  uj)  for  decree  no  interest,  ii.  667. 

how  creditors  m;iy  act  when  holding  security,  ii.  667. 

rule  in  England,  ii.  667,  n.  (/). 

insolvency  acts  as  a  dissolution  of  an  attachment,  ii.  668. 

in  some  States,  however,  it  may  be  continued  for  benefit  of  creditors, 
ii.  668. 


INDEX.  771 

BANKRUPTCY   AND  INSOLVENCY  —  Conhnue^^. 

liens,  mortgages,  &c.,  when  not  affected  by  insolvency,  ii.  668,  n.  («),  (v). 

as  to  what  constitutes  a  lien,  ii.  6G8,  n.  (u). 

law  of  set-off  wider  in  its  reach  than  at  common  law,  ii.  6  70 ;  and  see 
638,  and  n.  («). 

covers  all  mutual  claims  or  debts  of  any  kind,  ii.  670. 

creditor  owing  debtor  may  pay  it  by  set-off,  ii.  6  70. 

if  it  equals  insolvent's,  whole  debt  is  paid,  ii.  6  70. 

what  kinds  of  credits  may  be  set  off,  ii.  670,  n.  (a;). 

an  administrator  cannot  set  off  debt  in  his  own  right  against  distributive 
share  of  insolvent's,  ii.  670. 

debts  must  be  due  in  same  right  to  claim  set-off,  ii.  670,  n.  (x),  670, 
n-  (?/)• 

verdict  in  favor  of  one  creditor  may  be  inquired  into  by  another,  ii.  671. 

this  must  be  done  by  assignee,  when,  ii.  671. 

judgment  highest  evidence  of  debt,  and  at  common  law  conclusive,  ii. 
671. 

not  so  in  insolvency,  ii.  671. 

courts  of  insolvency  may  disregard  a  judgment  if  debt  not  due  in  good 
faith,  ii.  671. 
may  inquire  into  consideration  of  judgment  debt, 
ii.  671. 

judgment  may  make  a  claim  provable,  ii.  671. 

award  of  referees  does  not  change  the  nature  of  the  claim,  ii.  671. 
Of  the  proof  of  debts,  and  of  dividends,  ii.  672-677. 

as  to  who  may  prove  debts,  and  the  manner  in  which,  ii.  672. 

all  having  distinct  claims  against  insolvent  may  prove,  ii.  672. 

wife  having  distinct  estate  may  prove  against  estate  of  husband,  ii.  672. 

trustee  may  prove  for  cestui  que  trust,  ii.  672. 

infant  by  his  guardian,  ii.  672. 

and  for  such  purpose  courts  may  appoint  guardian,  ii.  672. 

assignee  of  bond  or  simple  contract  may  prove  in  his  own  name,  ii.  672. 
of  another  insolvent  may  prove  his  claim,  ii.  672. 

corporations  by  duly  authorized  attorney,  ii.  672. 

other  creditors  entitled  to  oath  of  party  in  interest,  ii.  673. 

whose  oath  required  in  cases  above  mentioned,  ii.  673. 

upon  what  grounds  required,  ii.  673,  n.  (^). 

the  reason  of  rule  shows  its  limit,  ii.  674.  ^ 

discretionary  power  of  courts  and  commissioners,  ii.  674. 

character  of  examination,  ii.  674. 

any  evidence  admissible  at  law  may  be  offered  or  demanded,  ii.  6  74. 

bankrupt  may  be  examined  by  principle  of  equity  jurisprudence,  ii. 
674,  n.  (7). 

the  rule  that  witness  need  not  criminate  himself,  used  with  some  qualifi- 
cations in  bankruptcy,  ii.  674,  n.  (7). 


772  INDEX. 

BANKRUPTCY   AND   INSOLVENCY— Con^mued. 

compelled  to  answer  In  regard  to  disposition  of  his  estate,  though  it  tend 
to  criminate  himself,  ii.  674,  n.  (j). 

when  bankrupt  may  prove  demand  against  his  own  estate,  ii.  675. 

insolvency  in  cases  of  partnership,  ii.  676. 

how  whole  property  may  pass,  ii.  672. 

most  beneficial  to  have  one  assignee  and  one  insolvency,  ii.  676. 

where  dividends  declared,  ii.  676.  • 

duty  of  assignee,  ii.  6  76. 

delay  without  good  cause,  strong  reason  for  removal,  il.  676,  677. 

debt  may  be  proved  at  any  meeting,  ii.  677. 

but  former  dividend  not  to  be  disturbed,  il.  677. 

late  proved  debt  entitled  to  subsequent  dividends  and  also  to  past  if 
assignee  has  vinapproprlated  funds,  ii.  677. 
Of  the  discharge,  ii.  677-680. 

how  a  discharge  operates,  dependent  upon  statute,  ii.  677. 

generally  la  this  country  entirely  discharges  debt,  Ii.  677. 

otherwise  in  Arkansas,  New  Jersey,  North  Carolina,  Mississippi,  Ten- 
nessee, Illinois,  Georgia,  Missouri,  Connecticut,  Pennsylvania,  and 
Ohio,  Ii.  67  7,  n.  (p). 

provisions  of  the  New  York  statute,  II.  677,  n.  (p). 

usually  provisions  preventing  fraudulent  Insolvents  from  getting  dis- 
charge, Ii.  677,  678. 

how  this  may  be  prevented,  ii.  6  78. 

where  discharge  must  be  declared,  Ii.  678. 

where  creditor  may  object,  and  what  objections  make,  Ii.  678. 

general  grounds  on  which  certificate  and  discharge  may  be  disallowed, 
ii.  678,  n.  (7). 

one  creditor  can  have  no  undue  advantage  over  another,  ii.  679. 

if  one  has  by  fault  of  insolvent,  discharge  prevented,  ii.  679. 

discharge  operates  fully  against  all  creditors  whose  debts  are  proved,  ii. 
679. 

but  not  against  those  not  proved,  and  could  not  be  from  their  nature, 
ii.  679. 

as  to  those  which  might  have  been,  but  were  not,  doubtful,  II.  680. 

•would,  however,  generally  be  barred,  Ii.  680. 

as  would  also  those,  in  their  nature  provable,  but  not  proved  from  per- 
sonal liiaderance  or  ignorance,  ii.  680. 

when  certificate  may  be  impeached,  ii.  680. 

eflcct  of  a  promise  to  pay  a  debt  discharged  by,  i.  308,  309,  360. 

what  constitutes  such  promise,  i.  308. 

form  of  action  upon  such  promise,  i.  308,  309. 
0/  privilcf/ed  or  pre/erred  debts,  ii.  681,  682. 

some  debts  iircfiTred,  though  general  purpose  of  ])ankrupt  law  to  put  all 
on  same  looting,  II.  681. 


INDEX. 


773 


BANKRUPTCY  AND  INSOLVENCY— Con/inwe^/. 
all  amounts  due  United  States,  ii.  681. 

State  in  -which  insolvent  resides,  ii.  681. 
certain  amounts  due  for  personal  service,  ii.  681. 
sometimes  costs  of  attachments,  &c.,  which  have  ended  in  insolvency, 

ii.  681. 
■why  majority  of  cases  cited  are  from  English  books,  ii.  681. 
two  principal  statutes  containing  leading  principles  of  bankruptcy,  ii. 
682. 
BAR, 

when  created  to  an  action  against  one  debtor  by  a  judgment  against  his 
co-debtor,  i.  12,  n.  (j). 

(See  Judgments.) 
BARTER, 

agent  to  sell  cannot,  without  special  authority,  i.  50,  n.  (g). 

BASTARDS, 

(See  Illegitimate  Children.) 

BEARER, 

note  or  bill  payable  to,  how  transferred,  i.  205. 
BELIEF, 

of  one  contracting  party  of  intention  of  the  other,  ii.  9-11. 

BETTING, 

(See  Stakeholders.    Wagers.) 

BEYOND   SEAS, 

meaning  of  the  term,  ii.  378. 
BIGAMY,  ii.  114,  n.(/). 
BILLS  OF  EXCHANGE  AND  PROMISSORY  NOTES, 

acts  concerning,  agent  for  must  have  specific  authority,  i.  52. 
if  agent's  note  be  taken,  principal  discharged,  i.  55. 
to  agent  or  servant,  when  it  affects  principal,  i.  65. 

(See  Indorsement.) 
liability  of  agent  intrusted  with,  i.  73,  n.  (y). 
power  of  agent  intrusted  with,  to  pledge,  i.  79,  80. 
liability  of  partnership  on,  when  drawn  without  authority,  i.  161,  n.  (n). 

of  executor  on,  i.  108. 
negotiable  bills  and  notes,  i.  202-206. 
gift  by,  i.  201. 

exceptions  to  rule  prohibiting  assignments  of  choses  in  action,  i. 
202. 
essentials  of,  i.  206-210. 
indorsement  of,  i.  211-216. 

no  firm  can  sue  a  note  if  one  of  the  same  firm  is  a  defendant,  i.  213. 
apportionment  of,  when  the  consideration  is  divisible,  i.  388,  n.  (vi). 
payable  on  demand,  i.  217-221. 
presentment  of,  for  acceptance,  i.  221,  222. 
for  payment,  i.  223-238. 
65* 


774  INDEX. 

BILLS  OF  EXCHANGE  AND  PROMISSORY  1^ OTES— Continued. 
of  whom,  when  and  where  the  demand  of  should  be  made,  i.  228-230. 
notice  of  non-payment  of,  i.  231. 
excuses  for  neglect  of,  i.  232. 
when,  where,  and  how  to  be  given,  i.  233-235. 
how  the  indorser  may  be  discharged,  i.  235,  236,  237. 
protest  of  bills,  i.  23  7,  238. 
damages  for  non-payment  of  bills,  i.  239. 
liability  of  holder  of,  as  collateral  security,  i.  591,  n.  (u). 
liability  of  banks  for  collection  of  when   intrusted  to  them,  i.  586,  and 

n.  (n). 
pledgee  of,  his  rights,  i.  600,  601,  613. 
payable  to  a  fictitious  payee,  not  construed  as  bills  payable  to  bearer,  ii. 

7,n.  (^). 
right  of  holder  in  certain  cases  to  consider  promissory  notes  as  bills,  ii. 

20. 
when  a  note  is  invalid  because  of  a  repugnant  indorsement,  ii.  26,  n.  (T). 
indorsement,  how  made  in  case  of  insolvency  or  bankruptcy,  ii.  626. 
restrictive  words  in,  ii.  26,  n.  (J). 
payable  at  certain  banks,  usage  of  such  banks  to  be  conformed  to,  ii.  49, 

one  not  a  payee,  indorsing,  may  prove  that  his  contract  was  conditional, 

ii.  65. 
how  affected  by  the  lex  loci,  ii.  87,  95-99. 

{See  Place,  Laav  of.) 
payment  in,  ii.  131,  136,  196,  198. 

(^See  Payment.) 
payable  in  specific  articles,  without  time  or  place,  payable  on  demand  at 

place  where  articles  are,  ii.  160,  n.  Q). 
accord  and  satisfaction  of,  ii.  196. 

suit  on,  when  may  be  brought  for  instalments,  ii.  132,  147. 
how  indorser  of,  may  sue  prior  indorser,  ii.  132. 
interest  on,  how  calculated,  ii.  146. 
alteration  of,  ii.  223-228,  and  n.  («). 

by  subsequent  attestation,  ii.  227,  n.  (v). 
sales  of,  within  the  statute  of  frauds,  ii.  331,  n.  (w). 
part  payment  in,  debts  barred  by  the  statute  of  limitations  revived  by, 

ii.  353-356. 
when  the  statute  of  limitations  begins  to  run  on,  ii.  370-372. 
when  usurious. 

{See  UsL'Kv,  Interest  and  Usury.) 
discount  of,  when  usurious,  ii.  408—110. 
damages  in,  action  of  trover  for,  ii.  4  71. 

ill  sales,  for  breach  of  (contract  to  give,  ii.  485. 
payablf  in  goods,  damages  in  action  on,  ii.  490-492. 
indorsement  of,  how  compelled,  ii.  532. 


INDEX.  775 

• 

BILLS  OF  LADING, 

bill  of  lading,  what  rights  given  by  possession  of,  by  factor,  i.  84. 

when  signature  of  master  binds  owner,  i.  42. 

negotiability  of,  i.  239. 

stoppage  in  transitu  defeated  by  indorsement  of,  i.  487-489. 

pledge  of,  i.  600. 

liability  of  carrier,  how  affected  by  exceptions  in,  i.  647. 

whether  indorsement  and  delivery  of,  is  sufficient  delivery  of  goods,  to 
conform  to  the  statute  of  frauds,  ii.  323. 

lonafide  transfer  of,  passes  property  in  goods,  even  against  assignees  in 
insolvency,  ii.  643. 

in  the  hands  of  insolvent  pass  to  assignee,  ii.  643. 

delivery  of,  without  indorsement,  not  sufficient  to  transfer  property,  II. 
643,  n.  (('). 

delivery  of  shipping  note  or  delivery  order  not  equivalent  to  delivery  of 
bill  of  lading,  and  will  not  transfer  property  in  goods,  II.  643,  n.  (i'). 

delivery  order  lodged  with  wharfinger  transfers  property,  II.  643,  n.  (v). 

sale  and  transfer  of  bill  of  lading  by  consignee  without  notice  of  con- 
signor's insolvency,  transfers  property,  Ii.  644. 

with  notice,  whether,  Ii.  644. 

qualifications  and  restrictions  in,  prevail,  ii.  644. 
BILL  OF  SALE, 

effect  of  to  transfer  ship  at  sea  as  against  assignee  In  insolvency,  II.  642. 
BLANKS, 

supplied,  how,  Ii.  75. 

alteration  of  instrument  by  filling,  II.  229. 
BOARDING-HOUSE  KEEPERS, 

liability  of,  i.  628,  and  n.  (li). 
BOATMEN, 

when  liable  as  common  carriers,  I.  644,  645. 
BOND, 

assignment  of,  I.  196,  197,  198. 

of  railroad,  negotiability  of,  I.  240. 

of  an  Infant,  I.  243,  260. 

condition  of,  explains  the  obligatory  part,  II.  14. 

to  be  construed  In  favor  of  obligor,  II.  22,  n.  (c). 

what  words  constitute  a,  II.  24. 

when  void  for  repugnancy,  ii.  26,  n.  (I). 

alteration  of,  Ii.  226,  n.  (7-)  and  (w). 

by  attestation  after  execution,  ii.  226,  n.  (t<). 

amount  due  on,  but  not  the  penalty,  pleadable  as  set-ofF,  il.  242. 

penalty  of,  how  relieved  against,  at  law  and  In  equity,  II.  433,  434. 

official,  executed,  on  Sunday,  valid  as  to  parties  pi'otected,  ii.  262  h. 

post  obit,  validity  of,  and  extra  Interest  upon,  ii.  418. 
of  railroad  company,  usury  In  the  sale  of,  ii.  422. 


776  INDEX. 

BOND  —  Continued. 

construed  as  contract,  ii.  514,  515. 

for  performance  of  work,  specific  performance  of,  "when  decreed,  ii.  530, 
n.  (0- 
BONUS, 

on  loans,  -when  in  conflict  with  the  usury  laws,  ii.  391,  426. 
BORROWER, 

rights  of,  i.  590. 
BOTTOMRY, 

loans  on,  not  usurious,  ii.  414-416. 
BREACH  OF  PROMISE, 

ground  for  increased  damages  in  an  action  for,  ii.  448. 

BREACH  OF  TRUST, 

...  < 

how  remedied  in  equity,  u.  533. 

BRIDGES, 

right  of  eminent  domain  in  relation  to,  ii.  690-699. 
BROKER, 

power  to  resell  and  charge  with  the  loss  the  purchaser  who  fails  to  pay, 

i.  49,  n.  (e). 
cannot  delegate  his  authority,  i.  71,  n.  (g),  84. 
distinction  between,  and  a  factor,  i.  78,  84. 
when  a  partner,  i.  125,  n.  (c). 
power  of,  when  the  pledgee  of  stock,  i.  599. 
rights  of,  against  his  principal  who  has  not  furnished  funds  to  meet  a 

purchase  when  the  broker  has  paid  the  expenses  of  a' resale,  ii.  49, 

n.(.). 
set-off  against,  when  allowed,  ii.  249. 

an  agent  for  both  parties  under  the  statute  of  frauds,  ii.  292. 
memorandum  required  by  the  statute  of  frauds,  what  sufficient,  ii.  292, 

charge  of,  for  services  in  discount  of  notes  and  bills,  not  usurious,  ii. 
410. 

{See  Factors  and  Brokers.) 
BROTHEL, 

proximity  of,  whether  it  avoids  a  contract  for  the  hire  of  a  house,  when 
not  disclosed  by  the  agent  at  the  time  it  Avas  made,  i.  52,  n.  (?•). 
BUILDING, 

burned  after  lease  made  and  before  term  began,  i.  426,  n.  (r). 

burned  after  term  began,  without  covenant  to  repair  or  rebuild,  i.  426, 

n.  (r). 
contract  for,  i.  540. 

extra  work  in,  when  and  how  to  be  paid  for,  i.  540,  542. 
BUYER, 

no  one  can  be  made  to  buy  of  another  against  his  will,  i.  436. 
sends  order  to  A,  which  B  executes,  buyer  not  bound  to  B,  i.  436. 


INDEX.  777 

BY-BIDDING, 

•when  sales  at  auction  are  avoided  by,  i.  417. 

prevents  sale  from  being  enforced  in  equity,  ii.  572,  n.  (h). 


C. 
CAPACITY   OF  PARTIES, 

(See  Parties.) 
CAPIAS  AD  RESPONDENDUM,  u.  579. 
CAPIAS  AD   SATISFACIENDUM,  il  bid. 
CARRIERS,  COMMON, 

liability  of,  how  measured,  i.  634,  635. 

excused  for  losses  occasioned  by  the  "  act  of  God,"  i.  634-637. 

still  bound  to  take  care  of  goods,  i.  637. 
by  the  natural  decay  of  goods,  i.  638,  676, 

677. 
by  public  enemies,  i.  638. 
Who  is  a  Common  Carrier,  i.  639-648. 
wagoners  and  market-men,  i.  639-642. 
truckmen,  cartmcn,  and  porters,  i.  641,  642. 
proprietors  and  drivers  of  stage-coaches,  i.  643. 
carriers  by  water,  i.  644-647. 
boatmen  and  ferrymen,  i.  645. 
proprietors  of  steamboats,  i.  645. 
owners  of  general  ships,  i.  646,  647. 
railroad  companies,  i.  647,  648. 
steam  tow-boats,  i.  645. 
Obligations  of  a  Common  Carrier,  i.  648-650. 
to  receive  goods,  i.  648. 

when  owner  of  goods  not  bound  to  receive,  i.  649. 
excuses  for  refusal  to  receive,  i.  649,  650. 
compensation  of,  i.  649,  650,  680,  697. 
discrimination  between  persons,  how  limited,  i.  650. 
When  the  responsibility  begins,  i.  650-652. 
with  delivery  to,  i.  650-652. 
determined  by  the  character  in  which  the  carrier  receives  goods,  i. 

652-654. 
notice  of  the  delivery,  i.  654,  669. 

delivery  to  what  persons  renders  the  carrier  liable,  i.  650,  651,  655-657, 
liability  of  the   owner  of  a  ship  carrying  goods  when  chartered  to  an- 
other, i.  65  7. 
delivery  to,  when  sufficient  to  satisfy  the  requirements  of  the  statute  of 

frauds,  ii.  327-330. 
damages  in  an  action  against,  ii.  468-470. 


778  INDEX. 

CARRIERS,  COMMON—  Continued. 

claim  against  for  goods  lost,  may  be  proved  against  estate  of,  in  insol- 
vency, ii.  665,  n.  (p). 
When  the  responsibility  ends,  i.  658-677. 

delay  in  delivery,  when  excused,  i.  659,  660. 

duty  of,  when  delivery  to  the  consignee  cannot  properly  be  made,  i.  660, 
670,  683,  684. 

what  constitutes  delivery  by,  i.  658,  661,  662. 

how  affected  by  usage,  i.  661,  670,  671,  ii.  49,  n.  (z). 

when  notice  to  the  consignee  of  the  arrival  of  goods  is  necessary,  i.  661, 
662,  669. 

railroad  carriers,  delivery  by,  i.  662-664. 

carriers  by  water,  delivery  by,  i.  665-670. 

•  none  on  Fast  Day,  i.  669. 

when  "  common  "  carriers  become  liable  only  as  warehouse-men  or  de- 
positaries, i.  671,  674,  680,  681. 

not  liable  for  goods  in  the  personal  custody  of  the  owner,  i.  650,  672, 
674. 

acceptance  of  the  goods  by  the  consignee  before  reaching  their  destina- 
tion, effect  of,  i.  6  74. 

failure  to  deliver,  when  excused,  i.  635-639,  675-677. 
Whei-e  a  third  parly  claims  the  goods,  i.  621,  677-680. 

delivery  to  the  true  owner  a  good  defence  to  an  action  brought  by  the 
consignor  having  no  right,  i.  678. 

remedy  in  equity,  i.  578,  621,  679. 
Compensation,  i.  648,  649,  680. 
Lien,  and  Agency  of,  and  responsibility  beyond  his  own  route,  i.  680-690. 

right  of  lien,  i.  681. 

how  varied,  i.  681. 

abandonment  of,,  i.  681,  n.  (a). 

liability  of,  while  holding  goods  on  the  ground  of,  i.  681. 

when  he  receives  the  goods  fi'ora  one  not  the  owner  or  his  agent,  i.  682. 

when  the  carrier  is  liable  only  as  factor,  i.  684,  685. 

liable  for  the  acts  of  agents,  i.  685,  686,  699. 

of  partners,  i.  699,  700. 

when  liable  for  the  safe  transportation  of  goods  beyond  the  terminus  of 
his  route,  i.  686-690. 
Common  carriers  of  passengers,  i.  690-702. 

liability  of,  how  measured,  i.  G90-695. 

for  gratuitous  passengers,  i.  691-695. 
for  the  carriage  of  slaves,  i.  692,  n.  (m). 

damages  may  be  exemplary,  i.  696. 

duty  of,  to  notify  passengers  of  peculiar  dangers,  i.  692,  n.  (m). 

liunhiii  of  proof  on,  to  disprove  negligence  in  case  of  loss,  i.  695. 

duty  of,  to  receive  passengers,  i.  696. 


INDEX.  779 

CARRIERS,  COMMON— Con/mMe(/. 

excuses  of,  for  not  receiving,  i.  69G,  n.  (o). 

duty  of,  as  to  speed,  treatment  of  passengers,  providing  suitable  means 

of  transport,  and  proper  servants,  i.  697-700. 
passengers  bound  to  show  tickets  and  comply  witli  reasonable  regula- 
tions, i.  700,  718. 
liability  of,  for  injuries  to  strangers,  i.  700. 
in  cases  of  collision,  i.  701,  702. 

when  the  negligence  of  the  injured  party  is  a  good  defence, 
i.  70C-702, 
liability  by  express  contract,  i.  703-707. 
effect  of  through  ticket,  i.  688,  718. 

servant  may  recover  for  loss,  though  master  bought  ticket,  i.  694. 
Of  special  agreements  and  notices^  i.  689,  703-718. 
whether  they  may  qualify  their  common  law  liability,  i.  703. 

by  express  contract,  i.  703-707. 
by  notice,  i.  707-712. 
how  far  they  may  limit  their  liability  by  notice,  i.  709-747. 
liability  of,  in  case  of  negligence  notwithstanding  notice,  i.  713-718, 

n.(;o. 

whether  the  notice  dispenses  with  a  special  inquiry,  i.  717,  718. 
what  is  sufficient  notice,  i.  719,  n.  (t). 
notice  by,  to  be  construed  against,  ii.  21. 

railroad  companies  bound  by  their  time-tables  and  advertisements,  i. 
709. 
Of  Fraud,  i.  719-722. 
liability  of,  how  affected  by  the  fraud  of  the  owner,  i.  719. 

for  baggage  of  passengers,  to  what  articles  it  extends,  i. 
673,  720,  721,  722. 
testimony  of  the  passenger,  admissible  to  prove  the  contents  of  his  trunk, 
to  what  extent,  i.  721,  722. 
CARRIERS,  PRIVATE, 

persons  liable  as  such,  i.  633,  639,  n.  (r). 
special  property  of,  in  the  chattel,  i.  633. 
liability  of,  how  measured,  i.  633. 
how  affected  by  special  contract,  i.  634. 
not  bound  to  receive  goods,  i.  648. 
CAUSA   PROXIMA, 

how  distinguished  from  causa  remota  in  regard  to  damages,  ii.  455. 
CAVEAT  EMPTOR, 

rule  of,  when  applied,  i.  460. 

exceptions  to,  i.  461,  465-470. 
CESSIO  BONORUM, 

of  the  civil  law,  ii.  585. 
CESTUIS  QUE   TRUST, 

fraud  upon,  ii.  270,  271. 


780  INDEX. 

CHAMPERTY, 

contracts  of,  void,  ii.  263. 

what  amount  to,  ii.  2G3. 
CHARTERS, 

construction  of,  ii.  16. 

of  corporations,  are  contracts,  ii.  513-515. 

how  construed,  ii.  515-517. 

reservations  in,  how  construed,  ii.  513-515. 

when  may  be  taken  for  public  purposes,  ii.  517-527. 
CHARTER-PARTY, 

the  rule,  expressio  unius  est  exclusio  allerius,  applied  to,  ii.  28. 
CHATTELS, 

whether  the  spontaneous  growth  of  land  is  to  be  considered  as,  ii.  314. 
CHECKS, 

of  a  bank,  payment  in,  ii.  135. 

{See  Payment  and  Bank  Checks.) 
CHILD, 

meaning  of  the  term,  ii.  12,  n.  (fi). 

whether  legitimate  when  born  in  legalized  polygamy,  ii.  104,  n.  (p), 
109,  n.  (0- 
CHOSES  IN  ACTION, 

assignments  of,  i.  192-202. 

rights  of  the  assignee  of,  i.  192,  193. 

what  may  be  assigned,  i.  194,  196. 

manner  of  assignment  of,  i.  197. 

equitable  defences  to,  i.  197. 

of  a  married  woman,  how  reduced  into  possession  by  her  husband,  i. 
284-286. 

{See  Assignment  and  Novation.) 

sales  of,  when  usurious,  ii.  421-427. 

{See  Bills  of  Exchange  and  Promissouy  Notes.) 
CLERK, 

of  court,  necessary  to  authenticate  proceedings,  that  they  may  receive 
"  full  fiiith  and  credit,"  ii.  124. 
CO-CONTRACTORS, 

contribution  between,  i.  32,  33. 
COHABITATION, 

how  it  ailcots  the  husband's  liabilities  for  contracts  of  Us  wife,  and  nec- 
essaries furnislu'd  to  her,  i.  286-306. 
COLLATERAL  SECURITY, 

bills  and  notes,  when  negotiated  as  such,  Avhethcr  open  to  equitable  de- 
fences, i.  216. 

liability  of  the  holder  oflioud  and  notes,  as  such,  i.  591,  n.  {ii). 

suspension  of  original  cause  of  action  not  to  be  inferred  from  the  giving 
witii  j)Ower  to  sell,  &c.  ii.  197. 
COLLISION  OF  VESSELS,  ii.  456. 


INDEX.  781 

COMBINATION, 

(See  Restraint  of  Trade.) 
COMMERCE, 

insufficiency  of  common  law  to  meet  wants  of,  il.  579. 
COMMISSIONS, 

factor's  right  to,  when  complete,  i.  84. 
his  lien  for,  i.  84. 

may  pledge  to  the  amount  of  his  lien  for,  i.  80. 
COMMODATUM, 

liability  of  borrower,  i.  590. 
COMMON  LAW, 

basis  of,  ii.  52,  53. 

insufficient  alone  to  meet  the  wants  of  commerce  ;  can  only  affect  two 
parties,  plaintiff  and  defendant ;    permits   unlimited  preference  to 
creditors ;  principle  of,  opposed  to  that  of  bankrupt   and  insolvent 
laws,  ii.  579-587. 
lawyers,  aversion  of,  to  bankrupt  laws  upon  their  introduction,  ii.  580. 
COMMUNITY, 

of  property,  in  Louisiana,  i.  306,  note. 
COMPANIES, 

(See  Joint-Stock  Companies.) 
COMPENSATION, 

(See  Damages.) 
of  the  civil  law,  ii.  240. 
in  equity,  ii.  556-56L 
COMPOUND  INTEREST, 

not  usurious,  ii.  427,  428. 
when  agreement  for,  is  valid,  ii.  428-430. 
annual  rests  in  merchants'  accounts  allowed,  ii.  430,  n.  (x). 
COMPROMISE, 

of  suits  or  claims,  a  valid  consideration,  i.  363,  364. 
of  a  debt,  binding,  ii.  130,  197. 
CONCEALMENTS, 

of  agent,  how  they  affect  the  principal,  i.  52. 
of  partner,  how  they  affect  the  firm,  i.  160,  n.  (I), 
by  the  owner  of  goods,  how  they  affect  the  liability  of  a  common  carrier, 
i.  719. 

(See  Fraud,  ii.  2 73,' 2 74.) 
CONCURRENT  AGREEMENTS,  ii.  189. 
CONDEMNATION, 

"  sentence  of,"  in  charter-party,  how  construed,  ii.  11,  n-.  (n). 
CONDITION, 

of  obligation,  how  construed,  ii.  22,  n.  (v). 
words  of,  construed  as  words  of  covenant,  ii.  23. 
grants  on,  avoided  by  a  broach  thereof,  ii.  36,  3-7. 
not  favored  by  the  law,  ii.  38. 
VOL.  IL  66 


782  INDEX. 

CONDITION—  Continued. 

■when  a  provision  in  a  contract  amounts  to,  ii.  39,  40. 

when  covenants  in  a  contract  are  a  condition  precedent  to  each  other, 

ii.  40,  41,  and  n.  (/),  187-189. 
tender  on,  not  valid,  ii.  155. 
signature  on,  i.  206. 
CONDITIONAL  SALES,  i.  449-451. 
CONFLICT  OF  LAWS, 

(&e  Place,  Law  of.) 
CONFUSION, 

of  goods,  effect  of,  i.  613,  ii.  474,  475.  . 

CONSEQUENTIAL  INJURY, 

when  damages  recoverable  for,  ii.  454-463,  487-498. 
CONSIDERATION, 

not  included  in  the  definition  of  a  contract,  i.  5,  6,  7. 
NecessiUj  for,  i.  353-356. 
in  the  civil  law,  i.  35.3,  355. 
in  the  continental  law,  i.  354,  355. 
in  the  common  law,  i.  354,  355. 
of  contracts  under  seal  or  specialties,  i.  354,  355. 
of  written  contracts,  i.  355,  356. 

when  expressed,  no  other  can  be  proved,  i.  355,  356,  contra,  357. 
Kinds  of,  i.  356-361. 
good,  i.  357,  ii.  7,  n.  (^). 
valuable,  i.  357. 
equitable,  i.  357. 
moral,  i.  358-361. 

promise  in  consideration  of  past  cohabitation  void,  i.  361. 
former  debt  barred  or  discharged,  good  consideration  for  new  promise, 
i.  308,  361. 
Adequacy  of,  i.  361-363,414. 

valid  considerations  classified,  i.  363-379. 

promise  by  son  not  to  complain  of  his  father's  disposition  of  his  estate, 

no  consideration  for  note,  i.  366. 
obtaining  passage  of  a  law  by  corrupt  means  no  cousidcration,  i.  366. 
Prevention  of  Utirjation,  i.  363-365. 
submissions  to  arbitration,  i.  363,  3  76. 
compromise  of  a  right  of  action,  i.  363,  364,  365. 
Forbearance  of  a  suit  at  law  or  in  equity,  i.  366-369. 
must  not  be  of  a  wholly  unfounded  claim,  i.  366. 
time  of,  i.  367. 

not  a  consideration  unless  there  is  a  party  liable  to  suit,  i.  368. 
waiver  of  a  right  of  action,  i.  369. 
incurring  liability  to,  i.  369. 
Assiymnenl  of  debt,  i.  370. 


INDEX.  783 

CONSIDERATION  —  Continued. 
Work  and  service,  i.  370,  371. 

when  gratuitous,  i.  371,  580,  n.  (i). 
Trust  and  confidence,  i.  372. 

liability  of  a  gratuitous  bailee,  i.  372,  n.  (d). 
Promise  for  a  promise,  i.  373-376. 

not  a  consideration  without  mutuality,  i.  374-376. 

except  between  infants  and  persons  of  full  age,  i.  276,  277,  376. 
Subscription  and  contribution,  i.  376-379. 

effect  of  seal  on  subscription  book,  i.  376. 

to  the  stock  of  incorporated  companies,  i.  377. 

for  charitable  purposes,  i.  378,  379. 
Of  consideration  void  in  part,  i.  379. 
Illegality  of  consideration,  i.  365,  380-382. 

how  it  affects  indorser,  i.  206. 

distinction  between  partial  illegality  of  consideration  and  partial  ille- 
gality of  promise,  i.  380. 

distinction  between  illegality  by  statute  and  illegality  by  common  law, 
i.  381. 

what  constitutes  illegality  by  statute,  i.  382. 
Impossible  considerations,  i.  382-386. 

the  impossibility  must  be  natural,  not  merely  personal  to  the  promisor, 
i.  383-385. 
Failure  of  consideration,  i.  386-388. 

total  failure,  i.  386. 

partial,  i.  386-388. 

when  divisible,  i.  386,  387. 

when  inquiry  precluded,  i.  388. 

extrinsic  evidence  admissible  to  prove  want  of,  i.  66,  n.  (6). 
Rights  of  a  stranger  to  the  consideration,  i.  389-391. 

by  the  ancient  rule  of  the  common  law,  when  secured,  i.  388,  389. 

by  the  prevailing  rule  in  this  country,  i.  390. 

in  contracts  under  seal,  the  action  must  be  brought  in  the  name  of  the 
party  to,  I.  391. 
21ie  time  of  the  consideration,  i.  391-398. 

concurrent,  i.  391. 

executory,  i.  391. 

executed,  founded  on  previous  request,  express  or  implied,  i.  391,  392. 

previous  request,  when  implied,  i.  392-396. 

extrinsic  evidence  admissible  to  prove  time  of  giving,  ii.  75. 

when  required  to  be  stated  in  declaration,  i.  395,  n.  (z). 

liability  of  promisor  not  extended  by  express  promise,  when  his  previous 
request  and  subsequent  promise  are  both  implied  by  law,  i.  395,  396. 

consideration  of  a  guaranty,  i.  366,  n.  (b),  375,  496. 
of  contracts  of  novation,  i.  189,  190. 


784  INDEX. 

CONSIDERATION—  Continued. 

of  negotiable  paper  presumed,  i.  206,  211. 
when  inquirable  into,  i.  211,  215. 
entireness  of  the  consideration,  how  it  affects  the  joinder  or  severance 

of  parties,  i.  15-20. 
how  affecting  entirety  of  contract,  ii.  31,  32. 

(See  Apportionment  of  Contracts.) 
apparently  exhausted,  evidence  that  it  is  not,  ii.  75. 
of  a  contract,  when  required  to  be  in  writing,  ii.  295-297. 
of  a  contract  within  the  statute  of  frauds,  when  recoverable,  ii.  315- 

318,  319,  338,  n.  0"). 
with  interest,  when  the  measure  of  damages  in  breach  of  covenants  in 

sales  of  real  estate,  ii.  499-502. 
in  equity,  ii.  517-522,  547,  n.  (z). 

(See  Specific  Performance.) 
what  necessary  to  proof  of  claim  against  estate  of  bankrupt  or  insol 
vent,  ii.  664. 
CONSIGNEE, 

or  owner,  when  not  bound  to  receive  goods  from  carrier,  i.  649. 
CONSTITUTION  OF  THE  UNITED  STATES, 
operation  of,  on  contracts,  ii.  683. 
What  are  contracts  within  the  clause  respecting  the  obligation  of  them,  ii. 
683-689. 
a  grant  is  within  the  clause,  ii.  683. 
contracts  between  two  States,  within,  ii.  704. 
between  a  State  and  an  individual,  ii.  704,  n.  (a), 
what  interference  violates  the  obligation,  ii.  684. 
laws  relating  to  public  property  or  rights,  ii.  685. 
municipal  corporation,  powers  and  franchises  of,  ii.  685. 
salaries  and  tenures  of  ofBce,  not  within,  ii.  686. 

grants  to  corporations  and  charters  thereof  within,  ii.  683,  n.  (c),  687-699. 
reservations  in  charters,  ii.  687-689. 
What  rights  are  implied  hy  a  grant,  ii.  689,  690. 

grants,  how  construed,  ii.  689. 
Of  an  express  grant  of  exclusive  privileges,  ii.  691-701. 
whether  exclusive  privileges  are  revocable,  ii.  691,  692. 
tenure  by  which  private  property  is  held,  ii.  693. 
eminent  domain,  power  of  the   State  over  grants  for  building  bridges, 

ii.  695. 
an  exclusive  right  to  build  a  bridge  may  be  taken  for  public  purposes, 

ii.  696. 
when  coupled  with  a  stipulation  not  to  authorize  another  bridge,  ii.  696. 
public  purposes,  and  provision  for  compensation  necessary  to  the  exer- 
cise of  the  rii'Iit  of  ciMiiicMt  domain,  ii.  698. 


INDEX.  785 

CONSTITUTION  OF  THE' UNITED  STATES— Continued. 

taxing  power,  whether  alienable  by  the  State,  ii.  692,  698,  699. 
abandonment  of,  not  to  be  presumed,  ii.  700. 

bank  charter  does  not  imply,  ii.  701,  n.  (u). 
by  a  town,  ii.  701,  n.  (m). 
not  to  be  exercised  by  legislature  in  violation  of  constitution,  ii.  701. 
Of  the  relation  of  the  clause  to  marriage  and  divorce,ii.  701-703, 116,  n.  (<j). 
■whether  marriage  is  within  the  clause,  ii.  701-703. 
whether  a  divorce  can  be  decreed  for  any  cause  not  a  ground  for  divorce 
when  the  marriage  was  contracted,  ii.  702. 
Of  the  relation  of  the  clause  to  bankruptcy  and  insolvency,  ii.  704-710. 
{See  Bankruptcy  and  Insolvency.) 
bankrupt  and  insolvent  laws  of  a  State  within,  ii.  704. 
power  of  congress  to  pass  a  bankrupt  law  not  exclusive,  ii.  705. 
an  act   abolishing  imprisonment  for  debts  previously  contracted,  not 

prohibited,  ii.  706-710. 
when  laws  exempting  property  from  attachment,  or  execution,  or  stay- 
ing process,  are  constitutional,  ii.  708-709. 
insolvent  laws  of  a  State,  operative  only  in  favor  of  the  citizens  thereof, 
ii.  709,  710. 
Of  the  meaning  of  the  toord  ^^  obligation"  in  the  clause,  ii.  710-713. 

whether  the  "  obligation  "  consists  in  the  municipal  law  existing  when 
the  contract  was  made,  or  in  the  universal  law  of  contracts,  ii.  710,  711. 
police  regulations  of  a  State  interfering  with  contracts,  when  constitu- 
tional, ii.  712. 
statutes  of  limitations  by  a  State,  when  constitutional,  ii.  712. 
divesting  of  vested  rights  not  prohibited,  ii.  708. 
CONSTRUCTION, 

of  warranties,  i.  459. 
of  guaranties,  i.  495. 
CONSTRUCTION  OF  CONTRACTS, 

General  purpose  and  principles  of  construction,  ii.  3-6. 
construction,  how  distinguished  from  interpretation,  II.  3,  n.  (a), 
doctrine  of  cy  pres  belongs  to  construction,  ii.  3,  n.  (a). 
rules  of  construction  and  interpretation  to  be  distinguished  from  rules  of 

law,  ii.  3,  n.  («). 
construction,  question  of  law,  ii.  3,  4. 

exception,  where  unusual,  technical,  or  official  words,  or  words  of  art, 
&c.,  or  words  obscurely  written  or  half  erased,  are  used, 
ii.  4,  n.  (&),  5,  and  see  68. 
where  contract  is  partly  in  writing  and  partly  oral,  ii.  4, 

in  case  of  libel  or  threatening  letter,  ii.  4,  n.  (h). 
principles  of  construction,  much  the  same  at  law  and  in  equity,  in  simple 
contracts,  deeds,  and  statutes,  II.  6. 

66* 


786  INDEX. 

CONSTRUCTION  OF  CONTRACTS—  Continued. 

Intention,  effect  of,  ii.  6-11. 

(See  Intention.) 
subject  to  the  rules  of  law  and  of  language,  ii.  6-11. 
in  a  deed,  how  operative,  ii.  6,  n.  (/),  7,  n.  (g). 
when  imparting  to  specific  the  sense  of  generic  terms,  ii.  8. 
mistakes  in  the  choice  of  words,  but  not  in  their  meaning,  remedied  in 

a  court  of  equity,  ii.  8,  9. 
how  controlled  by  the  rule  which  construes  so  as  to  effectuate  a  lawful 

intent,  ii.  9,  10,  12,  16. 
of  one  party  as  believed  by  the  other  not  to  prevail  against  the  fixed 

meaning  of  words,  ii.  9,  10,  11. 
a  contract  failing  to  express  the  meaning  of  parties  or  tainted  with 
fraud  may  be  set  aside,  but  that  which  the  parties  intended  to  make 
cannot  be  set  up  in  its  stead,  ii.  9,  10,  12,  33. 
General  rules  of  construction,  ii.  11-29. 
how  governed  by  the  subject-matter,  or  the  situation  and  purpose  of  the 

parties,  ii.  11. 
promise  by  executrix  to  pay  debt  of  testator,  how  construed,  ii.  11, 

n.  (n). 
"  sentence  of  condemnation,"  in  charter-party,  how,  ii.  11,  n.  (n). 
remedy  of  parties  when  their  purpose  and  language  conflict,  ii.  12  (see 

9,  10). 
construction  which  renders  contracts  legal  preferred,  ii.  9,  10,  12,  16. 

regulations  of  law  as  to  certain  words  control  their  inter- 
pretation, ii.  12,  and  notes  (p),  (q). 
a  comprehensive,  general,  and  ordinary  sense  presumed,  ii.  12,  see  9, 16. 
construction  should  be  made  by  viewing  subject  as  mass  of 

mankind  do,  ii.  12,  n.  (q). 
meaning  of  "becoming  insolvent,"  ii.  13,  n.  (q). 
construction  of  wills,  iL  12,  n.  (rj). 

policies  of  insurance,  ii.  12,  n.  (q). 
word  "child,"  ii.  12,  n.  (cy). 
where  the  law  has  defined  the  meaning  of  words,  they  are  to 
be   construed    according  to  that  meaning,  ii,  12,  n.  (q). 
(See  168,  n.  (q)). 
construction  of  each  part  should  be  collected  from  the  whole,  ii.  13-15. 
construction  of  leases,  ii.  13,  n.  (r). 
releases,  ii.  13,  n.  (r). 
sweeping  clauses,  ii.  13,  n.  (?•). 
mercantile  instruments,  ii.  13,  n.  (r). 
deeds,  ii.  13,  n.  (r). 
covenants,  ii.  13,  n.  (r). 
warranties,  ii.  13,  n.  (/). 
statutes,  ii.  13,  n.  (r). 


INDEX.  787 

CONSTRUCTION  OF  CONTRACTS— Con^mwerf.     • 
parts  struck  out,  ii.  13,  n.  (r). 
general  words  restricted  by  particular  recital,  ii.  13,  n. 

(r),  14,  15. 
condition  of  bond,  ii.  14. 
recital  in  deed,  ii.  14. 
several  instruments  made  at  one  time  constitute  but  one 

contract,  ii.  14,  15. 
so,  though  made  at  different  times  if,  ii.  15,  n.  (;(). 
construction  which  supports  preferred  to  that  which  defeats  a  contract, 

ii.  15-18. 
limitation  of  this  rule  —  the  rational  construction  of  language  not  to  be 
departed  from,  ii.  16,  18. 
of  a  lease,  ii.  15,  n.  (x). 
"from"  whether  inclusive  or  exclusive,  ii.  15,  n.  (x),  175- 

177. 
of  antenuptial  contracts,  ii.  15,  n.  (z). 
of  a  deed,  ii.  15. 

intended  for  a  release,  ii.  16. 
of  bargain  and  sale,  ii.  16. 

where  some  of  grantors  to,  incapable  of  conveying,  ii.  16. 
where  some  of  grantees  to,  incapable  of  taking,  ii.  16. 
of  grant  of  mortgage  and  confirmation  of  mortgagor,  ii. 

16. 
of  a  charter,  ii.  16. 
validity  must  be  given  to  all  parts  of  the  contract  and  force  to  all  the 
lan2;uage  if  possible,  ii.  16,  17. 
"  from  1835,"  how  construed,  ii.  17,  n.  (/). 
a  construction  which  renders  words  needless  not 

to  be  put  upon  them,  ii.  1 7,  n.  (/). 
unimportant  parts  suppressed  to  sustain  the  rest, 

ii.  17. 
remarks  upon  Chief  Justice  Hobart's  language, 
ii.  17. 
rule  of  construction  requiring  instruments  to  be  construed  contra  pro- 
ferentem, ii.  18-22. 
reason  of  rule  weak,  and  rule  to  be  availed  of  only  as  a 

last  resort,  ii.  19. 
most  applicable  to  deeds  poll,  ii.  20. 
not  applicable  to  grants  of  a  sovereign  or  State,  ii.  18. 
or  to  mutual  promises,  ii.  22. 
or  to  the  injury  of  third  parties,  ii.  22. 
words  of  exception  or  reservation  to  be  construed  against 

the  party  for  Avhose  benefit  made,  ii.  20,  n.  {ii). 
"  for  life,"  how  construed,  ii.  20. 


788  INDEX. 

CONSTRUCTION  OF  CO'STRACTS  —  Continued. 

indenture,  how  construed,  ii.  20,  and  n.  (n). 

if  an  instrument  may  inure  to  different  purposes,  Le  to 

whom  made  may  elect  which,  ii.  20. 
bill  of  exchange  or  promissory  note,  ii.  21. 
notice  of  carrier,  ii.  21. 
notice  of  lien,  ii.  21. 
accepted  guaranty,  ii.  21. 

the  condition  of  an  obligation  to  be  construed  in  favor  of 
the  obligor,  ii.  22,  n.  ((;). 
no  precise  words  are  necessary,  even  in  a  specialty,  ii.  22-25. 
no  precise  words  are  words  of  recital  in  deed  constituting  agreement, 
ii.  22,  23. 
recital  of  previous  agreement  equivalent  to  confir- 
mation, ii.  23. 
words  of  proviso,  condition,  and   agreement  con- 
strued as  Avords  of  covenant,  when,  ii.  23,  and 
n.(c). 
words  of  reservation  and  exception  construed  as 

words  of  grant,  ii.  23. 
when  a  license  operates  as  a  grant,  ii.  23,  515,  517. 
what  words  constitute  a  bond,  ii.  24. 
what  a  lease,  ii.  24. 

what  an  agreement  for  a  future  lease,  ii.  24. 
legal  instruments  shall  be  grammatically  construed,  ii.  25. 
contra  when  sense  requires  a  different  construction,  ii.  25. 

relative  words,  how  construed,  ii.  25. 
of  repugnant  clauses  in  deeds  the  earlier,  in  wills  the  later,  prevail, 

ii.  26. 
restrictive  words  destroying  grant  reject- 
ed, ii.  26,  n.  (/). 
contra  where  restrictive  words  are  only 

explanatory,  ii.  26,  n.  (/). 
restrictive  words  in  deed,  grant,  bond, 
note,  ii.  2G,  n.  (/). 
when  an  inaccurate  description  of  a  person  or  thing  may  be  remedied 

by  construction,  ii.  26,  27. 
implications  of  law,  nature  and  scope  of,  in  the  construction  of  contracts, 
ii.  27,  28. 
the  law  never  takes  the  place  of  express  pro- 
visions of  parties,  ii.  27. 
expression  of  what   the   law  implies   of  no 
effect,  ii.  27. 
the  rule  —  expressio  unius  est  axclusio  altcrius,  ii.  28. 

this   rule   applied  to   covenants  in    leases, 
mortgages,  and  charter-parties,  ii.  28. 


INDEX.  789 

CONSTRUCTION  OF  CONTRACTS  — Continued. 

construction  of  instruments  partly  written  and  partly  printed,  when  the 
written  and  printed  parts  conflict,  ii.  28,  29. 
Entirety  of  contracts. 

contract  when  severable  by  a  division  into  distinct  and  separate  items, 
ii.  29. 

when  by  apportionment  of  the  price,  ii.  29,  30. 
special  contract  for  the  building  of  a  ship  sever- 
able, ii.  30,  n.  (z). 
but  contract  not  severable  merely  by  the  designation  of  the  price  by 

weight  or  measure,  ii.  30,  31. 
contract  to  work  for  so  much  per  month  entire,  ii.  31,  n.  (?/). 

{See  Apportionment  of  Contracts.) 
contract  entire  when  consideration  is  entire,  ii.  31,  32. 
Apportionment  of  contracts,  ii.  32-36. 
defined,  ii.  32. 

compensation  for  service  under  contract  not  apportionable  dependent 
upon  its  entire  performance,  ii.  32,  33.  (But  see  35,  n.  ((/),  and  31, 
n.  (^/).) 

reason  of  this  rule,  ii.  33. 
when  contracts  are  apportionable,  ii.  33.     (^e  170-173). 
contract  for  service,  when,  ii.  33. 

apportionable  when  service  is  specified,  but  compensation  not,  if 
consideration  is  of  an  apportionable  nature,  ii.  34,  and  n.  (h). 
remedy  of  party  for  the  part  performance  of  a  contract,  not  apportion- 
able when  the  failure  is  not  his  fault,  ii.  34,  35,  and  n.  (d). 
(See  Performance,  Part  Performance.) 
of  remedy  for  part  performance  of  contracts  of  sale,  ii.  35,  n.  (d). 

for  specific  labor,  ii.  35,  n.  ((Z). 
for  service,  ii.  35,  n.  (fZ). 

Of  conditional  contracts,  ii.  36-40. 
grants  on  condition  waived  by  breach  thereof,  ii.  36,  37. 
such  condition  not  favored  by  law,  ii.  38. 

when   a  provision  in  a  contract  is  to  be  construed  as  a  condition,  ii. 
39,  40. 
no  precise  form  of  words  necessary,  ii.  39. 
Of  mutual  contracts,  ii.  40,  41. 
the  rule  verba  fortius  accipiuntur  contra  proferentem,  not  applicable  to 

cases  of  mutual  gift  or  promise,  ii.  22. 
of  covenants  mutual  and  independent,  ii.  40,  n.  QS). 
conditional  and  dependent,  ii.  40,  n.  Qc). 
mutually  conditional,  ii.  40,  n.  (/.). 
dependent  and  independent  covenants,  eifect  of  each  respectively,  ii. 
40,  187,  188. 


790  INDEX. 

CONSTRUCTION  OF  CONTRACTS—  Continued. 

the  law  has  no  preference  for  one  over  the  other,  il.  41. 

whether  dependent  or  independent,  determined  by  the  intention  of  the 

parties,  ii.  41. 
rules  for  determining  whether  covenants  are  dependent  or  indepen- 
dent, ii.  41,  n.  (/),  189. 
Of  the  presumptions  of  law,  ii.  42-48. 
presumption  that  parties  to  a  simple  contract  intend  to  bind  their  per- 
sonal representatives,  ii.  43-45. 
executors  when  liable  for  breach  of  testator's  contract,  broken  before  or 

after  his  death,  ii.  45. 
presumption,  that  parties  contracting  to  perform  an  act,  without  words 
of  severalty,  intend  to  bind  themselves  jointly,  ii.  45. 
which  may  be  rebutted,  how,  ii.  45. 
presumption  that  grants  carry  with  them  whatever  is  essential  to  their 
use  and  enjoyment,  ii.  45-47  (^and  see  n.  (/j),  p.  18). 
whether  this  presumption  exists  more  strongly  in  case  of  real 

than  of  personal  property,  ii.  46,  47. 
right  of  way  over  land  granted,  ii.  46,  47,  and  n.  (r). 
right  of  going  upon  land  of  seller  for  purpose  of  taking  goods 

bought,  ii.  46,  47. 
grant  of  trees  presumes  right  to  cut  and  carry  them  away,  ii. 

46,  n.  (u). 
so  of  fish  in  a  pond,  right  of  fishing,  id. 
rector  may  enter  close  and  carry  away  tithes,  id. 
presumption  that,  when  no  time  for  doing  an  act  is  specified,  a  reason- 
able time  is  intended,  ii.  47. 
what  is  a  reasonable  time  is  a  question  of  law  for  the  court,  id.    But  see 

n.  (x). 
questions  of  reasonableness,  other  than  that  of  time,  generally  questions 
of  fact  for  the  jury,  ii.  47. 
Of  the  effect  of  custom  or  usage,  ii.  48-59. 
custom  may  vary  the  construction  or  add  to  a  contract  stipulations  not 
contained  in  it,  ii.  50. 
application   of  this  rule   to  contracts   between   bookseller  and 
printer,  bought  and  sold  notes  given  on  a  sale   of  tobacco, 
remission  of  proceeds  of  goods  sold  by  consignee,  leases,  obli- 
gations of  common  carriers,  policies  of  insurance,  freight  of 
money,  bills  and  notes  payable  at  banks,  bank  usages,  trans- 
mission of  checks,  brokers'  contracts,  ii.  48,  n.  (ij),  49,  n.  (z), 
50,  n.  (ry),  n.  (o),  59. 
before  an  "  incident "  can  be  "  annexed  "  to  a  contract,  the  con- 
tract itself,  as  )na(l((,  must  be  proved,  ii.  49,  n.  (z). 
custom  may  control  and  vary  the  meaning  of  words,  ii.  49,  50,  51,  55. 
application  of  this  rule  to  policies  of  insurance,  bills  of  lading, 


INDEX.  791 

CONSTRUCTION  OF  CONTRACTS—  Con/mweJ. 

agreement  with  master  of  ship,  memorandum  respectin<T  races, 
leases,  agreements  for  labor,  ii.  48,  n.  (?/),  50,  n.  (a),  51,  n.  (b). 
influence  of  custom  upon  the  law-merchant,  ii.  52. 
custom  the  basis  of  the  common  law,  ii.  52,  53. 
must  be  established  uniform  and  general,  ii.  53,  54. 
not  necessary  that  word  sought  to  be  interpreted  should  be  of  itself 

ambiguous,  ii.  55  (and  see  50,  51,  a7id  n.  (h)). 
but  if  it  is,  less  evidence  of  usage  sufficient  to  fix  its  meaning,  ii.  55, 

_n.(/). 
difference  between  custom  and  usage,  ii.  55. 
the  existence  of  a  custom  a  question  of  fact,  ii.  55,  56. 
the  sufficiency  of  proof  of  existence  a  question  of  law,  ii.  56. 
character  of  evidence  necessary  to  prove  existence  of  custom,  ii.  56,  n. 

(0,  57.  • 

knowledge  of  custom  when  presumed  and  when  to  be  proved,  ii.  56,  57. 
illegal  custom  not  admissible,  ii.  57,  59,  n.  (5). 
unreasonable  custom  not  sanctioned  by  the  courts,  ii.  58. 
this  rule  applied  to  customs  of  ship-owners  and  of  plasterers,  ii.  58,  n.  (0). 

unreasonableness,  question  of  law,  ii.  58,  n.  (0). 
a  custom  may  be  excluded  expressly  or  by  implication,  ii.  58. 
custom  inconsistent  with  the  terms  of  a  contract  cannot  influence  it,  ii. 
59,  n.  (7). 
0/  the  admissibility  of  extrinsic  evidence  in  the  interpretation  of  written 
contracts,  ii.  59-79. 
extrinsic  evidence,  inadmissible  to  vary  or  contradict  the  terms  of  a 
written  contract,  ii.  60,  69. 
preference  of  the  law  for  written  evidence  over  unwritten,  ii.  60. 
of  two  written  contracts,  which  controls,  ii.  CO. 
of  the  force  of  letters,  forming  a  contract,  upon  contract  as  to 
the  same  subject-matter  subsequently  entered  into  between  the 
same  parties,  ii.  60. 
desire  of  the  law  to  prevent  fraud,  ii.  60. 

written  contract  considered  as  exact  and  final  expression  of  the 
purpose  of  parties,  ii.  60. 
extrinsic  evidence  admissible  to  explain  or  interpret  contracts,  ii.  61,  69. 
admissible  to  determine  parties  and  subject-matter, 

ii.  61. 
but  cannot  affect  the  terms,  conditions,  or  limitations, 

ii.  61,  62.  *  ' 

the   rule,  falsa   demonstratio   non   nocet,  II.  62,  and 

note  (i;). 
when  admitted  in  the  interpretation  of  wills,  ii.  62, 
H  n.  (v),  65  ;    and  see   69,   n.   (s),  72,  n.  (u),  76, 

n.  (.). 


792  INDEX. 

CONSTRUCTION  OF  CONTRACTS  —  Continued. 

an  instrument  of  settled  legal  meaning  not  open  to, 
ii.  63-G5. 
a  promise  to  pay  money,  no  time  be- 
ing expressed,  is  a  promise  on  de- 
mand, ii.  64,  65. 
aliler  if  promise  is  to  do  something 
other  than  to   pay  money,  ii.   65, 
n.  (w). 
admissible  to  rebut  a  presumption  against  the  appar- 
ent and  natural  efiect  of  an  instrument,  ii.  65. 
aliter  if  the  presumption  is  with  the  instrument,  ii.  65. 
admissible  when  only  part  of  contract  is  reduced  to 
writing,  ii.  65. 
contemporaneous  writings,  when  deemed  part  of  contract,  ii.  66. 
not  so  as  to  affect  third  party,  when,  ii.  66. 
admissible  to  contradict  recitals,  when,  ii.  66,  76. 
as  date,  ii.  66,  n.  (a). 

consideration,  ii.  66,  n.  (h). 
to  prove  instrument  void,  ii.  66,  n.  (b). 
to  prove,  as  for  want  of  consideration,  ii.  66,  n.  (h). 
fraud,  ii.  66,  n.  (b). 
duress,  ii.  66,  n.  (b). 
incapacity  of  parties,  ii.  66,  n.  (6). 
illegality  in  the  agreement,  ii.  66,  n.  (b). 
to  show  discharge  of  obligation,  ii.  6  7. 

substitution  in  whole  or  in  part  of  agreement  or 

consideration,  ii.  67. 
change  of  time  or  place,  ii.  6  7. 
waiver  of  damages,  ii.  67. 
to  prove  consideration  if  none  be  named,  ii.  6  7. 
to  vary  a  receipt,  ii.  67. 
to  explain  technical  terms  or  a  foreign  language,  ii.  67,  68, 

and  see  p.  5. 
when  the  question  is  as  to  the  rights  of  third  parties,  ii.  68, 
69. 
distinction  between  patent  and  latent  ambiguity,  II.  69,  73. 
extrinsic  evidence  admissible  to  explain  a  latent  but  not  a  patent  ambi- 
guity, II.  Gj)-72. 
reason  and  scope  of  the  rule,  II.  69-75. 

ai)plicatIon  of  the  rule  to  the  construction  of  wills,  Ii.  69,  n.  (s), 

72,  n.  (»),  76,  n.  (z). 
the  couit  slioiild  plari'.  Itself  in  the  situation  of  the  parties  to  the 

instrunuiiit,  II.  72,  n.  (?/).  ^ 

extrinsic  evidence  admissible  to  show  the  knowledge,  Ignorance, 

or  belief  of  a  party,  ii.  74,  n.  (v). 


INDEX.  793 

CONSTRUCTION  OF  CONTRACTS  —  Continued. 

or  surrounding  circumstances,  ii.  7-1. 
or  to  explain  uncertainties,  ii.  75. 
blank  in  instrument,  when  supplied,  ii.  75. 
this  rule  less  used  than  formerly,  ii.  75,  546,  n.  (u),  (2). 
summary  of  rules  relative  to  the  admissibility  of  extrinsic  evidence,  ii. 

76-79. 
when  contract  is  completed,  ii.  94. 
of  a  contract,  how  affected  by  the  lex  loci,  ii.  83,  94-97. 
construction,  contract  to  sell  wares  or  goods  of  a  certain  trade,  ii.  168. 
of  the  covenant  to  repair  in  leases,  ii.  507. 
requiring  specific  performance,  ii.  516. 

(^See  Specific  Pekfokmance.) 
Of  certain  terms  in  a  contract, 
'■'■good  barley,"  and  "■Jine  barley,"  ii.  4,  n.  (&),  48,  n.  (y). 
"horses,"  "  oxen,"  and  "mares,"  ii.  7,  8,  10. 
"men,"  "mankind,"  and  "  women,"  ii.  8. 
"  bucks,"  and  "  does,"  ii.  8. 
"  average,"  "  agio,"  "  grace,"  ii.  8. 
"  as  soon  as  possible,"  ii.  9. 

"  with  interest,"  and  "  compound  interest,"  ii.  9,  10. 
"  with  interest  from  1835,"  in  a  promissory  note,  ii.  17,  n.  (y). 
"sufficient  effects,"  in  the  promise  of  an  executrix,  ii.  11,  n.  (n). 
"  sentence  of  condemnation,"  in  a  charter-party,  ii.  11,  n.  (n). 
"  counsel,"  as  given  by  a  physician  or  lawyer,  ii.  11,  n.  (?i). 
"  all  offices,"  ii.  12,  n.  (0). 
"barrels,"  ii.  12,  n.  (/>). 
"  becoming  insolvent,"  ii.  12,  n.  (</). 
"child,"  in  a  will,  ii.  12,  n.  (^). 
"jointly  and  severally,"  in  a  lease,  ii.  13,  n.  (r). 
"  all  actions,  debts,  demands,"  &c.,  in  a  release  limited  to  the  particular 

actions  and  debts  recited,  II.  13,  n.  (?■). 
"  full  power,  &c.,  to  convey,"  in  the  covenants  of  a  deed  limited  to  the 

special  covenants,  ii.  13,  n.  (?•). 
"  other  persons,"  in  a  statute,  construed  as  applying  to  other  persons  of 

the  same  class,  ii.  13,  n.  (r). 
"from  the  day,"  whether  inclusive  or  exclusive  of  day  of  date,  ii.  15, 

n.  (x),  175-177. 
"  date,"  "  day  of  date,"  "  in  ten  days  from  date,"  "  between  "  two  days, 

"  until"  a  day,  whether  inclusive,  ii.  175-1  78. 
"  to  hold  for  seven,  fourteen,  or  twenty-one  years,"  in  a  lease,  lessee 

may  choose  which,  ii.  18  n.  {j). 
"  for  life,"  in  grants  and  leases,  whether  for  life  of  grantor  or  grantee, 

ii.  20,  22. 
"  before"  such  a  day  in  an  obligation,  ii.  22,  n.  (u). 

VOL.  II.  67 


794  INDEX. 

CONSTRUCTION  OF  CONTRACTS— Conr/nwcd 

"  held  and  firmly  obliged,"  not  necessary  in  a  bond,  ii.  24. 

"  his,"  as  a  relative  word,  ii.  25,  n.  (k). 

"  next,"  in  point  of  time,  ii.  25,  n.  (k). 

"sterling,  lawful  money,"  ii.  25,  n.  (k). 

"  demise,"  in  a  lease,  ii.  28. 

"  delivered  at  A,"  in  a  charter-party,  ii.  28. 

"  seven  months  at  twelve  dollars  per  month,"  in  an  agreement  for  labor, 

constitute  an  entire  contract,  ii.  31,  n.  (y). 
"for  .the  cause  aforesaid,"  in  covenants,  ii.  41,  n.  (/). 
"  in  the  month  of  October,"  ii.  48,  n.  (y).  ^1 

"  whaling  voyage,"  ii.  48,  n.  (y). 
"  cotton  in  bales,"  ii.  48,  n.  (i/). 
"  on  freight,"  ii.  48,  n.  (?/). 
"  days,"  ii.  48,  n.  (?/). 
"  privilege,"  ii.  48,  n.  (?/). 

"  across  a  country,"  in  memorandum  respecting  a  race,  ii.  48,  n.  (?/). 
"  sea-letter,"  ii.  48,  n.  (?/). 
"  furs,"  ii.  48,  n.  (?/). 

"  of"  equivalent  to  "  manufactured  hj"  ii.  48,  n.  (?/). 
"at  100s.,"  ii.  48,  n.  (y). 

"  rice,"  distinguished  from  "  corn,"  ii.  48,  n.  (?/). 
"level,"  among  miners,  ii.  48,  n.  (?/),  56,  n.  (/). 
"  full  and  complete  cargo,"  ii.  48,  n.  (y). 
"  in  regular  turns  of  loading,"  ii.  48,  n.  (?/). 
"  provisions,"  when  equivalent  to  "  furniture,"  ii.  48,  n.  (jf). 
"  roots,"  ii.  48,  n.  (?/). 
"  to  any  port  in  the  Baltic,"  ii.  50,  n.  (a). 
"  thousand,"  meaning  twelve  hundred,  ii.  51,  n.  (i). 
"  day's  work,"  ii.  51,  n.  (h). 
"until  discharged  and  safely  landed,"  in  an  insurance  policy,  ii.  55, 

"one  foot  high,"  in  the  measurement  of  trees,  ii.  55,  n.  (/). 
"  cargo,"  ii.  55,  n.  (i). 
"  freight,"  ii.  55,  n.  (i),  G9,  n.  (,s). 

"  deeper  than,"  and  "  below,"  among  miners,  ii.  5G,  n.  (/). 
various  terms  used  in  wills,  ii.  C2,  n.  (i'),  G9,  n.  (*•),  7C,  n.  (z). 
"  for  safe-kcci)ing,"  ii.  (J8,  n.  (o). 
"port,"  ii.  09,  n.  (.s). 
"stock,"  ii.  72,  n.  {n). 
"  this  day,"  ii.  75. 

"having  released,"  used  prospectively,  ii.  75,  n.  (y). 
"good  coarse  salt,"  ii.  1G8,  n.  (7). 
"  niercli,'uita1)lc,"  ii.  1  G8,  n.  {![). 

"  to  sell  certain  land,"  "to  convey  "  land,  "good  and  sullicient "  deed, 
"  deed  of  conveyance,"  "  good  title,"  ii.  1G8,  n.  (r),  1G9,  n.  (s),  (f). 


INDEX.  795 

CONSTRUCTION  OF  CONTRACTS— Con^mwcrf. 
"  from  one  to  three  thousand,"  ii.  169,  n.  (w). 
"on  notice,"  ii.  180. 
"good  security,"  ii.  204,  n.  (a). 

"  all  demands  and  questions,"  in  a  submission  to  arbitration,  ii,  211. 
"  costs,"  "  charges  and  expenses,"  "  release,"  in  an  award,  ii.  206,  n.  (t), 

(c?),  208,  n.  (9),  211. 
"  to  the  time  of  the  award,"  in  an  award,  ii.  212. 
legacy  left  to  wife  "  for  her  own  use,"  ii.  244,  n.  (r). 
"  whenever  called  upon  "  to  pay,  in  a  receipt  for  money  borrowed,  ii, 

371. 
"  necessity  and  mercy,"  in  the  statutes  regulating  the  observance  of  the 
Sabbath,  ii.  262,  c,  262,  df  262,  e. 
CONTINGENCIES, 

loans,  the  payment  of  which  is  dependent  on,  not  usurious,  ii.  414-419. 
contracts  depending  on,  not  within  the  statute  of  frauds,  i.  529  ;  ii.  316, 
n-  (?/)• 
CONTRACTS, 

Extent  and  scope  of  the  law  of,  i.  3,  4. 
how  expressed  and  enforced,  i.  4,  5. 
Definition  of  i,  5,  6, 

consideration  not  involved  in,  i,  6. 
by  what  terms  described,  i,  6,  7. 
when  complete,  i,  399,  408. 
Division  of  i.  7. 

into  contracts  by  specialty,  i,  7 
and  simple  contracts,  i.  7. 

distinction  between  verbal  and  written,  between  written  and  parol,  not 
sound,  i.  7. 
Essentials  of  i.  8. 
parties  to,  i.  9-349. 
joint  parties,  i.  11-37. 
agents,  i.  38-77, 
factors  and  brokers,  i.  78  85. 
servants,  i.  86-93, 
attornejjs,  i.  94-99, 
trustees,  i,  100-106, 

executors  and  administrators,!.  107  112. 
guardians,  i,  113-116, 
corporations,  i,  117-120. 
joint-stock  companies,  i.  121-123. 
partners  or  partnership,  i,  124-186. 
new  parties  by  novation,  i,  187-191 
assignment,  i.  192-201 
indorsement,  i.  202-241, 


796  INDEX. 

CONTRACTS  —  Continued. 

infants,  i.  242-282. 

married  women,  i.  283-306. 

bankrupts  and  insolvents,  i.  307-309. 

non  compotes  mentis,  i.  310-314. 

spendthrifts,  i.  314,  315. 

seamen,  i.  316-318. 

persons  under  duress,  i.  319-322. 

alie7is,  i.  323-325. 

slaves,  i.  326-347. 

outlaws,  i.  348,  349. 

attainted,  i.  348,  349. 

excommunicated,  i.  348,  349.  -  » 

consideration  of,  i.  353-398. 

assent  of  the  parties  to,  i.  399-408. 

subject-matter  of  contracts,  i.  409-722. 

real  property,  purchase  and  sale  of,  i.  414-420. 
hiring  of,  i.  421-434. 

personal  property,  sale  of,  i.  435-455. 

warranty,  i.  456-475. 

stoppage  in  transitu,  i.  476-490. 

hiring  of  chattels,  i.  491,  492. 

guaranty  or  suretyship,  i.  493-517. 

hiring  of  persons,  i.  518-536. 

contracts  for  service  generally,  i.  537-542. 

marriage,  i.  543,  568. 

bailment,  i.  569-722. 

made  under  duress,  void,  i.  319. 
Construction  and  interpretation  of,  ii.  3-78. 

general  purpose  and  principle  of  construction,  ii.  3-6. 

effect  of  intention,  ii.  6-11. 

general  rules  of  construction,  ii.  11-29. 

entirety  of,  ii.  29-32. 

apportionment  of,  ii.  32-36. 

conditional,  ii.  36-40. 

mutual,  ii.  40-42. 

presumptions  of  law  in  the  construction  of,  ii.  42-48. 

effect  of  custom  or  usage,  ii.  48-59. 

admissibility   of  extrinsic    evidence  in  the  construction   of  written,  ii. 
59-79. 
Imw  of  place,  ii.  79-126. 

preliminary  remarks,  ii.  79. 

general  principles,  ii.  80-84. 

capacity  of  parties,  ii.  84-90. 

domicil,  ii.  90-94. 


INDEX.  797 

COl^TRACTS— Continued. 

place  of  the  contract,  ii.  94-100. 

law  of  the  forum  in  respect  to  protest  and  remedy,  ii.  100-104. 
foreign  marriages,  ii.  104-113. 
divorces,  ii.  113-117. 
judgments,  ii.  117-126. 
Defences,  il  126-284. 
payment  of  money,  ii.  126-147. 

the  party  to  whom  payment  shall  be  made,  ii.  126-129. 
part  payment,  ii.  129-132. 
payment  by  letter,  ii.  132. 

in  bank-bills,  ii.  133-135. 

by  check,  ii.  135,  136. 

by  note,  ii.  136. 

by  delegation,  ii.  137. 
stakeholders  and  wagers,  ii.  138-140. 
appropriation  of  payments,  ii.  140-147. 
performance,  ii.  147-187. 
tender,  ii.  148-157. 

of  chattels,  ii.  157-168. 
kind  of  performance,  ii.  168-170. 
part  performance,  ii.  1 70-1 73. 
time  of  performance,  ii.  173-180. 
notice,  ii.  180-184. 

impossibility  of  performance,  ii.  184-187. 

defences  resting  on  the  acts  or  omissions  of  the  plaintiff,  ii.  187-193. 
accord  and  satisfaction,  ii.  193-200. 
arbitrament  and  award,  ii.  200-220. 
release,  ii.  220-223. 
alteration,  ii.  223-231. 
pendency  of  another  suit,  ii.  231-234. 
former  judgment,  ii.  234-239. 
set-off,  ii.  239-252. 
illegal  contracts,  ii.  252-264. 
in  restraint  of  trade,  ii.  253-259. 

opposed  to  the  revenue  laws  of  other  countries,  ii.  259,  260. 
corrupting  legislation,  ii.  260. 
wagering,  ii.  261. 

maintenance  and  champerty,  ii.  262-264. 
fraud,  ii.  264-284. 
Statute  of  frauds,  ii.  284-341. 
Statute  of  limitations,  ii.  341-380. 
general  purpose  of,  ii.  341-347. 
new  promise  to  revive  debts  barred  by,  ii.  347-353. 
part  payment,  ii.  353-359. 

67* 


798  INDEX. 

CO'i!iTR  ACTS— Continued. 

new  promises  and  part  payments  by  one  of  several  joint  debtors,  ii. 

359-36G. 
accounts  between  merchants,  ii.  366-370. 
■when  the  period  of  limitation  begins  to  run,  ii.  370-373. 
the  statute  exceptions  and  disabilities,  ii.  373-379. 
remedy  only,  and  not  the  debt  affected,  ii.  379. 
Interest  and  usury,  ii.  380-432. 

interest,  what  is  and  when  recoverable,  ii.  380-383. 
what  constitutes  usury,  ii.  383-385. 
immateriality  of  the  form  of,  ii.  385-392. 

the  contract  itself  must  be  tainted  with  the  usury,  ii.  392-394. 
substituted  tecurities  are  void,  ii.  394-400. 

distinction  between  the  invalidity  of  the  contract  and  the  penalty  im- 
posed, ii.  400-405. 
accidentally  usurious,  ii.  405-408. 
discount  of  notes  and  bills,  ii.  408-410. 
charge  of  compensation  for  service,  ii.  410-414. 

risk  incurred,  Ii.  414-419. 
in  which  a  lender  becomes  partner,  ii.  419,  420. 
sales  of  notes  and  other  choses  in  action,  ii.  421-427. 
compound  interest,  ii.  427-430. 

legal  rates  of  interest  in  the  several  States,  ii.  430,  431. 
Damages,  ii.  432-509. 

general  ground,  and  measure  of,  ii.  432. 

liquidated  damages,  ii.  433-441. 

circumstances  which  increase  or  lessen  damages,  ii.  441-446. 

vindictive  or  exemplary  damages,  ii.  446-454. 

direct  or  remote  consequences,  ii.  454-463,  498. 

breach  of  a  contract  that  is  severable  into  parts,  ii.  463,  464. 

legal  limit  of  damages,  ii.  465-490. 

in  an  action  against  an  attorney  or  agent,  ii.  465-468. 

a  common  carrier,  ii.  4(}8-470. 
in  the  action  of  trover,  ii.  470-477. 
in  actions  of  replevin,  ii.  477-479. 
where  a  vendee  sues  a  vendor,  ii.  479-483. 
where  a  vendor  sues  a  vendee,  ii.  483-487. 
whether  expenses  may  be  included  in  damages,  ii.  487-489. 
when  interest  is  included,  ii.  489. 

breach  of  contract  to  pay  money  or  goods,  ii.  490-492. 
nominal  damages,  ii.  492-494, 
damages  in  real  actions,  ii.  494-509. 
Specific  performance,  ii.  509-578. 
origin  and  purnose  of,  ii.  509-517. 
consideration,  ii.  517-522. 


INDEX.  799 

CONTRACTS  —  Continued. 

contracts  relating  to  personalty,  ii.  522-535. 
contracts  relating  to  the  conveyance  of  land,  ii.  536-545, 
statute  of  frauds,  in  equity,  ii.  546-557. 
compensation,  ii.  558-562. 
impossibility  and  other  defences,  ii.  562-578. 
Constitution  of  the  United  States,  ii.  G83. 
■what  are  contracts  within  the  clause  respecting  the  obligation  thereof, 

ii.  683-68i). 
what  rights  are  implied  by  grant,  ii.  689,  690. 
an  express  grant  of  exclusive  privileges,  ii.  691-700. 
the  relation  of  this  clause  to  marriage  and  divorce,  ii.  701-703. 
bankruptcy  and  insolvency,  ii.  704. 
statutes  of  limitations,  ii.  710,  711. 
police  regulations,  ii.  710. 
The  meaning  of  the  word  "obligation,"  ii.  710. 
CONTRACTUS,  ^LEX  LOCI, 

(See  Place,  Law  of.) 
CONTRIBUTION, 

when  and  on  Avhat  principle  enforced,  i.  32-34. 

by  a  surety  against  the  representatives  of  a  deceased  co-surety,  i.  32, 

n.  (e). 
by  surety  against  a  co-surety  for  costs  of  defending  suit,  i.  33,  n.  (/). 
not  claim  for  costs  if  defence  improper,  i.  33. 
not  necessary  to  wait  for  a  suit,  i.  33. 

if  surety  takes  security,  his  co-sureties  share  in  the  benefit,  i.  34. 
discharge  of  one  co-surety,  how  it  affects  other  sureties,  i.  35. 
fixed  and  positive  obligation  to  pay,  necessary  to,  i.  33. 
how  the  claim  for,  is  presented  and  adjusted,  i,  34,  35. 
contract  of,  is  a  several  contract,  i.  35. 

dates  from  the  time  when  the  relation  was  entered  into,  i.  35. 
when  the  right  to,  begins,  i.  36. 
none  between  wrongdoers,  i.  36. 

except  where  the  act  is  of  a  doubtful  char- 
acter and  done  bond  fide,  i.  36. 
controlled  by  circumstances,  showing  a  different  understanding,  i.  37. 
indorsers  of  accommodation  paper  not  entitled  to,  i.  216. 
CONVERSION, 

of  goods,  damages  for,  ii.  470-477. 
CONVEYANCE, 

{See  Deed.) 
CORPORATION, 

in  law,  persons,  i.  117. 

and  citizens  of  the  States  where  incorporated  and  doing  business, 
i.  117,  n.  (ii'). 


800  INDEX. 

CORPORATION—  Continued. 

how  authority  to  act  for  them  may  be  given,  i.  117. 

how  it  must  be  executed,  i.  118-120. 

seal  of  the  agent  of,  not  the  seal  of,  i.  94,  n.  (/). 

may  employ  their  members  as  agents,  i.  120. 

and  such  members  may  be  agents  for  the  other  contracting  party,  i.  120. 

may  be  liable  on  contracts  entered  into  in  a  manner  not  prescribed  in 
the  charter,  i.  120. 

but  not  when  the  contracts  themselves  exceed  their  powers,  i.  120. 

what  constitutes  a  corporate  act,  i.  120. 

when  affected  with  notice,  i.  66. 

contracts  relative  to  the  stock  of,  when  within  the  statute  of  frauds,  ii. 
315,  330-332. 

(See  Stock.) 

specific  performance  whether  decreed  against,  ii.  511,  n.  (h). 

how  may  prove  claim  against  insolvent,  ii.  672. 

grants  to,  protected  by  the  constitution,  ii.  683,  n.  (2),  687-689. 
how  construed,  ii.  689-693. 
taking  of,  for  public  purposes,  ii.  691-701. 

charters  of, 

(See  Charters.) 

municipal, 

(See  Municipal  Corporations.) 
CORRUPTION, 

of  legislation,  contracts  tending  to  corrupt,  void,  ii.  260. 

contract  tending  to  corrupt  appointment  in  private  corporation,  void,  ii. 
260. 
COSTS, 

no  claim  by  surety  for  making  needless  defence,  i.  33. 

award  of,  ii.  206,  notes  (6),  (d),  208,  n.  (7),  211. 

amount  and  manner  of  taxing,  ii.  441,  n.  (Q. 

in  patent  cases,  ii.  442,  n.  (/). 

when  privileged  claim  in  Insolvency,  ii.  681. 
CO-SURETIES, 

contribution  between,  i.  32. 

representatives  of  deceased,  liable  for,  i.  32,  n.  (e). 
COUNSEL  FEES, 

when  recoverable  as  damages,  Ii.  441,  442,  487-489,  502,  n.  (h). 
COUNTERFEIT  MONEY, 

(See  Money.) 
COUPONS, 

attached  to  railroad  bonds,  negotiable,  i.  240. 
COURTS, 

misconstruction  by,  proper  subject  of  exceptions,  li.  4,  n.  (b). 

oflTicc  of,  in  determining  the  construction  of  contracts,  ii.  4,  5. 


INDEX.  801 

COURTS  —  Continued. 

■what  is  reasonable  time,  ii.  4  7,  173. 
sufficient  proof  of  custom,  ii.  5G. 
what  alteration  vitiates  an  instrument,  ii.  226. 
•what    acknowledgment    will    revive     a     debt 
barred  by  the  statute  of  limitations,  ii.  348. 
clerk  of,  necessary  to  authenticate  proceedings  of, 

{See  Clerk.) 
payment  of  money  into,  effect  of,  ii.  149,  n.  (I). 
of  the  United  States,  imperium  in  imperio  of,  ii.  600. 
COVENANT, 

use  of  the  terra,  i.  6. 

action  on,  whether  joint  or  several, 

{See  Joint  Parties.) 
not  to  sue,  i.  28,  514. 
annexed  to  land,  i.  109,  199-201. 
infant  not  liable  on,  by  common  law,  i.  262. 
general  words  in,  limited  by  the  recitals,  ii.  13,  n.  (r),  14,  15. 
to  stand  seized  to  uses  when  a  deed  may  be  construed  as,  ii.  7,  n.  {g), 

15,  16. 
when  construed  against  the  covenantor,  ii.  20,  22. 
words  of  proviso  and  condition  construed  as,  ii.  23. 
dependent  and  independent,  effect  of  each,  ii.  40,  187,  188. 
whether  dependent  or  independent,  determined  by  the  intention  of  the 

parties,  ii.  41. 
rules  for  determining  whether  dependent  or  independent,  ii.  41,  n.  0, 

189. 
to  pay  money,  ii.  149. 

accord  and  satisfaction  before  breach  of,  not  a  bar,  ii.  200. 
not  to  sue,  effect  of,  ii.  219,  220. 
alteration  of,  ii.  231. 
to  repair  in  leases,  ii.  184,  n.  (x),  507. 

damages  for  breach  of,  in  the  conveyance  of  real  estate,  ii.  494-509. 
when  covenants  are  a  condition  precedent  to  each  other,  ii.  40,  41,  and 

n.  (Z),  187-189. 
negative,  breach  of,  prevented  by  injunction,  ii.  531,  n.  {v). 
not  running  with  land  when  enforceable  in  equity  against  assignee  of 
covenantor,  ii.  512,  n.  {k). 
CREDIT, 

agent  to  sell,  cannot  give,  without  especial  authority,  i.  50. 
damages  on  breach  of  contract  when  the  goods  are  bought  on,  ii.  480, 
485. 
CREDITORS, 

payment  to  one  of  two  joint,  ii.  127,  n.  {d),  128. 

rights  of,  how  aff'ected  by  an  agreement  to  receive  part  payment  in  full 
satisfaction,  ii.  129-131. 


802  INDEX. 

CREDITORS—  Continued. 

rights  of,  how  affected  by  a  suit  for  a  part  of  the  claim,  ii.  132,  147 

acceptance  of  an  order  on  a  third  party,  ii. 
137,  138. 
in  the  appropriation  of  payments,  ii.  140-147. 
(See  Payment,  Usury.) 
gifts,  when  void  against,  i.  201. 
CROPS, 

contracts  relative  to,  when  within  the  statute  of  frauds,  ii.  311-314. 
away  going,  allowed  to  tenants,  i.  430,  49,  n.  (z),  59,  n.  (5). 
CY  PRES, 

doctrine  of,  belongs  to  construction,  ii.  3,  n.  (a). 

applied  to  the  statute  of  usury,  ii.  407,  n.  (r). 
CUSTOM, 

(See  Construction,  Usage.) 


D. 

DAMAGES, 

release  of,  i.  28. 

in  an  action  by  principal  against  agent,  i.  74. 
for  non-payment  of  bills  of  exchange,  i.  238. 
in  an  action  for  freedom,  i.  332. 
common  law  remedy  by  means  of  giving,  i.  412. 
for  breach  of  contract  to  marry,  i.  551-553. 
in  an  action  on  the  warranty  of  chattels,  i.  474,  n.  (d). 
release  of,  i.  26. 
Of  the  general  ground  and  measure  0/  damages,  ii.  432. 
Of  liquidated  damages,  ii.  433-444. 
what  are,  distinction  between  and  penalty,  ii.  433. 
penalty  of  a  bond,  how  relieved  against,  at  law  and  in  equity,  ii.  433, 

434. 
whether  the  sum  named,  is  a  penalty  or  liquidated  damages,  not  deter- 
mined merely  by  the  terms  used,  ii.  434. 
the  sum  named,  a  penalty,  if  payable  for  an  injury  of  a  certain  extent 
and  amount,  ii.  435-438. 
if  payable  generally  on  the  breach  of  a  con- 
tract, made  up  of  several  stipulations  in 
respect  to  some  of  which  the  damages  are 
definite   or   easily  ascertainable  by  com- 
putation, ii.  4  38,  and  n.  (r/). 
intciitir)n  of  the  parties,  cfTect  of,  in  discriminating  between  a  penalty 
and  liquidated  damages,  ii.  431),  410. 


INDEX.  803 

DAMAGES—  Continued. 

Of  circumstances  wJiich  increase  or  lessen  the  damages,  ii.  441-446. 

"when  counsel  fees  and  expenses  of  litigation  are  chargeable  as,  ii.  441, 
442,  487-489,  502,  n.  (h). 

amount,  and  manner  of  taxing  costs,  ii.  441,  n.  (i). 

costs  in  patent  cases,  ii.  442,  and  n.  (J). 

limited  by  the  principle  of  compensation,  ii.  441,  442. 

not  to  exceed  the  ad  damnum,  ii.  442. 

when  the  intention  of  the  defendant  is  to  be  considered,  ii.  443,  444. 

mere  mental  suffering  generally  disregarded,  ii.  443,  444. 

aggravating  circumstances,  ii.  444,  473. 

lunatic  held  liable  for  injury,  ii.  444. 

in  actions  of  slander,  whether  words  spoken  at  another  time  are  admis- 
sible, ii.  445. 
Of  exemplary  and  vindictive  damages,  ii.  446-454. 

whether  allowable,  on  what  principle,  and  for  what  offences,  ii.  446-451. 

on  what  principles  verdicts  are  set  aside  for  excessive  damages,  ii.  451. 

when  special  damage,  to  be  recoverable,  must  be  alleged,  ii.  452,  453. 
Of  direct  or  remote  consequences,  ii.  454-463,  487,  498,  507,  n.  (jf). 

for  direct  consequences  only  allowed,  ii.  454. 

barred  or  reduced  by  plaintiff's  negligence  or  default,  ii.  454,  n.  (n), 
461,  n.  {u),  469. 

causa  proxima,  how  distinguished  from  causa  remota,  Ii.  455. 

what  consequences  are  direct,  ii.  454-457. 

when  profits  may  be  included  in,  ii.  458-461. 

where  a  party  fails  to  complete  a  contract,  ii.  460,  n.  (<). 

recoverable  by  a  surety,  ii.  461,  462. 
Of  the  breach  of  contract  that  is  severable  into  parts,  ii.  463,  464. 

where  the  suit  must  include  all  the  breaches   or  torts,   ii.    132,    147, 
463. 

when  money  is  payable  by  instalments,  ii.  464. 
Of  the  legal  limit  to  damages,  ii.  465-490. 

importance  of  rules  for  measuring,  ii.  465. 
In  an  action  against  an  atlorneij  or  agent,  ii.  465-468. 

where  the  agent  sells  for  a  less  than  the  authorized  price,  ii.  465,  466. 

where  the  factor  sells  to  repay  his  advances,  ii.  466. 

where  the  agent  fails  to  purchase  goods  ordered  by  his  principal,  ii.  467. 
In  an  action  by  the  agent  against  the  principal,  or  by  a  servant  against  his 

employer,  ii.  468. 
In  an  action  against  a  common  carrier,  ii.  468-470. 

where  the  carrier  fails  to  carry  or  deliver  goods,  Ii.  468. 

negligence  of  plaintiff',  effect  of,  in  reducing,  Ii.  454,  n.  (n),  461,  n.  (u), 
469. 

value  of  the  goods,  how  measured  In  estimating,  ii.  469. 
In  the  action  of  trover,  ii.  470-477. 

value  of  property,  the  measure  of,  il.  470. 


804  INDEX. 

DAMAGES—  Continued. 

deduction  from,  in  case  of  lien  or  restoration,  ii.  471, 

{see  476,  479). 
addition  to,  on  account  ofpretium  affectionis,  ii.  471. 
at  what  time  to  be  assessed,  ii.  472,  473. 
specific  injury  or  wilful  tort,  ground  of  increase  of,  ii.  473. 
in  trover  for  a  bill  or  note,  ii.  471. 
in  the  accession  and  confusion  of  goods,  ii.  474,  475. 
whether  special  damages  are  recoverable  in  trover,  ii.  476. 
where  the  plaintiff  holds  under  a  lien,  ii.  476  {see  471,  479). 
where  the  pledgee  has  converted  the  goods,  ii.  477. 
In  the  action  of  replevin,  ii.  477-479. 

recovered  by  the  plaintiff  and  defendant  respectively,  ii.  477. 
whose  loss,  when  the  goods  replevied  are  destroyed  by  act  of  God,  be- 
fore judgment,  II.  4  78. 
at  what  time  the  value  to  be  taken,  ii.  4  78. 
in  an  action  on  the  replevin  bond,  Ii.  478. 
where  the  writ  Is  sued  out  maliciously,  ii.  479. 
where  one  of  the  parties  has  a  qualified  right  as  by  lien,  ii.  479  (see  271, 

476). 
right  of  plaintiff  after  nonsuit  to  prove  property,  ii.  479. 
where  a  vendee  sues  a  vendor,  ii.  479-483. 

in  debt  on  bonds  for  the  replacement  of  stock,  ii.  472,  n.  (h),  480,  n.  (?/). 
value  of  the  goods,  the  measure  of,  ii.  479. 

when  to  be  taken,  ii.  480-482. 
where  the  goods  are  bought  on  credit,  ii.  480. 
mai-ket  value  of  goods,  how  determined,  ii.  482. 
vendee's  right  of  rescission,  when  and  how  exercised,  ii.  483. 
expense  of  Investigating  title,  ii.  483. 
for  breach  of  warranty,  ii.  457,  n.  (r),  486,  487. 
Where  a  vendor  sues  a  vendee,  ii.  483-487. 
rights  of  vendor,  where  the  vendee  refuses  to  complete  the  contract,  ii. 

483,  484. 
where  the  vendor  has  not  the  goods  himself,  but  has  only  contracted  for 

them,  ii.  484,  485. 
where  credit   or  a  bill   of  exchange  payable  at  a  future  day  is  to  be 

given,  ii.  485. 
for  breach  of  warranty,  II.  457,  n.  (r),  486,  487. 
Whether  expenses  viaij  he  included  in  damages,  II.  4  76,  487-489,  495. 

fraud  or  wilful  wrong,  effect  of,  ii.  487,  488. 
When  interest  is  included,  ii.  380-382,  489. 
0/  the  breach  of  contract  to  pa;/  money  or  goods,  ii.  490-492. 
whether  the  sum  of  money  or  the  value  of  the  goods  is  the  measure  of, 
il.  4 90-^92. 
Nominal  i/nma'/cs,  Ii.  452,  492-494. 

recoverable  lur  any  violation  of  right,  ii.  492,  493. 


INDEX.  805 

DAMAGES  —  Continued. 

actions  for  the  purpose  of  establishing  a  right,  ii.  493. 
■when  easement  is  interfered  with,  ii.  494. 
Of  damages  in  real  actions,  ii.  494-509. 
in  mixed  actions,  ii.  494. 
at  common  law,  ii.  494. 
in  action  of  ejectment,  ii.  494. 
measure  of,  ii.  495. 

rent  of  land,  whether  forming,  ii.  495. 
trespass  for  mesne  profits,  ii.  494,  495. 
improvements,  honCiJide  holder's  claim  for,  ii.  495-497. 
doweress,  rights  of,  where  the  dower  estate  has  been  withheld,  and  im- 
provements made  upon  it,  ii.  496,  497. 
for  direct  and  natural  consequences,  ii.  498.     (^See  Sect.  V.  p.  454.) 
for  breach  of  covenant  of  seisin  and  right  to  convey,  ii.  498. 

for  quiet  enjoyment,  ii.  499-502. 
measure  of,  whether  value  to  be  taken  at  the  time  of  conveyance  or  of 

eviction,  ii.  499-501. 
where  the  failure  extends  to  only  part  of  the  land,  ii.  502. 
for  breach  of  covenant  against  incumbrances,  ii.  502,  503. 
contract  to  sell,  ii.  503-507. 

that  a  third  person  shall  convey,  ii.  505,  n.  (m). 
to  give  land  for  work  and  labor,  ii.  507. 
covenants  in  leases,  ii.  507. 
recoupment  of,  ii.  246. 
unliquidated,  not  subject  to  set-off,  ii.  245. 
legal,  equity  presumes  defendant  will  pay,  ii.  524,  529. 
not  compensation,  ii.  559. 
DAMNOSA  HEREDITAS, 

assignee  in  insolvency  not  bound  to  accept,  ii.  622. 
DATE, 

day  of,  of  contract  whether  Included  in  the  computation  of  time,  ii.  15, 

n.  (x),  175-178. 
when  impossible  or  not  named,  ii.  177. 
DAYS, 

of  grace,  the  usage  of  banks,  ii.  49,  n.  (z),  58. 

notes  without,  due  on  Sunday  payable  on  Monday,  ii.  1 78. 
{See  Grace,  Days  of.) 
day  of  date  of  the  contract,  whether  included  in  the  computation  of 

time,  ii.  15,  n.  (z),  175-177. 
day's  work,  what  constitutes,  ii.  51,  n.  (b). 
DEATH, 

of  co-surety,  whether  it  relieves  his  estate  from  liability  for  contribution, 

i.  32,  n  (e). 
of  principal  revokes  agent's  authority,  i.  61. 
VOL.  II.  68 


806  INDEX. 

HE  ATR— Continued. 

contract,  when  determined  by,  i.  110,  111. 

of  partner  dissolves  the  partnership,  i.  172,  173. 

of  assignor  of  a  chose  in  action  does  not  defeat  the  assignment,  i.  196. 

of  a  party  bound  to  give  notice  of  non-payment  of  bill  or  note,  excuses 

■want  of  notice,  i.  232. 
of  party  to  submission  or  of  arbitrator  revokes  submission,  ii.  219  c. 
DEBT, 

may  be  collected  everywhere,  unless,  ii.  99. 

laws  abolishing  imprisonment  for,  do  not  impair  the  obligation  of  con- 
tracts, ii.  706-710. 
imprisonment  for, 

(See  Imprisonment  for  Debt.) 
privileged, 

(/See  Bankruptcy  and  Insolvency.) 
DEBTOR, 

{See  Creditor,  Payment.) 
DEED, 

of  agent  to  bind  the  principal  must  be  authorized  by  an  instrument 

under  seal,  i.  47,  94. 
execution  of,  by  agent  or  attorney,  i.  48,  95,  96. 

of  the  agent  of  a  corporation,  when  binding  on,  i.  94,  n.  (/),  118,  119. 
of  partner,  when  binding  on  the  firm,  i.  94,  n.  (/). 
of  real  estate  to  partners,  i.  126,  127. 
power  of  infant  to  make  or  ratify,  i.  243,  269,  n.  (?/),  271. 
consideration  of,  implied  by  the  seal,  i.  354. 

proved  and  varied  by  parol  evidence,  i.  355,  356. 
conveyances  of  real  estate  made  by,  i.  414. 
contracts  by,  to  marry,  i.  544. 
construction  of,  same  as  of  simple  contract,  ii.  6. 

restricted  to  the  sense  of  the  words  used,  ii.  6,  n.  (/), 

7,  n.  (r/). 
general  words  of  covenant  or  release,  limited  by  the 

recitals,  ii.  13,  n.  (r),  14,  15. 
may   operate    in  manner  not  intended,  to   accomplish 

intended  object,  if  necessary,  ii.  15,  16. 
as  a  grant,  confirmation,  release,  so   as   to   render   it 

operative,  ii.  7,  n.  (y),  15,  16. 
where  part  of  grantors  are  incapable  of  conveying,  or 

grantees  of  taking,  ii.  16. 
when  made  contra  proferentem,  ii.  18-22. 
recitals  in  a  deed,  when  operative  as  an  agreement  or 

grant,  ii.  23. 
repugnant  clausoH,  the  earlier  prevails,  ii.  26. 
restrictive  words  in,  ii.  26,  n.  (/). 


INDEX.  807 

DEED  —  Continued. 

grants  in  upon  condition,  ii.  36,  37. 
form  of,  when  sufficient  to  comply  with  a  contract  for,  ii.  168,  169. 
tender  of,  ii.  168,  188,  n.  {g). 
valueless  to  pass  estate,  except  as  evidence  of  its  own  execution,  ii.  223, 

n.  (9),  230. 
alteration  of,  by  a  stranger,  ii.  223. 
by  a  party,  ii.  223-227. 

by  adding  or  tearing  off  the  seal,  ii.  227,  228. 
by  filling  blanks,  ii.  229. 
whether  presumed  to  have  been  made  before  or  after 

execution,  ii.  228. 
vesting  of  the  estate  not  defeated  by,  ii.  230,  231. 
estoppel  by,  i.  340  c-340  e. 
fraud  in  procuring,  effect  of,  ii.  280,  n.  (y). 
unrecorded,  or  otherwise   inoperative,  when  specifically  enforced,  ii. 

514,  n.  {p). 
undelivered,  whether  sufficient  memorandum  in  equity  to  comply  with 
the  Statute  of  Frauds,  ii.  546,  n.  (y). 
DEL    CREDERE  COMMISSION, 

liability  of  factor  under,  i.  78,  81. 
whether  the  guaranty  must  be  in  writing,  i.  78,  500. 
DELECTUS  PERSONARUM,  i.  131. 
DEFAULTERS, 

public,  operation  of  U.  S.  bankrupt  law  of  1841  upon,  ii.  590. 
DEFENCES, 

Payment  ofmoney^  ii.  126-147. 

the  party  to  whom  the  payment  should  be  made,  ii.  126-129. 
part  payment,  ii.  129-132. 
payment  by  letter,  ii.  132. 

in  bank-bills,  ii.  133-135. 
by  check,  ii.  135,  136. 
by  note,  ii.  136. 
by  delegation,  ii.  137. 
stakeholders  and  wagers,  ii.  138-140. 
appropriation  of  payments,  ii.  140-147. 
(/See  Payment.) 
Per/br?nance,  ii.  147-187. 
tender,  ii.  148-157. 
tender  of  chattels,  ii.  157-168. 
kind  of  performance,  ii.  168-170. 
part  performance,  ii.  1 70-1 73. 
time  of  performance,  ii.  173-180. 
notice,  ii.  180-184. 

impossibility  of  performance,  ii.  184-187. 
in  equity,  ii.  561,  576. 


808  INDEX. 

DEFENCES  —  Continued. 

resting  on  the  acts  or  omissions  of  the  plaintiflF,  ii.  187-193. 
{See  Performance.) 
Accord  and  satisfaction.,  ii.  193-200. 

{See  Accord  and  Satisfaction.) 
Arbitrament  and  award,  ii.  200-219. 

(See  Arbitrament  and  Award.) 
Release,  ii.  219-223. 

(See  Release.) 
Alteration,  ii.  223-231. 

(See  Alteration.) 
Pendency  of  another  suit,  ii.  231-234. 

(See  Pendency  of  another  Suit.) 
Former  judgment,  ii.  234-239. 

(See  Judgment.) 
5e^q#;ii.- 239-252. 

(See  Set-off.) 
Illegal  contracts,  ii.  252-264. 

in  restraint  of  trade,  ii.  253-259. 

opposed  to  the  revenue  laws  of  other  countries,  ii.  259,  260. 

corrupting  legislation,  ii.  260. 

wagering,  ii.  261. 

maintenance  and  champerty,  ii.  262,  264. 

(See  Illegal  Contracts.) 
Fraud,  ii.  264-284. 

(See  Fraud.) 
Frauds,  statute  of  ii.  284-341. 

(See  Frauds,  Statute  of.) 
Limitations,  statute  of,  ii.  341-380. 

(See  Limitations,  Statute  of.) 
Usury,  ii.  383-431. 

(See  Usury.) 
DEFENDANT, 

absent,  notice  of  suit  how  given  to,  ii.  100,  and  n.  (Ji). 
DELAY, 

in  filing  bill  for  specific  performance,  effect  of,  ii.  574. 
DELEGATION, 

payment  by,  ii.  137,  138. 
DELIVERY, 

essential  to  gifts,  and  how  it  may  be  made,  i.  201. 
notes  transfera])le  by,  and  liability  for,  i.  206. 
ofchattels,i.  442-448. 

(See  Sale.) 
stoppage  in  transitu,  when  defeated  by,  i.  482-487. 
by  a  depositary  of  the  deposit,  i.  577. 


INDEX.  809 

DELI  VE  R  Y  —  Continued. 

to  a  common  carrier,  i.  650-652. 

notice  of,  '.  654,  669. 

to  what  persons  renders  the  carrier  liable,  i.  650,  651,  655-657. 

by  a  common  carrier,  i.  658. 

■what  constitutes,  i.  658-661. 

Bow  affected  by  usage,  i.  660,  661,  671. 

delay  in,  when  excused,  i.  659,  660. 

by  railroad  carriers,  i.  663,  664,  671. 

by  carriers  by  water,  i.  665-670. 

by  bailee,   when   the   ownership  is  in  dispute,  i.  577,  578,  621,  677- 
680. 

to  and  by  carrier, 

(See  Carrier,  Common.) 

effect  of,  by  party  signing,  in  determining  purpose  of  signature,  ii.  288. 

required  by  the  statute  of  frauds,  ii.  319-324,  327-330. 
DELIVERY  ORDER, 

(See  Bills  of  Lading.) 
DEMAND, 

set-off  of, 

(See  Set-off.) 

notes  payable  on,  incidents  of,  i.  217-221. 

of  bills  and  notes,  of  whom,  when,  and  whei'e  to  be  made,  i.  228. 

of  debt  by  pledgee  before  sale  of  the  pledge,  i.  595-600. 
DEMURRER, 

to  bill  for  specific  performance,  ii.  533. 
DEPENDENT  AGREEMENTS,  ii.  189. 
DEPOSITUM, 

bailee's  liability  for,  measure  of,  i.  572-577. 

delivery  of,  by  bailee,  i.  577,  578. 

property  of  bailee  in,  nature  of,  i.  578. 

who  are  chargeable  as  depositaries,  i.  579. 
DESCRIPTION, 

inaccurate,  when  remedied  by  construction,  ii.  26,  27. 
DESERTION, 

by  husband,  rights  of  wife  upon,  by  statute,  in  the  different  iJtates  of 
U.  S.,  i.  306,  note. 
DETINUE, 

old  action  of,  ii.  509. 
DEVISE, 

agreement  for,  whether  enforceable  in  equity,  il.  564. 

falling  to  insolvent  between   commencement  of  proceedings  in  insol- 
vency and  discharge,  ii.  630-632,  645. 
DISCHARGE, 

by  one  of  joint  plaintiffs,  ii.  129,  n.  (t). 

68* 


810  INDEX. 

DISCOUNT, 

of  notes  and  bills,  wlien  usurious,  ii.  406-409. 
DISSOLUTION, 

of  partnership,  i.  170-173. 

by  assignment  of  a  partner's  interest,  i.  170,  171. 
by  death,  i.  172,  173. 

by  civil  incapacity,  i.  172,  173.  • 

by  insanity,  i.  172,  173. 
by  a  court  of  equity,  i.  172,  173. 
by  bankruptcy  and  insolvency,  i.  173. 
by  war,  i.  173. 
DISTRESS, 

{See  Rent,  and  Remedy  for  Rent  UNPAifi.) 
DISTRIBUTION, 

of  personal  estates,  ii.  83,  n.  (/). 
DISTRINGAS, 

at  common  law,  ii.  579. 
DIVORCE, 

for  what  causes  granted,  i.  566. 

rights  of  the  parties  to,  how  affected  by,  i.  566,  567. 

DIVORCES, 

{See  Place,  Law  of.) 

in  the  State  of  the  actual  domicil  of  the  parties,  valid  everywhere,  ii. 
104,  n.  (p),  114-117. 

validity  of  when  granted  in  another  State  than  that  where  the  mar- 
riage was  contracted,  ii.  114-117. 

how  affected  by  the  constitution  of  the  United  States,  ii.  701-703. 

DOMICIL, 

{See  Place,  Law  of.) 
nature  of,  ii.  90. 

many  residences,  one  domicil,  ii.  90. 
evidence  of,  what  amounts  to,  ii.  90,  92,  n.  {x). 
change  of,  must  be  both  in  fact  and  in  intent,  ii.  91. 
how  proved,  ii.  91-93. 

may  be  inferred  against  express  declarations  of  party,  ii.  91. 
of  foreign  ministers,  soldiers,  and  seamen,  ii.  92,  notes  {v),  (x). 
of  party  who  spends  portions  of  the  time  at  different  places,  ii.  92. 
of  wife,  follows  the  husband's,  ii.  93,  111,  112. 

except  when,  ii.  112,  n.  {d). 
of  a  child,  follows  the  parents,  ii.  94. 
of  a  ward,  follows  tlie  guardian's,  ii.  94. 
effect  of,  on  capacity  of  parties,  ii.  84,  85-90. 
of  parties,  effect  of,  on  marriage,  ii.  104-113. 
on  divorce,  ii.  113-117. 
DOMAIN,  EMINENT, 

right  of  tiic  public  to,  ii.  691-701. 

{Sec  Constitution  of  the  United  States.) 


INDEX.  811 

DORMANT  PARTNER, 

liability  of,  i.  48,  n.  («),  142. 

when  discovered  after  au  unsatisfied  judgment  against  osten- 
sible partner,  i.  12,  n.  (j). 

may  be  sued,  but  cannot  sue,  i.  142. 

notice  of  his  withdrawal  not  necessary,  i.  144,  n.  (y). 

respective  rights  of  his  private  and  the  partnership  creditors,  i.  175. 
DOWER, 

in  the  real  estate  of  partnership,  i.  128. 

by  statutory  provision  in  the  different  States  of  U.  S.  i.  306,  note. 

damages  for  detention  of,  ii.  49G-4D8. 
DRUNKENNESS, 

contracts  made  during,  i.  311. 

distinctions  between  express  and  implied  contracts,  i.  312. 
whether  enforceable  in  equity,  ii.  5  75,  and  n.  (r). 

discharge  of  a  servant  on  account  of,  i.  521,  n.  (Jc). 
DURESS, 

contracts  made  under,  void,  i.  319-322. 

what  constitutes,  i.  319-322. 

by  violence  or  imprisonment,  i.  319. 

by  threats  of  violence  or  imprisonment,  i.  320,  321. 

of  one's  pi'operty,  i.  320,  321,  n.  (e). 

contracts  made  iinder,  voidable,  and  may  be  ratified,  i.  322. 

money  paid  under,  recoverable,  i.  322. 

instrument  may  be  shown  to  be  void  on  account  of,  ii.  66. 


E. 
EARNEST, 

what  amounts  to,  ii.  332. 
EJECTMENT, 

damages  in,  ii.  494.    , 
EMANCIPATION, 

of  slaves,  i.  342-345. 
EMBARGO,  ii.  187,  and  n.  (c). 
EMINENT  DOMAIN, 

right  of  the  public  to,  ii.  691-701. 
ENDORSEMENT, 

(See  Indorsement). 
ENEMIES, 

alien,  cannot  be  partners,  i.  1 73. 
ENJOYMENT, 

quiet,  damages  for  breach  of  covenant  for,  ii.  499,  502. 
ENTIRETY  OF  CONTRACTS, 

when  severed  by  division  into  distinct  items,  ii.  29. 

by  the  apportionment  of  the  price,  ii.  29,  30. 


812  INDEX. 

ENTIRETY   OF   CimTRACTS—  Continued. 

not  affected  by  designation  of  the  price,  weight,  or  measure,  ii.  30,  31. 

or  by  a  division  into  items  ■where  the  consideration  is  entire,  ii. 
31,  32. 
for  service,  ii.  35,  and  n.  (d). 

■where  contracts  are  apportionable,  ii.  32-35,  170-173. 
(See  AproKTiONMENT,  Performance.) 
EQUITABLE  DEFENCES, 

to  a  chose  in  action  in  the  hands  of  an  assignee,  i.  108. 
to  a  negotiable  bill  or  note  after  maturity,  i.  213,  214",  217. 
EQUITY, 

contribution,  ■when  enforced  by,  i.  32-34,  and  notes. 

sales  by  an  agent  to  himself,  and  purchases  of  himself  avoided  by  court 

of,  i.  75. 
resort  to,  ■when  necessary  to  recover  a  legacy,  i.  107,  n.  (/<). 
remedy  of  partners  in,  i.  139,  140. 

dissolution  of  a  partnership,  decreed  by  court  of,  i.  172,  173. 
application  by  court  of,  of  partnership  funds  to  pay  joint  and  separate 

debts,!.  174-180. 
governed  by  the  last  settled  account  bet^ween  partners,  i.  173. 
rights  of  the  assignee  of  a  chose  in  action  in,  i.  193. 
remedy  of  bailee  in,  ■when  the  ownership  of  the  thing  bailed  is  disputed, 

i.  578,  621,  679. 
origin  and  jurisdiction  of  courts  of,  i.  413. 
specific  performance  of  a  contract  to  convey  real  estate  enforced  in,  i. 

414. 
principle  of  construction  much  the  same  at  la^^v  and  in,  ii.  6. 
mistakes  in  a  contract,  when  corrected  by,  ii.  8,  9,  10. 
suit  in,  no  bar  to  suit  at  law,  ii.  233,  n.  (I). 

when  cases  taken  out  of  the  statute  of  frauds  by,  on  account  of  part  per- 
formance, ii.  339,  340. 
relief  of  debtor  on  a  usurious  contract,  how  granted,  ii.  404. 
he  who  asks,  must  do,  ii.  510,  n.  (/)• 
EQUITY  OF  REDEMPTION, 

release  of,  whether  good  as  accord  and  satisfliction,  ii.  199. 
pass  to  assignee  in  insolvency,  and  power  of  over,  ii.  632. 
EQUITY  JURISPRUDENCE, 

bankrupt  may  be  examined  by  principles  of,  ii.  674,  u.  (y). 
ESTOPPEL,  ii.  340  «,  499. 
nature  of,  ii.  340  a. 
By  record,  ii.  '.i\()/t. 

omission  to  (li,^pul(\  title  in  waste,  ii.  340  i. 
res  adjudicala,  ii.  340  c. 
Bij  deed,  ii.  340  <;. 

recitals  of  botii  jjartics,  conclusive,  ii.  340  c,  n.  (J). 


INDEX.  813 

ESTOPPEL  —  Continued. 

consideration  clause  not  conclusive,  ii.  340  c,  n.  (y). 

deed  may  be  shown  to  be  inoperative  and  void,  ii.  340  c,  n.  (/). 

after-acquired  estates  passed  by,  ii.  340  d,  n.  (Ic). 

of  married  woman,  ii.  340  e,  notes  (in'),  (ri). 
By  matter  in  pals,  ii.  340  e. 

growth  of  equitable  estoppels,  ii.  340/. 

application  to  negotiable  paper,  ii.  340/ 

"what  grounds  essential  to  constitute,  ii.  340  g,  n.  (q),  340  i,  n.  (r). 

omission,  negligence,  ii.  340  g,  n.  (q),  340  i,  n.  (r). 

acquiescence  in  another's  conduct,  ii.  340  i,  n.  (?•),  340  I,  n.  (.s). 

admissions,  &c.,  acted  on  as  true,  ii.  340^,  n.  (q),  340  i,  n.  (r). 
binding  for  a  reasonable  time,  ii.  340^,  n.  (7). 

none  where  position  of  parties  Is  unchanged,  ii.  340^,  n.  (5). 

or  where  actual  state  of  affairs  is  known,  ii.  340  i,  n.  (?•). 

doctrine  extended  to  real  property  in  equity,  ii.  340  /,  n.  (r). 

tenant,  ii.  340  i,  n.  (r). 

payment  of  rent,  II.  340  i,  n.  (?•). 

trustee,  ii.  340  i,  n.  (r). 

mortgagee,  ii.  340  i,  n.  (r). 

vendee,  ii.  340  i,  n.  (r). 

legatee,  ii.  340  i,  n.  (r). 

lessee,  Ii.  340  i,  n.  (r). 

no  estoppel  to  preclude  party  from   denying  that   which  he  had  no 
power  to  do,  ii.  340  /,  n.  (r). 

none  by  admissions  to  third  persons,  ii.  340  i,  n.  (r). 
ESTREPEMENT, 

writ  of,  ii.  494. 
EVICTION, 

damages  for,  when  to  be  computed,  ii.  499-501. 
EVIDENCE, 

parol  admitted  to  charge  unnamed  principal,  but  not  to  discharge  signer, 
i.  49. 

parol,  not  admissible  to  qualify  a  general  release,  i.  162,  n.  (s). 

what,  admissible  to  prove  freedom  or  slavery,  I.  329-332. 

to  prove  incapacity  to  contract,  I.  311,  n.  (h),  313. 

what,  admissible  to  prove  consideration  of  a  written  contract,  i.  355, 
356. 

of  contract  to  marry,  I.  545. 

of  marriage,  I.  559. 

presumption  of  negligence  of  the  common  carrier  in  case  of  injury  to  a 
passenger,  I.  695. 

testimony  of  the  passenger  admissible  to  prove  the  amount  of  his  bag- 
gage when  lost  by  the  common  carrier,  i.  722. 

partly  written  and  partly  parol,  Ii.  4,  n.  (b). 


814  INDEX. 

EVIDENCE—  Continued. 

of  parol  agreement  in  satisfaction,  Tvhen  admissible  to  bar  suit  upon 

■written  contract,  ii.  196. 
character  of,  necessary  to  prove  existence  of  custom,  ii.  56,  n.  (i),  57. 
extrinsic,  not  admissible,  to  vary  or  contradict  the  terms  of  a  written 
contract,  ii.  60,  69. 
of  the  force  of  letters,  forming  a  contract,  upon 
contract  subsequently  entered  into  between 
same  parties  as  to  same  subject-matter,  ii.  60. 
the  rule  faha  demonslratio  non  nocet,  ii.   62, 

and  n.  (y). 
or  to  change  the  settled  legal  meaning"  of  an 

instrument,  ii.  63-65. 
or  to  connect  instruments,  when  the  statute  of 
frauds  requires  the  contract  to  be  in  writing, 
ii.  298. 
admissible  to  determine  the  subject-matter  and  parties,  ii.  61- 
63. 
rebut  the  presumption  against  the  apparent  and 
natural   efiect  of  an    instrument,  —  aliter,  if 
presumption  is  with  instrument,  ii.  65. 
when  only  a  part  is  reduced  to  writing,  ii.  65. 
to  contradict  recitals,  ii.  65,  66,  76. 
to  vary  or  contradict  the  date  or  consideration, 

ii.  65. 
contemporaneous  writings  when  deemed  part  of 
contract,  ii.  66. 
admissible  to  show  the   incapacity  of  parties,  fraud,  duress, 
illegality,  discharge,   change   of  time   or  place, 
waiver   of   damages,   consideration  when   none 
is    named,   substitution   of   a  new   contract  or 
consideration,  ii.  66,  67. 
to  vary  a  receipt  —  alite?'  as   to  a  release,  ii.  67, 

221. 
to  explain  technical  terms  and  foreign  languages, 

ii.  67,  68. 
when  the  question  is  between  third  parties,  ii.  68, 

69. 
to  explain  a  latent  ambiguity,  ii.  69-75. 
to  show  the  knowledge,  or  ignorance,  or  belief  of 

a  party,  ii.  74,  n.  (y). 
to  explain  surrounding  circumstances,  ii.  74. 
to  explain  uncertainties,  ii.  75,  76. 
to  show  time  of  giving  consideration  for  guaranty, 
ii.  75. 


INDEX.  815 

EVIDENCE  —  Continued. 

blank  in  instrument,  -when  supplied,  ii.  75. 

to  rebut   the   implication   of  reasonable   time   for 

performance,  ii.  173. 
to  explain  wills,  "when,  ii.  62,  n.  (r),  G5,  74,  70-79. 
to  show  authority  of  an  agent  under  the  statute 
of  frauds,  ii.  291,  n.  (>i),  293,  294. 
foreign  judgments,  prmayac/e,  ii.  119. 
examination  of  witnesses  before  arbitrators,  ii.  218. 
alteration  of  instruments,  when  presumed,  ii.  228. 
of  what,  sufficient  to  take  case  out  of  the  statute  of  limitations,  ii.  341, 

343. 
rules  of,  as  applied  to  contracts  requiring  specific  performance,  ii.  516. 
extrinsic,  admissible  in  equity  to  prove  omission,  ii.  516,  n.  (/). 

connect  parts   of  a   contract,  ii.   546, 

n.  (w). 
prove   additional  consideration,  when, 

ii.  54  7,  n.  (z). 
rebut,  but  not  to  raise  an  equity,  ii.  547. 
show  mistake,  ii.  556. 
EX  ANTECEDENTIBUS   ET    CONSEQUENTIBUS  FIT  OPTIMA 

INTERPRETA TIO,  ii.  12,  n.  (?).  f 

EXCEPTION  AND  RESERVATION, 

words  of,  how  construed,  ii.  20,  n.  (n). 
EXCHANGE, 

rates  of,  included  in  the  damages  of  holder  of  bills  of  exchange,  i.  238, 

239. 
rate  of,  charge  for,  not  usurious,  ii.  413. 
EXCLUSIVE   PRIVILEGES, 

grants  of,  how  affected  by  the  constitution,  ii.  691-701. 
EXCOMMUNICATION,  i.  349. 
EXCOMMUNICATED  PERSONS,  i.  349. 
EXECUTION, 

laws  exempting  property  from,  whether  constitutional,  ii.  707-709. 
EXECUTORS  AND  ADMINISTRATORS, 
how  they  act,  i.  107. 
extent  of  their  liability,  i.  107. 

how  assets  in  their  hands  may  be  I'eached  by  legatees,  i.  107. 
when  personally  liable  on  their  promises  as  such,  i.  108. 

on  awards,  i.  108,  109. 
rights  of  action  of,  and  against,  i.  109-111. 
doctrine  of  a  continuing  breach,  i.  109. 
when  bound  by  arbitration,  i.  109. 

on  what  contracts  of  deceased  they  may  sue  and  be  sued,  i.  110,  111. 
when  their  rights  begin,  i.  111. 
death  and  survivorship  of,  i.  112. 


81 6  INDEX. 

EXECUTORS   AND   AJ)MimiiTR AT ORS—  Continued. 
executor  de  son  tort,  i.  112. 
may  indorse  the  note  of  the  testator,  i.  205. 

action  for  breach  of  contract  to  marry  does  not  survive  to,  i.  552. 
of  co-surety,  whether  liable  for  contribution,  i.  32,  n.  (e). 
of  a  joint  party,  liability  of,  i.  30,  31. 
of  a  deceased  partner  whose  interest  is  continued  in  the  firm,  i.  173, 

statutory  provisions  in  the  United  States  as  to  administration  upon  prop- 
erty of  deceased  husband  or  wife,  i.  306,  note, 
promise  of,  to  pay  debt  of  testator  "  when  sufficient  assets  are  received," 

how  construed,  ii.  11,  n.  (n). 
bound  by  the  contracts  of  the  testator,  ii.  43-45. 
appropriation  of  payment,  where  the  party  paying  owes  in  his  own 

right,  and  as  executor,  ii.  142. 
payment  to  one  of  several,  ii.  128. 
set-off,  by  and  against,  ii.  243,  244. 

promises  of,  when  within  the  statute  of  frauds,  ii.  284,  300. 
the  contracts  of,  may  be  enforced  in  equity  against  their  successors,  ii. 
516,  and  n.  (w). 
EXEMPLARY  DAMAGES^ 

•  (See  Damages.) 

EXPENSES, 

of  litigation,  when  recoverable  as  damages,  ii.  441,  442,  476,  487-489, 
495,  502,  n.  (k). 
EXPERTS, 

use  of,  in  determining  the  meaning  of  technical  terms,  ii.  5,  67,  68. 
EXPRESSIO  UNI  US  EST  EXCLUSJO  ALTERIUS,  ii.  28. 


FACT, 

questions  of, 

(See  Jury.) 
FACTOR, 

cannot  delegate  his  authority,  i.  71,  and  n.  (7). 
his  duty  and  j)ower  to  insure,  i.  73,  n.  (x),  80. 
the  authority  of,  wlien  irrevocable,  i.  58,  (li). 
when  a  common  carrier  is  liable  as  such,  i.  684. 
set-off  against,  when  allowed,  ii.  248-251. 
right  of,  to  sell  goods  to  pay  advances,  ii.  466. 

when  money  or  goods  in  hands  of  assignees  in  insolvency  of,  can  be 
recovered,  in  whole  or  in  part,  by  consignor,  ii.  638,  n.  (in). 
(See  Factoks  am>  Bkokkus.) 


INDEX.  817 

FACTORS  AND  BROKERS, 

Who  is  a  factor  and  who  a  broker,  i.  78. 
0/  factors  under  a  commission,  i.  78,  81,  500. 
whether  they  are  liable  as  principals  or  sureties,  i.  78. 
if  entitled  to  charge  guaranty  commission,  liable  although  he  does  not 

charge  it,  i.  79. 
but  does  not  affect  his  claim  for  advances,  i.  79. 
whether  their  contract  is  within  statute  of  fravids,  i.  79,  500. 
Of  the  duties  and  rights  of  factors  and  brokers,  i.  79-85. 
power  to  pledge  the  goods  of  the  principal,  i.  79,  80. 
principal  retains  his  property  in  the  goods  as  long  as  he  can  identify 

them  in  the  hands  of  any  party  who  holds  them  as  representative  of 

the  factor,  i.  80. 
cannot  barter,  i.  80,  n.  (y). 

bound  to  follow  instructions  and  conform  to  the  usages  of  trade,  i.  80. 
not  bound  to  insure,  i.  80. 

may  bind  the  principal  by  acts  within  the  scope  of  the  agency,  i.  81. 
bound  absolutely  by  instructions  if  no  advances  made,  i.  81. 
how  the  principal  may  dispose  of  goods  sent  to  him  by  the  factor  with- 
out authority,  i.  81. 
may  be  personally  liable  to  principal  when  acting  without  del  credere 

commission,  if  himself  in  default,  or  negligent,  i.  81. 
the  respective  liabilities  of  foreign  and  domestic  factors,  and  of  their 

principals,  i.  81,  82. 
who  are  foreign  factors,  i.  81,  82. 

States  of  the  Union  not  foreign  to  each  other,  i.  82,  n.  (n). 
conflicting  claims  of  principal  and  factor  against  purchasers,  i.  83. 
factor  may  act  in  his  own  name,  but  broker  only  in  principal's,  i.  84. 
factor  has  lien,  but  broker  none,  i.  84,  ii.  249. 
bound  absolutely  by  instructions,  if  he  has  made  no  advances,  i.  81. 
what  rights  given  by  possession  of  a  bill  of  lading,  i.  84. 
acquires  lien  on  goods  by  accepting  bill  drawn  on  them,  i.  84. 
has  no  lieu  unless  goods  come  to  him  as  factor,  i.  84. 
consignee  may  always  transfer  goods  before  they  are  in  the  hands  of 

factor,  i.  84. 
how  far  and  when  factor  bound  by  instructions,  after  advances,  i.  84. 
general  rights  and  duties  of,  i.  84,  85. 

authority  of,  not  revocable  when  coupled  with  an  interest,  i.  85. 
FAILURE, 

of  consideration  total  and  partial,  i.  386-388. 

of  performance  of  a  contract  by  one,  a  defence  by  the  other,  ii.  187-193. 

(iee  Part  Performance.) 
of  title  to  real  estate,  494-508. 
FALSA  DEMONSTRATIO  NON  NOCET,  ii.  62,  and  n.  (v). 
FALSE  REPRESENTATIONS.  {See  Fraud.) 

VOL.  II.  69 


818  INDEX. 

FAST  DAY, 

carriers  not  to  deliver  goods  upon,  i.  669.^ 
FELON, 

cannot  be  a  partner,  i.  172. 
FEME  COVERT, 

(See  Makried  Women.) 
FERRY, 

liability  of  the  owner  of,  i.  657. 
FERRYMEN, 

liable  as  common  carriers,  i.  645. 
FIGURES, 

words  prevail  over,  i.  210. 
FINDER, 

cannot  give  title  against  owner  by  sale,  i.  436. 

rights  and  obligations  of,  i.  580. 

place  where  property  is  found  has  no  effect  on  title  of  finder,  i.  579. 
FISH, 

grant  of,  implies  right  of  fishing,  ii.  46,  n.  (ti). 
FIXTURES, 

rights  of  landlord  and  tenant  to,  i.  430,  431. 

rights  of  purchaser  to,  i.  609. 

contracts  for  the  sale  of,  when  within  the  statute  of  frauds,  ii.  314. 
FORBEARANCE, 

when  a  consideration,  i.  365-370. 

by  creditor,  effect  of  on  a  guarantor's  liability,  i.  512-514. 
FOREIGN   ATTACHMENT, 

when  procured  in  a  foreign  country,  a  bar,  ii.  118,  232. 
FOREIGN  JUDGMENTS, 

(See  Judgments.) 
FOREIGN  LANGUAGES, 

how  explained,  ii.  67,  68. 
FOREIGN   STATES, 

whether  the  States  of  the  Union  are  foreign  as  to  judgments,  ii.  119,  n. 

(p),123-126,  232,n.(i7). 
as  to  bankrupt  laws,  ii.  709, 
710. 

contracts  between,  ii.  704. 

(See  Place,  Law  of.) 

whether  our  States  arc  such  as  regards  the  liabilities  of  principals  for 
factors,  i.  82. 

or  as  to  protest  of  bills  of  exchange,  i.  237,  n.  (n). 
FOREIGNERS, 

(See  Aliens.) 
FORGED  151 LL, 

new  bill  given  for,  i.  220. 

Bubsequeiit  indorser,  n.  (w),  security  taken  for,  i.  220. 

1  Since  the  firBt  volume  was  in  press,  tlie  case  of  Goddard  v.  15ark  Tangier  has  been 
reversed.    Ricliardson  v.  Goddard,  U.  S.  Supreme  Ct.  8  Am.  L.  Reg.  278, 


INDEX.  819 

FORMER  JUDGMENT, 

a  defence,  ii.  234-239, 

{See  Judgment.) 
FORWARDING  MERCHANTS, 

liabilities  of,  i.  618-G21,  652,  653. 
FRANCHISE, 

of  a  corporation,  may  be  taken  by  the  State  for  public  purposes,  on 
providing  compensation,  ii.  696-700. 
FRAUD, 

of  agent,  liability  of  principal  for,  I.  62,  63. 

of  partner,  liability  of  firm  for,  I.  63,  n.  (5). 

of  agent  unknown  to  the  principal,  vitiates  the  agent's  contract,  I.  52. 

effect  of.  In  contract,  when  connected  with  inadequacy  of  consideration, 
i.  362. 

effect  of,  in  contract,  when  specific  performance  is  sought  In  equity,  i. 
414. 

in  a  sale,  when  implied  by  the  possession  of  the  vendor,  I.  442. 

in  a  mortgage,  when  Implied  by  the  possession  of  the  mortgagor,  i.  453, 
454. 

of  the  vendor  In  a  sale,  I.  461,  463. 

of  creditor  on  the  surety,  i.  497. 

contracts  In  fraud  of  marriage  settlements,  void,  i.  555. 

marriage  obtained  by,  void,  i.  564,  565. 

of  the  owner  of  goods,  effect  of,  on  the  liability  of  a  common  carrier,  i. 
719. 

effect  of.  In  setting  aside  a  contract,  Ii.  9,  10,  12,  33. 

may  be  proved  by  extrinsic  evidence,  II.  66. 

as  a  defence,  H.  264-284. 

not  defined  by  the  law,  ii.  266. 

sphere  of  the  moral  law  and  of  municipal  law  compared,  ii.  264-266. 

materiality  of,  necessary  to  avoid  a  contract,  Ii.  266. 

what  is  material,  Ii.  266,  n.  (m),  267. 

to  be  determined  by  the  jury,  ii.  267. 

must  be  actually  Injurious,  ii.  268. 

damages  for,  only  recoverable  for  the  injury  directly  attributable  to,  ii. 
268. 

in  false  representations  of  a  party's  solvency,  Ii.  267,  n.  (n),  269,  notes 
(r)  and-(0,  270,  574,  n.  {h),  276,  notes  (m),  (n). 

of  representations,  literally  true,  but  substantially  false,  II.  269. 

must  be  such  as  the  injured  party  had  a  right  to  rely  upon,  ii.  270. 

when  damages  for,  II.  270. 

on  cestuis  que  trust,  Infants,  and  persons  of  feeble  mind,  II.  270,  271. 

effect  of  Intention  In,  Ii.  267,  n.  (0),  268-271,  281-283. 

in  a  matter  collateral  to  the  contract,  II.  272,  273. 

distinction  between  extrinsic  and  intrinsic  circumstances,  Ii.  273. 


820  INDEX. 

FRAUD —  Continued. 

concealments  when  amounting  to,  ii.  273,  274. 
concealments  in  contracts  of  insurance,  ii.  274. 
effect  of,  upon  enforcement  of  contract  in  equity,  ii.  513,  572,  and  notes 

W,  (0- 

expressions  of  opinion  and  statements  of  fact  distinguished,  ii.  275. 
misrepresentations  of  third  parties  adopted,  or  of  an  agent,  ii.  276,  277. 
rescission  in  cases  of,  ii.  277-279. 

waiver  of  right  of,  by  delay,  ii.  278,  279. 
where  both  parties  are  in  fault,  ii.  279. 
how  availed  of,  as  a  defence  at  law  and  in  equity,  ii.  279,  280,  281, 

in  procuring  deed,  ii.  280,  n.  (y). 

whether  pleadable  in  bar  of  action  founded  upon  a  specialty,  ii.  280. 

not  presumed,  ii.  281. 

in  false  statements,  how  affected  by  a  party's  means  of  knowledge,  ii. 

271,  272,  281-284. 
legal  fraud,  ii.  281. 
award  avoided  for,  ii.  203-210. 
in  the  alteration  of  an  instrument,  ii.  224-231. 
sale  does  not  pass  property,  ii.  283. 

when  the  statute  of  limitations  begins  to  run  on,  ii.  378. 
effect  of  upon  amount  of  damages,  ii.  487,  488. 

enforcement  of  contract  in  equity,  ii.  572. 
on  the  part  of  insolvent  or  bankrupt,  ii.  637,  640-642,  659,  660,  664, 

678,  679. 
FRAUDS,  STATUTE  OF, 

whether  it  requires  the  consideration  to  be  in  writing,  i.  6. 

proof  of  a  contract,  how  affected  by,  i.  7. 

whether  it  requires  the  agent's  authority  to  be  in  writing,  i.  42,  43, 

n.(y). 

ratification  by  the  principal  of  an  agent's  contract  within,  i.  47. 

how  the  rights  of  an  undisclosed  principal  on  a  written  contract  made 

by  his  agent,  affected  by,  i.  53. 
whether  the  guaranty  of  a  del  credere  factor  is  required  by,  to  be  in 

writing,  i.  78,  79,  500. 
contracts  of  service  within,  i.  529. 
a  signing  not  essential  to  a  deed  since,  i.  96,  n.  (fjg)- 
agent  for  a  corporation  to  sign  the  memorandum  required  by,  who  may 

be,  i.  120. 
when  the  partnership  agreement  must  be  in  writing,  i.  131,  n.  (m). 
contracts  of  novation,  whether  within,  i.  188,  n.  (t),  191. 
an  entire  promise,  partly  within,  void,  i.  379. 
a  guaranty,  when  within,  i.  497-500. 
contracts  to  marry,  when  within,  i.  546,  547. 


INDEX.  821 

FRAUDS,  STATUTE  O^  —  Continued. 

promises  in  consideration  of  marriage  within,  i.  554. 
whether  it  operates  on  a  foreign  contract,  ii.  103. 
jirovisions  of,  ii.  284,  285. 
signing  required  by,  ii.  285-294. 

when  a  letter  amounts  to,  ii.  285,  and  n.  (c),  310,  311. 
indorsement  of  unsigned  contract  for  the  purpose  of 

transfer  sufficient,  ii.  285,  n.  (c). 
writing  of  the  agreement  not  sufficient,  ii.  285,  286. 
phice  where  the  name  may  be  written,  ii.  287-289. 
entry  of  seller  in  order  book  and  signature  of  buyer, 

ii,  287. 
effect  of  the  delivery  of  the  instrument,  ii.  288. 
when  the  requirement  to  be  "  subscribed  "  is  satisfied,  ii. 

289. 
when  the  same  is  printed  or  written  in  pencil,  ii.  289, 

290. 
by  the  party  to  be  charged,  alone  necessary,  ii.  290. 
by  an  agent,  when  sufficient,  II.  291,  292. 
when  agent  may  write  his  own  signature,  ii.  291,  292. 
how  the  agent  may  be  authorized,  ii.  291,  n.  (n),  292, 

n.  (9),  293,  294. 
who  may  be  agent  for  this  purpose,  Ii.  292. 
sales  by  auctioneers,  sheriffs,  and  masters  in  chancery,withln,  ii.  292,  n.(r). 
the  names  of  the  parties  to  be  expressed,  ii.  294,  n.  (w). 
parol  evidence  Inadmissible  to  bring  contract  within,  ii.  294,  299. 
the  subject-matter  to  be  set  forth,  ii.  294,  n.  (li). 
when  the  price  is  to  be  stated,  ii.  294,  n.  (m),  295. 
consideration,  whether  required  to  be  expressed,  ii.  295-297. 
form  of  agreement,  required  by,  ii.  297-300. 

when  made  up  of  separate  papers,  ii.  298. 
connection  of  different  parts  not  to  be  established 

by  extrinsic  evidence,  ii.  298. 
when  capable  of  certainty  by  reference  to  a  stand- 
ard, II.  298. 
when  a  part  of  the  agreement  conforms  to  the  statute,  and  the  rest  does 

not,  whether  the  whole  or  a  part  void,  ii.  298,  299. 
promises  by  executors  and  administrators,  when  within,  ii.  284,  300. 

"  to  answer  for  the  debt,  default,  or  miscarriage  of  another," 
when  within,  ii.  300-309. 
the  promise  must  be  collateral,  ii.  300-302. 

must  be  made  to  the  party  to  whom  the  person  undertaken 

for  is  liable,  ii.  302,  and  n.  (m). 
must  not  operate  as  a  discharge  of  the  original  debtor,  ii. 
302-304. 

69* 


822  INDEX. 

FRAUDS,  STATUTE  OF  —  Continued. 

must  not,  when   performed,  leave  the  original  party  still 

liable,  ii.  304. 
must  not  be  equivalent  to  the  purchase  of  a  debt  by  the 

promisor,  ii.  305. 
not  within  the  statute  when  its  main  purpose  is  to  subserve 
some  purpose  of  the  promisor,  ii.  305-307. 
consideration  of  the  guaranty,  whether  to  be  expressed,  ii.  295,  n.  (w), 

296,  n.  (x),  29  7,  n.  (2). 
guaranty  of  a  factor,  selling  upon  a  del  credere  commission,  not  within, 

ii.  307. 
cases  where  the  liability  to  pay  the  debt  of  another  arises  by  operation 
of  law,  as  out  of  some  trust  or  transaction  between  the  parties,  with- 
out the  aid  of  a  special  promise,  not  within,  ii.  307-309. 
contract  under  seal  not  within,  ii.  309. 
promises  to  answer  for  another's  torts,  within,  ii.  309. 
"in  consideration  of  marriage,"  ii.  309-311. 
to  marry,  not  within,  ii,  310. 

to  marry  after  a  period  longer  than  a  year,  within,  ii.  310. 
in  the  nature   of   settlement,  advancement,  or  provision,  in 

view  of  marriage  within,  ii.  310. 
effect  of  parol  promise  before  marriage,  on  a  written  promise 

subsequent  to,  ii.  310. 
what  writing  is  sufficient,  ii.  310,  311. 
{See  Marriage.) 
"  contracts  or  sales  of  lands,  tenements,  or  hereditaments,  or  any  inter- 
est in  or  concerning  them,"  within,  ii.  311-316. 
when  contracts  for  the  sale  of  growing  crops  are  within,  ii.  311-314. 
contracts  to  pay  for  improvements  on  land,  not  within,  ii.  314,  315. 

for  sale  of  removable  fixtures,  not  within,  ii.  314. 
a  mere  license  to  enter  on  land,  not  within,  ii.  315. 
any  contract  the  effect  of  which  is  to  give  an  easement  within,  ii.  315. 
agreement  by  lessee  to  make  further  improvements  not  within,  ii.  315. 
when  contracts  for  sale   of  the  jiroperty  of  a  corporation  are   within, 

ii.  315. 
contract  to  convey  lands  for  services,  ii.  316. 

contracts  void  by,  when  executed,  the  payment  of  the  consideration  re- 
coverable, and  form  of  action  in  such  instance,  ii.  315,  318,  319,  and 
aee  338,  n.  (7) . 
contracts  not  to  Ijc  perfornicd  witliin  a  year,  when  within,  ii.  316-319. 

for  the  sale  of  goods,  when  within,  ii.  319-336. 
principles  of  the  common  law,  how  affected  by  the  statute  of  Elizabeth 

and  tiie  statute  of  frauds,  ii.  320. 
acceptance  and  delivery  recjuired  by,  what  anioiinls  to,  ii.  319-322. 
buyer  takes  article  and  li'uds  it  to  the  seller,  ii.  321. 


•  INDEX.  823 

FRAUDS,  STATUTE  OF  —  Continued. 
constructive  delivery,  ii.  322-324. 

in  a  sale  by  sample,  ii.  324. 
acceptance,  what  is  equivalent  to,  ii.  324,  325. 
rights  of  buyer,  when  after  acceptance  the  article  proves  deficient  in 

quantity  or  quality,  ii.  325-327. 
whether  delivery  to  a  carrier  is  sufficient,  ii.  327-330. 
stock  and  shares  of  a  corporation  within,  ii.  315,  330-332. 
sales  of  promissory  notes  within,  ii.  331,  n.  (w). 
earnest,  what  amounts  to,  ii.  332. 
part  payment,  of  the  same  eflect  as  earnest,  ii.  332. 

what  constitutes,  ii.  332. 
when  executory  contracts  are  within,  ii.  333-336. 
contracts  for  or  savoring  of  hiring  and  labor,  ii.  333-336. 
contracts  within,  operation  of  the  statute  on,  ii.  336-338. 
how  affecting  third  parties,  ii.  338. 
when  executed,  ii.  338. 
the  fourth  and  seventeenth  sections  of,  do  not  affect  the  validity,  but 

preclude  the  bringing  of  actions  to  enforce,  ii.  337,  338. 
when  cases  taken  out  of,  by  part  performance,  ii.  339,  340. 

what  constitutes  part  performance,  ii.  340. 
construction  and  operation  of,  in  equity,  ii.  546-557. 
relief  in  equity,  ii.  546. 
construction  in  equity,  ii.  546. 
sufficient  pleading  of,  in  equity,  ii.  549. 
FRAUDULENT  CONVEYANCE, 

of  property  as  against  creditors,  ii.  603,  n.  (i«),  637,  637-640,  642,  660, 
664,  678,  679. 
FREEDOM, 

action  for,  i.  328-333. 

(See  Slavks.) 
FREIGHT, 

on  goods,  ii.  28. 
on  money,  ii.  49,  n.  (2). 
"FROM," 

whether  inclusive  or  exclusive,  ii.  15,  n.  (z),  175-177. 
"from  1835,"  ii.  17,  n.  (/). 


G. 

GENERAL  WORDS, 

restricted  by  particular  recitals,  ii.  13,  n.  (r),  14,  15. 
GENERIC  TERMS, 

specific,  when  taking  the  sense  of,  ii.  8. 


824  INDEX.  • 

GIFTS, 

to  a  slave,  i.  337-339. 

of  the  use  of  the  word  "  give,"  i.  201. 

gifts  inter  vivos,  i.  201. 

who  may  make  them,  i.  201. 

that  completed  gifts  are  executed  contracts,  i.  201. 

must  go  into  complete  effect  at  once,  i.  201. 

delivery  absolutely  essential,  i.  201. 

transfer  by  writing  not  enough,  i.  201. 

delivery  may  be  constructive,  and  when,  i.  201. 

when  by  order  on  a  bailee,  i.  201. 

gift  completed  is  irrevocable,  i.  201. 

when  void  as  against  creditors,  i.  201. 

gift,  by  note  or  promise  without  seal,  revocable,  i.  201. 

by  check  or  order  of  any  kind,  revocable  until  accepted,  i.  201. 

gifts  ^^  causa  mortis"  i.  201. 

by  whom  and  when  may  be  made,  i.  201. 

how  made,  i.  201. 

delivery  requisite,  and  mere  continued  possession  not  enough,  i.  201. 

law  jealous  of  gifts  causa  mortis,  and  why,  i.  201. 

what  notes,  checks,  or  bills  pass  by  gift  causa  mortis,  I.  201. 

gifts  causa  mortis  always  revocable  during  life  of  donor,  i.  201. 
void  as  against  creditors,  i.  201. 

equity  relief  in  case  of  promised  gifts,  il.  519. 
GOODS, 

accession  and  confusion  of,  ii.  4  74,  475. 

purchaser's  right  to  go  upon  land  of  seller  for  purpose  of  taking,  Ii. 
46,  47. 

contracts  for  the  sale  of,  when  within  the  statute  of  frauds,  ii.  319-33G. 
(See  Personal  Pkoperty.) 
GOOD-WILL, 

whether  partnership  property,  i.  130. 

agreement  for  sale  of,  when  enforced  in  equity,  ii.  526. 
GOVEllNMEiNT  AGENTS  AND  OFFICERS, 

power  of,  i.  49. 
GRACE,  DAYS  OF, 

what  arc  and  how  counted,  i.  230,  234. 

meaning  of,  when  used  as  a  term  in  contracts,  ii.  8. 

the  usage  of  banks,  ii.  49,  n.  (z),  57,  58. 

notes  without,  due  on  Sunday,  payable  on  IMoiiday,  ii.  178. 
GRAMMATICAL  CONSTRUCTION,  ii.  25. 

grantj:i:s, 

when  part  of  arc  incapable  of  taking  estate,  ii.  16. 
GRANTORS, 

wlicn  pari  of  are  incapable  of  conveying  estate,  ii.  16. 


INDEX.  825 

GRANTS, 

construction  of,  so  as  to  be  made  operative,  ii.  7,  n.  (g),  15,  IG. 
to  be  construed  favorably  to  the  grantee,  ii.  18. 
aliter,  if  the  sovereign  or  State  is  the  grantor,  ii.  18,  n.  (Jc). 
words  of  reservation  and  exception  construed  as,  ii.  23. 
license  operating  as,  ii.  23,  and  see  514,  515,  n.  (q). 
restrictive  words  destroying,  when  rejected,  ii.  26,  n.  (I). 
upon  condition,  ii.  36-38. 

imply  whatever  is  essential  to  their  use  and  enjoyment,  ii.  45,  46. 
within  the  contracts  protected  by  the  constitution,  ii.  683,  687-689. 
how  construed,  ii.  689,  690. 

when  may  be  taken  for  public  purposes,  ii.  691-701. 
GUARANTY, 

What  is  a  guaranty,  I.  493-495. 
application  of  the  term,  i.  493. 
not  negotiable,  i.  493. 
how  construed,  i.  495. 
rights  and  liabilities  of  guarantor,  I.  495. 
Consideration  of,  i.  365,  n.  (b),  375,  496,  497. 

fraud  in,  i.  497. 
Whether  original  or  collateral,  i.  494,  497-500. 
when  within  the  statute  of  frauds,  i.  369,  n.  (t),  497,  498. 
when  contemporaneous  with  a  note,  whether  collateral  or  original  prom- 
ise, i.  498. 
entry  of,  in  seller's  books,  effect  of,  i.  499. 
by  factor  under  a  del  credere  commission,  I.  78,  500. 
Acceptance  of,  i.  375,  401,  500-502. 
notice  of,  I.  501,  502. 
Of  the  change  of  liability,  i.  502-508. 
when  extinguished  by  extension  of  the  guarantor's  liability,  i.  503,  504. 

by  payment  on  novation  of  the  debt,  i.  505,  506. 
of  a  partnership  liability  extinguished  by  change  in  the  members  of  the 

firm,  i.  506,  507. 
continuing  guaranty,  i.  507,  508. 
How  affected  by  indulgence  to  a  debtor,  i.  509-514. 

delay  of  creditor  to  sue  when  requested  by  surety,  i.  509-512. 
forbearance  by  creditor,  i.  512,  513. 
creditor's  covenant  not  to  sue  for  a  limited  time,  i.  514. 
for  good  conduct,  obligation  does  not  pass  to  guarantor's  representatives, 
surety  is  discharged  by  indulgence  to  principal,  only  when  his  surety- 
ship Is  known,  i.  514. 
that  debt  is  collectable,  debt  must  be  put  In  suit,  i.  514. 
Of  notice  to  the  guarantor,  I.  514. 

guarantor  must  have  notice  of  debtor's  failure  to  pay,  I.  514,  ii.  174. 
Guaranty  by  one  in  office,  I.  515. 


826  INDEX. 

GUARANTY—  Continued. 

Revocation  of  guaranty,  i.  516,  517. 

power  of  a  partner  to  bind  the  firm  by  a  guaranty  in  its  name,  i.  161. 
■whether  to  be  construed  against  guarantor  or  guarantee,  ii.  21. 
extrinsic  evidence  admitted  to  prove  that  the  consideration  was  not  ex- 
ecuted, ii.  75. 
notice  to  guarantor,  ii.  174,  175. 
consideration  of  when  to  be  in  writing,  ii.  295,  n.  (?«),  296,  n.  (x),  299, 

n.(.). 
when  within  the  statute  of  frauds,  ii.  300-309. 

{See  Frauds,  Statute  of.) 
guarantor  when  liable  for  interest,  ii.  381. 

may  set  up  the  defence  of  usury,  ii.  399. 
GUARDIANS, 

Of  the  kinds  of  guardians,  i.  113,  213. 
considered  as  trustees,  i.  113,  115. 
when  required  to  give  bonds,  i.  113. 
Of  the  dutrj  and  power  of  a  guardian,  i.  114-116. 
have  only  an  authority  and  not  an  interest,  i.  114. 
power  of,  to  convert  the  ward's  property,  i.  114. 
when  leave  of  court  must  be  obtained,  i.  114,  115. 
duties,  rights,  and  liabilities  of,  i.  115,  116. 
trust  a  personal  one,  i.  116. 

how  marriage  affects  a  feme  sole  guardian,  i.  116. 
powers  of,  not  assignable,  i.  116,  196,  n.  (a). 
remedies  of  the  ward,  i.  115. 
when  guardian  is  personally  liable,  i.  116. 

one   of  two  guardians  taking  exclusive  possession,  the  other  has   his 
action,  i.  116. 
GUESTS, 

who  are,  i.  628-630. 
rights  of,  i.  623-627,  631. 

negligence  of,  good  defence  by  an  inkeeper  for  a  loss  by,  i.  625. 
GUILDS, 

in  England,  ii.  257. 


II. 
HIRER  OF  CHATTELS, 

liability  of,  how  measured,  i.  602,  603. 

liability  of,  for  the  negligence  of  his  servants,  i.  604,  605. 

for  theft  or  robbery,  i.  606. 

for  slaves  employed,  i.  603,  n.  (r),  608,  n.  (/;). 
duty  of,  as  to  manner  of  using  the  chattel,  i.  608. 

as  to  accounting  for  the  loss  of  the  chattel,  i.  606. 


INDEX.  827 

HIRER  OF  CHATTELS— Con///iMt'(7. 

qualified  property  of,  in  the  chattel,  i.  COO. 
qualified  property  of,  Avhen  terminated,  i.  608,  009. 
HIRING  OF  CHATTELS,  i.  491,  492. 

(See  Bailment,  and  Hirer  of  Chattels.) 
HIRING  OF  PERSONS,  i.  518-536. 
Servants,  i.  518-532. 
proof  of  term  of  service,  how  affected  by  the  specified  periods  of  pay- 
ment, i.  518,  519. 
liability  of  master  on  an  entire  conti-act  to  hire,  i.  520,  521,  527, 
servant  on  an  entire  contract  to  serve,  i.  522-527. 
how  affected  by  physical  inability,  i.  524. 
infant  on  an  entire  contract  to  serve,  i.  263,  n.  (/),  268,  523, 
n.  (/). 
effect  of  misconduct  of  the  servant,  i.  521,  n.  (k),  526. 

rescission  of  the  contract  by  mutual  consent,  i.  526. 
medical  attendance  on  servant,  master's  liability  for,  i.  527. 
master  not  liable  for  accident  to  servant,  i.  528. 

unless  he  exposes  the  servant,  i.  527,  528. 
for  injury  by  one  servant  to  another,  i.  528. 
testimonial  of  servant's  character,  master's  obligation  to  furnish,  i.  529. 
mutuality  of  contracts  of  service,  i.  529. 
contracts  for  service  within  the  statute  of  frauds  if  not  to  be  performed 

within  a  year,  i.  529. 
hiring  presumed  from  service,  i.  371,  530. 

whether  presumed  from  service  rendered  by  a  child  to  a  parent, 
i.  530,  537,  n.  (u). 
rights  of  a  master  against  a  person  seducing  a  servant  from  his  employ, 

i.  532. 
payment  for  service,  when  presumed,  i.*532. 
Apprentices,  i.  532-536. 

law  governing  the  relation  of,  how  it  arose,  i.  532,  533. 
liability  of,  i.  262,  277,  533. 
duty  of  master  towards,  i.  533,  534. 

liability  of  parties  covenanting  for  good  behavior  of,  i.  534. 
rights  of  master  against  persons  seducing  or  harboring,  i.  535,  536. 
Service  generally,  contracts  for,  i.  537-542. 
implied  promises  of  employer  and  employee,  i.  537,  538. 
service  of  arbitrators,  i.  538. 

attorneys,  i.  538,  539. 
physicians,  i.  539. 
employee's  claim  for  extra  work,  i.  540-542. 
HIRING  OF  REAL  PROPERTY, 

{See  Real  Property,  Lease.) 
HOMESTEAD  EXEMPTION, 

by  statutory  provision  in  the  different  States  of  U.  S.  i.  -306,  note. 


828  INDEX. 

HUSBAND, 

when  liable  for  liis  wife's  acts  as  agent,  i,  43,  287,  280,  304. 
cannot  sue  jointly  with  wife  for  assault  and  battery,  i.  20. 
{See  Marriage.) 
HUSBAND  AND  WIFE, 

{See  Married  Women.) 


I. 
IDIOTS, 

(See  Non  Compotes  Ilentis.) 
IGNORANCE, 

of  parties,  how  proved,  ii.  74,  n.  (v). 
IGNORANTIA  LEGIS  NEMINEM  EXCUSAT,  ii.  557. 
ILLEGALITY, 

of  consideration,  i.  365,  380,  382. 
ILLEGAL  CONTRACTS, 
how  proved,  ii.  66. 

illegality,  a  good  defence,  ii.  186,  187. 
subsequent  act  of  legislature,  rendering  act  unlawful,  good  defence,  ii. 

186. 
act  of  legislature  rendering  unlawful  act  lawful,  imparts  no  validity  to 

contract  previously  entered  into,  ii.  186. 
effect  of  law  in  suspending  an  agreement,  ii.  187. 
prevention  of  performance  by  foreign  law,  no  defence,  ii.  187. 
illegality  in  a  severable  contract,  ii.  29,  n.  (iv). 
money  paid  in  furtherance  of,  when  recoverable,  ii.  252,  253. 
Of  contracts  in  restraint  of  trade,  ii.  253-259. 
reason  and  origin  of  the  law  prohibiting  the  restraint  of  trade,  ii.  253- 

257. 
distinction  between  a  general  and  limited  restraint  of  trade,  ii.  254,  257, 

and  n.  (y),  258. 
the  rule  illustrated  by  cases,  ii.  254,  n.  (x). 
Of  contracts  opposed  to  the  revenue  laws  of  other  countries,  ii.  259,  260. 
modified  in  this  country,  ii.  257-259. 
which  tend  to  corrupt  legislation,  ii.  260. 
Of  wagering  contracts  —  when  void,  ii.  261,  262. 

money  lent  ibr  the  purpose  of  betting  not  to  be  re- 
covered by  lender,  ii.  261,  n.  (/). 
Of  the  Sunday  laic,  ii.  262  a-262  h. 
in  England  and  (he  United  States,  ii.  262  a. 
by  the  common  law,  ii.  262  a,  n.  (/ia). 
meaning  of  the  clause  "  necessity  and  mercy"  in  statutes,  ii.  262  c,  262  d, 

262  e,  and  notes, 
wills  made  on  Sunday,  ii.  262  e. 
marriages  celebrated  on  Sunday,  ii.  262  c. 


INDEX.  829 

ILLEGAL  COl^TRACTS  —  Continued. 
marriage  contracts,  ii.  262  e,  n.  (%). 
whether  a  tort  founded  upon  a  contract  violating  the  Sunday  laws  can 

be  redressed,  ii.  262/,  262  g. 
what  constitutes  the  "  Lord's  day,"  ii.  262  g. 
in  what  States  applying  to  those  who  observe  the  seventh  day  of  the 

week,  ii.  262  g. 
contract  commenced  on  Sunday,  but  subsequently  completed,  as  note 

signed  but  afterwards  delivered,  valid,  ii.  262  g. 
contract  entered  into  on  Sunday  but  subsequently  recognized,  ii.  262  k. 
whether  property  delivered  in  pursuance  of  contract  entered  into  on 

Sunday  can  be  recovered  by  vendor,  ii.  262  /(. 
whether  the  invalidity  of  a  contract  made  on  Sunday  can  be  set  up 

against  an  innocent  party,  ii.  262  Ji. 
official  bond  executed  on  Sunday  valid  as  to  the  parties  protected,  ii. 
262  A. 
Of  maintenance  and  cliampertij,  ii.  262-264. 
IMPLICATIONS, 

of  law  in  construing  instruments,  nature  and  scope  of,  ii.  27,  28. 
IMPOSSIBLE  CONSIDERATIONS,  i.  382-385. 
IMPOSSIBILITY, 

of  performance,  when  a  defence,  ii.  184-186,  188. 

{See  Performance.) 
as  affecting  a  decree  for  specific  performance,  ii.  562-578. 
{See  Specific  Performance.) 
IMPRISONMENT, 

for  debt,  laws  abolishing,  do  not  interfere  with  the  obligation  of  con- 
tracts, ii.  706-710. 
not  allowed  at  common  law,  ii.  579. 
IMPROVEMENTS, 

on  real  estate,  honajide  holder's  claim  for,  ii.  495-498. 
INABILITY, 

of  performance, 

{See  Perfokmance.) 
INADEQUACY, 

of  cni.sideration,  ii.  362,  363,  414. 
INCAPACITY  OF  PARTIES, 

{See  Parties.) 
INCEST, 

{See  Marriage.) 
INCIDENT, 

cannot  be  annexed  to  a  contract,  till  the  contract  is  first  proved,  ii.  49,. 
n.  (.). 
INCUMBRANCES, 

damages  for  breach  of  covenant  against,  ii.  502,  503. 
indemnity,  as  compensation  in  equity,  ii.  559,  n.  (?■). 

VOL.  II.  70 


830  INDKX. 

INI^KNTIJIIK, 

)Ji(!  fiilc,  vcrlxt  foiiiuH  (iccipiurilur  contra  profamntan,  when  ai»j)Iic(l  to, 
ii.  'J(K  22. 
INDKI'KNDKN  r  ACIIIOKMKNTS,  ii.  J8!). 
INDOllSKI';, 

hcf'orc,  iii.'ilnrily,  I'iglit  of,  i.  21.'J-'2I7. 

uCtcr  iniidirity,  i.  214-217. 

when  a  want  of  conHidciration  in  a  good  defence  in  an  action  l>y,  i.  21  J>. 

altliough  lie  lian  knowledge  of  defence  may  recover  under  innocent  prior 
party's  title,  i.  21.'}. 

of  a  note  payaltU;  to  bearer  or  indor.sc«l  in  hhmk,  i.  218. 

of  a  forged  note  or  bill,  i.  218. 

innocent,,  rightH  of,  (jn  uHurion.s  bills  and  note.s,  ii.  .'ilH,  .'5!^'). 

(,SVv     iNDonsiOMlCNT.       lill.l.H    AND    NoiK.H.       I.NDOIi.HKK.) 

iNi)()i:si:i;, 

(Icfiiiilion  of,  i.  201,  2().'>. 

of  a  l)lunk  note,  i.  20.'}. 

the  executor  of  a  decea.sed  payee  may  be,  i.  205. 

who  inuy  lie,  i.  200,  212. 

powci-  of,  to  rci.strict  the  indorHcnient,  i.  212. 

when  w.uil  of  consideration  la  a  good  defence  in  an  action  against,  i. 

21.'i,  2H;. 
when  tlie  note,  is  indorsed  in  pai'l,  i.  21 H. 
without  recourse,  i.  211). 
of  a  forged  bill  or  note,  i.  220. 
prcsentnienL  for  .-icccsjjtancc!  neceH.sary  to  charge,  i.  221. 

p.'iynient  necessary  to  (;liarg(,',  i.  223-227, 
of  whoiii,  when,  and  where;,  the  (hirnand  should  be  made,  i.  227-2.'J0. 
notice  to,  of  nfjn-jciynicnt,  i.  2yi-2.'5(). 
when  discharged  by  ficlay,  i.  2.T.'J-2.')7. 
ol';i  hill  of  lading,  i.  2.':!). 
may  sue  j)iior  indorser  liow,  ii.  l.'}2. 

may  prove  claim  for  indorsing  against  insolvent  prin(;ipal,  ii.  'i'!I,  (]('>2, 
and'  n.  (j). 

(Si;e  Ti\i>()i{.SKMicNi'.     J»ii,f-s  and  Noikm.) 
INDOIISKMIONT, 

0/  ncfjolidhlc  bills  (ind  Jiolr.s,  i.  202-20(1. 
general  principles  and  advantages  of,  i.  202-201. 
if  indorsement  birfore  maturity  expressly  rc^strictive,  negoii.'ibiliiy  unef- 

fected,  i.  20;i. 
indorsement  by  any  thing  eiiuivah^nt  to  name,  i.  201. 
how  m;idc,  i.  201,  20.''». 
Ill  liianlv  ;inil  in  full,  i.  20,0. 

of  th(;  note  of  a  testator  may  be  made  by  his  executor,  i.  20J}. 
liability  of  an  indorser  of  a  blank  note,  i.  20.'i,  20(i,  n.  (/j). 
by  parly  not  payee  or  indoroi-e,  ellecl  of,  i.  20(). 


INDEX.  83J 

INDORSEMENT—  Continued. 

an  agent's  authority  to  draw,  not  equivalent  to  an  authority  to  indorse, 

i,  43,  n.  (o). 
note  payable  to  bearer,  how  transferred,  i.  205,  200. 
transferrer  by  delivery  not  liable  as  Indorscr  ;  how  liable,  I.  20G. 
signature  on  condition  that  another  signs,  i.  200. 

how  indorser  affected,  by  his  proof  of  original  illegal  consideration,  I.  200. 
when  bill  drawn  on  goods,  operates  as  a  transfer  of  them,  i.  20G. 
an  indorser  cannot  show  in  defence  that  the  paper  was  not  indorsed  to 

him,  i.  200. 
presumption  in  favor  of  the  holder's  title,  I.  200. 
when  party  putting  his  name  on  back  of  a  note  is  maker,  when  in- 

dorsej-,  when  guarantor,  i.  20C. 

(See  Bills  and  Notes.) 
Of  the  essentials  of  nerjotiahle  bills  and  notes,  i.  206-211. 
may  be  payable  to  the  maker's  own  order,  i.  206,  207. 
may  by  statute  be  und<;r  seal,  i.  207. 
when  negotiable  without  words  "  or  order  "  I.  207. 
should  be  signed  by  the  maker  at  the  bottom,  i.  208. 
must  contain  words  Importing  a  promise  to  pay,  i.  200,  n.  (j). 
must  be  payable  in  money,  i.  209. 
not  dependent  on  a  contingency,  i.  210. 
when  figures  and  words  differ,  words  prevail,  i.  210. 
payee,  when  a  fictitious  person,  i.  210. 
consideration  of,  presumed,  i.  211. 
parties  to,  I.  211. 
Of  indorsement,  i.  211,  212. 
when  it  passes  the  property  In  a  bill  or  note,  i.  212. 
who  may  indorse,  i.  212. 

when  the  negotiability  may  Ijc  restrained,  i.  212. 
when  party  aware  of  defence  by  maker  against  payee,  may  recover  on 

the  strength  of  intermediate  innocent  holder's  title,  i.  213. 
indorsement  by  agent,  i.  213. 
Of  indorsement  after  maturity,  i.  213-210. 
respective  rights  of  holders  and  makers  before  maturity,  I.  21. 3. 
right  of  party  taking  under  suspicious  circumstances,  I.  213,  214. 
equities  between  original  parties  opened  when  transferred  after  maturity, 

i.  214. 
demand  and  notice  still  necessary,  i.  214. 
only  equities  arising  from  note  itself  let  in,  i.  215. 
consideration  of  bills  and  notes  when  Inquirable  Into,  I.  215. 
when  the  notes  are  accommodation  notes,  I.  216. 

where  indorsee  buys  for  less  than  face  of  note,  what  he  recovers,  i.  216. 
whether  a  preexisting  debt  is  a  sufficient  consideration  for  a  transfer,  so 

as  to  shut  out  equitaVjIe  defences,  i.  216. 
note  indorsed  on  last  day  of  grace,  i.  216. 


832  INDEX. 

INDORSEMENT—  Continued. 
Notes  on  demand^  i.  217-221. 

not  entitled  to  days  of  grace,  i.  229. 

wlien  overdue,  i.  217. 

when  bank  checks  are  overdue,  i.  217,  218. 

negotiability  of  bills  ceases  on  payment,  i.  218. 

indorsement  in  part,  effect  of,  i.  218. 

liability  of  the  holder  transferring  a  forged  note  payable  to  bearer,  i. 

218. 
general  liability  of  indorser,  how  avoided,  i.  219. 
such  liability  strictly  conditional,  i.  219. 
liability  of  parties  when  the  names  of  previous  parties  were  forged,  i. 

219,  220. 
what  indorsement  implies,  i.  220. 
prior  indorsement  forged,  how  subsequent  indorser   affected,  i.  220, 

n.  (?o). 
new  bill  given  for  a  forged  bill,  i.  220. 
effect  of  payment  in  forged  bills  or  the  bills  of  an  insolvent  bank,  i.  220, 

221. 
security  taken  for  forged  note,  i.  121. 
Of  i^esentment  for  acceptance.,  i.  221,  222. 
by  whom,  to  whom,  and  at  what  time,  to  be  made,  i.  221,  222. 
in  case  of  non-acceptance,  when  presentment  must  be  made  to  another, 

i.  337. 
bills  payable  a  certain  time  after  sight  or  after  date,  when  to  be  pre- 
sented, i.  221. 
to  be  made  during  proper  hours,  i.  221,  228. 
what  amounts  to  an  acceptance,  i.  222. 
by  previous  promise,  i.  222. 
by  one  of  many  drawers,  i.  223. 
Of  'presentment  for  ■payment.,  i.  223-228. 
why  necessary  to  hold  the  indorsers,  i.  223. 
when  to  be  made,  i.  223,  224. 
excuses  for  neglect  of,  i.  224,  22G. 

where  to  be  made  when  the  bill  or  note  is  payable  at  a  particular  place 
specified,  i.  22G,  227,  228. 
Of  whom,  and  when,  and  where  the  demand  shoidd  he  made,  i.  228-231. 
when  to  be  made,  i.  228,  229. 

effect  of  usage  in  regulating  demand  and  notice,  i.  228,  229. 
days  of  grace,  what  are,  and  what  bills  and  notes  are  entitled  to,  i.  229, 

230. 
how  demand  should  be  made,  and  notice  given  when  the  bill  is  drawn 
in  one  country  and  payable  in  another,  i.  230. 
Of  notice  of  non-payment,  i.  231-23G. 
waiver  of,  i.  231,  232,  233. 
excuses  for  neglect  of,  i.  232. 


INDEX.  833 

INDORSEMENT—  Continued. 

party  bound  to  give  notice,  cannot  profit  by  time  allowed  other  parties, 

i.  233. 
when,  how,  and  by  whom  it  may  be  given,  i.  233,  234,  235. 
agent  of  holder  treated  as  a  holder  for  purpose  of  giving,  i.  234. 
party  giving  must  be  himself  holder,  or  indorser  fixed,  i.  235,  236. 
when  Sundays  and  holidays  are  excluded  in  the  computation  of  the 

proper  time,  i.  234. 
purpose  of  the  notice,  and  its  form,  i.  234,  235. 
if  party  giving  notice  does  not  know  the  truth  of  it,  i.  235,  n.  (<). 
indorser  discharged  by  the  binding  promise  of  the  holder  to  discharge 

or  delay  suit  against  the  maker  or  acceptor,  i.  235,  236. 
whether  this  rule  operates  in  the  case  of  voluntary  assignments  in  insol- 
vency of  the  maker's  or  acceptor's  eflfects,  i.  236. 
Of  protest,  i.  237,  238. 
required  of  foreign  bills,  i..  237. 

notary's  certificate  not  evidence  of,'  in  cases  of  Inland  bills,  i.  237. 
what  are  foreign  bills,  i.  237,  n.  (a), 
how  far  our  States  are  foreign  to  each  other,  i.  237. 
acceptance  supra  protest,  rights  and  liabilities  of  person  making  it,  i. 

237,  238. 
how  far  evidence,  i.  238. 
Of  damacjes  for  non-payment  of  hills,  i.  238. 

banks  of  collection,  how  far  responsible  for  agents,  i.  238. 
Bills  of  lading,  quasi   negotiable,  i.  239. 

stoppage  in  transitu,  when  defeated  by  indorsement  of,  i.  487-489. 
what  amounts  to  such  indorsement,  i.  239. 
Of  property  passing  ivith  the  possession,  i.  239,  240,  241. 
what  instruments  entitled  to  the  privileges  of  negotiable  bills  and  notes, 

i.  240. 
whether  bonds  in  blank  are  so  or  not,  i.  240. 
State  \)onds,  railroad  bonds,  certificates  of  stock  in  a  corporation,  i.  240, 

respective  rights  of  holder  and  maker  of  lost  bills  and  notes,  i.  240,  241. 
lost  note,  how  sued,  statutes,  i.  241. 
Indorsement  of  a  writ  by  an  attorney,  i,  99,  n.  (w). 
INFANTS, 

Incapacity  of,  to  contract,  I.  242-246. 
why  allowed  by  the  law,  I.  242. 
who  are  infants,  i.  242. 
when  a  person  becomes  of  age,  i.  243. 
defence  of  incapacity  waived  by  a  new  promise  after  the  disability  is 

removed,  i.  242,  n.  (s),  360. 
conti-acts  of,  when  held  void,  i.  243,  244. 

when  voidable,  how  confirmed,  i.  243. 

70* 


834  INDEX. 

INFANTS  —  Continued. 

for  necessaries,  binding,  i.  244. 
mortgage  by  infant  wife,  effect  of,  i.  244. 
voidable  contracts,  i.  246. 
cannot  borrow  money,  i.  246. 

what  are  necessaries,  and  how  determined,  i.  245,  246,  259,  2G0. 
if  father  has  given  son  his  time,  and  published  that  he  will  not  be  liable 
for  him,  i.  250,  n.  (  p). 
Of  the  oMigations  of  parents  in  respect  to  infant  children,  i.  247-260. 
whether  the  father  is  legally  liable  for  the  contracts  of  his  minor  chil- 
dren for  necessaries,  i.  247-253. 
rules  determining  his  liability,  i.  253. 
when  a  stranger  may  recover  of  parent  for  necessaries  furnished  to  his 

child,  i.  250,  n.  (p),  254,  392,  n.  (u). 
whether  the  child's  property  can  be  applied  to  its  own  support  when 

the  father  is  able,  i.  256. 
whether  the  mother  is  bound  to  support  her  children,  the  father  being 

dead,  i.  256. 
husband  not  bound  to  support  the  children  of  his  wife  by  a  former  hus- 
band, i.  257. 
when  father  entitled  to  wages  of  son  for  illegal  services,  i.  257, 
when  not  presumed  liable  to  them  for  their  services,  i.  257. 
right  of  the  parent  to  the  earnings  of  the  child,  how  abandoned,  i.  257,  258. 
whether  the  parent's  liability  for  the   child's  necessaries  ceases  on  his 

relinquishing  all  right  to  his  services,  i.  258. 
common  law  liability  of  parent  ceases  on  his  becoming  of  age,  i.  259. 
statute  liability  of  parents  for  indigent  adult  children,  and  of  children 

for  indigent  parents,  i.  259,  260. 
liability  of  persons  representing  an  infant  in  a  partnershijj,  i.  124,  125. 
Voidable  contracts  for  necessaries,  i.  260-263. 
contracts  of  an  infant  for  necessaries  inquirable  into,  i.  260. 
only  liable  for  their  fair  value,  i.  260. 
cannot  bind  himself  by  his  contracts  in  trade,  i.  261,  262. 
whether  liable  on  his  covenants  as  an  apprentice,  i.  262,  533. 
may  avoid  his  contracts  of  service,  i.  262,  n.  (e). 
cannot  avoid  contracts  to  do  what  he  is  legally  bound  to  do,  i.  262. 
infant  wife  cannot  bar  her  right  to  dower,  i.  263. 
Of  the  torts  of  an  infant,  i.  263-268. 
liable  for  frauds  and  other  torts,  i.  263,  264. 
liable  for  falsely  representing  himself  to  be  an  adult,  whereby  others 

are  induced  to  contract  witii  liini,  i.  264,  265. 
whether  goods  sold  to  him,  still  remaining  in  his  possession,  for  which  he 

refuses  payment,  may  be  reclaimed  by  the  vendor,  i.  266,  267. 
if  he  has  received  goods  and  pai<l  lor  them,  he  cannot  recover  the  money 

without  returning  the  goods,  i.  2(J7. 
iatlier  not  liable  for  torts  of,  i.  269. 


INDEX.  835 

INFANTS  —  Continued. 

Of  the  effect  of  an  infant's  avoidance  of  his  contract,  i.  2G8,  269. 
respective  riglits  of  an  adult  and  an  infant  in  a  contract,  when  the  prop- 
erty bought  or  sold  remains  in  the  possession  of  either  party,  i.  268. 
•whether  an  infant  can  recover  for  the  work  done  on  an  entire  contract 

which  he  rescinds,  i.  263,  n.  (/),  268,  523,  n.  (I). 
when  he  may  disafhrm  a  contract,  i.  243,  268-274,  279. 
Of  ratification,  i.  269-275,  360. 
what  contracts  of  an  infant  are  subject  to,  i.  243,  244,  261,  n.  (y),  274. 
what  amounts  to,  i.  268,  269-271,  309,  n.  Q"). 

whether  a  sealed  instrument  may  be  ratified  by  parol,  i.  269,  n.  (?/),  272. 
mere  neglect  to  disaffirm,  with  other  facts,  may  be  equivalent  to,  i.  271. 
mere  acquiescence  in  conveyances  of  real  estate  is  not,  i.  271,  273. 
disaffirmance  by  a  new  conveyance,  i.  273. 
mere  acquiescence  in  2;)urchases  confirms  them,  i.  273,  n.  («'). 
Wlio  may  take  advantage  of  an  infant's  disahility,  i.  275-277,  544,  545. 
Of  the  marriage  settlements  of  an  infant,  i.  277,  278. 
Illegitimate  children,  statutes,  &c.,  i.  282. 

Infant's  liability  with  respect  to  fixed  property  acquired  by  his  contract,  i. 
278-282. 
liable  for  burdens  attached  to  property  devolved  on  him  by  marriage  or 

descent,  i.  279. 
may  disaffirm  leases  to  him  during  his  minority,  i.  279. 
may  on  reaching  majority  disaffirm  that  disaffirmance,  i.  279. 
not  liable  as  other  persons  on   contracts  which  owe  their  validity  to 

statutes,  i.  281. 
plea  of  infancy,  i.  282. 

rights  of  surety  for,  on  contracts  for  necessaries,  i.  494. 
contracts  of,  to  work  for  a  time  certain,  i.  263,  n.  (/),  268,  523,  n.  (/). 
contract  of,  to  marry,  i.  276,  544,  545. 
contracts  of  marriage,  i.  563,  564. 
capacity  of,  how  affected  by  the  lex  loci,  ii.  85-87. 
tender  for  by  a  friend,  ii.  151. 

whether  can  become  an  insolvent,  ii.  617,  and  n.  (7). 
claim  of,  in  insolvency  may  be  proved  by  guardian,  ii.  672. 
whether  able  to  compel  specific  performance  of  contracts,  ii.  290,  n.  (Jc), 

6. 
bankruptcy  of,  ii.  617. 
INHABITANCY, 

meaning  of  the  term,  ii.  92. 
INJUNCTION, 

{See  Specific  Pfrformance.) 
new  action  of,  by  Englif.h  Procedure  Act,  u.  ui  /. 
INJURIA  SINE  DAMNO,  ii.  492-494. 
INNKEEPEPtS,  i.  623-632. 

persons  liable  as  such,  i.  623. 


836  INDEX. 

INNKEEPERS  —  Continued. 

infants  not  responsible  as,  i.  263. 
liability  of,  how  measured,  i.  624,  625. 

when  discharged  by  the  conduct  of  the  guest,  i.  626,  627. 
distinguished  from  that  of  boarding-house  keepers,  i.  628,  and  u.  (/<). 
duty  of,  to  receive  guests,  i.  627. 

to  admit  drivers  of  public  coaches,  I.  627. 
persons  entitled  to  the  legal  rights  of  guests,  i.  628-630. 
not  liable  to  an  invited  visitor,  i.  628. 
■when  goods  are  within  the  custody  of,  i.  626,  627,  631. 
lien  of,  i.  632. 
INNOCENT  PARTY, 

to  contract  made  on  Sunday,  il.  262  fi. 
INSANITY, 

less  degree  of  intellect  requisite  to  make  a  will  than  to  enter  into  a  con- 
tract, i.  314. 
of  party  to  submission  to  arbitration  revokes  submission,  ii.  219  e. 
{See  Lunatic  and  Non  Compotes  Mentis.) 
INSOLVENCY, 

of  vendee  in  cases  of  stoppage  in  transitu,  i.  476-478. 

voluntary  assignments  of  a  maker  of  a  note  in,  eflfect  of,  on  the  liability 

ofindorsers,  i.  236,  237. 
meaning  of  the  term,  ii.  1 2,  n.  {q). 
bank,  payment  in  bills  of,  ii.  134. 
acknowledgment  by,  whether  sufficient  to  revive  a  debt  barred  by  the 

statute  of  limitations,  ii.  351. 
laws  of  a  State,  how  affected  by  the  constitution  of  the  United  States,  II. 
705. 

{See  Bankruptcy  and  Insolvency.) 
INSTALMENTS, 

suit  for,  ii.  132,  147,463,  464. 

when  the  statute  of  limitations  begins  to  run  on  money  payable  by,  II. 
373. 
INSURANCE, 

agent  to  .'subscribe  policies,  how  his  authority  is  implied,  I.  43. 

policy  of  life  premium  payable  on  Sunday,  Ii.  179. 

on  life  of  husliand  for  benefit  of  wife,  statutory  2)rovisions  In  U.  S.  as  to, 

i.  306,  note, 
construction  of  a  ])olicy  of,  ii.  9,  n.  (ni),  12,  n.  (7). 
meaning  of  terms  in,  fixed  by  usage,  ii.  48,  n.  (y),  4  9,  n.  (c),  50,  n.  (a), 

55,  n.  (/). 
meaning  of  lenns  in,  the  usage  must  be  the  usage  of  the  past,  ii.  53,  n.  (e). 
meaning  of  "  lielwecn  two  days"  in,  ii.  178,  n.  (o). 
the  maxim,  causa  jiroxiina,  nan   reinola,  spcctalur,  applied  to  contracts 

of,  ii.  455,  456. 
covenants  for  in  leases,  ii.  507,  n.  {</). 


INDEX.  837 

INSURANCE—  Continued. 

agreements  for,  when  enforced,  ii.  533. 

interest  in  policy  of,  passes  to  assignee  upon  insolvency,  ii.  635,  n.  (li). 
notwithstanding  assignment  prohibited,  ii.  636. 
although  assignment  is  voluntary,  ii.  636. 
INTENTION, 

in  libel,  how  determined,  ii.  4,  n.  (h). 
effect  of,  in  the  construction  of  contracts, 

{See  Construction  of  Contracts.) 
ascertaining  domicil,  ii.  91, 
to  break  contract,  no  breach,  ii.  188. 
effect  of,  in  fraud,  ii.  267,  n.  (o),  268-271,  281-283. 
{See  Fraud.) 
computing  damages,  ii.  439,  440,  443-445,  473,  487. 
confusion  of  goods,  ii.  474,  475. 

assessing  damages  for  breach  of  covenant  in  sale  of  real 
estate,  ii.  499,  503-505. 
lawful,  the  rule  effectuating,  ii.  9,  10,  12,  16. 
INTEREST, 

when  agent  is  chargeable  with,  on  balance  in  his  hands,  i.  77. 
■when  a  trustee  is  chargeable  with  simple  or  compound,  i.  103,  115. 
when  a  guardian,  i.  115. 
authority  coupled  with,  not  revocable,  i.  61,  62,  85. 

cannot  be  executed  by  an  infant,  i.  94,  n.  (e). 
construed  to  mean  simple,  although  parties  intend  compound,  when,  ii. 

9,  10. 
legal  rate  of,  in  a  contract,  determined  by  the  place  of  performance, 

ii.  95-100. 
method  of  calculating,  on  bonds  and  notes,  when  partial  payments  have 

been  made,  ii.  146. 
when  instalments  of,  may  be  sued  for  without  suing  for  the  principal, 

ii.  147. 
when  included  in  damages,  ii.  380-382,  489. 

when  added  and  when  discounted  upon  claims  proved  in  insolvency  or 
bankruptcy,  ii.  666. 
INTEREST  AND  USURY, 

Of  interest^  and  when  it  is  recoverable,  ii.  380-383,  489. 
when  implied  by  the  law  on  a  contract,  ii.  380,  381. 
for  wrongful  detainer  of  money,  ii.  381. 

upon  judgment  or  account  liquidated;  for  goods  sold;  on  unsettled 
claims ;  for  rent,  money  paid  to  another's  use,  money  lent,  money 
payable  on  demand,  money  retained  by  public  ofBcer,  or  by  agent, 
money  fraudulently  withheld,  torts  and  unliquidated  damages,  ii. 
380-382. 
upon  the  consideration  money,  when  recoverable  by  grantee  of  land  on 
failure  of  title,  ii.  500. 


838  INDEX. 

INTEREST  AND  USURY  —  Continued. 
What  constitutes  usury,  ii.  383-385. 
Immateriality  of  the  contract,  ii.  385-392. 
usury,  form  of  immaterial,  ii.  385,  387. 

by  paying  illegal  interest  for  the  further  forbearance  of  existing 

debt,  ii.  384,  n.  (u). 
by  lending  money  and  receiving  part  back  again,  or  by  selling 

property  at  an  exorbitant  price,  ii.  386. 
burden  of  proof  of  value  of  property  so  sold,  ii.  386,  387. 
in  loans  on  notes,  ii.  386. 
in  loans  of  stock,  ii.  388-390. 
in  sales  of  short  annuities,  ii.  388,  n.  (c). 
when  the  contract  is  contained  in  separate  instruments,  or  in 

instrument  and  separate  oral  promise,  ii.  390. 
laws  against,  how  evaded,  ii.  391. 
in  foreign  contracts,  ii.  95,  n.  (e),  391,  392. 
question  of,  for  the  jury,  ii.  387. 
The  contract  itself  must  he  tainted  loilh  usury,  ii.  392-394. 
when   the   original   contract  is  good,  and  a  second  contract   void   for 

usury,  ii.  392. 
agreement  to  pay  a  sum  beyond  lawful  interest,  by  way  of  penalty,  not 

usurious,  ii.  393,  394. 
agreement  to  pay  legal  interest  upon  money  due,  and  such  further  in- 
terest as  creditor  may  be  obliged  to  pay  for  use  of  money  to  be  raised 
by  him  on  account  of  delay,  not  usurious,  ii.  393,  394. 
agreement  to  take  usurious  interest  not  conclusively  implied  from  the 
taking  thereof,  ii.  394. 
Substituted  securities  are  void,  ii.  394-400. 
'  usury  in  the  inception  of  a  note,  effect  of  on  the  rights  of  indorsees, 
ii.  394,  395. 
usury  in  the  indorsement  of  a  note  valid  at  its  inception,  effect  of,  on 

the  liability  of  the  maker,  ii.  395. 
when  the  substituted  security  is  purged  from  usury,  ii.  39G-398. 
judgment  upon  a  usurious  claim  valid,  ii.  397. 

against  and  Ijy  whom  the  defence  of  usury  may  be  made,  ii.  397-400. 
Distinction  hetween  the  invalidity  of  the  contract  and  the  penalty  imposed, 
ii.  400-405. 
penalty  not  incurred  until  usurious  interest  is  jiaid,  ii.  400. 
contract  may  be  avoided  at  any  time,  ii.  400. 
usury,  wlicn  the  offence  of  is  complete,  ii.  400-403. 

how  availed  of  by  tlie  debtor,  in  suits  at  law  and  in  equity,  ii. 

403,  404. 
recoverable  in  a  suit,  ii.  405. 
Of  contracts  accidentally  usurious,  ii.  405-408. 
usury  taken  under  a  mistake  of  fact,  corrected,  ii.  405. 


INDEX,  839 

INTEREST  AND  V SHUY  —  Contmued. 

law,  illegal,  ii.  405,  406. 
■when  the  offence  of,  is  committed  by  banks  in  the  calculation  of 
interest,  doctrine  of  cy  pres,  Ii.  407. 
Of  discount  of  notes  and  bills,  ii.  408-410. 
whether  receiving  the  interest  in  advance  is  usurious,  ii.  408,  409. 
qua:rterly  or  semiannual  interest,  whether  usurious,  ii.  409. 
0/  a  charge  of  compensation  for  service,  ii.  410-414. 
when  a  commission  for  services  Is  not  usurious,  ii.  410-412. 
proper  amount  of  compensation,  II.  412. 

when  a  charge  for  the  rate  of  exchange  is  not  usui-ious,  II.  413. 
on  the  payment  of  a  bill  before  it  Is  due,  larger  sum  than  legal  Interest 
may  be  deducted,  Ii.  413,  414.  , 

Of  a  charge  for  compensation  for  ris/j  incurred,  ii.  414-419. 
extra  Interest  allowed  when  the  payment  of  the  principal  depends  on ' 

contingencies,  as  in  loans  on  bottomry  and  respondentia,  Ii.  414-416. 
extra  interest  In  the  purchase  of  annuities  and  rent  charges,  II.  416,  417. 
contingency  must  be  real,  ii.  417. 
extra  Interest  In  loans,  the  payment  of  which  depends  on  the  life  of  the 

parties,  II.  418. 
extra  interest  In  post  ohit  bonds,  Ii.  418. 

where  party  binds  himself  to  pay  a  sum  exceeding  lawful  interest,  on 
default  of  paying  principal,  ii.  429. 
Contracts  in  which  a  lender  becomes  partner  —  when  usurious,  ii.  419,  420. 
Of  sales  of  notes  and  other  choses  in  action,  ii.  421-427. 
at  less  than  the  nominal  value,  when  good,  ii.  421-423. 
notes  and  bonds  of  a  railroad  corporation,  II.  422. 
when  and  for  how  much  the  Indorser  is  liable  on  default  of  maker,  Ii. 

423-426. 
■  indorsement,  or  making  of  negotiable  paper  for  a  premium,  II.  426,  427. 
cross  notes  between  parties  at  different  rates  of  Interest,  not  usurious, 
ii.  427. 
Of  compound  interest,  II.  427-432. 
not  usurious,  Ii.  427-429. 
how  far  courts  will  enforce  payment  of,  II.  430. 

agreement  to  convert  interest  into  principal,  when  valid,  ii.  428-430. 
annual  rests  In  merchants'  accounts  allowed,  ii.  428-430,  n.  (,r). 
Legal  rates  of  interest,  and  pejialties  for  violation  of  the  usury  laivs  in  the 
several  States,  Ii.  430,  431. 
INTERLINEATION, 

(See  Alteration.) 
INTERPRETATION  OF  CONTRACTS, 

(See  Construction  of  Contracts.) 
INTOXICATION, 

(See  Drunkenness.) 


840  INDEX. 


J. 

JOINT  PARTIES, 

Whether  jxirlies  are  joint  or  several,  i.  11-21. 
presumption  of  law  as  to,  i.  11. 

as  to  UalilUy,  dependent  on  the  terms  of  the  conti'act,  i.  11. 
when  both  joint  and  several,  i.  12. 

treated  either  as  joint  as  to  all  of  the  obligors,  or  as  sev- 
eral as  to  all,  i.  12. 
cases  of  joint  liability,  of  several  liability,  and  of  joint  and 

several  liability,  classified,  i.  11,  n.  {i). 
unsatisfied  judgment  against  a  debtor,  when  a  bar  to  an 
action  against  his  co-debtor,  i.  12,  n.  (j). 
as  to  right,  not  rendered  several  by  merely  designating  the  share  of  each, 
without  distinct  promises  to  each,  i.  12,  13. 
either  joint  as  to  all  of  the  obligees,  or  several  as  to  all,  i.  13. 
must  all  join  in  a  suit  on  a  contract,  joint  and  several  in  its 
terms,  to  enforce  a  benefit  accruing  to  only  one,  i.  13,  14. 
in  general  joint,  when  their  interest  in  the  contract  is  joint, 

and  several  when  that  interest  is  several,  i.  14. 
what  such  interest  is,  i.  14. 

not  joint  or  several  as  to  the  same  covenant,  at  the  option  of 
the  covenantees,  but  must  sue  jointly  if  they  can,  i.  14,  and 

whether  an  obligation  or  right  is  joint  or  several,  by  what  rules  to  be 

determined,  I.  14-20. 
dependent  particularly  on  the  entlreness  of  the  consideration,  i.  14-20. 
obligations  and  rights  belonging  to  each  class  may  co-exist,  i,  20. 
rule  in  cases  of  contracts  applied  to  injuries  received,  i.  20. 
cases  classified  where  it  was  held  that 

a  joint  action  was  properly  brought,  i.  20- 

22,  n.  (c). 
a  several  action  should  have  been  joint,  i. 

22,  23,  n.  (c). 
a  several  action  Avas  properly  brought,  i.  23- 

25,  n.  (c). 
a  joint  action  should  have  been  several,  i. 
25,  2G,  n.  (c). 
Incidents  of  joinder,  i.  21-31. 

authority  of,  to  bind  each  other,  i.  24. 

accord  by  one,  effect  of,  i.  25. 

release  by  one,  effect  of,  i.  2(j. 

release  of  one,  ellcct  of,  i.  27,  28. 

will  Homctinicfl  be  only  a  covenant  not  to  sue  tliat  one,  i.  23. 

Hinic  rulci  applied  In  cases  of  torts  as  in  contracts,  i.  28. 


INDEX.  841 

JOINT  VAUTIES— Continued. 

discharge  of  one  by  operation  of  law  does  not  discharge  others,  i.  2!). 
operation  of  release  to  one  may  be  restrained  by  its  terms,  i.  2D. 
accord  with  one  to  discharge  others  must  be  complete,  and  amount  to 

satisfaction,  i.  29. 
notice  to  quit  by  one,  i.  433. 
liability  of  joint  trustees  or  executors,  i.  29,  30. 
liability  of  surviving  joint  party,  i.  30,  31. 
liability  of  the  representatives  of  one  joint  party  to  the  other  and  to  the 

creditor,  i.  30,  31. 
right  of  surviving  joint  obligee,  i.  31. 
Contribution  between,  i.  31-37. 
when  and  on  what  principle  enforced,  i.  32-34. 
by  a  surety  against  the  representatives  of  a  deceased  co-suretv,  i.  32,  n. 

by  surety  against  co-surety  and  against  principal  for  costs  of  defending 
suit,  i.  33,  n.  (/). 

fixed  and  positive  obligation  to  pay,  necessary  to,  i.  33. 

must  not  be  a  liability  as  co-partner,  i.  34. 

how  the  claim  for,  is  presented  and  adjusted,  i.  34. 

contract  of,  is  a  several  contract,  i.  35. 

dates  from  what  time,  i.  35,  3G. 

right  to,  does  not  exist  between  successive  indorsers,  i.  35. 

nor  in  favor  of  a  surety  as  against  a  guarantor,  i.  35. 

when  the  right  to  begins,  i.  35,  36. 

none  being  wrongdoers,  i.  36. 

except  where  the  act  is  of  a  doubtful  character, 
and  done  bond  fide,  i.  36. 

controlled  by  circumstances  showing  a  different  understanding,  i.  37. 

enforced  in  some  countries  of  Europe,  but  not  by  the  civil  law,  i.  37. 

when  presumed  to  be  such,  ii.  45. 

payment  to  one  of,  ii.  127,  128. 

plaintiffs,  discharge  by  one,  ii.  129,  n.  (/). 

new  promises  and  part  payments  by  one  of,  effect  of  in  reviving  debts 
barred  by  the  statute  of  limitations,  ii.  359-366. 
JOINT  PURCHASERS, 

notice  to  one  not  notice  to  all,  i.  64,  n.  (ti). 
JOINT-STOCK  COMPANIES, 

how  constituted,  i.  121. 

difference  between  and  partnerships,  i.  121,  122. 

power  of  a  managing  committee,  i.  122. 

power  of  a  member  of,  i.  122. 

what  constitutes  a  member,  i.  122,  123. 

in  what  cases  a  member  can  sue  the  company,  i.  123. 
VOL.  II.  71 


842  INDEX. 

JUDGMENT, 

against  one  debtor,  when  a  bar  to  an  action  against  his  co-debtor,  i.  12, 

assignable,  i.  196,  197. 

confession  of,  by  an  infant,  whether  void  or  voidable,  i.  243,  244. 

(^See  Place,  Law  of.) 
foreign,  when  a  bar,  ii.  117-119. 
foreign  jurisdiction  of  the  court,  and  notice  to  parties  necessary  to  the 

finality  of,  ii.  120-123. 
of  one  State  of  the  Union,  effect  of  in  another,  ii.  119,  n.  (p),  120,  n. 

(q),  123-126. 
party  who  has  recovered  judgment  abroad  may  elect  to  sue  upon  it  at 

home  or  upon  original  cause  of  action,  ii.  123. 
awards  analogous  to,  ii.  213. 
.    former,  a  bar  to  another  suit,  when  on  the  same  matter  in  issue,  ii.  234. 
matter  in  issue,  when  the  same,  ii.  235,  238. 

to  be  shown  to  be  the  same  by  the  record,  ii. 
233,  n.  (/),  234,  n.  (m). 
when  trover  or  trespass  is  a  bar,  ii.  236,  237. 
to  be  a  bar,  must  be  between  the  same  parties  (except  when, 
238,  n.  (s)  ),  and  not  obtained  by  mistake,  ii.  238,  239. 
foreign,  cannot  be  pleaded  in  bar  to  action  founded  on  original  cause  of 

action,  ii.  239,  n.  (wa). 
set-off  of,  ii.  240-242. 

interest  allowed  in  an  action  of  debt  on,  ii.  380. 
for  a  part  of  a  debt  when  a  bar,  ii.  132,  147,  463. 
upon  an  usurious  claim,  valid,  ii.  397. 
when  not  conclusive,  but  may  be  inquired  into  by  a  court  of  insolvency, 

ii.  667. 
may  make  claim  provable  in  Insolvency,  ii.  667. 
JURY, 

office  of,  in  determining  the  construction  of  a  contract,  Ii.  4,  5,  197,  n. 

(J), 
existence  of  a  custom,  ii.  55,  56. 
misconstruction  by,  ii.  4,  n.  {b). 
what  is  a  material  fraud,  determined  by,  II.  267. 

whether  an  acknowledgment  revives  a  debt  barred  by  the  statute  of 
limitations,  how  determined  by,  ii.  348. 
(See  Co u UTS.) 


K. 

knowlkd(;e, 

of  parties,  how  shown,  Ii.  74,  n.  (/). 


INDEX.  843 


L. 


LABOR, 

contracts  for, 

(See  Service,  Contracts  of.) 
LAND, 

(See  Real  Property,  Real  Actions,  Leases.) 
LANDLORD  AND  TENANT, 

by  what  action  or  treatment  of  landlord  rent  is  suspended,  i.  428. 
liability  of,  i.  422. 

rights  of  to  away-going  crops,  i.  430. 
to  fixtures,  i.  431. 

(See  Real  Property,  Lease.) 
usages  between,  ii.  49,  n.  (z). 
LANGUAGE, 

rules  of,  and  of  law  to  govern  intention,  ii.  6-11,  12,  16. 
LAW, 

(For  many  distinctions  between  law  and  equity,  see  Specific  Per- 
formance.) 
questions  of,»what  are, 

(See  Courts.) 
rules  of,  to  be  distinguished  from  those  of  construction  and  interpreta- 
tion, ii.  3,  n.  (a). 
construction,  a  question  of,  ii.  3,  4. 

principles  of  construction  much  the  same  at  law  and  in  equity,  ii.  6. 
rules  of,  and  of  language  to  govern  intention,  ii.  6-11,  12,  16. 
sph^e  of  the  moral  and  municipal,  compared,  ii.  264-266. 
suit  at,  no  bar  to  suit  in  equity  and  vice  versa,  ii.  233,  n.  (I). 
of  a  State  has,  propria  vigore,  no  extra-territorial  force,  ii.  80. 
binds  all  pei-sons  and  things  within  the  State,  ii.  81. 

its  citizens  everywhere  by  such  obligations  as  home  tri- 
bunals can  enforce,  ii.  81. 
governs  the   construction   of  contracts  construed  within   its 
limits,  ii.  81. 
foreign,  force  of  by  international  comity,  ii.  81,  82. 

special  agreement,  or  treaty,  ii.  81. 
constitutional  requirements,  as  in  the  United  States, 
ii.  81. 
LAW  MERCHANT, 

how  influenced  by  custom,  ii.  5at 
LAW   OF  PLACE, 

(See  Place,  Law  of.) 
LAWFUL  INTENT, 

(See  Intention.) 


844  INDEX. 

LEASE, 

hiring  of  real  property  eflfected  by,  i.  421. 
description  of  property  in,  -what  sufficient,  i.  421. 
liability  of  lessor  incurred  by,  i.  422. 
liability  of  lessee  incurred  by,  i.  423-426. 
assignment  of,  i.  426. 
forfeiture  of,  i.  426,  427. 
surrender  of,  by  operation  of  law,  i.  429. 

rights  of  lessor  and  lessee  to  away-going  crops  and  fixtures,  i.  430-433. 
construction  of  the  words  "jointly  and  severally"  in,  ii.  13,  n.  (r). 
"  from  the  day,"  ii.  15,  n.  (x),  175,  177. 
of  the  covenant  to  repair  in,  ii.  184,  n.  (a:),  507. 
when  construed  against  the  lessor,  ii.  18,  n.  (y),  20,  22. 
•--when  an  instrument  is  to  be  construed  as  a  lease,  or  an  agreement  for  a 
future  lea.e,  ii.  24. 
construction  of  the  relative  word  "  his  "  in,  ii.  25,  n.  (k). 
implied  covenants  in,  how  affected  by  the  expression  of  covenants,  ii.  28. 
effect  of  usage  in  the  construction  of,  ii.  49,  n.  (z). 
rent  on,  when  apportioned,  ii.  171,  n.  (a), 
effect  of  alteration  of,  after  execution,  ii.  230,  n.  (c). 
signature  to,  required  by  the  statute  of  frauds,  wh«n  sufficient,  ii.  287, 

notes  (e)  and  (/). 
covenants  in,  damages  for  breach  of,  ii.  507. 

specific  performance  of,  ii.  515,  n.  (s),  526,  527,  530,  n.  (<),  531-534. 
renewal  of,  how  compelled,  ii.  532. 
agreement  for,  when  enforced  in  equity,  ii.  566,  n.  {q),   567. 

whether  enforced  when  intended  lessee  is  insolvent,  ii. 
567.  ^ 

held  by  party  becoming  bankrupt  or  insolvent,  operation  of  insolvency 
upon,  ii.  644-649. 

(See  Bankruptcy  and  Insolvency.) 
LEGACIES, 

how  recovered  by  legatees,  i.  107  and  n.  (/<). 

peculiarly  under  jurisdiction  of  courts  of  equity  in  England,  i.  107. 
how  they  may  be  enforced  against  the  executor,  i.  107,  108. 
LEGISLATION, 

contracts  tending  to  corrupt,  void,  ii.  260. 
LESSEE, 

technically,  at  common  law  lias  no  estate  until  entry,  ii.  645. 
LESSOR, 

when  bound  to  disclose  conditio§  of  house,  i.  423. 
LETTER, 

contract  l)y,  i.  40G-10K,  4-10. 

threatening,  meaning  of",  liow  determined,  ii.  4,  n.  (ft). 
forc(;  of  letters,  forming  a  contract,  upon   contract  as  to  the  same  sub- 
ject-matter subHCfpiently  entered  into  between  same  parties,  ii.  60. 


INDEX.  845 

LETTER  —  Continued. 

contract  by,  when  made,  ii.  94. 
payment  by  at  whose  risk,  ii.  132. 

direction  of,  ii.  132,  n.  (c).  ^  9 

of  attorney,  no  tender  to  be  madWor,  iL  151,  n.  (r). 
when  a  sufficient  memorandum  by  the  statute  of  frauds,  ii.  285,  and  n. 
(c),  310,  311. 
LETTER  OF   CHATTELS, 
rights  of,  i.  602-607. 

when  he  may  repossess  himself  of  the  chattel,  i.  607. 
when  bound  to  repair,  i.  607. 
compensation  of,  i.  609. 

{See  Hirer  of  Chattels.) 
LEX  FORI, 

(See  Place,  Law  of.) 
LEX  LOCI,  il  79-126. 

(See  Place,  Law  of.) 
LEX  LOCI  CONTRACTUS, 

(See  Place,  Law  of.) 
LEX  LOCI  DOMICILII, 

(See  Place,  Law  of.) 
LEX  LOCI  RE  I  SITJL, 

(See  Place,  Law  of.) 
LIABILITY, 

of  principal  for  the  acts  of  his  agent,  i.  38. 
how  incurred,  i.  42-47. 
extent  of,  i.  42,  49-53,  62. 
how  terminated,  i.  58-62. 
of  an  agent,  to  third  persons,  i.  54-58. 
to  his  principal,  i.  69-77. 
(See  Agents.    Attorneys.    Principals.) 
oi  a  partner,  when  it  exists,  i.  131-138,  146. 
extent  of,  i.  151-168. 
of  dormant  partner,  i.  12,  n.  (j),  48,  n.  (a),  142. 

(See  Partnership.) 
of  the  parent  for  necessaries  furnished  to  his  child,  i.  247-257. 
of  the  husband,  for  necessaries  furnished  to  his  wife,  i.  286-306. 
of  the  master,  for  his  slave,  i.  334,  335. 
to  an  action,  incurring  of,  a  valid  consideration,  i.  369. 
of  lessor,  i.  422. 
of  lessee  or  tenant,  i.  423-428. 
LIBEL, 

intent  of,  found  by  the  jury,  ii.  4,  n.  (6). 
(See  Slander.) 
71* 


846  INDEX. 

LICENSE, 

distinction  between,  and  a  grant,  ii.  23,  and  n.  (e).     (&e  515,  517.) 
may  operate  as  grant,  ii.  23,  and  n.  (e). 
t^enter  on  land,  -when  implied,  ii.  23,  46. 

"wlien  not  ■wHnin  the  statute  of  frauds,  ii.  315. 
■when  revocable  under  the  U.  S.  Constitution,  ii.  712. 
LIEN, 

of  factor,  i.  80,  84. 

of  partner,  and  creditors  of  partner,  on  the  partnership  property,  i.  174- 

17C,  180. 
of  vendor,  i.  441,470,479. 
of  attorney,  i.  98,  538,  539. 
of  finder  for  his  reward,  i.  580,  n.  (/«). 
of  pledgee,  i.  593,  600. 
of  bailee  in  locatio  operis  faciendi,  i.  617. 
of  innkeeper,  i.  632. 
of  private  carrier,  i.  634,  681. 
of  common  carrier,  i.  681. 

■when  the  goods  are  received  from  one  not  the  o'wner 
or  his  agent,  i.  681-684. 
abandonment  of,  i.  681,  n.  (a), 
notice  of,  construed  against  party  claiming,  ii.  21. 
of  attorney  on  an  award,  ii.  213. 
of  factor,  when  set-off  prevented  by,  ii.  249. 
damages  where  a  party  holds  under  a,  ii.  471,  476,  479. 
not  lost  by  expiration  of  time  limited  in  Statute  of  Limitations,  ii.  379. 
when  not  affected  by  insolvency,  ii.  668,  and  notes  (u),  (y). 
LIFE-ESTATE,  ii.  507. 

(See  Leases.) 
LIFE  INSURANCE, 

(See  Insurance.) 
LIMITATION, 

of  actions  governed  by  the  lex  fori,  ii.  102,  103. 
LIMITATIONS,  STATUTE  OF, 

how  it  affects  contribution  between  parties,  i.  32,  n.  (e),  36,  37. 
promise  to  pay  a  debt  barred  by,  i.  309,  n.  (j),  360. 
debt  barred  by,  not  revived  by  the  promise  of  a  spendthrift  under  guar- 
dianship, i.  315. 
The  general  purpose  of  Ike  statute,  ii.  341-347. 
founded  on  a  principle  of  the  common  law,  ii.  341. 
ground  of  the  common  law  j)rinciplc,  ii.  341. 
by  what  evidence  rebutted,  ii.  341,  343. 

ground  of  statute,  whether  presumj)tion  of  payment  or  repose,  change 
of  judicial  opinion,  ii.  342-345. 


INDEX.  847 

LIMITATIONS,  STATUTE  OV  —  Continued. 
policy  of,  ii.  346,  347. 
how  regarded  by  the  courts,  ii.  343-347. 
Of  a  new  promise,  ii.  347-353. 
what  amounts  to  a  new  promise,  ii.  343,  n.  (?/),  345,  n.  (c),  347. 
when  an  acknowledgment  is  equivalent  to,  and  how  determined,  whether 

by  the  court  or  jury,  ii.  348-351. 
when  sufficiently  definite,  ii.  349. 
may  be  conditional,  ii.  350. 
must  be  voluntary,  ii.  351. 
whether  the  acknowledgment  of  a  party  made  under  process  of  law,  as 

by  a  bankrupt  on  examination,  is  sufficient,  ii.  351. 
effect  of  the  charge  of  a  new  item  in  a  mutual  account,  ii.  351-353. 
Of  part  payment,  ii.  353-359. 
cases  taken  out  of  the  statute  by,  when  made  in  goods  or  negotiable 

paper,  ii.  353-350. 
appropriation  of  payments  by  the  creditor,  ii.  356. 

appropriation  by  the  creditor  so  as  to  revive  debts  barred  by  the  stat- 
ute, not  allowed,  ii.  141,  356. 
payment  of  interest,  ii.  356. 
part  payment  accompanied  by  a  denial  of  the  debt  does  not  revive  it. 

ii.  356. 
balance  of  mutual  accounts,  effect  of  striking,  ii.  356. 
payment  by  the  debtor  for  the  creditor,  effect  of,  ii.  356,  357. 
admission  of  pai't  payment  not  required  to  be  in  writing,  to  be  effectual 

to  revive  the  debt,  ii.  357. 
whether  the  written  acknowledgment  of  an  agent  is  sufficient,  ii.  357- 

359. 
Of  new  promises  and  part  i^ayments  by  one  of  several  Joint  debtors,  ii.  359- 

366. 
when  sufficient  to  revive  a  debt  against  other  joint  parties,  ii.  359-362. 

as  against  sureties,  ii.  362. 
as  against  partners  after  the  dissolution  of  the  firm,  ii.  363,  364. 
when  made  in  fraud  or  expectation  of  bankruptcy,  ii.  363. 
when  admissible  as  evidence,  not  conclusive,  ii.,  364. 
statutory    provisions   which  revive  the   debt  against  the  joint  debtor 

promising,  and  not  against  the  others,  ii.  364. 
to  whom  the  promise  to  be  effective  must  be  made,  ii.  365. 
Of  accounts  between  merchants,  ii.  366-370. 
what  constitutes  an  account,  ii.  366,  367. 
who  are  merchants,  ii.  367-369. 

whether  the  last  item  must  have  been  within  six  years,  ii.  369. 
When  the  period  of  limitations  begins  to  run,  ii.  370-373. 
on  the  expiration  of  the  credit,  ii.  370. 
where  third  parties  are  interested,  ii.  371. 


848  INDEX. 

LIMITATIONS,  STATUTE  OF  —  Continued. 

on  negotiable  paper,  ii.  371,  372. 

on  the  breacli  of  a  contract,  ii.  372,  373. 

on  money  payable  by  instalments,  ii.  373. 

on  the  claims  of  attorneys  for  professional  services,  ii.  373. 
Of  the  statute  exceptions  and  disabilities,  ii.  373-380. 

vhat  ari>,  ii.  373. 

■when  the  disability  must  exist,  ii.  374. 

whether  the  operation  of  the  statute  after  having  commenced  can  be 
arrested,  ii.  374. 

if  several  disabilities  coexist  when  the  right  of  action  accrues,  ii.  374. 

if  disabilities  arise  afterward,  ii.  374. 

absence  of  the  defendant,  ii.  375-378. 

if  one  of  several  joint  debtors  who  are  abroad  returns,  ii.  374,  377. 

whether  this  exception  in  the  statute  applies  to  foreigners,  ii.  376. 

statute  provisions  as  to  absent  defendants,  ii.  376. 

foreign  corporation  like  natural  person  when  absent  from  State,  ii. 
377,  n.  (pa). 

"beyond  seas"  —  the  meaning  of  the  term,  Ii.  378. 

fraud,  when  the  statute  begins  to  run  on,  ii.  378. 
TTie  statute  affects  the  remedy  only,  and  not  the  debt,  ii.  379. 

lien,  not  destroyed  by,  ii.  379. 

exposure  of  debt  to  operation  of,  by  a  withdrawal  of  set-oflf,  ii.  252. 

appropriation  of  payment  where  one  debt  is  barred  by,  ii.  140,  141. 

by  a  State,  when  constitutional,  ii.  712. 
LIMITED  PARTNERSHIPS, 

how  constituted,  i.  185. 

liabilities  incurred  by,  i.  186, 
LIQUIDATED  DAMAGES, 

(See  Damages.) 
LIS  PENDENS, 

when  a  good  cause  of  abatement,  ii.  231-234. 
LITIGATION, 

prevention  of,  a  valid  consideration,  i.  363-365. 

expenses  of,  when  recoverable  as  damages,  ii.  441,  442,  476,  487-489, 
495,  502,  n.  (h). 
LOCATIO  OPERIS  FACIENDI,  i.  610-632. 

(See  Bailment.) 
LOCATIO  RET, 

(See  Bailment  and  Hirer  of  Chattels.) 
LOCI,  LEX,  ii.  79-12<3. 

(See  PLAclfe,  Law  of.) 
LOCUS  PQ^.NITENTLE,  ii.  179,  n.  (I),  188,  n.  (/). 
LOCUS  SiaiLLl, 

whether  sunicicnt  to  constitute  a  seal  determined  by  the  lex  fori,  ii.  100. 


INDEX.  849 


LORD'S  DAY, 

laws  regulating  the  observance  of, 

{See  Illegal  Contracts.) 
LOSER  OF  BILLS  OR  NOTES, 

rights  of,  i.  241. 
LOSSES, 

of  partnership,  sharing  of,  i.  141. 
LUNACY, 

of  princijial  revokes  the  agent's  authority,  i.  61,  n.  (/). 

of  partner  dissolves  the  partnership,  i.  172,  173. 
{See  NoN  Compotes  Mentis.) 
LUNATICS, 

incapacity  of,  to  make  a  contract,  i.  310-314. 

{See  NoN  Compotes  Mentis.) 

liable  for  injury,  ii.  444. 

cannot  become  insolvents,  ii.  616. 


M. 
MAINTENANCE, 

contracts  resting  on,  void,  ii.  262. 
MAJORITY, 

power  of,  in  a  corporation,  i.  120. 

of  partners,  power  of,  i.  156,  168,  169. 
MANDAMUS, 

new  action  of,  by  the  English  Procedure  Act,  ii.  577. 
MANDA  TUM, 

bailee's  liability  for,  ground  of,  i.  372,  580-585. 
measure  of,  i.  586-589. 

distinction  between  mandatary's   liability  ex  contractu  and  ex  delicto, 
'.  :  85,  586. 
MARINERS, 

{See  Seamen.) 
MARRIAGE,  i.  543-568. 

Contracts  to  marry,  i.  543-554. 

valid  in  law,  i.  543. 

must  be  reciprocal,  i.  544. 

by  deed,  i.  544. 

of  infants,  i.  276,  376,  544. 

under  the  age  of  consent,  i.  277. 

proof  of,  i.  545,  546. 

when  within  the  statute  of  frauds,  i.  546,  547. 

without  specification  of  time,  when  to  be  performed,  i.  547. 

on  condition,  i.  547,  551. 

on  request,  i.  548. 


850  INDEX. 

MARRIAGE  —  Continued. 

defences  to,  I.  548-551. 

damages  for  breach  of,  i.  551-553. 

whether  seduction  may  enhance,  i.  553. 
Promises  in  relation  to  settlements  or  advances,  i.  554,  555. 
consideration  of,  i.  554. 
■within  the  statute  of  frauds,  i.  554. 
contracts  in  fraud  of,  void,  i.  555. 
Contracts  in  restraint  of  marriage,  i.  556. 

marriage  brokage  contracts,  i.  556. 
Contracts  of  marriage,  i.  556-565. 
notice  of  revocation  of  the  wife's  previous  authority  as  agent,  i.  60,  n.  (i). 
effect  of,  on  the  rights  of  the  parties,  i.  283,  284. 
of  slaves,  illegal,  i.  340,  341. 
a  valuable  consideration,  i.  357. 
what  constitutes  marriage,  i.  556-563. 
of  non  compotes  mentis,  void,  i.  563. 
of  infants,  i.  563,  and  n.  (x),  564. 
obtained  by  fraud,  void,  i.  564,  565. 
within  the  prohibited  degrees,  i.  548,  563. 
governed  by  the  lex  loci  contractus,  i.  565. 
Divorce,  i.  566-568. 

for  what  causes  granted,  i.  566. 

effect  of,  on  the  rights  of  parties  to,  i.  566,  567. 

divorce  a  mensa  et  thoro,  i.  567,  568. 

(See  Place,  Law  of.) 
contracts  in  consideration  of,  how  construed  so  as  to  be  sustained,  ii.  15, 

n.  (x). 
valid  where  contracted,  valid  everywhere,  ii.  104,  105. 
foreign,  invalid  in  a  State  where  prohibited  as  incestuous,  ii.  106. 

effect  of,  in  a  State  where  within  the  prohibited   degrees,  ii. 

107-109. 
effect  of,  when  contracted  abroad  to  evade  the  laws  of  the  State 
where  the  parties  are  domiciled,  ii.  104,  n.  (/?),  109,  110. 
settlements,  construction  of,  ii.  15,  n.  (x). 

validity  of,  determined  by  the  laws  of  the   State  where 

made,  ii.  110. 
when  made  on  Sunday,  ii.  262  e,  n.  (lig)- 
when  capable  of  being  rescinded,  ii.  513,  n.  (I). 
evidence  of  in  equity,  ii.  545,  n.  (m). 

when  taken  out  of  the  statute  of  frauds  by  part  perform- 
ance in  equity,  ii.  555. 
capacity  of  parties  to  contract,  how  affected  by  domicil,  ii.  104-113. 

of  wife  to  contract,  governed  by  the  lex  loci  contractus,  ii.  111. 
between  the  parents  of  a  child  after  its  birth,  effect  of,  ii.  Ill,  112. 


INDEX.  851 

MARRIAGE  —  Continued. 

place  of  domicil  not  determined  by,  ii.  112,  113. 

whether  a  sacrament  or  a  civil  contract,  ii.  113,  114. 

dissolution  of,  how  affected  by  the  lex  loci,  ii.  114-117. 

appropriation  of  payments,  where  one  debt  was  contracted  by  the  wife 

before,  ii.  141. 
when  a  release,  ii.  15,  n.  (x),  222. 
when  celebrated  on  Sunday,  ii.  262  e. 

promises  to  marry,  or  in  consideration  of,  when  within  the  statute  of 
frauds,  ii.  309-311. 

(See  Frauds,  Statute  of.)  ^ 

of  feme  sole,  party  to  submission  to  arbitration,  revokes  submission,  ii. 

219  e. 
how  affected  by  the  Constitution  of  the  United  States,  ii.  701-703. 
promises  before  and  after,  specific  pesformance  of,  ii.  520,  521. 
MARRIAGE   SETTLEMENTS, 
of  an  infant,  i.  277,  278. 
consideration  of,  i.  554. 
within  the  statute  of  frauds,  i.  554. 
contracts  in  fraud  of,  void,  i.  555. 

statutory  provisions  in  the  different  States  of  the  United  States,  relative 
to,  i.  306,  note. 
MARRIED   WOMAN, 

agent  of  her  husband,  when,  ii.  43,  287,  289,  304. 
domicil  of,  follows  her  husband's,  ii.  93,  111,  112. 
capacity  of,  how  affected  by  the  lex  loci,  ii.  111. 
payment  to,  as  the  husband's  agent,  ii.  127. 
whether  can  become  an  insolvent,  ii.  618. 
of  bankrupt  or  insolvent,  rights  of, 

(See  Bankruptcy  and  Insolvency.) 
appropriation  of  payments,  when  one  debt  was  contracted  by,  before 

marriage,  ii.  141. 
widow's  claim  for  damages  for  detention  of  dower,  ii.  496-498. 
contract  to  sell  land  of,  whether  enforced  in  equity,  ii.  567,  n.  (a;), 
enforcement  of  contract  with,  ii.  571. 

contract  of  husband  that  wife  shall  perform  certain  act,  whether  en- 
forceable, in  equity,  ii.  571. 
MARRIED   WOMEN,  CONTRACTS   OF, 

Of  the  general  effect  of  mariiage  on  the  rights  of  the  parties,  i.  116,  283, 

284. 
Of  the  contracts  of  made  before  marriage,  i.  284-286. 
may  be  appropriated  by  the  husband  to  his  benefit,  i.  284. 
how  he  may  reduce  her  choses  in  action  into  possession,  i.  285. 
when  husband  and  wife  must  join  in  an  action,  i.  285,  286. 
effect  of  husband's  insolvency  on  wife's  debt,  i.  286. 


852  INDEX. 

MARRIED  WOMEN,  CONTRACTS  OF  —  Continued. 
liability  of  husband  for  wife's  debts,  i.  286. 
when  husband  is  an  infant,  i.  286. 
his  estate  not  liable  unless,  i.  286. 
but  her  liability  revives,  i.  286. 
his  liability  upon  her  death,  i.  286. 
how  wife  may  now  contract,  i.  306. 
of  disabihty  of  wife  to  act,  i.  306. 
Of  the  contract  of  a  married  woman  made  during  the  marriage,  i.  286-306. 
cannot  bind  herself  by  a  contract  during  coverture,  i.  286. 
how  far  Mable  for  her  torts,  i.  286,  306. 

whether  her  contract  made  during  coverture  may  be  ratified  after  cov- 
erture has  terminated,  i.  361. 
her  husband  entitled  to  the  benefit  of  her  earnings,  and  gifts  to  her,  i. 

286. 
gift  to  wife  by  husband,  i.  286. 

whether  he  may  adopt  her  executory  contracts,  i.  286,  287. 
when  her  authority  to  act  for  him  may  be  implied,  i.  287. 

must  be  express,  i.  289. 
when  she  binds  him  by  her  contracts  in   trade,  or  her  drawing  or  in- 
dorsements of  bills  and  notes,  i.  292. 
husband  not  liable  on  contracts  where  she  is  dealt  with  on  her  own  ac- 
count, i.  288,  289. 
his  liability  for  necessaries  furnished  to  her  during  cohabitation,  i.  289- 
291. 
during  separation,  i.  255,  293,  294. 
when  the  separation  is  occasioned  by  the  adultery  of  either, 

or  both,  i.  295. 
when  he  receives  her  back  after  her  adultery,  i.  296,  297. 
when  she  leaves  him  without  just  cause,  i.  296. 
after  she  oflTers  to  return,  i.  296,  29  7. 
Avhen  the  separation  is  voluntary,  i.  29  7-301,  302. 
his  liability  for  necessaries  furnished  to  a  woman  whom  he  has  held  out 

as  his  wife,  i.  43,  n.  (/),  60,  n.  (/),  294,  n.  (/>),  295,  n.  (r),  304. 
infant's  liability  for  necessaries  furnished  to  his  wife,  i.  245. 
effect  of  agreements  of  separation  between  husband  and  wife,  i.  297- 

303. 
whether  llm  Iiusl)atiil  is  lialilc  for  prolessioiial  sor\i('es  of  an  attorney  in 
prosecuting  legal  pruceediiigs  against  him  on  account  of  his  wife,  i. 
303. 
illegality  of  niari'agc,  wliclhcr  il  is  a  dclciu'c  to  a  suit  against  the  hus- 
band for  wife's  debts  incurred  hclbn'  marriage,  i.  305. 
when  she  is  considered  as  afnne  sole  during  coverture,  i.  305,  306. 
wl«en  a  woman's  disposition  of  lior  projicrly  beibre  marriage  is  void,  i. 
306. 


INDEX.  853 

MARRIED  WOMEN,  CONTRACTS  OF  —  Continued. 
how  made  when  protected,  i.  306. 
when  her  note  binds  her  separate  estate,  i.  305,  n.  (ca). 
cannot  indorse  a  note,  i.  212. 

not  barred  of  dower  by  joining,  when  an  infant,  her  husband  in  a  con- 
veyance, i.  2G3. 
•      statutory  provisions  in  the  United  States  as  to  the  contracts,  rights,  and 
liabilities  of,  i.  306,  note, 
separate  estate  and  settlements,  i.  306. 
MASTER, 

liabilities  of,  for  his  servants,  i.  86-93. 

(See  Servants  and  Service.) 
and  slave,  relation  of, 

(See  Slaves.) 
and  apprentice,  relation  of, 

(^e  Apprentices.) 
of  a  vessel,  i.  66,  67. 

(See  Shipmasters.) 
MASTERS  IN   CHANCERY, 

sales  by,  within  the  statute  of  frauds,  ii.  292,  n.  (r). 
MATURITY, 

of  negotiable  paper,  rights  of  holders  of,  before  and  after,  i.  213-216, 
217. 
MENTAL   SUFFERING, 

generally  disregarded  in  computing  damages,  ii.  443,  444. 
MERCANTILE  INSTRUMENTS,  ii.  13,  n.  (r). 
MERCHANTS, 

accounts  between,  excepted  from  the  statute  of  limitations,  ii.  366-370. 

(See  Limitations,  Statute  of.) 
accounts  between,  annual  rests  allowed  in,  ii.  430,  n.  (x). 
MESNE   PROFITS, 

when  recoverable  in  real  actions,  ii.  494,  496,  500. 
action  of  trespass  for,  ii.  494,  495. 
MINISTERS, 

foreign,  domicil  of, 

(See  Domicil.) 
MISCONSTRUCTION, 
by  the  court, 

(See  Court.) 
ty  jury, 

(See  Jury.) 
MISREPRESENTATIONS, 

(See  Fraud.) 
MISTAKE  OF  LAW, 

obligation  acknowledged  under,  not  binding,  i.  363. 

VOL.  II.  72 


854  INDEX. 

MISTAKES, 

•when  corrected  by  construction,  ii.  8,  9,  10,  2G,  27. 
of  arbitrator,  wlien  avoiding  an  award,  ii.  213-217. 

{See  Fraud.) 
in  statements  in  contracting  for  usurious  interest,  effect  of,  il.  405-408. 
of  fact  and  of  law,  in  equity,  ii.  556,  557. 
MIXED  ACTIONS, 

damages  in,  ii.  494. 
MIXTURE, 

of  goods,  ii.  474,  475. 
MONEY, 

counterfeit,  the  manufacture  of,  for  use  in  a  foreign  country,  whether 

unlawful,  ii.  260. 
payment  of  into  court,  effect  of,  ii.  149,  n.  (/). 
when  payable  in  instalments,  damages  for  breach  of  contract,  ii.  464. 

{See  Instalments.) 
payment  of, 

(See  Payment.) 
promise  to  pay  without  time,  is  promise  on  demand,  ii.  64,  65. 
freight  of,  allowed  to  master  of  vessel  by  usage,  ii.  49,  n.  (s). 
investment  of,  when  compelled  in  equity,  ii.  532. 
MORTGAGE, 

of  chattels,  i.  452-455. 

at  common  law,  i.  453. 

by  statute,  i.  453. 

distinction  between  a  mortgage  and  a  pledge,  i.  452,  n.  (xx), 

595-598. 
possession  by  the  mortgagor,  effect  of,  i.  453. 
of  chattels  to  be  purchased,  i.  453,  454. 
mortgagor's  right  of  possession,  how  acquired,  i.  454,  n.  (c). 
right  of  mortgagor  to  assign  his  right,  i.  197. 
the  rule,  expressio  unius  est  exclusio  alterius,  applied  to,  ii.  28. 
when  usurious,  rights  of  parties  in,  ii.  399. 

{See  Incumbrances.) 
equities  of  redemption  pass  to  assignee  in  insolvency,  ii.  626,  632. 
power  of  assignee  over,  ii.  632. 

where  record  is  required,  no  unrecorded  mortgage  available  by  mort- 
gagee or  his  assignee,  against  bona  fide  purchaser,  ii.  632. 
where  record  is  recpiircd,  assignee  takes  ])ropcrty  of  insolvent,  notwith- 
standing his  unrecorded  mortgage,  ii.  632. 
cquilal)l(!,  of  the  English  law,  created  by  delivery  of  title  deed,  scarcely 
known  in  this  country,  ii.  632. 
MOTHER, 

not  liable  for  the  support  of  her  children  by  a  deceased  husband,  i.  256. 
MUNK^TAL  (JOlll'ORATIONS, 

powers  and  fraiu-liises  of,  ii.  511-513. 


INDEX.  855 

MUTUAL  CONTRACTS, 

the  rule,  verba  fortius  accipiuntur  contra  proferentem  not  applicable  to,  ii. 

22. 
dependent  and  independent  covenants,  effect  of  each  respectively,  ii.  40, 

187,  188. 
whether  dependent  or  independent  determined  by  interest  of  the  parties, 

ii.  41. 
rules  for  determining  -whether  covenants  are  dependent  or  independent, 

ii.  41,  n.  0,  189. 


N. 
NECESSARIES, 

infant's  contracts  for,  binding,  i.  244. 

what  are,  i.  244-246,  261. 

whether  a  father  is  liable  for,  when  furnished  to  his  child,  i.  247-255, 

258,  259. 
whether  a  mother  is,  i.  256. 
contracts  of  infants  for,  inquirable  into,  i.  260. 
only  liable  for  their  fair  value,  i.  260. 

husband's  liability  for,  furnished  to  their  children  by  the  wife  after  sepa- 
ration, i.  255. 
furnished  to  the  wife,  liability  of  husband  for,  i.  255,  289-304. 
furnished  to  a  woman  cohabited  with  as  wife,  i.  43,  n.  (/),  294,  n.  (/)), 

296,  n.  (y),  304. 
furnished  to  a  lunatic,  his  liability  for,  i.  312. 
furnished  to  a  slave,  liability  of  the  master  for,  i.  336. 
NEGLIGENCE, 

of  a  servant,  master  liable  for  Injury  done  to  third  persons  by,  i.  86-92. 
distinction  between  gross  negligence  and  mala  fides,  i.  214,  n.  (a),  571. 
what  degree  of,  renders  a  depositary  liable,  i.  586-589. 
a  borrower,  i.  74,  n.  (z),  590. 
a  pledgee,  I.  591. 
a  hirer,  i.  602,  603. 
degrees  of,  i.  74,  n.  (r),  570. 
presumption  of,  when  the  hirer  does  not  account  for  the  injury,  i.  606. 

(^See  Bailment.    Innkeeper.     Common  Carrier.) 
of  plaintiff,  effect  of  In  reducing  damages,  ii.  454,  n.  (n),  461,  n.  (u), 

469. 
of  party,  causing  loss  of  remedy  at  law,  whether  remedied  by  decree  of 
specific  performance,  ii.  512,  n.  (Z:). 
NEGOTIABILITY, 

{See  Indorsement.) 
NEGRO, 

presumed  to  be  a  slave,  i.  329,  330. 


856  INDEX. 

NEW  PARTIES, 

by  novation,  i.  187-191. 

(See  NovATiox.) 
by  assignment,  i.  192-201. 

(See  Assignment.) 
by  indorsement,  i.  202-241. 

(See  Indorsement.) 
NOMINAL  DAMAGES, 

wben  recoverable,  ii.  452,  492-494. 

in  ejectment,  ii.  494. 
NOMINAL  PARTNERS, 

liability  of,  i.  145,  146. 
NON  COMPOTES  MENTIS, 
cannot  marry,  i.  563. 
cannot  contract,  i.  310. 
by  drunkenness,  i.  310,  n.  (m),  311. 
by  lunacy,  i.  312. 

appointment  of  guardians  of,  under  statute,  i.  313,  314. 
finding  of  lunacy  by  a  competent  court,  when  conclusive  proof  of,  i. 

313. 
imbecility  of  Intellect  In  a  party  to  a  contract,  I.  314. 
NONSUIT, 

award  of,  ii.  208,  209. 

NOTES, 

(See  Bills  of  Exchange.) 
NOTICE, 

by  an  unauthorized  agent,  when  it  may  be  ratified,  I.  45,  n.  (il). 

of  the  revocation  of  an  agent's  authority,  i.  59-62. 

to  an  agent  is  notice  to  his  principal,  i.  64. 

when  it  may  be  given,  so  as  to  afiect  the  principal,  i.  63,  n.  (s). 

of  the  principal  is  notice  to  the  agent,  i.  66,  n.  (]/i/)- 

how  made,  so  as  to  affect  a  corporation,  i.  C6. 

how  a  purchaser  from  a  partnership  is  affected  by,  i.  129,  130. 

of  a  partner's  withdrawal  from  the  firm,  i.  143,  144,  145. 

to  the  other  partners  of  a  partner's  withdrawal,  I.  169,  n.  (n). 

to  one  partner  affects  the  firm,  i.  163. 

to  one  joint  purchaser,  not  notice  to  the  others,  i.  64,  n.  (m). 

to  a  debtor  of  the  assignment  of  the  debt,  effect  of,  i.  198,  199. 

of  non-payment  of  a  note  or  bill,  i.  231-237. 

waiver  of,  i.  232. 

excuses  for  neglect  of,  i.  232. 

when,  where,  and  how  given,  i.  233-235. 

by  a  parent  of  the  emancipation  of  his  son,  i.  258,  259. 

by  a  husband  of  the  revocation  of  his  wife's  implied  authority,  i.  289. 

of  a  wife's  adultery,  to  a  tradesman  .supplying  her  with  necessaries,  not 
requisite,  i.  295,  n.  (r). 


INDEX.  857 

NOTICE  —  Continued. 

of  a  wife's  separate  allowance,  i.  301,  302. 

of  the  acceptance  of  a  guaranty,  i.  501. 

of  the  default  of  debtor  under  a  guaranty,  i.  514. 

to  a  carrier  necessary  to  stoppage  in  transitu,  i.  45,  n.  (<<),  477. 

to  the  pledgor  of  the  sale  of  the  pledge,  i.  595-602. 

to  a  common  carrier  of  the  delivery  of  goods,  i.  654. 

by  a  common  carrier  of  the  arrival  of  goods,  i.  660-662. 

by  railroad  companies,  i.  663,  664. 
'  by  carriers  by  water,  i.  665,  668,  669,  670. 

liability  of  common  carriers,  to  what  extent  limited  by,  i.  707-718. 

of  carrier,  to  be  construed  against  himself,  ii.  21. 

of  lien,  construed  against  party  giving,  ii.  21. 

of  suit,  how  given  to  absent  defendant,  ii.  100,  and  n.  (Ii). 

to  a  guarantor,  ii.  1 74. 

within  a  reasonable  time,  what  amounts  to,  ii.  173,  174. 

when  necessary,  ii.  180-182. 

by  whom  to  be  given,  how  determined,  ii.  184. 

constructive,  two  kinds,  ii.  184. 

to  parties  to  an  award,  ii.  217,  218. 

of  set-ofF,  ii.  251. 

{See  Indorsement.) 
NOTICE  TO  QUIT, 

who  entitled  to,  i.  432,  433. 

sufficiency  of,  i.  433. 

effect  of,  i.  434. 

by  an  unauthorized  agent,  when  it  may  be  ratified,  i.  45,  n.  («). 

by  one  partner  a  valid  notice  for  the  firm,  i.  163. 

by  an  agent  of  an  agent,  must  be  recognized  by  the  principal,  i.  71, 
n.  (5). 
NOVATION, 

defined  and  illustrated,  i.  187,  188. 

what  is  necessary  to,  i.  188-191. 

old  debt  must  be  absolutely  discharged,  i.  189. 

whether  contracts  of,  are  within  the  statute  of  frauds,  i.  187,  n.  (/),  191. 

whether  an  accepted  order  for  less  than  the  entire  debt  is  a  discharge  of 
the  whole,  i.  191. 

guaranty  of  debt  discharged  by,  i.  505,  506. 

satisfaction  by,  ii.  137,  138. 
NUDUM  PACTUM,  I  ro^. 


O. 
OATH, 

required  of  party  proving  claim  in  insolvency,  ii.  673,  674. 

72* 


858  INDEX. 

OBITER  DICTUM, 

what  Is  to  be  considered  as,  ii.  610,  n.  ((/). 
ORAL  CONTRACT, 

■when  made,  ii.  94. 
OBLIGATION, 

condition  of,  how  construed,  ii.  22,  n.  (i'). 

of  a  contract,  meaning  of  the  term  in  the  U.  S.  Constitution,  ii.  710-713. 
(5ee  CoxsTiTUTiON  of  the  United  States  ;  Remedy.) 
OBLIGOR, 

condition  in  a  bond  to  be  construed  in  favor  of,  ii.  22,  n.  (r). 
liability  of,  after  an  alteration  by  the  obligee,  ii.  226,  notes  (r)  and  (w). 
{See  Bond.) 
OFFERS, 

(^ee  Assent.) 
OFFICERS, 

public,  power  of,  I.  49. 

specific  performance,  whether  decreed  against,  ii.  511,  n.  Qi). 
OMISSION, 

In  written  agreement,  how  proved,  and  effect  of  upon  decree  for  spe- 
cific performance,  ii.  516,  n.  (^). 
OUTLAWS,  I.  348,  349. 
OUTLAWRY, 

consequences  of,  i.  348. 
OWNER, 

cannot  reclaim  property  from  one  who  buys  It  of  a  person  to  whom  owner 
voluntarily  transfers  it,  although  he  was  induced  to  do  so  by  fraud,  I. 
436. 


P. 

PAINTING, 

contract  for  painting  likeness  not  apportionable,  ii.  34,  n.  (h). 
PARENT, 

whether  liable  for  necessaries  furnished  to  his  child,  I.  247-256. 

liability  of,  when  the  child  has  sufliolent  property  of  Its  own,  I.  256. 

riglit  of,  to  the  custody  and  earnings  of  his  child,  I.  257. 

not  liable  for  torts  of  infant  child,  i.  259. 

whether  his  liability  ceases  on  his  relinquishing  all  claims  to  his  services, 
i.  258. 

liability  of,  by  statute,  for  his  Indigent  adult  children,  I.  259. 
{See  Infants.) 

doinicil  of,  that  of  the  child,  ii.  94. 

interiiiarnage  of,  after  birth  of  a  child,  effect  of  on  its  legitimacy,  ii.  113. 
PAROL  A(iREI<:MENT, 

for  accord,  evidence  of,  admissible  to  bar  suit  upon  written  contract,  ii. 
196. 


INDEX.  859 

PAROL  AGREEMENT— Con/mwerZ. 
when  completed,  ii.  94. 

in  modification  of  written  agreement  and  entered  into  simultaneously, 
in  equity,  ii.  54  7,  n.  (b),  566,  n.  (fy). 
PAROL  CONTRACTS, 
what  are,  i.  7. 

consideration  of,  how  proved,  i.  354,  355,  356. 
PAROL  EVIDENCE, 

not  admissible  to  qualify  a  general  release,  i.  162,  n.  (s). 

when  admissible  to  prove  or  vary  the  consideration  of  a  written  contract, 

i.  355,  356. 
not  admissible  to  vary  or  add  to  written  warranty,  i.  472. 
(See  EviDEXCE.) 
PARTIES, 

classification  of,  i.  9,  10. 
(See  Contracts.    Joint  Parties.     Agents.    New  Parties.) 
to  a  written  contract,  incapacity  of,  provable  by  extrinsic  evidence, 

ii.  66. 
capacity  of,  presumed,  ii.  84. 
incapacity  of,  natural  and  artificial,  ii.  85. 

artificial,  whether  determined  by  the  lex  loci  domicilii,  or 

the  lex  loci  contractus,  ii.  84-90. 
to  contract  marriage,  how  affected  by  domicil,  ii.  104-113. 
(See  Place,  Law  of.) 
PARTNERS, 

liability  of  dormant,  on  written  contracts  of  copartners  not  signed  by 
them,  I.  48,  n.  («). 
after  separate   unsatisfied  judgment   against  the 
ostensible  partner,  i.  12,  n.  (j). 
right  of  surviving,  to  sue  on  paper  of  the  firm,  i.  21,  n.  (c). 
when  should  sue  jointly,  i.  20-26,  n.  (c). 

(.See  Joint  Parties,  passim.') 
contribution  between,  not  enforced,  I.  32,  n.  (c),  34,  n.  (J). 
power  of,  after  dissolution,  to  indorse  in  the  name   of  the  firm,  i.  44, 

. ":  .*^'^^- 

liability  of,  for  the  frauds  of  each,  i.  63,  n.  (q). 

how  a  contract  under  seal,  made  by  one  partner,  may  be  authorized  or 

ratified,  i.  94,  n.  (/). 
one  partner  may  sign  the  firm  name  to  a  note  or  bill,  without  more, 

i.97,  n.  (^^). 
firm  cannot  sue  a  note  If  one  of  the  same  firm  is  a  defendant,  I.  213. 
infant,  In  a  firm,  his  liability  on  becoming  of  age,  i.  262,  and  n.  (</). 

(See  Partnership.) 
liability  of  a  common  carrier  for  those  associated  with  him  as  partners, 

i.  686. 


860  INDEX. 

PARTNERS—  Continued. 

payment  to  a  partner  binding  on  the  firm,  ii.  127. 

after  dissolution,  ii.  127,  n.  (r/). 
appropriation  of  payments  when  a  private  and  a  firm  debt  is  owed  by, 

ii.  143,  144. 
acknowledgment  by  one,  after  dissolution  of  the  firm,  effect  of  in  reviv- 
ing a  debt  barred  by  the  statute  of  limitations,  ii.  359-364. 
■when  a  lender  becomes  a  partner,  so  that  the  loan  is  not  usurious,  ii. 

419,  420. 
agreements  respecting,  how  enforced  in  equity,  ii.  524-526. 
agreement  that  business  shall  be  carried  on  in  retiring  partner's  name, 
against  the  policy  of  the  law,  and  not  enforceable  in  equity,  ii.  576, 
_   n.  (m). 
insolvency  of, 

{See  Bankruptcy  and  Insolvency.) 
PARTNERSHIP, 

What  constitutes  a  partnership,  i.  124,  125. 
general,  i.  124. 
special,  i.  124. 
when  at  law,  i.  165. 
when  commenced,  i.  124,  and  n.  («). 
persons  competent  to  enter  into,  i.  124. 
liability  of  persons  representing  infant  partners,  i.  124,  125. 
in  what  it  may  consist,  i.  125. 
0/  the  real  estate  of  a  partnership,  i.  1  25-130. 
may  be  to  trade  in  land  or  cultivate  land,  i.  125. 
rights  of  partners  and  partnership  creditors  in  respect  to,  i.  125,  126, 

128,  129. 
rights  of  personal  representatives  and  heirs,  i.  126,  127. 
of  widow  of  a  partner,  i.  128. 
of  purchasers  of  partnership  property,  i.  128,  129. 
Of  the  good  will,  i.  130. 

whether  partnership  property,  i.  130. 
partner  restrained  from  injuring,  i.  130. 
distinction  between  commercial  and  fn'ofessional,  i.  130. 
Of  the  delectus  personarum,  i.  131. 
How  a  partnership  may  be  formed,  i.  131-138. 
how  formed  and  proved,  i.  131. 
must  be  for  lawful  purposes,  i.  131. 
agreement  with  trustees  for  creditors  does  not  make  them  partners, 

i.  131. 
if  to  carry  on  business,  it  may,  i.  131. 
contract  to  enter  into  and  renew,  how  determined  and  enforced,  i. 

132,  133. 
shares  in  the  profits,  i.  132,  136,  n.  {i6). 


INDEX.  861 

PARTNERSHIP— Cow^muc^. 

what  constitutes  a,  i.  125,  n.  (h),  132,  n.  (q),  133,  138. 

between  partners,  and  between  themselves  and  third 
persons,  i.  133. 

joint  purchase  with  purpose  of  separate  sale,  no  partnership,  i.  132. 

when  the  lender  of  money  is  a  partner,  i.  134. 

when  a  clerk  or  agent  Is,  i.  134-137. 

difference  between  a  partnership  and  a  tenancy  in  common,  i.  138. 

how  far  agreements  inter  se  bind  those  with  knowledge,  I.  167. 
Of  (he  right  of  action  between  partnen^,  i.  139,  140. 

when  a  partner  may  sue  at  law,  and  when  he  must  resort  to  equity,  i. 
139,  140. 

one  firm  cannot  sue  another,  some  of  whose  members  are  the  same  per- 
sons, i.  140. 

partners  bound  to  perfect  good  faith  inter  se,  i.  140. 

liable  in  equity  for  bi-each  of  obhgations,  i.  140. 
Of  the  sharing  of  losses,  i.  141. 

partners  may  make  any  agreement  as  to,  inter  se,  i.  141. 
Of  dormant  and  sec j-et  partners,  i.  142. 

definition  of,  i.  142. 

may  not  sue,  but  can  be  sued,  i.  142. 

liabilities  of,  i.  48,  n.  (a),  142. 
Of  retiring  partners,  i.  143-145. 

liability  of,  when  an  annuity  Is  secured  to  them,  I.  143. 
until  notice,  I.  144. 

what  is  notice,  I.  144,  145. 

creditor  presumed  to  discharge  retiring  partner  if  he  takes  firm  paper 
after  the  retirement,  i.  145. 
Of  nominal  partners,  I.  145,  14G. 

liability  of,  I.  145. 

admissions  of,  when  conclusive,  I.  146. 
Where  a  joint  liability  is  incurred,  I.  14  7-151. 

for  the  stock  purchased  for  the  firm,  i.  14  7-151,  152,  157,  165. 

when  the  purchasing  or  borrowing  partner  is  alone  liable,  I.  147,  and  n, 
(n),  148,  and  n.  (r-),  157,  159. 
Of  the  authority  of  each  partner,  I.  151-168. 

how  derived,  i.  151,  167. 

how  measured,  I.  167,  168. 

admissions  of,  to  bind  the  firm  or  prove  its  existence,  i.  152. 

to  bind  the  firm  for  goods  purchased,  I.  152,  153,  160. 

to  sell  or  assign  all  the  partnership  pi-operty,  I.  154-156,  160. 

to  assign  his  own  Interest  to  his  individual  creditors,  i.  154. 

to  bind  the  firm  by  a  deed,  i.  94,  n.  (/)• 

revoked  by  dissent  of  his  copartners,  i.  156. 

to  borrow  money,  I.  15  7-159. 


862  INDEX. 

PARTNERSHIP—  Conlmued. 

to  sue  on  the  firm's  paper  after  retirement  of  a  copartner,  i.  21,  n.  (c). 
to  bind  the  firm  for  trust-money  applied  by  him  to  its  use,  i.  158,  159. 
to  indorse  the  firm's  name  to  a  bill  of  exchange  after  dissolution,  i.  44, 

n.(q). 
to  purchase  and  dispose  of  partnership  property,  i.  154,  160. 
to  sign  the  firm's  name  without  more,  i.  96,  n.  ((/</). 
to  render  the  firm  liable  for  his  torts,  i.  160,  161,  n.  (n). 
to  bind  the  firm  by  a  guaranty  in  its  name,  i.  161,  162. 
not  to  bind  firm  by  deed  generally,  i.  163. 
how  knowledge  or  notice  of  prior  deed  afi'ects  partners,  i.  163. 
of  consideration  of  note,  i.  163. 
to  give  a  notice  to  quit,  i.  433. 
to  release  the  debtors  of  the  firm,  i.  162. 
to  bind  the  firm  by  his  signature,  admissions,  and  notice  received,  i.  146, 

152,  163. 
partner,  when  one  will  be  allowed  compensation  for  services  to  the  firm, 

i.  173. 
what  circumstances  sufficient  to  affect  a  person  with  the  liabilities  of  a 

partner,  i.  164,  165,  166,  167. 
whether  a  partnership  exists  is  a  question  of  law,  i.  152,  n.  (s),  166, 

where  partnership  is  indebted  to  a  member  of  the  firm,  i.  157. 

when  a  new  partner  is  liable  for  debts  of  the  old  firm,  i.  166. 

firm  not  bound  by  a  submission  to  arbitration  by  a  partner  without 

special  authority,  i.  168. 
one  partner  cannot  bind  firm  or  transfer  its  property  for  his  own  debt, 
i.  160,  168,  n.  (kk). 
Power  of  a  majority,  i.  156,  168,  169. 

presumptions  of  law  when  partnership  carried  on  in  the  name  of  one 
partner,  i.  158. 
Of  dissolution ,  i.  170-173. 
renders  partners  tenants  in  common,  i.  169. 
of  stipulations  concerning  retirement,  id. 
when  may  take  place  at  the  pleasure  of  each  partner,  i.  170. 
whether  a  partnership  for  a  specified  time  is  dissoluble  at  the  pleasure 

of  each,  i.  170. 
what  circumstances  will  justify  the  inference  of  an  agreement  to  form 

such  a  partnership,  i.  133,  171. 
dissolution  by  a  partner's  assigmnent  of  his  interest,  i.  131,  170,  171, 
172. 
by  death,  i.  172,  173. 
by  civil  incapacity,  i.  172,  173. 
»    by  insanity,  i.  1  72. 

by  a  court  of  equity,  i.  171,  172,  173. 


INDEX.  863 

PARTNERSHIP—  Continued. 

by  bankruptcy  and  insolvency,  i.  173. 
by  war,  i.  1 73. 
continuance  of  the  firm  after  death  of  a  partner  by  express  agreement 

or  provision  in  his  will,  i.  173,  and  n.  (a), 
power  of  surviving  partners  upon,  i.  173. 
settlement  of  accounts  by  a  court  of  equity  upon,  i.  173. 
when  a  receiver  Avill  be  appointed,  i.  171,  173. 
a  solvent  partner  may  adjust  debts,  i.  173. 
partnership  of  executors  carrying  on  business  in  pursuance  of  a  will,  i. 

173. 
when  creditor  of  the  firm  may  proceed  against  estate  of  deceased  par- 
ties, i.  173. 
Of  the  rights  of  creditors  in  respect  to  partnership  funds,  i.  174-180. 
how  partnership  funds  must  be  applied,  i.  1 74. 
how  they  may  be  reached  by  a  private  creditor  of  a  partner,  i.  174,  175, 

176. 
the  rights  of  a  creditor  of  a  dormant  partner,  i.  175. 
the  attachable  interest  of  a  partner,  i.  174,  n.  (5^),  17G-179. 
whether  the  sheriff  can  take  possession  of  the  partnership  property  to 

satisfy  a  private  debt,  i.  17C-179. 
respective  rights  of  the  joint  and  private  creditors  of  a  partner  in  respect 

to  his  private  property,  i.  180. 
partnership  creditors  have  no  preference  as  to  property  bond  fide  con- 
verted into  private  estate  during  partnership  or  upon  dissolution,  i. 
180. 
guaranty  of  the  debt  of,  how  discharged,  i.  506-508. 
Limited  partnerships,  i.  185,  186. 
how  constituted,  i.  185. 
statute  provisions  relative  to,  i.  186. 
liabilities  of  special  partner,  i.  186. 

special  partner  selling  his  interest  to  general  partners,  i.  186. 
special  partner  being  general  partner  of  another  firm,  id. 
of  acquets  or  gains  in  Louisiana,  i.  306,  note. 
Insolvency,  in  cases  of, 

{See  Bankruptcy  and  Insolvency.) 
relief  in  equity,  ii.  525. 
PART  PAYMENT, 

{See  Payment.) 
when  a  satisfaction  of  the  whole,  ii.  129-132,  198,  and  n.  (/). 
effect  of  suit  for,  ii.  132-147. 
required  by  the  statute  of  frauds,  ii.  332. 

effect  of,  in  reviving  debts  barred  by  the  statute  of  limitations,  ii.  353-359. 
by  one  of  several  joint  debtors,  in  reviving  debts  baiTcd  by  the 
statute  of  limitations,  ii.  359-366. 
{See  Limitations,  Statute  of.) 


864  INDEX. 

PART  OWNERS, 

joint  suits  by,  i.  20-26,  n.  (c). 

(See  JoixT  Parties,  pafsim.) 
of  vessels,  ■whether  they  can  all  sue  on  a  policy  of  insurance  effected  in 
the  name  of  one,  i.  48,  n.  («). 
PAPvT  PERFORMANCE, 

(See  Performance.) 
■when  the  contract  is  severable,  ii.  33,  1 70. 
entire,  ii.  29-32,  172. 
a  defence  to  a  suit  by  the  party  performing  in  part,  ii.  248-251. 
the  unperformed  part  is  incidental  and  unimportant,  ii.  172. 
the  failure  to  complete  is  not  the  fault  of  the  employee,  ii.  34,  35. 
compensation  for,  may  be  set  off,  ii.  246. 
cases  taken  out  of  the  statute  of  frauds  by,  ii.  339,  340.    ■ 
"what  constitutes,  ii.  340. 

in  the  conveyance  of  real  estate,  damages,  ii.  501. 
in  equity,  Ii.  549-554. 

(See  Specific  Performance.) 
PASSENGERS, 

payment  of  fare  by,  i.  649. 

liability  of  common  carriers  for,  ho'w  measured,  i.  690,  695. 

gratuitous  passengers,  i.  691-695. 
the  baggage  of,  i.  673,  720,  721,  722. 
PATENT  RIGHT, 

passes  to  assignee  upon  insolvency  of  patentees,  ii.  635,  n.  (/<). 
PAYMENT, 

of  negotiable  paper,  presentment  for,  i.  223-228. 
demand  of,  i.  228-231, 
notice  of  non-payment,  i.  231-236. 
protest  for  non-payment,  i.  237,  238. 
of  another's  debt,  "when  the  amount  may  be  recovered  of  the  debtor  by 

the  party  paying,  i.  392-396. 
of  rent,  place  of,  i.  424. 
liability  of  the  lessee  to  make,  i.  423,  425. 
of  fare  by  a  passenger,  i.  649. 
Of  money,  ii.  126-147. 

Of  ihe  parly  to  whom  pnymrnt  sliould  he  made,  ii.  126-129. 
to  an  agent,  when  binding  on  tlie  principal,  ii.  126,  128. 
in  money,  alone  binds  the  priiieipal,  ii.  128. 
to  the  debtor's  agent,  ii.  126. 
to  an  attorney,  Ii.  126. 
to  the  agent  of  an  agent,  ii.  127. 
to  the  creditor's  ■wife,  ii.  127. 
to  a  partner,  ii.  127. 

al'ter  dissolution,  ii.  127,  n.  (d). 


INDEX.  865 

PAYMENT—  Continued. 

to  a  sheriflT  employed  to  serve  a  writ,  ii.  127,  n.  (c). 

to  an  auctioneer,  ii.  127. 

to  one  of  joint  creditors,  ii.  127,  n.  (d),  128. 

to  one  apparently,  though  not  really,  intrusted  -with  creditor's  business, 

Ii.  127. 
to  one  of  joint  depositors  of  money,  ii.  128. 
trustees,  ii.  128. 
assignees,  ii.  128. 
several  executors,  ii.  128. 
to  a  trustee  for  the  cestui  que  trust,  ii.  1 28. 
discharge  by  a  nominal  plaintiff,  ii.  129. 
discharge  by  one  of  several  plaintiffs,  ii.  129,  n.  (?). 
Of  part  payment,  ii.  129-132. 
part  payment,  in  general,  not  a  satisfaction  of  the  •whole,  ii.  129,  130, 

198.     See  13,  n.  (r). 
when  part  payment  is  full  satisfaction,  ii.  130,  131,  198,  n.  (/)• 
suit  for  a  part  of  a  claim,  effect  of,  ii.  132,  147,  4G3,  464. 
(See  Part  Payment.) 
Of  payment  by  letter  —  at  whose  risk,  ii.  132. 

direction  of  the  letter,  ii.  132,  n.  (c). 
Of  payment  in  bank-bills,  ii.  133-135. 
in  good  bank-bills,  good  if  not  objected  to,  ii.  133,  134. 

forged  bills,  or  bills  of  insolvent  banks,  whose  loss,  ii.  134,  135. 
party  receiving,  when  to  return  forged  bills,  or  bills  of  insolvent  banks, 

ii.  134,  135,  and  notes, 
in  forged  bills  of  a  bank,  to  its  own  officers,  ii.  134,  notes  (/),  (g). 
Of  payment  by  check,  effect  of,  ii.  135. 
not  a  discharge  of  a  debt,  ii.  135. 
when  holder  must  present,  ii.  135. 

a  debtor,  drawing  a  check  upon  a  bank  where  he  has  no  funds,  commits 
a  fraud,  and  loses  his  right  to  presentation  and  demand,  ii.  136. 
Of  payment  by  note,  ii.  136. 

giving  a  negotiable  promissory  note,  whether  equivalent  to,  ii.  136,  196. 
Of  payment  by  delegation,  ii.  137,  138. 
made,  where  the  debtor  directs  a  person  indebted  to  him  to  appropriate 
the  debt  or  a  part  thereof  to  the  benefit  of  his  creditors  —  under  what 
circumstances  a  payment,  ii.  137,  138. 
Of  stakeholders  and  wagers,  ii.  138-140. 
rights  of  parties  to  the  deposit,  ii.  138-140. 

whether  situation  of  stakeholder  is  similar  to  that  of  arbitrator,  so  that 
either  party  can  withdraw  the  wager  before  decision,  ii.  139,  and  n. 
(.). 
illegal  wagers,  ii.  139,  261,  262. 
VOL.  II.  73 


866  INDEX. 

PAYMENT  —  Continued. 

wagers  regarded  -with  disfavor  by  the  courts,  and  made  illegal  by  stats. 

8  &  9  Vict.  ii.  139. 
duty  of  auctioneer,  as  stakeholder,  ii.  139. 
Of  appropriation  of  payments,  ii.  140-147. 
right  of  debtor  to  make,  ii.  140. 

creditor  to  make  when  the  debtor  makes  none,  ii.  141. 
how  restricted,  ii.  142,  143. 
how  made  by  the  law,  ii.  141. 
when  one  debt  is  due  upon  specialty,  the  other  not,  ii.  141. 

is  debt  of  husband,  the  other  of  wife,  dum  sola,  ii.  141. 
effect  of,  when  made  by  the  creditor,  in  reviving  debts  barred  by  the 

statute  of  limitations,  ii.  141,  356. 
by  debtor,  when  implied,  ii.  141,  142. 

duty  of  creditor,  where  the  debtor  owes  one  debt  in  his  own  right,  and 
another  as  executor,  ii.  142. 
when  one  debt  is  due  him  in  his  own  right,  and  another 

as  agent,  ii.  142,  n.  (I). 
when  one  is  a  prior  legal  debt,  and  the  other  a  subse- 
quent equitable  claim,  ii.  142. 
right  of,  accrues  only  where  the  debtor  has  had  an  opportunity  to  make 

the  appropriation,  ii.  143. 
how  made  by  the  law  when  the  securities  are  different,  ii.  143. 

the  sum  paid  will  precisely  satisfy  one  debt, 

ii.  143. 
one  liability  is  contingent,  ii.  143. 
where  one  debt  is  a  partnership  debt,  and  the 
payment  is  made  with  partnership  funds,  ii.  144. 
when  the  payment  is  by  a  firm,  after  a  change  of 
members,  ii.  144. 
there  is  a  continuous  account,  ii.  144. 
for  the  benefit  of  sureties,  ii.  145. 
involuntary,  as  upon  execution,  or  dividend  in  insolvency,  must  be  pro- 

portionably  applied  to  each  of  a  creditor's  claims,  ii.  146,  and  n.  (a), 
method  of  casting  interest,  when  there  have  been  partial  payments  on 

bonds,  notes,  or  other  securities,  ii.  14  6,  147. 
when  suit  may  be  brought  for  an  instalment  of  interest  without  suing 

for  the  principal,  ii.  132,  14  7. 
when  no  place  of  payment  is  mentioned,  debtor  must  sock  creditor,  ii. 

148,  notes  (/)  and  (;/). 
of  money  into  court,  effect  of,  ii.  14!*,  n.  (/). 
effect  of,  in  reviving  debts  barred  by  the  statute  of  limitations,  ii.  353- 

359. 
place  of,  governs  ilw.  contract,  ii.  94-100. 

(See  I'lack,  Law  or.) 


INDEX.  867 

PECULIUM, 

of  a  slave,  i.  339,  340. 
PENALTY, 

money  paid  by  way  of,  for  non-payment  of  a  debt  when  due,  not  usu- 
rious, ii.  393. 
of  a  usurious  contract,  distinction  between  and  its  invalidity,  ii.  400-405. 
when  the  sum  stated  in  a  contract  as  damages  for  its  breach  is  regarded 
as,  ii.  433-441. 
PENCIL, 

signature  in,  ii.  289,  290. 
PENDENCY  OF  ANOTHER  SUIT, 

when  a  good  cause  of  abatement,  ii.  231,  232,  233,  n.  Q). 

whether  in  action  against  two,  prior  action  against  one  is  good  cause  of 

abatement,  ii.  232,  n.  (K). 
in  a  qui  tarn  action,  the  parties  need  not  be  the  same,  ii.  233. 
in  a  foreign  tribunal,  when  a  good  cause  of  abatement,  ii.  232,  n.  (J). 
whether  the  courts  of  the  States  and  of  the  United  States  are  foreign, 

ii.  232,  n.  U)- 
prior  suit  must  be  entered  in  court  and  be  valid  and  effectual,  ii.  233, 

where  party  is  summoned  as  trustee  in  one  suit,  and  principal  defend- 
ant in  another,  first  is  no  bar  to  second,  ii.  233,  n.  (I). 

suit  in  equity  no  bar  to  suit  at  law,  and  vice  versa,  ii.  233,  n.  (/). 

plea  of,  when  must  show  jurisdiction,  ii.  233,  n.  (la). 
PENDENS,  LIS, 

when  a  good  cause  of  abatement,  ii.  231-234. 
PERFORMANCE, 

what  is  necessary  to,  ii.  147-187. 

must  be  by  party  bound  to  perform,  ii.  147. 

readiness  merely  is  not  sufficient,  ii.  148. 

when  no  place  of  payment  or  performance  is  mentioned,  duty  of  debtor 
to  seek  creditor,  ii.  148,  notes  (/)  and  (g). 
Of  tender,  ii.  148-157. 

when  allowed,  ii.  148,  149. 

plea  of,  admits  the  contract,  ii.  149. 

effect  of,  ii.  149. 

when  made  in  court,  effect  of,  ii.  149,  n.  (I). 

stops  accruing  damages  and  interest,  and  gives  defendant  costs,  ii.  150. 

to  whom  and  by  whom  to  be  made,  ii.  150,  151,  160. 

ratification  of,  renders  good,  ii.  151. 

in  behalf  of  an  idiot  or  infant,  ii.  151. 

amount  to  be  tendered,  ii.  151-153. 

if  an  agent  at  his  own  risk  supplies  deficiency  in  tender,  ii.  151. 

when  to  be  made  at  common  law,  ii.  148,  n.  (g),  153,  154. 
by  statute,  ii.  153,  154. 


868  INDEX. 

PERFORMANCE—  Continued. 

■what  constitutes  a  tender,  ii.  154,  155. 

must  be  unconditional,  ii.  155. 

■whether  a  receipt  may  be  required,  ii.  155,  156. 

cannot  be  in  bank-bills  if  objected  to,  ii.  133,  157. 

may  be  in  the  creditor's  own  overdue  notes,  ii.  154,  n.  (a). 

effect  of,  defeated  by  a  subsequent  demand  and  refusal,  ii.  157. 

on  the  operation  of  the  statute  of  frauds,  ii.  31.5-318,  319,  338- 
340. 
Of  the  tender  of  chattels,  ii.  157-168. 
■what  acts  amount  to,  ii.  157-160,  164. 
effect  of,  ii.  159,  160. 
■what  profert  necessary,  ii.  160. 
must  be  unconditional,  ii.  160. 
by  or  to  an  agent,  ii.  160. 
time  or  place  of,  ii.  160-163. 

if  the  time  fixed  fall  on  Sunday,  ii.  161,  n.  (u). 
time  or  place  of,  at  what  time  of  day,  ii.  161,  n.  (?•). 

■when  deliverer  must  seek  receiver,  he  need  not  follo^w 

out  of  the  State,  ii.  162. 
payee   not  bound  to  receive  property  before   day   of 
payment,  ii.  163,  n.  {g). 
■when  the  promisor  may  elect  to  tender  money  or  chattels,  ii.  163. 
of  3' part,  where  the  contract  is  entire,  ii.  163. 

demand  for  chattels  deliverable  on  demand  must  be  reasonable,  ii.  164. 
contract  to  deliver,  reasonably  construed,  ii.  164. 

at  a  certain  time   and  place,  when  discharged  by 

tender,  ii.  164. 
when  the  property  passes  by  the  tender,  ii.  165- 

168. 
quality  of  articles  tendered,  ii.  168,  n.  {q). 

must  conform  to  regulations  of  law  if  such 
exist,  ii.  168,  n.  (7).   {See  also,  12  n.  (5)). 
other  defences  pro  tanto  in  the  nature  of  tender,  ii. 
160. 
Of  the  kind  of  performance,  ii.  168-170. 
to  be  reasonable,  ii.  168. 
of  the  conveyance  of  real  estate,  ii.  168. 
■when  the  exact  method  is  prescribed,  ii.  168,  169. 
■what  is  a  "good  and  suflicicnt  <leed,"  ii.  169. 
when  the  contract  is  in  the  alternative,  ii.  163,  169,  170. 
if  one  branch  of  the  alternative  becomes  impossible,  ii.  170. 
agreement  optional  with  one  party,  binding  upon  the  other,  ii.  170. 
Of  part  performance,  ii.  1  70-1 73. 
effect  of,  when  the  contract  is  severable,  ii.  33,  170. 


INDEX.  869 

PERFORMANCE  —  Continued. 

for  labor,  ii.  35,  n.  {d),  171,  n.  (a), 
an  entirety,  ii.  29-32,  172. 
part  unperformed  is  incidental  and  unimportant,  ii.  172. 
effect  of,  when  the  failure  to  complete,  not  the  fault  of  the  party  whose 

duty  it  is  to  perform,  ii.  34,  35. 
how  the  entirety  or  severalty  of  contracts  is  determined,  ii.  29-34. 
when  cases  are  taken  out  of.  the  statute  of  frauds  by  equity  on  account 
of,  ii.  339,  340. 
(See  Entirety  of  Contracts,  Apportionment  op   Contracts,  Con- 
struction, Part  Performance.) 
Of  the  time  of  performance^  ii.  173-180. 
reasonable  time  presumed  in  the  absence  of  stated  time,  ii.  173. 

extrinsic  evidence  inadmissible  to  rebut  presumption  of, 

ii.  173. 
question  of  law,  ii.  1 73. 
how.  determined,  ii.  173,  174. 
for  notice  to  a  guarantor,  ii.  1 74. 
whether  the  day  when  the  contract  is  made  should  be  excluded  or  in- 
cluded in  the  computation,  Ii.  15,  n.  (x),  175-177. 
when  the  date  is  impossible,  or  not  named,  ii.  177. 
when  last  day  falls  on  Sunday,  ii.  1 78. 
when  Sunday  intervenes,  ii.  178,  179. 

whether  a  party  can  be  sued  for  failure  to  perform  before  the  expira- 
tion of  the  time  of  performance,  who  has  in  the  mean  time  incapaci- 
tated himself,  ii.  179,  188. 
Of  notice,  ii.  180-184. 
necessity  of,  when  created  by  express  terms  of  the  contract,  ii.  180. 

the  law,  ii.  181,  182. 
by  whom  to  be  given,  how  determined,  ii.  184. 
Of  impossihility  of  performance,  ii.  184-187. 

in  equity,  ii.  562-578. 
performance  of  an  act,  made  impossible  by  act  of  God,  excused,  ii. 

184. 
aliter,  when  it  may  be  substantially  carried  into  effect,  ii.  184,  185. 
performance  of  an  act  otherwise  impossible,  when  excused,  ii.  185,  18C, 

188. 
illegality  of  contract,  a  good  defence,  ii.  186,  187. 
subsequent  act  of  legislature  rendering  act  unlawful,  good  defence,  ii. 

186, 
act  of  legislature  rendering  unlawful  act  lawful  gives  no  validity  to 

agreement  previously  entered  into,  ii.  186. 
effect  of  law  in  suspending  an  agreement,  ii.  187. 
prevention  of  performance  by  foreign  law,  no  defence,  ii.  187. 
73* 


870  INDEX. 

VERF  ORM  AN  CE— Continued. 

0/ defences  renting  upon  the  acts  or  omissions  of  the  plaintiff,  ii.  187-193. 
failure,  or  inability,  or  refusal  to  perforin  a  condition  precedent,  Ii.  40, 

187-189,  191. 
declaration  of  intention  to  break  contract,  no  breach,  ii.  188. 
agreements,  when  dependent,  concurrent,  or  independent,  ii.  189. 
rescission  of  contract,  by  mutual  consent,  ii.  189,  190. 

■when  in  the  power  of  one  party  on  account  of  the 

other's  default,  ii.  191. 
under  what  circumstances  allowed,  ii.  191-193. 
in  cases  of  fraud,  ii.  277-279,  192,  n.  (o). 
place  of,  governs  the  contract,  ii.  94-100. 
PERSONAL   PROPERTY,   SALE   OF, 
Essentials  of,  i.  435. 
Absolute  sale  of  chattels,  i.  436-439. 
subject-matter  of,  i.  437. 

possibilities,  not  coupled  with  an  interest,  not  salable,  i.  438. 
Price,  and  agreement  of  parties,  i.  439,  440. 

consideration  of,  i.  376. 
The  effect  of  a  sale,  i.  440,  441. 
the  property  passes  by,  i.  440. 
not  until  the  thing  sold  is  identified,  i.  441. 
lien  of  vendor,  i.  441,  449,  476. 
Of  possession  and  delivery,  i.  441-449. 
sale  without  delivery  avoided  as  to  third  parties  by  fraud,  i.  442. 
constructive  delivery,  i.  443. 

duty  of  vendor  and  vendee  until  deliverj-,  i.  444-447. 
time  and  place  of  delivery  by  vendor,  i.  444,  446. 
of  payment  by  vendee,  i.  447. 

in  specific  articles,  i.  448. 
conditional  sales,  i.  449-451. 
implied  condition  of  payment  of  price,  i.  449. 
express  conditions,  i.  449. 
contracts  of  sale  or  return,  i.  450. 
condition  of  sales  at  auction,  i.  450,  451. 
Mortgages  of  chattels,  i.  452-455. 

at  common  law,  and  by  statute,  i.  452,  453. 

distinction  between  a  mortgage  and  a  pledge,  i.  452,  n.  (xx),  595-598. 
possession  by  the  mortgagor,  cfl'ect  of,  i.  453. 
mortgage  of  goods  to  be  purchased,  i.  453,  454. 
mortgagor's  right  of  possession,  how  acquired,  I.  454,  n.  (c). 
Warranty  of  chattels. 

(^See  Wauuanty.) 
whether  the  presumption  that  grants  carry  with  them  whatever  is  essen- 
tial to  tiieir  use  and  enjoyment,  exists  more  strongly  In  respect  to 
real  than  to  personal  property,  Ii.  46,  47. 


INDEX.  871 

PERSONAL  PROrERTY,  SALE  OF  —  Continued. 

■whether  purchaser  may  go  on  land  of  seller  for  purpose  of  taking  gooda 

bought,  ii.  46. 
contracts  relative  thereto,  governed  by  lex  loci  contractus,  ii.  83. 
whether  assignment  in  insolvency  transfers  personal  property  in  a  for- 
eign State  to  assignees,  as  against  foreign  attaching  creditors,  ii.  83, 
n.(/). 
distribution  of. 

(.See  Distribution.) 
prescription  of,  governed  by  the  lex  loci,  ii.  104. 
tender  of,  ii.  157-168. 

notes  payable  in,  damages  in  suits  on,  ii.  490-492. 
specific  performance  of  contracts  relating  to, 

{See  Specific  Perfokmance.) 
•what  insolvency  transfers  to  assignee,  ii.  634-651. 
PERSONAL   REPRESENTATIVES, 

(See  Representatives.) 
PERSONAL   STATUTE, 
*  {See  Statute.) 

PHYSICIAN, 

master's  liability  for  attendance  of,  on  a  servant,  i.  527. 
compensation  of,  i.  539. 
PLACE, 

of  presentment  for  payment  of  a  note  or  bill,  i.  226,  228-230. 
■when  payable  at  a  particular  place,  i.  226. 
of  payment  by  tenant,  i.  424. 
of  delivery  by  vendor,  i.  444,  446. 
of  payment  by  vendee,  i.  44  7. 
of  payment  in  specific  articles,  i.  448,  449. 
of  delivery  by  and  to  a  common  carrier. 
(.See  Delivery.) 
of  delivery  of  chattels,  ii.  160-163. 

(See  Place,  La-vv  of.)  . 
PLACE  OF  THE  CONTRACT, 

effect  of,  on  its  validity,  ii.  94-100. 
PLACE,  LAW  OF, 

circumstances  which  give  rise  to,  ii.  79. 
General  principles,  ii.  80-84. 
laws  of  a  State,  have,  proprio  vigore,  no  extraterritorial  force,  ii.  80. 
bind  all  persons  and  things  within  the  State,  ii.  81. 
bind  its  citizens  everywhere,  by  such  obligations  as  home 

tribunals  can  enforce,  ii.  81. 
govern  the  construction  of  contracts  construed  within 
its  limits,  ii.  81. 
foreign  laws,  force  of,  by  international  comity,  ii.  81,  82. 


872  ,       INDEX. 

PLACE,  LAW  OY  —  Continued. 

by  special  agreement,  or  treaty,  ii.  81. 
by  constitutional  requirements,  as  in  the  United 
States,  ii.  81. 
contract,  validity  of,  determined  by  the  lex  loci  contractus,  ii.  82. 

construction  of,  determined,  in  case  of  movables,  by  the  lex 
loci  contractus,  ii.  83. 
determined,  in  case  of  immovables,  by  the  lex 

loci  rei  sitce,  ii.  83. 
whether   assignment  in  bankruptcy  transfers 
personal  property  in   foreign  State   to  as- 
signees, ii.  83,  n.  (/). 
Capacity  of  parties,  ii.  84-90. 
presumed,  ii.  84. 

incapacity,  natural  and  artificial,  ii.  85. 
incapacity,  artificial,  whether  determined  by  the  lex  loci  domicilii,  or  the 

lex  loci  contractus,  ii.  84,  85-90. 
difficulty  of  the  subject,  ii.  88,  n.  (j). 

State  will  not  suffer  foreign  laws  to  operate  injuriously  upon  her  citi- 
zens, ii.  88,  n.  (7). 
Domicil,  ii.  90-94. 
nature  of,  ii.  90. 

evidence  of,  what  amounts  to,  ii.  90,  92,  n.  (x). 
change  of,  must  be  both  in  fact  and  in  intent,  ii.  91. 
how  proved,  ii.  91-93. 

may  be  inferred  against  express  declarations  of  party,  ii.  91. 
of  foreign  ministers,  soldiers,  and  seamen,  ii.  92,  n.  (y),  and  n.  (x). 
of  party  who  spends  portions  of  the  year  at  different  places,  ii.  92. 
of  wife,  follows  the  husband's,  ii.  93,  112. 

may  be  separate  for  the  purposes  of  divorce,  and  when  parties 
have  been  separated  by  judicial  decree,  ii.  112,  n.  (d). 
of  a  child,  follows  the  parents',  ii.  94. 
of  a  ward,  follows  the  guardian's,  Ii.  94. 
Place  of  the  contract,  ii.  94-100. 

oral  contract,  completed,  when,  ii.  94. 
written,  when,  ii.  94. 
contract  by  letter,  when,  ii.  94. 

validity  and  construction,  generally  determined  by  the  place  of  perform- 
ance, ii.  94-97. 
instance  of  promissory  note,  ii.  95,  96. 
how  affecting  tlie  usury  laws,  ii.  95,  9G,  and  n.  (/),  391. 
how  place  of  performance  determined,  ii.  97-100. 

instance  of  promissory  note,  ii.  97-99. 
contracts  relative  to  real  property  governed  by  the  lex  loci  rei  sitce,  ii. 
83,  95,  n.  (c),  Gil. 


INDEX.  873 

PLACE,  LAW  OF  —  Continued. 

the  lex  loci  rei  sitm  may  be  resorted  to  for  the  purpose  of  determining 

what  is  real  property,  ii.  95,  n.  (e). 
debts  may  be  demanded  and  collected  everywhere,  unless  special  pro- 
vision to  the  contrary,  ii.  99. 
Of  the  law  of  the  forum  in  ret^pect  to  process  and  remedy,  ii.  100-104. 
foreigners  may  avail  themselves  of  courts  in  like  manner  as  citizens, 

ii.  100. 
property  of  foreigners,  how  affected  by  the  lex  loci,  ii.  100. 
remedies,  governed  by  the  lex  fori,  ii.  100. 

whether  instrument  is  a  specialty,  determined  by  the  lex  fori,  ii.  100. 
whether  right  of  arrest  is  governed  by  the  lex  loci  contractus  or  the  lex 

fori,  ii.  101,  102. 
effect  of,  on  the  limitation  of  actions,  ii.  102,  103. 
effect  of,  on  presumption  in  the  use  of  personal  property,  ii.  104. 
•the  demand  of  bills   and  notes  and  notice  thereof,  how  affected  by,  i. 
229,  230. 
Of  foreign  marriages,  ii.  104-113. 
a  marriage,  valid  where  contracted,  valid  everywhere,  i.  565,  ii.  104, 105. 
when  voidable  in  a  State  where  prohibited  as  incestuous, 

ii.  106,  108,  n.  (s). 
effect  of  incestuous  marriage,  when  not  avoided,  upon  the 

legitimacy  of  children,  ii.  108,  n.  (.s). 
effect  of,  in  a  State  where  it  is  within  the  prohibited  de- 
grees, ii.  107-109. 
effect  of,  when  contracted  in  a  foreign  State  in  order  to 
evade  the  laws  of  a  State  where  the  parties  are  domiciled, 
ii.  104,  n.  (p),  109,  110. 
polygamy,  valid  where  entered  into,  to  what  extent  void  elsewhere, 
ii.  104,  n.  {p),  109. 
effect  of,   upon  the  legitimacy  of  children,  ii.  104,  n.  (^), 
109,  n.  (J). 
marriage  void  where  contracted,  void  everywhere,  ii.  110. 

exception  to  this  rule,  ii.  110. 
marriage  settlements,  validity  of,  determined  by  the  law  of  the  place 

where  made,  ii.  110. 
exception  to  this  rule,  ii.  110. 
capacity  of  wife  to  contract,  go^nerned  by  the  lex  loci  contractus,  ii.  111. 
effect  of  intermarriage  of  parents  after  the  birth  of  a  child  on  its  legiti- 
macy, and  their  subsequent  removal  to  another  State,  ii.  Ill,  112. 
domicil  of  parties  not  dependent  on  the  place  of  their  marriage,  ii. 

112,  113. 
wife's  domicil  conforms  to  that  of  husband,  ii.  93,  112. 

ground  upon  which  this  rule  is  based,  ii.  112,  n.  ((/). 
exception  to  the  rule  ;   for  the  purposes  of  divorce,  wife 
may  have  separate  domicil,  ii.  112,  n.  Ql). 


874  INDEX. 

PLACE,  LAW  OF  —  Continued. 

so  if  the  parties  have  been  separated  by  decree  of  court, 
ii.  112,  n.  (d). 
Of  foreign  divorces,  ii.  113-117. 
marriage,  whether  a  sacrament  or  a  civil  contract,  ii.  113,  114. 
divorce  granted  in  the  State  of  the  actual  domicil  of  the  parties,  if  also 

the  place  of  marriage,  valid  everywhere,  ii.  114-117. 
•whether  the  divorce  obtained  in  another  State  than  that  where  the  mar- 
riage was  contracted  will  be  acknowledged  in  the  State  where  it  was 
contracted,  ii.  114-117. 
immaterial  where  or  under  what  system  of  divorce  laws  the  offence, 
which  is  the  ground  of  divorce,  was  committed,  or  where  the  parties 
lived  when  it  was  committed,  ii.  116,  n.  (g). 
the  provision  of  the  United  States  constitution  which  prohibits  the  States 
from  passing  laws  impairing  the  obligation  of  contracts,  how  affecting 
divorce,  ii.  116,  n.  (g.) 
Foreign  judgments,  ii,  117-126. 
when  a  bar,  ii.  117,  118. 
•when  prima  facie  evidence  only,  ii.  119. 
effect  of  foreign  attachment  on  a  foreign  suit  pending,  ii.  118,  119. 

judgments  procured  in  another  State  of  the  Union,  ii.  120,  n. 

(9)- 
to  be  final,  must  be  rendered  by  a  court  of  competent  jurisdiction,  ii. 

120-123. 
the  defendant  must  have  notice,  ii.  123. 
party  who  has  recovered  judgment  abroad  may  elect  to  sue  upon  the 

judgment,  or  upon  the  original  cause  of  action,  ii.  123. 
whether  the  States  of  the  Union  are  foreign  as  to  judgments  rendered 

in  any  one,  ii.  119,  n.  (/)),  123,  n.  (7),  123-126. 
provisions  of  the  constitution  and  of  the  laws  of  congress  relative  to  the 

effect  of  the  judgments  of  one  State  in  another,  ii.  123-126. 
proceedings  of  a  court  without  a  clerk  cannot  be  authenticated  as  act  of 
congress  requires,  in  order  to  receive  "full  faith  and  credit"  in  other 
States,  ii.  124. 
operation  of  the  law  of  place  upon  bankruptcy  and  insolvency, 
(See  Bankruptcy  and  Insolvency.) 
PLAINTIFF, 

effect  of  negligence  or  default  of,  in  reducing  or  preventing  damages,  ii. 

454,  n.  (»),  461,  n.  (w),  469. 
discharge  by  nominal,  ii.  129. 

one  of  several,  ii.  129,  and  n.  (/). 
PLEADINC;, 

what  sufficient,  of  tlic  statute  of  frauds  in  equity,  ii.  548. 
PLEDGE, 

wh(;n  an  agent  has  power  to  make  a,  i.  51,  n.  (g). 
when  a  factor,  i.  79,  80. 


INDEX.  875 

FLEDGE— Continued. 

pledgee's  liability,  measure  of,  i.  591. 

property  in  the  pledge,  i.  592. 
use  of,  i.  593. 

liability  to  account  for  the  profits  of,  i.  593. 
liability  for  the  theft  of,  i.  594. 
difference  between  a  pledge  and  a  mortgage,  i.  452,  n.  (xx),  594-599. 
of  a  bill  of  lading,  effect  of,  on  the  consignor's  right  of  stoppage  in  tran- 
situ, i.  488. 
of  stocks,  i.  594-599. 

rights  of  pledgee,  i.  592,  600,  COl. 
of  negotiable  paper,  i.  600. 
sale  of,  i.  602. 

■whether  an  implied  warranty  in  a  sale  of,  i.  456,  457,  n.  (g). 
termination  of,  i.  602. 
POLICE  REGULATIONS, 

of  a  State  when  consistent  with  the  clause  of  the  United  States'  Consti- 
tution, relative  to  the  obligation  of  contracts,  ii.  712,  713. 
POLYGAMY, 

(See  Place,  Law  of.) 
validity  of,  and  effect  upon  the  legitimacy  of  children,  ii.  104,  n.  (j)), 
109,  n.  (0- 
PONE, 

at  common  law,  ii.  579. 
POSTMASTERS, 

liability  of,  i.  622. 
POST  OBIT  BONDS, 

when  valid,  ii.  418. 
POWER  OF  ATTORNEY, 

how  made  and  executed,  i.  94,  95. 
commonly  gives  power  of  substitution,  i.  72. 
PRECIPE, 

at  common  law,  ii.  579. 
PREFERRED  DEBTS, 

(See  Bankruptcy  axd  Insolvency.) 
PRESCRIPTION, 

effect  of  the  lex  fori  upon,  ii.  102,  103. 

in  the  use  of  personal  property,  governed  by  the  lex  fori,  ii.  104. 
PRESENTMENT, 

of  negotiable  paper  for  acceptance,  i.  221,  222. 
for  payment,  i.  223,  227. 
PRESUMPTION, 

of  consideration  in  negotiable  paper,  i.  205,  210. 

how  rebutted,  i.  206,  210. 
of  indorsement  of  negotiable  paper  before  maturity,  i.  215,  n.  (h). 


876  INDEX. 

PRESUMPTION—  Continued. 

of  hirer's  negligence,  when  authorized  by  his  conduct,  i.  600. 
of  the  negligence  of  the  common  carrier,  in  case  of  injury  to  a  passen- 
ger, i.  695. 
whether  the  basis  of  the  statute  of  limitations,  ii.  343-345. 
PRESUMPTIONS  OF  LAW,  ii.  42-48. 

{See  Construction,  &c.) 
PRETIUM  AFFECTIONJS, 

addition  to  value  of  property  on  account  of,  ii.  471. 
influence  of  upon  decree  for  specific  performance,  ii.  533. 
PRICE, 

lien  of  vendor  for,  i.  440,  441. 
time  and  place  of  payment  of,  i.  444,  447. 

apportionment  of,  how  affecting  the  entirety  of  a  contract,  ii.  29-31. 
when  required  to  be  stated  by  the  statute  of  frauds,  ii.  294,  n.  (u),  295. 
PRINCIPAL, 

how  the  liability  of,  for  the  acts  of  a  general  and  special  agent,  is  meas- 
ured, i.  38-42. 
liable  for  omission  or  neglect  of  agent,  i.  41,  n.  (g). 
distinction  between  authority  and  appearance  of  authority,  i.  42. 
bound  by  authority  which  he  really  gives,  or  which  he  appears  to  give, 

i.  42. 
but  not  by  appearance  of  authority  which  agent  assumes,  i.  42. 
how  authority  may  be  derived  from,  i.  42-44. 
rights  and  liabilities  of,  on  account  of  his  ratification  of  unauthorized 

acts,  i.  44-4  7,  69,  72. 
how  authority  derived  from,  to  sign  a  written  instrument,  must  be  exe- 
cuted, i.  47. 
liability  of,  for  the  sales,  pledges,  warranties,  and  representations,  and 

misconduct  of  his  agent,  i.  49-52,  62. 
right  of,  to  sae  on  the  contracts  of  his  agent,  i.  53. 
may  revoke  at  pleasure,  the  authority  of  the  agent,  unless  coupled  with 

an  interest,  i.  58-61. 
death,  insanity,  or  bankruptcy  of,  revokes  the  authority  of  the  agent,  i. 

60. 
how  affected  by  notice  to  his  agent,  i.  64. 
or  l)y  misconduct  of,  i.  62. 

rights  of,  not  determinable  in  an  action  against  his  agent,  i.  67,  68. 
as  regards  his  agent,  i.  69-77. 
to  a  strict  conformity  to  his  iiistruclions,  i.  09. 
to  reject  unauthorized  acts,  i.  69,  70. 
to  authorize  the  appointment  of  sub-agents,  i.  71,  72. 
to  the  care,  diligence,  and  skill  of  his  agent,  i.  73. 
to  indemnity  for  his  misconduct,  i.  74. 

to  reject  the  agent's  sales  to  himself  and  purchases  of  himself, 
for  the  principal,  i.  75. 


INDEX.  877 

T'RmClPAL—  Continued. 

to  an  account,  i.  76. 

to  his  property  when  mixed  by  the  agent  with  his  own,  i.  77. 
to  interest  on  balaDces  in  the  agent's  hands,  i.  77. 
when  his  agent  is  a  factor  or  broker,  i.  78-85. 
(See  Agents.     Attorneys.     Factors  and  Brokers.     Servants.) 
PRINTED  INSTRUMENTS, 

construction  of  instruments  partly   written,  partly  printed,  when  the 
written  and  printed  parts  conflict,  il.  28,  29. 
PRINTED  SIGNATURE, 

whether  complying  with  statute  of  frauds,  il.  289,  290. 
PRIVILEGES, 

(See  Exclusive  Privileges.) 
PRIVILEGED  DEBTS, 

(See  Bankruptcy  and  Insolvency.) 
PROFERT, 

when  sea,l  of  instrument  is  torn  off,  ii.  227. 
PROFESSIONAL  SERVICES, 
of  an  attorney, 

(See  Attorney".) 
PROFITS, 

partnership  in,  i.  125. 

when  sharing  in,  constitutes  a  partner,  i.  132-138.. 
whether  recoverable  as  damages,  ii.  458-461. 
mesne,  when  recoverable  in  real  actions,  ii.  495,  496,  500^ 
PROMISE, 

use  of  the  term,  i.  6. 

to  pay  money,  no  time  being  expressed,  is  promise  on  demand,  ii.  64,  65. 
aliter,  if  to  do  other  act,  ii.  65,  n.  (w;). 

new,  acceptance  of,  when  equivalent  to  accord  and  satisfaction,  ii.  194, 
195. 
revival  of  original  cause  of  action  after,  ii.  1,95, 196. 
effect  of  accepting  negotiable  paper  as,  ii.  196. 
what  sufficient  to  revive  a  debt  barred  by  the  statute  of  limita- 
tions, ii.  343,  n.  (?/),  345,  n.  (c),  347-353. 
by  one  of  several  joint  debtors,  effect  of  in  reviving  debts  barred 
by  the  statute  of  limitations,  ii.  359-366. 
of  executors  and  administrators,,  when  within  statute  of  frauds,  ii.  284,. 
300.     (See  11,  n.  (//)•) 
PROMISE  FOR  A  PROMISE, 

a  valid  consideration,  i.  373-376. 
PROMISSORY  NOTE, 

(See  Bills  and  Notes.    Indorsement.) 
PROPERTY, 

by  what  tenure  holden,  ii.  693. 
VOL.  II.  74 


878  INDEX. 

PROTEST, 

for  non-acceptance  or  non-payment  of  bills,  i.  237,  238. 
(See  Indorsement.) 
PROVISION, 

amounting  to  condition,  ii.  39,  40. 
PROVISO, 

when  equivalent  to  covenant,  ii.  23,  and  n.  (c). 
PUBLIC  ENEMIES, 

common  carrier  excused  for  losses  by,  i.  638, 
PUBLIC  OFFICERS, 

liability  of,  on  their  contracts  for  the  public,  i.  104-106. 

specific  performance,  ■whether  decreed  against,  ii.  511,  n.  {7i). 
PUFFER, 

(^See  By-Bidper.) 


QUANTUM  MERUIT, 

remedy  upon,  ii.  35. 

tender  pleadable  to,  ii.  149. 

interest  whether  recoverable  upon,  ii.  382,  n.  (5). 
QUANTUM  VALEBAT, 

interest  whether  recoverable  upon,  ii.  382,  n.  (s). 
QUIET  ENJOYMENT, 

covenant  for  in  a  deed,  ii.  499. 
QUI  PRIOR  EST  TEMPORE  POTIOR  EST  JURE,  ii.  118,  n.  (n). 
QUI  TAM  ACTION, 

when  abated  by  the  pendency  of  another  suit,  ii.  233. 

arbitrators  have  no  power  to  order  to  cease,  ii.  201,  n.  (0). 


R. 
RAILROAD  COMPANIES, 

when  liable  as  common  carriers,  i.  647,  662-664,  673. 

receipts  in  form  of  bills  of  lading,  not  so  in  law,  i.  664. 

liability  of,  for  passengers,  i.  700,  n.  (/). 

bonds  of,  assignable,  i.  240. 

bonds  and  notes,  usury  in  the  sale  of,  ii.  422. 

company  party  to  contract;  whether  decree  of  specific   performance 
granted,  ii.  511,  n.  (li). 
RATES, 

of  interest  in  the  several  States,  ii.  430,  431. 

of  exchange,  charges  for,  not  usury,  ii.  413. 
RATIFICATION, 

0/ an  agent's  aut/iorlli/,  i.  44-47. 

expressly  and  by  implication,  i.  44,  45,  47,  n.  (w). 

of  part  of  the  agency  confii-ms  the  whole,  i.  46. 


INDEX.  879 

RATIFICATION—  Continued. 

once  made  cannot  be  disaffirmed,  i.  46,  n.  (u). 

by  principal  unknown  when  the  contract  was  made,  i.  44,  n.  (<). 

parol,  of  a  deed,  not  sufficient,  i.  47,  94,  n.  (/), 

unless  the  seal  was  unnecessary  to  its  validity,  i.  47. 
in  what  cases  a  principal  may  adopt  the  acts  of  a  person  who  assumes 

to  act  for  him,  i.  45,  n.  (ft). 
of  a  trespass,  i.  45,  n.  (tt),  47,  n.  ^wi/),  69. 
to  bind  the  principal  must  be  with  a  full  knowledge  of  the  facts,  i.  46, 

n.  (u). 
does  not  take  away  the  liability  of  an  agent  for  unauthorized  acts,  i.  47. 
by  a  state,  i.  47,  n.  (wi/). 
of  the  appointment  of  a  sub-agent,  i.  71-73. 
of  an  attorney's  execution  of  his  power  by  a  sealed  instrument,  when 

valid,  i.  47,  94,  n.  (/). 
by  a  corporation  of  an  act  done  in  its  behalf,  i.  118. 
by  an  administrator  of  an  act  of  the  agent,  in  ignorance  of  the  prin- 
cipal's death,  i.  111. 
Of  a  partner's  authority. 
to  contract  for  the  firm,  i.  156,  157. 
to  make  a  sealed  instrument,  i.  94,  n.  (/). 
{See  Agext.    Factors  and  Brokers.    Partnership.    Principal.) 
Of  an  infant's  contracts,  i.  243,  269-275. 
what  contracts  of  an  infant  are  subject  to,  i.  243,  244,  261,  n.  (?/),  274, 

275. 
what  amounts  to,  i.  268,  269. 
whether  he  may  ratify  a  sealed  instrument  by  parol,  i.  269,  n.  (?/),  272, 

273. 
mere  neglect  to  disaffirm,  with  other  facts,  may  amount  to,  i.  271. 
mere  acquiescence  in  purchases  confirms  them,  i.  273,  n.  (?'). 
mere  acquiescence  in  a  conveyance  of  real  estate  does  not,  i.  271,  273, 

274. 
disaffirmance  of  a  new  conveyance,  i.  273. 
of  a  wife's  contract  by  her  husband,  i.  286,  287,  289,  292. 
REAL   ACTIONS, 

damages  in,  ii.  494-509. 

{See  Damages.) 
REAL   PROPERTY, 

liability  of  the  owners  of,  for  injuries  committed  on,  i.  92. 

of  a  partnership,  incidents  and  liabilities  of,'i.  125-130. 

law  relative  to  dormant  partners  does  not  extend  to  sales  and  purchases 

of,  i.  142,  n.  (/). 
of  a  partnership,  i.  125. 

cannot  be  assigned  or  sold  by  one  partner  without 
special  authority,  i.  155,  n.  (r),  160,  n.  (/). 


880  INDEX. 

KEAL  PROPERTY— Con^mueJ. 

covenants  annexed  to,  i.  109,  199. 

covenants  affecting,  when  assignable,  i.  199-201. 

infant's  power  to  bind  himself  by  sale  or  purchase  of,  i.  243,  244,  271. 

infant's  liability  with  respect  to,  when  acquired  by  contract,  i.  278-282. 
Purchase  and  sale  of,  i.  414-420. 

specific  performance  of  contract  relative  to,  when  enforced,  i.  414. 

inadequacy  of  consideration,  i.  414. 

no  implied  warranty  in  the  sale  of,  i.  457,  n.  ((/),  471. 

sales  of,  at  auction,  effect  of  misdescription,  i.  415-417,  451. 
in  separate  lots,  i.  417. 
when  avoided  by  by-bidding,  i.  417,  418. 

sales  of  at  auction,  retraction  of  bids,  i.  403,  418. 

powers  and  liabilities  of  auctioneer,  i.  418-420. 
Hiring  of,  i.  421-434. 

effected  by  a  lease,  i.  421. 

what  passes  by  the  description  in  a  lease,  i.  421. 
Of  the  general  liabilities  of  the  lessor,  i.  422,  423. 

his  obligation  to  renew,  i.  422. 

his  obligation  to  repair,  i.,422. 

effect  of  neglect  to  fulfil  his  obligation  on  the  liability  of  lessee,  i.  423. 
Of  the  general  liabilitg  and  obligation  of  the  tenant,  i.  423-428. 

to  pay  rent,  i.  423,  425. 

to  pay  the  taxes,  i.  423. 

payment  of  rent,  time  and  place  of,  i.  424. 

to  repair,  i.  424,  425. 

covenant  by,  not  to  assign  or  underlet,  i.  426. 

forfeiture  by,  how  caused  and  waived,  i.  426,  427. 

may  not  dispute  his  landlord's  title,  i.  428. 
Of  surrender  of  leases  by  operation  of  law,  i.  429,  430. 
Of  away-going  crops,  rights  of  tenant,  i.  429,  430. 
Of  fixtures,  i.  430,  431. 
Of  notice  to  quit,  i.  432-434. 

who  entitled  to,  i.  432,  433. 

what  is  sufficient,  i.  433. 

effect  of,  i.  434. 

sale  of,  when  an  entire  contract,  ii.  29,  n.  (^lo). 

conveyance  of,  when  a  condition  precedent  to  a  right  of  action  for  the 
purchase-money,  ii.  41,  n.  (/). 

grant  of,  when  it  cai-ries  with  it  a  right  of  way  to,  and  whatever  is 
necessary  to  its  use  and  enjoyment,  ii.  46. 

when  the  purchaser  of  the  owner's  goods  can  enter  on  his  land  and  take 
tliem,  ii.  46,  4  7. 

contracts  relative  to,  governed  by  (he  lex  loci  rci  sita,  ii.  83,  95,  n.  (e). 

auctioneer  employed  to  sell,  no  authority  to  receive  payment  for,  ii.  127. 


INDEX.  881 

REAL  FROFERTY  —  Continued. 

conveyance  of,  when  sufficient  to  satisfy  a  contract,  ii.  168,  169. 

fraud  in  sale  of,  ii.  266,  n.  (m),  275,  n.  (J). 

sales  of  at  auction,  the  auctioneer  the  agent  of  both  parties,  ii.  292,  n.  (r). 

contracts  relative  to,  when  within  the  statute  of  frauds,  ii.  311-316. 

damages  for  breach  of  covenants  in  the  conveyance  of,  ii.  494-509. 
(iSee  Damages.) 

specific  performance  of  contracts  relating  to, 

(See  Specific  Performance.) 

what  passes  to  assignees  by  insolvency,  ii.  628-634. 
(See  Bankruptcy  and  Insolvency.) 
REAL   STATUTE, 

(See  Statute.) 
RECEIPT, 

of  joint  trustees  and  co-executors,  when  it  may  be  explained,  i.  29,  30. 

of  agent  is  receipt  of  principal,  i.  42,  n.  (i). 

how  controlled  by  extrinsic  evidence,  ii.  13,  n.  (r),  67,  129-132,  221, 
517,  n.  (a). 

(See  Release,  Part  Payment.) 

whether  one  may  be  required  in  a  tender,  ii.  155,  156. 
RECEIVER, 

when  equity  will  appoint,  i.  171,  173. 
RECITALS, 

effect  of,  in  construing  a  written  instrument,  ii.  13,  n.  (r),  14,  15,  22, 
23,  220,   221. 

how  controlled  by  extrinsic  evidence,  ii.  66. 
RECORD, 

(See  Registration.) 
RECOUPMENT, 

difference  between,  and  set-off,  ii.  246. 

of  damages,  ii.  246. 
RECOURSE, 

indorsement  without,  efiect  of,  i.  219. 
RECTOR, 

may  enter  close,  aud  carry  away  tithes,  ii.  46,  n.  (u). 
REDUCTION, 

difference  between,  and  set-off,  ii.  246. 
REENTRY, 

for  non-payment  of  rent,  how  made,  i.  424. 
REGISTRATION, 

laws  and  effect  of,  ii.  632. 
RELATIVE  WORDS, 

how  construed,  ii.  25. 
RELEASE, 

what  constitutes  release,  and  what  only  agreement  not  to  sue,  i.  28. 

74* 


882  .    INDEX. 

RELEASE  —  Continued. 

of  damages,  effect  of,  i.  28. 

of  the  interest  of  a  witness  cannot  be  made  by  an  attorney,  by  virtue  of 

his  oral  authority,  to  appear  in  a  cause,  i.  97,  n.  (Ji). 
by  or  to  one  partner  is  a  release  by  or  of  all,  i.  162. 
by  an  infant,  void,  i.  243. 
by  or  of  one  of  joint  partners,  i.  26-29. 
by  a  surety,  i.  35.  ' 
construction  of,  ii.  13,  n.  (?•). 

deed  of,  not  operative  as  such,  construed  as  a  grant,  the  reversion,  at- 
tornment, &c.,  ii.  15,  16. 
in  full  of  all  actions,  debts,  demands,  &c.,  resh-icted  to  the  amount  re- 
ceived, ii.  13,  n.  (r),  129-132,  198,  and  n.  (/),  517,  n.  («)• 
{See  Receipt.) 
the  rule, /aZsa  demonstratio  non  7iocet,  applied  to,  ii.  62,  n.  (w). 
suit  for  part  payment  releases  the  whole,  ii.  129-132,  198,  and  n.  (/). 

{See  Part  Payment.) 
of  mutual  claims,  ii.  130,  197. 

mutual  power  of  arbitrator  to  award,  ii.  208,  n.  {p),  211. 
what  constitutes  a,  ii.  219. 

when  a  covenant  not  to  sue  is  equivalent  to,  ii.  219,  220. 
operative  only  on  a  present  right,  ii.  220. 
how  construed  ;  general  words  in  limited  by  particular  recitals,  ii.  13,  n. 

(r),  220,  221. 
with  reservation  of  rights  against  others,  ii.  221. 
of  part  of  claim,  ii.  221, 

npt  limited  or  controlled  by  extrinsic  evidence,  ii.  221. 
by  whom  to  be  made,  ii.  222. 
by  a  trustee,  when  set  aside,  ii.  222. 
by  one  of  several  plaintiffs,  ii.  129,  n.  (t). 
by  operation  of  law,  ii.  222. 

by  intermarriage  of  parties,  ii.  15,  n.  (x),  222. 
exception,  ii.  222, 
n.  (u). 
effect  of  security  in  releasing  debt,  ii.  222. 
REMEDY, 

For  breach  of  contract, 

wholly  pecuniary  in  courts  of  law,  i.  412,  413. 
not  so  in  equity,  i.  413. 
governed  by  lex  fori,  ii.  104. 

of  parties,  when  their  purpose  and  language  conflict,  Ii.  9,  10,  12. 
the  statute  of  limitations  aj)[)lies  only  to,  ii.  379. 

distinction  between,  and  tlie  obligation  of  a  contract,  ii.  531-538,  591- 
595. 
RENT, 

obligation  of  the  lessee  or  tenant  to  pay,  i.  423,  424,  426. 


INDEX.  883 

HEl^T  —  Continued. 

apportionment  of,  i.  433. 

remedy  for  non-payment,  i.  433. 

interest  allowed,  in  an  action  for,  ii.  381. 

on  leases,  -when  apportioned,  ii.  171,  n.  (a). 
RENT  CHARGE, 

extra  interest  in  the  purchase  of,  ii.  416,  417. 
REPAIR, 

covenant  to,  in  a  lease,  ii.  184,  n.  (x),  507. 
REPLEVIN, 

damages  in  action  of,  ii.  47  7-4  79. 

(See  Damages.) 

action  on  replevin  bond  defeated  by  the  destruction  of  the  property, 
ii.  478. 
REPRESENTATIONS,        * 

false  but  innocent,  ii.  283. 

(See  Fraud.) 

effect  of,  upon  the  enforcement  of  contracts  in  equity,  ii.  513,  572,  n. 
(h),  573,  n.  (i). 
REPRESENTATIVES, 

presumption  of  law,  that  parties  to  simple  contract  intend  to  bind,  ii.  44. 
REPUGNANT  CLAUSES, 

in  deeds  and  wills,  ii.  26. 
RESCISSION, 

what  amounts  to,  ii.  190,  n.  (k). 

of  a  contract,  by  mutual  consent,  ii.  189,  190. 

when  in  the  power  of  one  party  on  account  of  the  other's  default,  ii.  191. 

under  what  circumstances  allowed,  ii.  191-193,  483. 

in  cases  of  fraud,  ii.  277-279,  192,  n.  (o). 
RESERVATION  AND  EXCEPTION, 

words  of,  construed  as  words  of  grant,  ii.  23. 
RESIDENCE, 

and  domicil,  not  convertible  terms,  ii.  90. 

meaning  of  the  word,  ii.  92. 
RES  JUDICA  TA, 

when  a  bar  to  another  suit,  ii.  234-239. 

(See  Judgment.    Estoppel.) 
RESPONDENTIA, 

loans  on,  not  usurious,  ii.  414-416. 
RESTS, 

annual,  in  merchants'  accounts  allowed,  ii.  428,  430,  n.  (x). 
RESTRAINT  OF  TRADE, 

contract  in,  when  void,  ii.  253-259. 
RESTRICTIVE  WORDS, 

when  rejected,  ii.  26,  n.  (I). 


884  INDEX. 

KETIRING  PARTNER, 

liabilities  of,  until  notice,  i.  143-145. 
REVENUE  LAWS, 

have  no  extraterritorial  force,  ii.  82,  n.  (e). 

of  other  countries,  contracts  in  violation  of,  not  void,  ii.  259,  260. 
REVOCATION, 

Of  an  agents  aulhority, 
may  be  at  the  pleasure  of  the  principal,  unless  coupled  with  an  interest, 

or  given  for  valuable  consideration,  i.  58,  and  n.  Qi),  85. 
•whether  that  of  factor  is  revocable  after  advances  by  him,  i.  59,  n.  (/<), 

85. 
until  notice  of,  continues  as  regards  third  persons,  i.  42,  59,  60. 
occasioned  by  death  unless  coupled  with  an  interest,  i.  61. 
by  lunacy,  i.  61,  n.  (/). 
by  bankruptcy,  i.  61,  n.  (Z). 
by  marriage  o?  feme  sole,  i.  61,  n.  (J), 
Of  a  partner's  autJiority, 
by  dissent  of  his  copartners,  i.  156,  168,  169. 
by  dissolution  of  the  firm,  i.  169-173. 
by  assignment  of  a  partner's  interest,  i.  171. 
by  death,  i.  172,  173. 
by  civil  incapacity,  i.  172. 
by  insanity,  i.  172,  173. 
by  a  court  of  equity,  i.  173. 
by  bankruptcy  and  insolvency,  i.  173. 
by  war,  i.  1 73. 
Of  guarantij,  i.  51Q,  517. 
Of  submission  to  arbitration, 

(5ee  Award.) 
RIGHT, 

of  way,  over  land  granted, 

(See  Real  Property.) 
distinction  between,  and  remedy  in  regard  to  contracts, 

(See  Remedy.) 
actions  for  purpose  of  establishing,  ii.  493. 
vested,  ii.  534. 
ROWLETT'S  TABLES,  ii.  407. 


S. 
SABBATH, 

laws  relating  to  the  observance  of, 

(See  Illegal  Contracts  and  Sunday.) 
SAILORS, 

(See  Seamen.) 


INDEX.  885 

SALE, 

contracts  of,  ii.  35,  n.  (d). 

of  real  property,  when  enforced  in  equity,  i.  414. 

■what  a  defence  to  a  note  given  for,  ii.  GG. 
no  implied  warranty  in,  i.  457,  n.  (y),  471. 
within  the  statute  of  frauds,  ii.  311-316. 
at  auction,  effect  of  misdescription,  i.  415-417,  451. 
in  separate  lots,  i.  417. 
when  avoided  by  by-bidding,  i.  417. 
powers  and  liabilities  of  auctioneer,  i.  418- 

420. 
conditions  of  sale,  i.  450. 
of  personal  property,  i.  435-455. 

when  within  the  statute  of  frauds,  ii.  319-341. 
essentials  of,  i.  435. 
'absolute  sale  of,  i.  436-439. 
subject-matter  of,  i.  437,438. 
possibilities  not  coupled  with  an  interest  not  sub- 
jects of,  i.  438. 
price  and  agreement  of  parties,  i.  439,  440. 
consideration  of,  i.  376. 
effect  of,  i.  440,  441. 

on  credit  without  agreement  as  to  delivery,  i.  440. 
the  property  in  the  chattel  passes  by,  i.  440. 
not  until  the  thing  sold  is  identified,  i.  441. 
lien  of  vendor,  i.  441,  449,  476. 
possession  and  delivery  of,  i.  441-448. 
partial  setting  apart  transfers  the  part,  i.  441. 
effect  by  the  civil  law.  Jus  ad  rem  and  jus  in  re,  i. 

441. 
sale  without  delivery  avoided  as  to  third  parties  by 

fraud,  I.  442. 
constructive  delivery,  i.  443. 
duty  of  vendor  and  vendee  until  delivery,  i.  444- 

447. 
for  "  cash  or  credit"  election  of  vendee,  i.  446. 
time  and  place  of  delivery  by  vendor,  i.  444-446. 
of  payment  by  vendee,  i.  447,  448. 
of  payment  in  specific  articles,  i. 
448. 
conditional,  i.  449-451. 

implied  condition  of  payment  of  price,  i.  449. 
express  conditions,  i.  449. 
contracts  of  sale  or  return,  i.  450. 
conditions  of  sale  at  auction,  i.  450,  451. 


886  INDEX. 

SALE  —  Continued, 

sale  with  future  increase  or  addition,  i.  454. 
mortgages  of,  i.  452-455. 
(See  Personal  Property.) 
•warranty  of,  i.  456-475. 
(See  Warranty.) 

of  a  pledge,  by  a  pledgee,  i.  602. 
agent's  power  of,  how  limited,  i.  50,  51. 
(See  Stoppage  in  Transitu.) 
of  notes  and  other  choses  in  action,  not  usurious,  ii.  421-427. 
damages  in  contracts  of,  when  vendee  sues  vendor,  il.  479-483. 

vendor  sues  vendee,  ii.  483-487. 
where  covenants  in  sales  of  real  estate  are  broken,  ii.  503- 
507. 
SA^IPLE, 

sale  by,  constructive  delivery  in,  so  as  to  satisfy  the  requirements  of  the 
statute  of  frauds,  ii.  324. 
SATISFACTION, 

(See  Accord  and  Payment.) 
SCRAWL, 

whether  sufficient  as  a  seal,  governed  by  the  lex  fori,  ii.  100. 
SEAL, 

whether  sufficient,  governed  by  the  lex  fori,  ii.  100. 
when  mere  surplusage,  ii.  227,  228. 

alteration  of  instrument,  by  adding  or  tearing  off,  ii.  227,  228. 
how  far  establishing  the  presumption  of  consideration,  in  equity,  ii.  515. 
SEALED  INSTRUMENT, 

(See  Specialty.     Deed.) 
SEAMEN, 

contracts  in  derogation  of  their  general  rights,  when  held  void,  i.  316, 

317. 
forfeiture  of  tjie  wages  of,  i.  318,  n.  (a). 
domicil  of, 

(See  Domicil.) 
SECRET  PARTNER,  i.  142. 

(See  Dormant  Partner.) 
SEDUCTION, 

when  consideration,  i.  361. 
action  for,  requisites  of,  i.  553. 
j)inii.-lMn('iit  and  damages  for,  ii.  449. 
SEISIN', 

covenants  of,  damages  for  breach  of,  ii.  498. 
SERVANTS, 

may  Ijc  appointed  by  an  agent,  i.  71,  n.  (7). 

what  constitutes  the  iclation  of  master  and  servant,  i,  86. 


INDEX.  887 

SERVANTS  —  Coniinmd. 

master's  responsibility  for  the  servant's  acts,  how  measured,  i.  87. 

■when  he  is  responsible  for  the  servant's  torts,  i.  87,  n.  (««). 

liability  of  employer  for  the  torts  of  contractors,  sub-contractors,  and 

their  servants,  i.  88-92. 
•when  the  owners  of  real  estate  are  liable  for  injuries  committed  on  it 

by  others,  i.  92,  and  n.  {d). 
master  not  answerable  to  one  servant  for  injuries  received  from  another 

engaged  in  his  service,  i.  528. 
exception  in  the  hire  of  slaves,  i.  335. 
when  contract  for  service  is  entire,  i.  520,  528. 
right  to  leave  reserved,  how  exercised,  i.  527. 
«laim  on  employer  for  injury  by  fellow  servant  caused  by  employer's 

negligence,  i.  528. 
contract  of  service  within  the  statute  of  frauds,  i.  529. 

{See  Hiring  of  Persons.) 
damages  in  action  by,  against  emj^loyer,  ii.  468. 
SERVANT  BY  INDENTURE, 
not  assignable,  i.  196,  197. 
SERVICE,  CONTRACTS  OF, 

apportionment  of,  ii.  31,  n.  (?/),  32-35,  and  n.  (jl). 
effect  of  part-performance  of,  ii.  35,  n.  (r/),  171,  n.  (a). 
*■  what  amounts  to  a  day's  work,  ii.  51,  n.  (6). 

not  within  the  statute  of  frauds,  ii.  333-336. 
commission  for  service,  not  usurious,  ii.  410-414. 
when  enforced  in  equity,  ii.  526,  530-532,  533,  n.  (n),  567. 
profits  of  daily  labor  do  not  pass  to  assignee,  upon  insolvency,  ii.  635,  n. 

compensation  for,  when  a  privileged  claim  in  insolvency,  ii.  681. 
SET-OFF, 

what  allowed,  in  the  case  of  negotiable  paper,  i.  214-216. 

by  law  of  foreign  state,  ii.  103. 

of  demands,  when  allowed,  ii.  239,  240. 

power  of  courts  of  equity  to  order,  independent  of  statutes,  ii.  239, 

n.  {v). 
similar  to  the  compensation  of  the  civil  law,  ii.  240. 
of  judgments,  ii.  240-242.  , 

of  costs,  ii.  241. 

allowed  upon  motion,  ii.  242,  and  n.  (m). 
how  affected  by  attorney's  lien,  ii.  242. 
of  a  note,  ii.  242. 
of  a  recovered  verdict,  ii.  242. 
of  amount  due  on  a  bond,  but  not  the  penalty,  unless  considered  as 

liquidated  damages,  ii.  242. 
when  allowed  upon  motion  and  when  to  be  pleaded,  ii.  242,  and  n.  (ni). 


888  INDEX. 

SET-OFF —  Continued. 

allowed  only  where  the  party  holds  the  demand  in  his  own  right,  ii.  243. 
of  a  joint  against  a  separate  debt,  and  of  a  separate  against  a  joint  debt, 

not  allowed,  ii.  244,  245. 
of  a  demand  against  the  party,  having  the  equitable  but  not  the  legal 

interest,  ii.  244. 
when,  in  an  action  for  the  breach  of  a  contract,  part-performance  may 

be  set  off,  ii.  246. 
how  distinguished  from  reduction  and  recoupment,  ii.  246,  247. 
defence  of,  optional,  ii.  247. 
whether  defendant  can  set  off  claim   on  which  suit  is  pending  in  his 

favor,  ii.  247,  n.  (e). 
whether  plaintiff  can  file  counter  set-off  to  defendant's,  ii.  247,  n.  (e). 
what  claims  cannot  be  set  off,  ii.  248,  and  n.  (/),  (g). 
debt,  to  be  subject  of,  must  have  existed  and  belonged  to  defendant  at 

time  of  commencement  of  plaintiff's  action,  ii.  248. 
time  when  the  debt  should  be  due,  to  be  subject  of,  ii.  248. 
right  of  not  taken  away  by  an  agreement  to  pay  in  a  specific  way,  ii. 

248. 
by  a  purchaser  against  a  factor,  ii.  248-251. 

a  consignor,  when  factor  has  lien,  ii.  249. 
a  broker,  ii.  249. 

a  principal,  in  suit  brought  by  agent,  ii.  250.       ■* 
by  or  against  a  trustee,  of  money  due  to  or  from  a  cestui  que  trust,  ii. 

251. 
may  exceed  the  amount  due  on  the  original  action,  ii.  251. 
notice  of,  ii.  251. 
right  of  defendant  to  withdraw,  though  this  exposes  plaintiff's  claim  to 

statute  of  limitations,  ii.  252. 
right  of,  not  affected  by  insolvency,  ii.  638,  670,  C71. 
SEVERABLE   CONTRACTS, 

damages,  and  form  of  action  for  breach  of,  ii.  132,  147,  463,  464. 
SEVERALTY, 

of  contracts, 

(See  Entirety  of  Contracts.) 
SHERIFF, 

payment  of  money  to,  ii.  127,  n.  (c). 

sales  by,  within  the  statute  of  frauds,  ii.  202,  n.  (/•). 

who  wrongfully  seizes  goods,  ii.  457,  n.  (r). 

SHIP, 

•  (See  Vessels.) 
SHIPMASTER, 

to  what  extent  agent  of  the  ownci's,  i.  42. 

powers  of,  i.  66,  67. 

allowed  the  freight  on  money  carried,  by  usage,  ii.  49,  n.  (c). 


INDEX.  889 

SHIPS,  OWNERS   OF, 

■\vhtMi  liable  as  common  carriers,  i.  64G,  G47,  G57. 

agents  of,  to  receive  goods,  i.  G51. 

custom  of,  to  pay  bills  drawn  by  masters,  does  not  bind  them  as  accept- 
ors, ii.  58,  n.  (o). 
SHIPPING-NOTE, 

{See  Bills  of  Lading.) 
SIGNATURE, 

of  an  agent,  "what  sufficient  to  make  the  principal  a  party,  i.  47-49, 102. 

of  a  partner,  for  the  firm,  to  a  sealed  instrument,  i.  94,  n.  (/). 

of  an  attorney,  how  it  must  be  made,  i.  94-96,  118,  119. 

of  an  auctioneer,  whether  it  must  appear,  i.  96,  n.  {gg~). 

of  a  trustee,  when  it  binds  himself,  i.  49,  102. 

of  executors  and  administrators,  when- it  renders  them  personally  liable, 
''i.  108. 

of  a  partner,  when  it  binds  the  firm,  i.  1G3. 

of  an  indorser  to  a  bill  or  note,  i.  204. 

of  the  maker,  i.  208. 
SIGNING, 

required  by  the  statute  of  frauds,  ii.  285-294. 

■when  a  letter  amounts  to,  ii.  285,  and  n.  (c). 

indorsement  of  unsigned  contract  for  the  purpose  of  transfer,  sufficient, 
ii.  285,  n.  (c). 

•writing  of  the  agreement,  not  sufficient,  ii.  285,  286. 

place  of,  ii.  287-289. 

•when  in  printing  or  pencil,  ii.  289,  290. 

by  an  agent,  under  the  statute  of  frauds,  ii.  291,  292. 

by  an  agent  authorized  by  parol,  ii.  293,  294. 
SLANDER, 

in  actions  for,  "where  other  "words  admissible  in  evidence,  ii.  445. 

what  are  actionable  "words,  and  when  damage  must  be  j^roved,  ii.  453. 

action  for,  whether  maintainable  on  the  ground  that  damage  resulted 
from  repetition  of  defendant's  words  by  third  party,  ii.  457,  n.  (r). 

nominal  damages  when  given  for,  ii.  494,  n.  (lo). 
SLAVES, 

Nature  of  the  relation  of  master  and  slave ^  i.  32G-328. 

peculiar  in  this  country,  i.  326. 

maxim  that  the  law  favors  liberty,  how  to  be  understood,  i.  327. 

no  intermediate  state  between  freedom  and  slavery  allowed,  i.  327. 

maxim,  parous  sequiiur  ventrem,  i.  328. 
Action  for  freedom,  i.  328-333. 

in  what  form  it  may  be  prosecuted,  i.  328. 

proceedings  in,  pending  the  trial,  i.  328. 

presumption  of  freedom  or  slavery,  how  it  may  arise  or  be  overcome  in 
either  case,  i.  329,  330. 

presumption  against  every  negro  that  he  Is  a  slave,  i.  330. 
VOL.  II.  75 


890  INDEX. 

SLAVES  —  Coniimied. 

evidence  admissible  to  prove  freedom  or  slavery,  i.  331,  332. 
damages  recoverable  by  plaintiff  on  proof  of  freedom,  i.  332,  333. 
The  capacity  of  slaves  to  contract,  i.  333,  334. 
how  regarded  by  the  law,  i.  333. 
injuries  to  their  persons,  how  punished,  i.  333,  334. 
death  of,  by  excessive  whipping,  murder,  i.  334. 
Liability  of  the  master  for  the  slave,  i.  334-336. 
for  his  torts,  i.  334,  335. 
for  necessaries  furnished  to  him,  i.  336. 
for  medical  attendance  on  him,  i.  336,  527,  n.  (w). 
master  not  bound  by  his  contracts  with  his  slave,  i.  336. 
and  generally  not  even  for  emancipation,  i.  339. 
Of  contracts  between  a  slave  and  one  not  his  master,  i.  336,  337. 
generally  prohibited  by  statute,  i.  336. 

whether  the  contract  of  a  slave  may  be  ratified  by  his  master,  i.  336, 
337. 
Of  gifts  to  a  slave,  i.  337-339. 
contracts  of  emancipation  between  master  and  slave,  and  between  mas- 
ter and  third  persons,  i.  338,  339. 
Tlie  pecidium,  i.  339,  340. 
Of  the  marriage  of  slaves,  i.  340,  341. 
not  legal,  i.  340. 

efiect  of  marriage  during  slavery  on  the  status  of  emancipated  slaves,  i. 
341,  n.  (i). 
Emancipation  of  i.  342-345. 
how  effected,  i.  342. 
taking  effect  on  a  contingency,  i.  342. 
conditions  subsequent  to,  void,  i.  343. 
the  rights  of  creditors,  how  affected  by,  i.  343. 
restrictions  on,  i.  344. 

validity  of,  dependent  on  the  laws  of  the  State  where  the  emancipated 
slaves  reside,  i.  345. 
Of  slaves  for  a  limited  time,  or  statu-liberi,  i.  345-347. 
capacity  to  take  by  testament  or  gift,  i.  346. 
a  court  of  equity  will  not  forbid  their  removal  from  the  State  by  the 

master,  i.  34G. 
condition  of  the  children  of  a  statu-liberi,  i.  346,  347. 
■warranty  in  the  sale  of  a  slave,  i.  459,  n.  (i). 
responsibility  of  the  hirer  of,  i.  603,  n.  (r),  608,  n.  (h). 
liability  of  common-carriers  for  the  transportation  of,  i.  692,  n.  (in),  694, 

n.  (inm). 
how  affected  by  the  lex  domicilii,  ii.  86,  n.  (i). 

execution  of  contract  for  the  benefit  or  manumission  of,  Low  compelled, 
ii.  533,  and  n.  (Jui). 


INDEX.  891 

SOVEREIGN, 

the  rule  contra  proferentem,  not  applicable  to  grant  of,  il.  18. 
SPECIALTY,  CONTRACTS  BY, 
definition  of,  i.  7. 
consideration  of,  i.  354. 

how  proved  and  varied  by  parol  evidence,  i.  355,  356. 
must  be  sued  on  in  the  name  of  a  party  to,  i.  391. 
form  of,  ii.  22-25,  100. 
fraud,  whether  bar  to  action  upon,  ii.  280. 
(^See  Deed.) 
SPECIFIC  ARTICLES, 

bills  and  notes  payable  in,  not  negotiable,  i.  209. 
payment  in,  time  and  place  of,  i.  448. 
tender  of,  ii.  157-168. 

(See  Tender.) 
notes  payable  in,  ii.  162-166. 
damages  for  non-payment  of,  ii.  490-492. 
SPECIFIC  "performance, 

of  a  contract,  when  enforced  by  the  common  law,  i.  412,  413. 
of  a  contract  relative  to  real  estate,  i.  414. 
Of  the  origin  and  purpose  of  this  remedy,  ii.  509-517. 
difference  between  remedies  afforded  by  courts  of  law  and  courts  of 

equity,  ii.  509. 
old  action  of  detinue,  ii.  509. 

origin  and  effects  of  decrees  for  specific  performance,  ii.  509,  n.  (a), 
to  supply  insufficiency  of  the  law,  ii.  509. 
"  equity  follows  the  law,"  by  carrying  out  its  principles,  ii.  509,  and  n. 

(ft),  510,  549,  and  n.  (Z),  i.  571. 
conditions  which  entitle  party  to  decree  for  specific  performance,  ii. 

510,  n.  (d). 
to  be  granted  at  the  discretion  of  the  coui-t  upon  the  facts  of  each  case, 

ii.  510,  and  n.  (/),  511,  570,  end  of  note  (x). 
what  equities  are  to  be  inquired  into,  ii.  510,  n.  (/),  511,  and  n.  (g). 
"  he  who  asks  equity  must  do  equity ;  "  meaning  and  application  of  the 

rule,  ii.  510,  n.  (/). 
if  change  of  circumstances  renders  specific  performance  of  contract  op- 
pressive, or  inequitable,  ii.  511,  n.  (g). 
decree  of,  to  be  granted  when  remedy  at  law  is  inadequate,  ii.  511,  512. 
whether,  when  plaintiff  has  lost  his  remedy  at  law  by  negligence,  ii.  512, 
n.  (k). 
when  legal  remedy  is  inadequate  by  reason  of  its  dependence 

on  the  personal  responsibility  of  the  creditor,  ii.  524. 
against  corporations  and  public  officers,  ii.  511,  n.  (Ji). 
when  land  is  taken  by  railroad  company,  ii.  511,  n.  (K). 
to  enforce,  against  a  purchaser,  covenants  not  running  with 
land,  ii.  512,  and  n.  (k). 


892  INDEX. 

SPECIFIC  PERFORMANCE  —  Continued. 

to  enforce  agreement  against  creditor,  ii.  512,  and  n.  (F). 
■when  both  parties  are  dead,  ii.  512. 
■what  interest  ■will  support  a  bill  for,  ii.  513. 

marriage  settlements,  -when  capable  of  being  rescinded,  ii.  513,  n.  (/). 
concealment  by  contracting  party  of  his  true  character,  effect  of  upon, 

ii.  513,  572,  and  notes  (A),  (i). 
terms  of  contract  and  proof,  necessary  to  obtain,  ii.  513,  n.  (o). 
■when  bill  for  may  be  amended,  ii.  513,  n.  (o). 
form  of  contract  immaterial,  ii.  514. 
of  deed  unrecorded,  ii.  514,  n.  (/»). 

inoperative,  for  ■want  of  acknowledgment,  ii.  514,  n.  (^p). 
void  by  matter  subsequent,  ii.  514,  n.  (p). 
agreement  to  refer  and  a'ward,  ii.  514,  n.  (/>),  536,  n.  (x),  554,  n.  (e). 
bond  -with  penalty,  considered  as  a  contract,  ii.  514,  515. 
for  the  performance  of  ■work,  ii.  530,  n.  (t). 
seal,  how  far  establishing  presumption  of  consideration  in  equity,  il. 

515. 
lease,  ii.  515,  n.  (s),  52G,  527,  530,  n.  (0-     {See  531.) 
decree  may  be  obtained  by  both  parties  to  a  contract,  if  by  one,  ii.  515, 

523,  n.  (0,  527,  n.  (Ic),  541,  n.  (^•). 
rules  of  construction  and  evidence  aj^plied  to  contracts  requiring,  the 

same  as  at  law,  ii.  516. 
omission  in  written  agreement,  how  proved,  ii.  516,  n.  (t). 
equity  will  consider   that  as  done,  which   ought  to  have  been  done  ; 

meaning  and  application  of  the  rule,  ii.  516. 
who  may  be  compelled  to  specific  performance,  ii.  516,  and  notes  (w), 

(x),  517,  and  n.  (y). 
how  far  courts  of  equity  may  go  in  giving  full  relief,  after  having  taken 
jurisdiction  for  the  purpose  of  granting  specific  performance,  II.  533, 
n.  (/),  533,  n.  (n). 
Of  consideration.)  ii.  517-522. 
equitable  construction  of  the  rule  that  promises  without  valuable  con- 
sideration are  void,  ii.  517. 
when  promisee  has  acted  upon  the  faith  of  such  promise,  ii.  517,  518. 
a  benefit  conferred,  received,  or  held  constitutes  a  valuable  considera- 
tion, ii.  518. 
necessity  for  valuable  consideration  confined  to   executory  promises, 

ii.  518. 
inadequacy  of  consideration,  ii.  510,  520. 

between  near  relatives,  ii.  610,  n.  (j). 
contract  benefiting  party  collaterally  interested,  from  Avhom  no  part  of 

consideration  proceeds,  when  enforced,  ii.  520. 
distinction  between  j)roniisos  made  before  and  after  consideration  is  re- 
ceived, ii.  521,  530. 
promises  before  and  after  marriage,  ii.  520,  521. 


INDEX.  893 

SPECIFIC  PERFORMANCE—  Con^inuerf. 

good  or  meritorious  consideration,  ii.  521,  522. 
Of  contracts  relating  to  personalty^  ii.  522-535. 
distinction  between  contracts  relating  to  realty  and  those  relating  to 
personalty  ;  specific  performance  granted  of  the  former,  not,  in  gen- 
eral, of  the  latter,  ii.  522. 
ground,  force,  and  scope  of  this  distinction,  ii.  523,  524. 
decree,  when  granted  to  enforce  contracts  relating  to  personalty,  ii.  522, 

n.  (.s),  523. 
contract  of  sale  when  creating  the  relation  of  trustee  and  cestui  que 

trust  between  vendor  and  vendee,  ii.  522,  n.  (5). 
if  decree  would  effect  only  the  payment  of  money  or  its  equivalent, 

ii.  523. 
if  vendee  can  avail  himself  of  this  remedy,  vendor  may,  ii.  523,  n.  (J). 

(See  515,  and  527,  n.  (k).). 
if  legal  remedy  is  inadequate  by  reason  of  its  dependence  upon  the 

personal  responsibility  of  defendant,  ii.  523,  524. 
if  surety  has  claims  for  contribution  against  co-sureties,  some  of  whom 

are  insolvent,  ii.  524. 
in  agreements  respecting  partnership,  ii.  524,  525. 
in  agreement  by  partner  not  to  engage  in  other  business,  ii.  525. 
contracts  for  personal  services,  ii.  526,  530,  and  notes,  531,  532,  533, 

n.  (w). 
agreement  to  sell  the  good-will  of  trade,  ii.  526. 

to  sell  the  business  of  an  attorney,  ii.  526,  n.  (g). 

for  lease,  or  renewal  of  lease,  ii.  415,  n.  (s),  526,  527,  530, 

n.  (t).     (See  531.) 
concerning  annuities,  ii.  527,  528. 
for  the  purchase  of  debts,  ii.  527. 
to  keep  banks  of  river  in  repair,  ii.  527. 
to  pay  a  specified  sum,  and  an  additional  sum  for  article 

manufactured,  ii.  528. 
for  the  sale  of  shares  and  stock,  ii.  528,  529. 
for  the  exclusive  property  in  certain  partnership  books,  ii. 
528,  n.  (r). 
distinction  between  contract  to  build,  and  to  repair  a  house,  ii.  530. 
contract  for  defined  work  upon  land,  ii.  531. 
contracts  relating  to  realty,  not  enforceable  in  equity  when  breach  of 

can  be  adequately  compensated  for  in  damages,  ii.  531. 
covenants  in  leases  enforced  by  injunction,  ii.  531,  532,  and  notes.    (See 

533,  534.) 
the  breach  of  negative  covenants  prevented  by  injunction,  ii.  531,  n.  (v). 
agreements  by  tenants  to  surrender  estate  to  landlord,  ii.  531,  n.  (v). 
contracts  relating  to  personalty  enforced  when  the  effect  of  breach  of 
cannot  be  estimated  with  exactness,  ii.  532. 

75* 


894  INDEX. 

SPECIFIC  PERFORMANCE—  Continued. 

specific  performance  of  personalr  acts,  when  decreed,  ii.  532. 
as  indorsement  of  note,  ii.  532. 
renewal  of  lease,  ii.  532. 
charging  annuity,  ii.  532. 
investment  of  money,  ii.  532. 
execution  of  contract  for  the  benefit  or  manu- 
mission of  slaves,  ii.  533,  and  n.  (lid). 
agreement  to  insure,  ii.  533. 
how  far  preiium  affectionis  influences  the  court  in  decreeing  specific  per- 
formance, ii.  533. 
when  personal  property  is  detained  in  breach  of  trust,  ii.  533. 
when  breach  of  contract  may  be  compensated  for  in  damages,  as  to  part 
only  of  subject-matter,  specific  performance  granted  of  entire  con- 
tract, ii.  533. 
not  ground  of  demurrer  to  bill,  that  it  seeks  specific  performance  of 

contract  relating  to  personalty,  ii.  533. 
injunction,  when  granted,  ii.  533,  534.     (See  531,  and  n.  (v).) 
specific  performance  granted  when  promise  is  jiositive ;  injunction  when 

nei^ative,  — force  and  limitations  of  this  rule,  ii.  533,  534. 
eflfect  of,  when  in  a  contract  there  is  an  agreement  to  act,  and  an  agree- 
ment of  restraint,  not  the  converse  of  each  other,  ii.  533, 
n.  (n). 
when  ancillary,  ii.  533,  n.  (n). 
United  States  Supreme  Court  less  disposed  to  regard  distinction  be- 
tween realty  and  personalty  than  English  courts,  ii.  535. 
power  given  to  the  State  courts  as  to  specific  performance,  ii.  536. 
Of  contracts  relatinrj  to  the  convojance  of  land,  ii.  536-545. 

when  agreement  contemplates  another  remedy  for  default,  ii.  536,  n.  (w). 
whether  equity  will  protect  vendor  less  readily  than  vendee,  ii.  536,  n. 

when  equity  will  remove  an  obstacle  in  the  way  of  a  present  application 

for  specific  performance,  ii.  536,  n.  (x). 
specific  performance  of  an  award  when  decreed,  ii.  536,  n.  (x),  554,  n. 

(e).     (&e  514,  n.  (;)).) 
when  tlie  land  is  in  a  foreign  country,  ii.  536. 
defect  in  title,  ii.  53  7-540. 

reference  out  of  court  to  remove,  ii.  537,  n.  (z). 

waiver  of;  pleadings,  ii.  537,  notes  (a),  (h). 

costs  of  suit  on  account  of,  il.  537,  n.  (a). 

vendor  must  prove  title  noi  covenant  for  tide,  il.  538,  n.  (c). 

uiiliiiportant  ol)jcctIons  to,  ii.  538,  and  n.  (d). 

unfavoral)lc  decision  of  inferior  (■curt  docs  not  render  title 

doubtful,  ii.  539,  n.  (/). 
adverse  02)niIons  of  conveyancers  and  lawyers,  ii.    539, 
540. 


INDEX.  ^^'^ 

SPECIFIC  PERFORMANCE—  Conimuef/. 

■when  readily  removable,  ii.  540. 

Low  and  when  removable  so  as  to  perfect  the  title,  effect 

of  removal  of,  ii.  540,  and  notes  ((),  (./)• 
if  vendor  unfairly  conceals  defect,  which  is  subsequently 

removed,  ii.  540,  n.  (7). 
for  purchaser,  not  seller,  to  object  to,  ii.  540. 
when  purchaser  can  insist  upon  conveyance  of  part  of 

land,  if  title  to  the  remainder  has  failed,  ii.  541. 
mutuality  in  contracts,  ':i.  541,  n.  (0- 
time  when  "  of  the  essence  of  the  contract,"  ii.  541-545. 
chan-re  of  circumstances,  effect  of,  upon  question  of  time,  u.  542,  n.  (p). 
time,°though  not  originally  of  the  essence  of  the  contract,  may  become 

so,  ii.  542,  n.  (7). 
different  rules  at  law  and  in  equity,  11.  543,  n.  (s). 
prima  facie,  time  not  essential  in  equity,  ii.  543,  n.  (s). 
otherwise,  when  property  is  perishable,  or  wanted  for  an   mamediate 
purpose,  or  when  vendor  has  determinable  Interest  only,  or  by  ex- 
press stipulation,  ii.  543,  n.  (s).  . ,  ^    ^ 
express  agreement  of  parties  upon  particular  time,  what  evidence  that 

time  is  of  the  essence  of  the  contract,  II.  543. 
modern  and  American  tendency,  II.  544,  545. 
0/the  Statute  0/ Frauds,  Ii.  546-557.^^ 
effect  of  In  equity  upon  contracts,  ii.  546. 
what  is  a  compliance  with  the  statute,  II.  546,  n.  (w)- 
parol  evidence,  when  admissible  to  connect  parts  of  a  contract,  u.  546, 
n.  (w). 
when  to  prove  additional  consideration,  II.  547,  n.  (~). 

provisions  of,  Ii.  547. 

undelivered  deed,  II.  546,  n.  (v). 

when  memorandum  Is  lost,  ii.  546,  n.  (v). 

agent,  signature  of,  Ii.  546,  n.  {w). 

when  equity  requires  the  contract  to  be  written,  ii.  546. 

when  contract  In  writing  is  completed,  II.  546,  notes  (v),  547,  (z). 

parol  evidence  admissible  to  rebut,  but  not  to  raise  an  equity,  11.  o4/. 

when  simultaneous  parol  agreement  Is  entered  Into  In  modification  ot 

written  agreement,  Ii.  547,  n.  (h).     (See  566,  n.  (r/).) 
evidence  of  simultaneous  parol  agreement,  Ii.  548,  n.  (<?). 
statute  of  frauds  must  be  pleaded  to  defeat  contract  not  In  writing,  11. 

548. 
what  constitutes  sufficient  pleading,  II.  548,  n.  (/).  _         __ 

principles  of  equity,  how  affected  by  general  statute  provisions,  u.  550, 

n.  (/). 
part  performance,  ii.  550-555. 

how  pleaded,  ii.  550,  n.  (s). 
what  constitutes,  II.  551-554. 


896  INDEX. 

SPECIFIC  PERFORMANCE  —  Continued. 

payment  of  money  not,  ii.  552. 

marriage  settlements,  when  taken  out  of  the  statute 
by,  ii.  555. 
instances  where  equity  has  disregarded  the  statute  of  frauds,  ii.  555. 
parol  promise  of  executor,  ii.  555.  • 

of  heir,  ii.  555. 
equity  will  correct  a  mistake,  ii.  556. 
parol  evidence  when  admissible  to  show  mistake,  ii.  556. 
mistake  of  law  ;  ignorantia  legis  neminem  excusat,  ii.  557. 
Of  compensation,  ii.  558-562. 
when  change  or  mistake  renders  exact  execution  of  contract  impossible, 

ii.  558. 
when  party  is  entitled  to,  ii.  558. 

amount  of,  how  ascertained  at  law  and  in  equity,  ii.  558. 
what  failure  or  deficiency  will  prevent  decree  for  specific  performance, 

ii.  558. 
compensation  not  damages,  ii.  559. 

force  of  this  rule,  ii.  559. 
for  uncertain  and  contingent  diminution  of  estate,  ii.  559. 
indemnity  as,  ii.  559,  n.  (r). 

purchaser  not  bound  to  take  property  different  from  what  he  bargained 

for,  ii.  559. 
as  lease  for  underlease,  ii.  560. 
as  underlease  for  lease,  ii.  560. 
life-  estate  for  fee,  id. 
reversion  for  present  estate,  id. 
purchaser  may  compel  execution  and  payment  of  compensation,  if  estate 

is  less  than  that  bargained  for,  ii.  560. 
whether  equity  will  decree  compensation,  when  it  cannot  decree  spe- 
cific performance,  ii.  560. 
Impossibility  and  other  defences,  ii.  562-578. 

impossibility,  on  the  part  of  the  court,  to  enforce  its  decree,  ii.  563. 
as  to  comjiel  stage  actor  to  perform  his  part,  ii.  563. 
on  the  part  of  defendant,  ii.  563-567. 
as  where  an  act  is  to  be  done  by  some  other  party  before 

defendant  can  act,  ii.  563,  n.  (g). 
when  price  is  to  be  settled  by  arbitration,  ii.  563,  n.  (g). 
where  literal  performance  is  impossible,  ii.  563,  n.  (g). 
what  would  not  be  a  defence  at  law  may  be  in  equity,  ii. 

564. 
except  by  violation  of  law,  ii.  564. 
representatives  of  party  bound  to  perform  his  agreement, 

ii.  564. 
agreement  to  devise  property,  ii.  565. 


INDEX.  897 

SPECIFIC  PERFORMANCE— Con«OT«eJ. 

of  performing  contract,  to  be  distinguished  from  impossi- 
bility of  using  consideration  as  contemplated,  ii.  565. 

on  account  oftuant  of  mutuality,  ii.  5G5-570. 

■when  plaintiff  cannot  perform  his  part  of  the  agreement, 
V  ii.  565. 

when  j^laintliFyaZ/s  to  perform,  and  the  court  cannot  com- 
pel performance  of,  his  part  of  the  agreement,  ii.  566. 

in  case  of  lease,  ii.  566,  n.  (9),  567. 

insolvency  of  intended  lessee,  ii.  567. 

condition  precedent  to  relief  by  specific  performance,  ii. 
566,  n.  {q). 

parol  agreement  collateral  to  written,  ii.  566,  n.  {q).     (5'ee 
547,  n.  (&).) 

if  infant  seeks  specific  performance,  ii.  290,  n.  (k),  5G6. 

agreement  to  purchase  article  at  j^articular  place  only,  ii. 
566. 

probable  disability  of  plaintiff  to  perform  his  part  of  con- 
tract, ii.  567. 

as  insolvency  of  plaintiff,  ii.  567. 

contracts  between  servant  and  employer,  ii.  567. 

what  mutuality  of  remedy  is  necessary  to  entitle  party  to 
decree  for  specific  performance,  ii.  567,  n.  (x). 

want  of  mutuality  by  act  of  defendant,  ii.  567,  n.  (x). 

want  of  mutuality  by  the  act  of  God,  ii.  567,  n.  (x). 

infirmity  of  title,  ii.  567,  n.  (x). 

where  one  party  only  signed  agreement,  ii.  567,  n.  (x). 

waiver  of  want  of  mutuality  by  party  entitled  to  set  up 
this  defence,  ii.  567,  n.  (x). 

assent  to  the  modification  of  agreement  by  party  sought  to 
be  charged,  ii.  567,  n.  (x). 

in  contract  of  sale  of  wife's  land,  ii.  567,  n.  (x). 

what  mutuality  of  agreement  is  necessary  to  entitle  party 
to  decree  for  specific  performance,  ii.  567,  n.  (x). 

distinction  between  want  of  consideration  and   want  of 
mutuality,  ii.  567,  n.  (x). 

when  plaintiff  has  performed  part  of  his  share  of  the  con- 
tract, and  is  prevented  from  performing  the  rest,  ii.  568. 
when  specific  performance  is  impossible,  but  will  become  possible,  ii. 

571. 
enforcement  of  contract  with  married  woman,  Ii.  571. 
covenant  of  husband,  that  wife  shall  do  certain  acts,  ii.  572. 
good  faith  requisite,  II.  573.  . 

contract  tainted  with  fraud,  ii.  572. 
representations  and  concealments,  ii.  513,  572,  and  notes  (Ji),  (J). 


898  INDEX. 

SPECIFIC  PERFORMANCE  —  Continued. 

construction  of  representations,  ii.  573,  n.  (i). 
puffer  at  auction,  ii.  572,  n.  (h). 
promise  to  alter,  and  oral  waiver  of,  contract,  ii.  573. 
waiver  or  variation  of  contract,  ii.  369,  n.  (?/),  574,  and  n.  (^•). 
prevarication  in  bill,  ii.  574.  % 

delay  in  filing  bill,  ii.  574. 
oppressiveness  of  bargain,  ii.  574. 

intoxication  of  party  when  agreement  was  made,  ii.  575,  and  n.  (r). 
when  the  rights  of  parties  have  been  determined  at  law,  ii.  575. 
when  contract  is  illegal,  or  against  the  policy  of  law,  ii.  575. 

as  that  business  should  be  carried  on  in  retiring 
partner's  name,  ii.  576,  n.  (u). 
when  part  of  contract  only  is  illegal,  ii.  576,  and  n.  (y). 
on  the  new  actions  of  mandamus  and  injunction  of  the  English  Pro- 
cedure Act,  ii.  577. 
SPECIFIC   TERMS, 

when  taking  the  sense  of  generic,  ii.  8. 
SPENDTHRIFTS, 

under  guardianship,  by  statute,  disability  of,  i.  314,  315. 
SPONTANEOUS   PRODUCTS    OF   LAND, 

whether  chattels,  ii.  314. 
STAGE-COACHES, 

liability  of  owners  of,  as  common  carriers  of  goods,  i.  643,  656. 
for  baggage  of  passengers,  i.  6  73. 
STAKEHOLDERS   AND   WAGERS, 

rights  of  parties  to  the  deposit,  ii.  138,  140. 
illegal  wagers,  ii.  139,  261,  262. 

whether  the  situation  of  a  stakeholder  is  similar  to  that  of  an  arbitrator, 
so  that  either  party  can  withdraw  the  wager  before  decision,  ii.  139, 
and  n.  (f). 
wagers  regarded  with  disfavor  by  the  courts  and  made  illegal  by  statute 

8  and  9  Vict.  ii.  139. 
duty  of  auctioneer  as  stakeholder,  ii.  139. 
money  lent  for  the  purpose  of  betting  not  recoverable  by  the  lender, 

ii.  261,  n.  (/). 
stakeholders  not  liable  for  money  paid  over  on  illegal  wager,  ii.  139,  n. 

(x),  139. 
law  otherwise  iu  New  York  by  statute,  ii.  139,  n.  (xd). 
STATE, 

the  rule,  contra  proferentem,  not  apjjlicablc  to  grants  of,  ii.  18. 
STATES, 

comity  of, 

(6'ee  Plack,  Law  of.) 


INDEX.  899 

STATES— Continued. 

whether  the  States  of  the  Union  are  foreign  as  to  judgments,  ii.  119,  n. 

(p),    123-126,    232,   n. 

as    to   bankrupt  laws,   ii. 
709,  710. 
contracts  between,  or  between  States  and  individuals,  how  affected  by 
»        the  United  States  Constitution,  ii.  704,  and  n.  (a). 

courts  of,  powers  of  in  respect  to  decrees  of  specific  performance,  ii.  535. 
STATUTE, 

construction  of,  much  the  same  as  of  simple  contract  and  deed,  ii.  6. 

general   following  particular  words,  applicable  to  per- 
sons ejusdem  generis,  ii.  13,  n.  (r),  262  a,  n.  (he). 
meaning  of  the  term  in  the  civil  law,  ii.  86,  n.  (i). 
STATUTE  OF  FRAUDS, 

{See  Frauds,  Statute  of.) 
STATUTE  OF  LIMITATIONS, 

{See  Limitations,  Statute  of.) 
STATUTES  OF  USURY, 

{See  Usury.) 
STAY-LAWS, 

when  constitutional,  ii.  707-709. 
STOCK, 

{See  Corporation.) 
different  meanings  of  the  word,  ii.  72,  n.  (m). 
how  transferred,  ii.  83,  n.  {g). 
personal   property,  though  the  whole  property  of  the  corporation  be 

real,  ii.  315,  330-332. 
contracts  relative  to,  within  the  statute  of  frauds,  ii.  315,  330-332. 
agreement  for  sale  of,  when  enforced  in  equity,  ii.  528,  529. 
usury  in  loans  on,  ii.  388-390. 

damages  in  debt  on  bonds  for  replacement  of,  ii.  472,  n.  (i),  480,  n.  {y). 
STOLEN  GOODS, 

{See  Auctioneer  and  Finder.) 
STOPPAGE  IN  TRANSITU, 

right  of,  defined,  i.  476,  481. 

created  by  the  insolvency  of  vendee,  i.  476,  477,  478, 
whether  discovery  of  material  misrepresentation  by  buyer  gives  the 

seller  the  right  of,  i.  476. 
notice  of,  to  whom  to  be  given,  i.  477,  478. 
effect  of,  i.  479,  480,  481. 
to  whom  the  right  of  belongs,  i.  481,  482. 
right  of,  defeated  by  delivery  to  the  consignee,  i.  483-487. 

by  indorsement  of  the  bill  of  lading  by  consignee,  i. 
487-489. 


900  INDEX. 

STOPPAGE  IN  TRANSITU—  Continued. 

effect  of,  with  consent  of  the  consignee  or  buyer,  i.  4S9,  490. 
by  an  unauthorized  agent,  when  it  may  be  ratified,  i.  45,  n.  (?/). 
right  of  insolvent  to,  accrues  to  assignee,  ii.  644. 

goods  consigned  to  insolvent,  with  right  of  stoppage  in  consignor,  do  not 
pass  to  assignee,  ii.  644,  n.  (x). 
STRANGER, 

effect  of  alteration  by,  ii.  223.  ^ 

not  affected  by  award, 

{See  Award.) 
STPdCTISSnil  JURIS, 

whether   a   contract   of  guaranty   is   to  be    construed  as,  ii.  21,  and 
n.  (w). 
SUB-AGENT, 

notice  to,  is  notice  to  principal,  i.  64,  n.  (m). 
when  one  may  be  appointed  by  an  agent,  i.  71,  72. 
whose  agent  the  substitute  is,  i.  72,  77. 
to  whom  liable  to  account,  i.  76. 
payment  to,  not  A^alid,  ii.  126. 
SUBJECT-MATTER, 

of  conti'acts,  I.  411-413. 
influence  of  upon  construction,  ii.  11. 
SUBMISSION, 

{See  Award.) 
SUBSCRIPTION  AND  CONTRIBUTION, 
a  valid  consideration,  i.  377-379. 
effect  of  seal  upon,  i.  376. 
SUFFERING, 

mental,  disregarded  in  computing  damages,  ii.  443,  444. 
SUIT, 

notice  of,  how  given  to  absent  defendant,  ii.  100,  and  u.  (Zt). 
pendency  of  another,  a  defence,  ii.  231-234. 

{See  Pendency  of  Another  Suit.) 
in  whose  name  to  be  brought  in  case  of  insolvency  or  bankruptcy,  ii. 

623,  624,  631. 
for  part  of  claim,  as  for  interest  without  principal,  effect  of,  ii.  132,  147, 

463,  464. 
payment  of  debt  and  costs  upon  one  action,  will  not  defeat  action  for 
nominal  damages,  against  another  party  for  same  cause  of  action,  ii. 
130,  n.  («). 
aAvard  of  discontinuance  of,  ii.  209. 

upon  claim  submitted  to  arbitration  revokes  submission,  ii.  219  h. 
SUNDAY, 

cxcliidcil  in  (lie  couiiiiitalion  of  time  for  the  demand  of  bills  and  notes, 
and  iif)licc  llicrcof,  i.  234. 


INDEX.  901 

SUNDAY  —  Continued. 

■when  last  day  of  performance  comes  on,  or  "when  intervening  between 
first  and  last  days  of  performance,  ii.  178,  179. 
SUNDAY  LAW, 

{See  Illegal  Conteacts.) 
SUPPRESSIO  VERl,  ii.  273,  274. 
SURETIES, 

contribution  between,  i.  32-37. 

representatives  of  deceased  surety  liable  for,  i.  32,  n.  (e). 

(^ee  Contribution.    Joint  Parties.) 
del  credere  factor  liable  as  surety,  i.  78. 

rights  of,  against  the  principal,  on  payment  of  the  debt,  i.  393,  394, 
for  the  payment  of  a  debt, 

(^ee  Guaranty  and  Suretyship.) 
appropriation  of  payments  for  the  benefit  of,  ii.  145. 
new  promise  of  one  of  several,  when  sufficient  to  revive  a  debt  against 

the  others,  barred  By  the  statute  of  limitations,  ii.  362. 
when  the  statute  of  limitations  begins  to  run  against  the  claims  of,  ii. 

371. 
damages  in  an  action  by,  ii.  461,  462. 
when  surety  can  sue  principal,  ii.  461. 
claim  of,  for  contribution  against  co-sureties,  some  of  whom  are  insolvent, 

how  enforced  in  equity,  ii.  524. 
may  prove  claim  against  insolvent  principal,  ii.  661,  662,  and  n.  (_;"). 
SURETYSHIP, 

{See  Guaranty  and  Suretyship.) 
SURRENDER, 

of  leases  by  operation  of  law,  i.  428,  429. 
SWEEPING  CLAUSES,  ii.  13,  n.  (r). 


T. 
TAXATION, 

power  of,  whether  alienable  by  the  State,  ii.  692,  698,  699. 
abandonment  of,  not  to  be  presumed,  ii.  527. 
TECHNICAL  TERMS, 

meaning  of,  how  determined,  ii.  4,  n.  (6),  5,  67,  68. 
TELEGRAPHS, 

obligations  of,  and  whether  common  carriers,  i.  647. 
TENANT, 

liability  of,  to  pay  rent  and  taxes,  i.  422-426. 
to  repair,  i.  424. 

on  his  covenant  not  to  assign  or  underlet,  i.  426. 
cannot  recover  of  his  landlord  for  repairs  made  by  him,  i.  541,  n. 
forfeiture  by,  how  caused  and  waived,  i.  426,  427. 
VOL.  II.  76 


902  INDEX. 

TENANT  —  Continued. 

surrender  by,  i.  428,  429. 
right  of,  to  away-going  crops,  i.  429,  430. 
to  fixtures,  i.  430,  431. 
to  notice  to  quit,  i.  432-434. 

{See  Real  Property.    Lease.) 
allowed  to  take  away-going  crops,  ii.  49,  n.  (:;),  59,  n.  {q). 
TENANTS  IN  COMMON, 

joint  suits  by,  i.  20-26,  n.  (f). 

{See  Joint  Parties,  passim.) 
difference  between,  and  partners,  i.  138,  147-151. 
former  partners  after  dissolution,  i.  69. 
TENDER, 

to  agent  is  tender  to  the  principal,  i.  42,  n.  (i). 

by  the  lessee  of  rent,  i.  424. 

of  freight-money  to  a  common  carrier,  i.  649. 

when  allowed,  ii.  148,  149. 

plea  of,  admits  the  contract,  ii.  149. 

effect  of,  ii.  149. 

defeated  by  a  subsequent  demand  and  refusal,  ii.  157. 
when  made  in  court,  effect  of,  ii.  149,  n.  (I). 

stops  accruing  damages  and  interest,  and  gives  defendant  costs,  ii.  150. 
to  whom,  and  by  whom  to  be  made,  ii.  150,  151,  160. 
ratification  of,  renders  good,  ii.  151. 
in  behalf  of  idiot  or  infant,  ii.  151. 
amount  required,  ii.  151,  153. 

need  not  be  made  for  charge  of  attorney  for  writing  letter,  ii.  151,  n.  (r). 
if  agent  at  his  own  risk  supplies  deficiency  in,  ii.  151. 
at  common  law,  ii.  148,  n.  (g),  153,  154. 
by  statute,  ii.  153,  154. 
■what  constitutes  a,  ii.  154,  155,  188,  n.  (g"). 
must  be  unconditional,  ii.  155. 

whether  a  receipt  may  be  required  by. the  debtor,  ii.  155,  156. 
in  bank-bills,  if  objected  to  not  valid,  ii.  133,  157. 
may  be  in  creditor's  own  overdue  notes,  ii.  154,  n.  (a). 
Of  chattels,  ii.  157-168. 
what  acts  amount  to,  ii.  157-160,  164. 
effect  of,  ii.  159,  IGO. 
■what  profcrt  necessary,  ii.  160. 
must  be  unconditional,  ii.  160. 
by  or  to  an  agent,  ii.  160. 
time  or  place  of,  ii.  160-163. 

if  the  time  fall  on  Sunday,  ii.  101,  n.  (y). 
at  what  time  of  the  day,  ii.  161,  n.  (u). 
wlien  deliverer  must  seek  receiver,  he  need  not  foUcw 
hiui  out  of  the  State,  ii.  162. 


INDEX.  903 

TENDER—  Continued. 

payee  not  bound  to  receive  property  before  day  of  pay- 
ment, ii.  163,  n.  {g). 
of  money  or  chattels,  when  the  promisor  may  elect,  il.  163. 
of  a  part,  when  the  contract  is  entire,  ii.  163. 
on  a  contract  to  deliver,  reasonably  construed,  ii.  164. 
demand  for  chattels  deliverable  on  demand  must  be  reasonable,  ii.  164. 
at  a  certain  time  or  place,  when  a  contract  discharged  by,  ii.  164. 
when  the  property  passes  by,  ii.  165-168. 
of  deed,  ii.  168,  188,  n.  {g). 
quality  of  articles  tendered,  ii.  168,  n.  {q). 
must  conform  to  regulations  of  law,  if  such  exist,  ii.  12,  n.  (^),  168, 

n.  (7). 
other  defences  ^ro  tanto  in  the  nature  of  tender,  ii.  160. 
TENURE, 

of  private  property,  ii.  693. 
TESTATOR, 

how  may  sign  will, 

{See  Will.) 
THREATENING  LETTER, 

{See  Letter.) 
TICKET, 

through,  effect  of,  i.  688,  718. 
passenger  bound  to  show,  i.  700,  718. 
TIME, 

when  notes  on  demand  become  overdue,  i.  217-219. 
of  presentment  of  bills  for  acceptance,  i.  221,  222. 

of  negotiable  paper  for  payment,  i.  223,  224. 
of  forbearance,  as  a  consideration,  i.  366,  367.     • 
offers  on,  acceptance  of  {See  Assent),  i.  403-408. 
of  delivery  by  vendor,  i.  444,  446. 
of  payment  by  vendee,  i.  447,  448. 
of  the  consideration  of  a  contract,  i.  391-398. 

reasonable,  for  performance  of  contract  when  none  is  fixed,  ii.  47,  173. 
*      a  question  of  law,  ii.  47,  173. 

by  what  rule  determined,  ii.  47,  174. 
for  limitation  of  actions  and  presumption  determined  by  the  lex  fori,  ii. 

102-104. 
when  essential  in  the  performance  of  a  contract,  ii.  172. 
computation  of,  when  certain  days  are  exclusive  or  inclusive,  ii.  15,  n. 

{x),  175-178. 
when  a  suit  may  be  brought  for  breach  of  contract  before  the  expiration 

of  the  time  of  performance,  ii.  179,  188. 
of  tender,  ii.  148,  n.  {g),  153,  160-163. 
when  of  the  essence  of  the  contract,  in  equity,  ii.  541-545. 
question  of,  in  respect  to  bankruptcy  and  insolvency,  ii.  656-660. 


904  INDEX. 

TITHES, 

rector  may  enter  close  and  carry  away,  ii.  46,  n.  (m). 
TITLE, 

assignment  of  covenants  for,  i.  199,  200. 

of  holder  of  negotiable  paper,  how  impeached,  i.  206,  211,  213. 

failure  of,  ii.  494-508. 

defect  in,  what  constitutes,  how  affecting  decree  for  specific  performance, 
and  how  remedied,  ii.  537-540,  567,  n.  (x). 

(5ee  Specific  Perfokmance.) 
TORTS, 

of  agent,  ratification  of  by  principal,  i.  45,  n.  (t(),  47,  n.  (w?/). 

of  servant,  responsibility  of  master  for,  i.  86-92. 

of  partner,  responsibility  of  his  copartners  for,  i.  159. 

of  infants,  their  liability  for,  i.  264-267, 

of  slaves,  liability  of  the  master  for,  i.  334,  335. 

whether  a  tort  founded  upon  a  contract  violating  the  Sunday  laws  can 
be  redressed,  ii.  262/,  262  g. 

promises  to  answer  for  another's,  within  the  statute  of  frauds,  ii.  309. 

damages  for,  ii.  446-454,  456. 
TRADE, 

contracts  in  restraint  of,  when  void,  ii.  253-259. 

probable  ground  of  considering  illegal,  ii.  254-257,  259. 

agreements  for  sale  of  good- will  of,  when  enforced  in  equity,  ii.  526. 
TRADE  MARKS, 

right  of  aliens  to  protection  in  the  use  of,  i.  324. 
TRANSFER, 

of  bills  and  notes, 

(See  Indorsement.) 
TRESPASS, 

when  tender  may  be  made  for,  ii.  149. 

when  a  bar  to  a  real  action,  ii.  236-239. 

for  mesne  profits,  damages  for,  recoverable,  ii.  494,  496,  500. 
TROVER, 

when  a  bar,  ii.  235,  n.  (w),  237. 

damages  in  action  of,  ii.  470-477.  * 

TRUST, 

breach  of, 

(See  Breach  of  Trust.) 

property  held  in,  whether  passing  to  assignee  upon  insolvency  of  trustee, 
ii.  634,  635. 
TRUST  AND  CONFIDENCE, 

a  valid  consideration,  i.  372. 
TRUSTEES, 

Orif/i.n  of  Irustx,  i.  100. 

how  administered,  i.  100. 


INDEX.  905 

TRUSTEES—  Continued. 

Classification  of  trusts,  i.  101,  102. 

simple  and  special,  i.  101. 

ministerial  and  discretionary,  i.  101. 

■with  a  power  annexed,  and  mixture  of  trust  and  power,  i.  101. 

private  and  public,  i.  101. 
Private  trustees,  i.  102-104. 

■who  are,  i.  102. 

estate  of,  i.  102. 

■when  personally  bound  by  their  contracts  as  trustees,  i.  102. 

■when  chargeable  •with  simple  or  compound  interest,  i.  103. 

liability  of  joint  for  each  other,  i.  29,  30. 

cannot  buy  the  trust  property  for  themselves,  or  purchase  their  o-wn 
for  the  cestui  que  trust,  i.  75,  104. 
Public  trustees,  i.  104-106. 

ordinarily  not  personally  responsible  for  their  contracts  for  the  public, 
i.  104. 

■when  personally  responsible,  i.  105,  106. 

guardians  are  trustees,  i.  113. 

joint,  payment  to  one  of,  ii.  128. 

payment  to,  binds  cestui  que  trust,  ii.  128. 

release  by,  when  set  aside,  ii.  222. 

set-off  against,  ii.  244,  251. 

fraud  by,  ii.  270. 

operation  of  United  States  bankrupt  law  of  1841  upon,  ii.  590. 

may  prove  in  insolvency  for  cestui  que  trust,  ii.  672. 


u. 

UNCERTAINTIES, 

explained  by  extrinsic  evidence,  ii.  75. 
UNIMPORTANT  PARTS  OF  CONTRACT, 

suppressed  to  sustain  the  rest,  ii.  1 7. 
UNLAWFUL  CONTRACT, 

(See  Illegal  Coxtract.) 
USAGE, 

effect  of  in  determining  the  authority  of  an  agent,  i.  39,  52. 

will  not  excuse  disobedience  by  an  agent  to  positive  instructions  by  his 
principal,  i.  G9. 

may  justify  an  agent  in  appointing  a  sub-agent,  i.  72. 

sometimes  defined  by  law,  i.  73. 

factor  must  conform  to  usages  of  trade,  i.  80. 

effect  of,  in  regulating  demand  of  bills  and  notes,  and  notice  of  non- 
payment, i.  229. 

effect  of,  in  relation  to  bank-checks  and  discount  of  notes  by  banks,  L 
229. 

76* 


906  INDEX. 

USAGE  —  Continued. 

rejected  to  affect  warranty,  i.  468. 

delivery  to  a  common  carrier,  how  affected  by,  I.  654. 

by  a  common  carrier,  how  affected  by,  I.  661,  663,  665-670. 
(See.  Construction  of  Contkacts.) 

in  the  use  of  language,  ii.  12,  n.  (7),  48-52. 

in  policies  of  insurance  and  bills  of  lading,  ii.  48,  n.  (?/),  49,  n.  (z),  50, 
n.  (a),  59,  n.  (7). 

in  leases  where  the  custom  is  local,  ii.  49,  n.  (2). 

in  delivery  of  goods  by  common  carrier,  ii.  49,  n.  (z). 

in  the  remission  of  money  by  an  agent  to  his  principal,  ii.  49,  n.  (z). 

in  the  business  of  banks,  ii.  49,  n.  (2). 
of  brokers,  ii.  49,  n.  (z). 

■when  the  freight  of  money  is  allowed  to  the  master  of  vessel  by,  ii.  49, 
n.  (.). 

influence  of,  upon  the  law  merchant,  ii.  52. 

basis  of  the  common  law,  ii.  52,  53. 

must  be  established,  uniform  and  general,  ii.  53,  54. 

ambiguities  explained  by,  ii.  55. 

may  explain  ambiguous  words,  ii.  55. 

affixes  to  a  word  a  meaning  different  from  its  common  one,  ii.  50,  51,  55. 

difference  between  custom  and  usage,  ii.  55. 

the  existence  of,  a  question  of  fact,  ii.  55,  56. 
how  proved,  ii.  56,  57. 

knowledge  of,  when  a  presumption  of  law,  and  when  to  be  proved,  ii. 
56,  57. 

evidence  of  knowledge,  ii.  57. 

illegal  customs,  not  admissible,  ii.  57,  59,  n.  (q). 

unreasonable  customs  not  sanctioned  by  the  law,  ii.  58. 

unreasonableness  of  usage,  question  of  law,  ii.  58,  n.  (0). 

may  be  excluded  from  a  contract,  expressly  or  by  implication,  ii.  58. 

inconsistent  with  the  terms  of  a  contract,  Ii.  59,  n.  (q). 

interest  allowed  by,  ii.  380,  407. 

how  affected  by  the  lex  loci,  ii.  95-100. 
USURY, 

lender  on,  when  a  partner,  i.  134,  143,  n.  (i). 

(See  Interest  and  Usury.) 
What  constitutes,  ii.  383-385. 

form  of  the  contract,  immaterial,  ii.  385,  387. 

})urdcn  of  proof  of,  II.  386,  387. 

in  loans  on  notes,  ii.  386. 

in  loans  of  stock,  ii.  388-390. 

when  the  contract  is  contained  in  separate  instruments,  ii.  390. 

laws  against,  liow  evaded,  ii.  391. 

in  foreign  contracts,  ii.  95,  n.  (e),  391,  392. 


INDEX.  907 

USURY—  Continued. 

intent  necessary  to  constitute,  i.  392. 

the  contract  itself,  to  be  void  for,  must  be  tainted  with,  ii.  392-394. 
the  original  contract  may  be  good,  and  the  second  void  for,  ii.  392. 
additional  interest  to  be  paid  as  penalty,  not  amounting  to,  ii.  393,  394. 
agreement  for,  not  conclusively  implied  from  acceptance  of,  ii.  394. 
Suhslituted  securities  are  void,  ii.  394-400. 

in  the  inception  of  a  note,  effect  of,  on  the  rights  of  indorsees,  ii.  394- 

396. 
in  the  indorsement  of  a  note,  effect  of  on  the  liability  of  the  maker,  ii. 

395. 
■when  the  new  security  is  purged  from,  ii.  396-398. 
against  whom  the  defence  of,  may  be  made,  ii.  397-400. 
defence  of  may  be  made  by  a  guarantor,  ii.  399. 
usurious  mortgage,  ii.  399. 
Distinction  between  the  invalidity  of  the  contract,  and  the  penalty  imposed,  ii. 
400-405. 
when  the  offence  of,  is  complete,  ii.  400-403. 

how  availed  of  by  the  debtor,  in  suits  at  law  and  in  equity,  ii.  403,  404. 
recoverable  in  a  suit,  ii.  405. 
Accidentally  included  in  the  contract,  ii.  405-408. 

contract  for,  under  a  mistake  of  fact,  corrected,  ii.  405. 

under  a  mistake  of  law,  illegal,  ii.  405,  406. 
by  banks  in  the  calculation  of  interest,  doctrine  of  cy  pres,  ii.  407. 
In  the  discount  of  hills  and  notes,  where  the  interest  is  paid  in  advance,  ii. 
408-410. 
charges  for  services,  by  brokers,  bankers,  and  other  lenders,  not,  ii. 
410-412. 
for  the  rates  of  exchange,  not,  ii.  413. 
deduction  by  the  acceptor  of  a  bill  paying  it  before  maturity,  of  a  larger 
sum  than  the  legal  interest,  not  amounting  to,  ii.  413,  414. 
Extra  interest  for  risk,  or  payable  on  contingencies,  not,  ii.  414-419. 
on  loans  on  bottomry  and  respondentia,  ii.  414,  416. 
in  the  purchase  of  annuities  and  rent  charges,  ii.  388,  n.  (c), 

416,417. 
in  loans  depending  on  the  life  of  the  parties,  ii.  418. 
in  post  obit  bonds,  ii.  418. 
Contracts  in  ichich  the  lender  professes  to  become  a  partner,  when  void  for^ 

ii.  419,420. 
In  the  sales  of  notes  and  other  choses  in  action,  ii.  421-427. 
at  less  than  the  nominal  value,  when  good,  ii.  421-423. 
how  affected  by  the  liability  of  the  indorser  in  default  of  the  maker,  ii. 

423-42G. 
indorsement  or  making  of  negotiable  paper  for  a  premium,  ii.  426,  427. 
cross-notes  between  parties  at  different  rates  of  interest,  not,  ii.  427. 


908  INDEX. 

USURY— Continued. 

Compound  interest,  ii.  427-432. 

not  usurious,  ii.  427,  428. 
agreement  to  convert  interest  Into  principal  when  valid,  ii.  428-430. 
annual  rests  in  merchants'  accounts  allowed,  ii.  436,  n.  (x). 
laws  against,  In  the  several  States,  ii.  430,  431. 
how  affected  by  the  lex  loci,  ii.  95-100. 
UT  RES  MAGIS   VALE  AT  QUAM  PEREAT,  ii.  7,  n.  (g). 


V. 

VALUE, 

of  property,  how  measured  In  computing  damages,  ii.  468,  469, 471-473, 
479-482. 

(See  Damages.) 
of  real  estate,  whether  to  be  taken  at  the  time  of  conveyance  or  of  evic- 
tion, in  assessing  damages  on  real  estate,  ii.  499-501. 
YENDEE, 

damages  in  suits  by,  ii.  479-483. 
VENDOR, 

damages  In  suits  against,  ii.  483-487. 

whether  protected  in  equity  more  readily  than  vendor,  Ii.  535,  n.  (iv). 
auctioneer  agent  for  both  vendor  and  vendee,  ii.  292,  and  n.  (r). 
damages  in  suits  against,  ii.  479-483. 

in  suits  by,  ii.  483-487. 
rights  of,  and  of  vendee,  II.  483-485. 

whether  protected  less  readily  by  equity  than  vendee,  ii.  533,  n.  (w). 
VERBA   FORTIUS  ACCIPIUNTUR    CONTRA  PROFERENTEM, 

the  rule,  ii.  18-22. 
VERDICT, 

when  set  aside  for  exceeding  damages,  ii.  451. 
{See  Judgment.) 
VESSELS, 

Injured  by  collision,  ii.  456. 

in  port,  pass  to  assignee  upon  Insolvency,  ii.  642. 

at  sea,  Avhether,  ii.  642. 

effect  of  bill  of  sale  to  transfer,  II.  642. 
VESTED   RIGHTS,  ii.  708. 
VINDICTIVE   DAMAGES, 

(See  Damages.) 


W. 
WAGERS, 

(See  Stakeiioedeus.) 


INDEX.  909 

WAIVER, 

of  demand  of  a  note  or  bill,  i.  225. 
of  a  right  of  action,  a  valid  consideration,  i.  369. 
of  forfeiture,  by  the  lessor,  i.  427. 
of  a  breach  of  warranty,  i.  475. 
WAR, 

dissolves  partnership,  the  members  of  which  are  of  hostile  nations,  i. 

173. 
excuses  neglect  of  notice  of  non-payment  of  note,  i.  232,  n.  (k). 
WARD, 

(See  Guardian.) 
WAREHOUSE-MEN, 

liability  of,  how  measured,  i.  618. 

when  extended  to  that  of  a  common  carrier,  i.  618-620. 
when  incurred,  i.  620.  ' 

delivery  by,  when  the  title  is  in  dispute,  i.  621. 
when  the  common  carrier  is  liable  as  such,  i.  671,  674,  681. 
WARRANT   OF   ATTORNEY, 

to  confess  judgment,  not  revocable,  i.  61,  n.  (m). 

need  not  be  under  seal,  i.  94,  n.  (/). 
by  an  infant  authorizing  a  conveyance,  whether  void  or  voidable,  i.  243, 
244. 
WARRANTY, 

kinds  of,  i.  456. 

implied,  of  title  to  goods  in  vendor's  possession,  i.  456-459. 

none  of  merchantable  quality,  i.  467. 
of  title  not  implied  where  possession  of  seller  is  not  of  a  kind  to  imply 

it,  i.  458. 
evidence  of  usage  to  affect,  when  rejected,  i.  468. 
statements  in  circulars  and  advertisements,  i.  470. 
buyer  may  rescind  after  discovery  of  a  breach,  though  he  has  sold  a 

part  of  what  he  bought,  i.  474. 
when  breach  is  a  bar  to  an  actlo'a  for  the  price,  i.  474. 
Express,  i.  459-475. 
construction  of,  i.  459. 

general,  whether  it  covers  obvious  defects,  i.  459,  n.  (i). 
of  quality  must  be  express,  I.  460. 
what  amounts  to,  i.  461-465. 

implied,  when  the  goods  are  not  examined  by  vendee,  i.  465,  466. 
when  sold  by  sample,  i.  46  7,  468. 
when  ordered  for  a  specific  purpose,  i.  468-471. 
in  the  sales  of  provisions,  qucere,  i.  470,  n.  (iv). 
of  the  genuineness  of  a  negotiable  instrument  i.  220. 
none  where  a  warranty  is  refused  or  is  put  in  writing,  i.  472. 
none  upon  the  sale  or  leasing  of  real  estate,  i.  457,  n.  {g),  471. 


910  INDEX. 

WARRANTY  —  Continued. 

in  the  sale  of  ships,  i.  472. 

breach  of,  what  amounts  to,  i.  473,  474. 

remedies  of  vendee,  i.  474,  475. 
how  waived,  i.  475. 
authority  of  an  agent  to  make,  when  it  exists,  i.  51,  52. 
covenants  of,  run  with  the  land,  i.  199,  201. 
construction  of,  ii.  13,  n.  (r). 

damages  for  breach  of,  in  contracts  for  personal  property,  ii.  457,  n.  (r), 

486,487. 
for  real  property,  ii.  499-502. 
WATER,   CARRIERS  BY, 

liability  of,  i.  644-647,  657,  665-670. 
WAY, 

right  of,  when  granted  by  implication. 

(^See  Real  Property.) 
WHARFINGERS, 

liability  of,  i.  622. 

when  not  bound  by  receipt  of  servant,  i.  622. 
WIDOW, 

her  dower  in  partnership  property,  i.  128. 

liability  of  infant  widow  for  funeral  expenses  of  her  deceased  husband, 

i.  24.5,  n.  (i). 
not  liable  for  the  support  of  her  children,  i.  256. 
WIFE, 

(See  Marriage,  Married  Woman,  &c.) 
WILL, 

power  of  married  woman  to  make,  by  statute,  in  the  diSerent  States  of 
•  the  United  States,  i.  306,  note. 

(See  Devise.) 
construction  of,  ii.  12,  n.  (q),  17,  n.  (/). 

rule  0^  verba  fortius  accipiuntur  contra  proferentem,  does 

not  apply  to,  ii:  18,  n.  (k). 
of  repugnant  clauses,  the  later  prevails,  ii.  26. 
admissibility  of  parol  evidence  in  construction  of,  ii.  62, 
n.  (v),  65,  69,  n.  (*),  72,  n.  (n),  74,  76. 
distinction  between  patent  and  latent  ambiguities  in,  ii.  69,  n.  (.s),  72. 
when  extrinsic  evidence  admitted  to  explain,  ii.  76-79. 
alterations  in,  eilect  of,  ii.  228,  n.  («). 
made  on  Sunday,  ii.  262  e. 
signing  of,  ii.  291,  n.  (7Ai). 
WITNESS, 

(See  Attestation.) 
rule  that,  ncod  not  criminate  himself,  how  far  tappllod  in  examination  of 
insolvent  debtor,  ii.  (i71,  n.  ^(J). 


INDEX.  911 

WORDS, 

of  art,  bow  construed, 

{See  Art.) 
obscurely  written,  or  half  erased,  ii.  5. 
technical, 

{See  Technical  Terms.) 
specific,  when  used  in  a  generic  sense,  ii.  8. 
mistake  in  choice  of,  but  not  in  their  meaning,  remedied  in  a  court  of 

equity,  ii.  8,  9.  - 
fixed  meaning  of,  to  control  intention,  ii.  9,  10,  11. 
general  and  particular.  In  same  instrument,  ii.  13,  n.  (r),  14,  15. 
repugnant,  in  deeds  and  wills,  ii.  2G. 
prevail  over  figures,  i.  210. 
WORK  AND  LABOR, 

a  consideration,  i.  371. 

{See  Hiring  of  Persons  and  Service,  Contracts  of.) 
WRIT, 

0^  estrepement,'\\.  4:^4:. 
WRITING, 

assignment  of  chose  in  action  need  not  be  in,  i.  197. 
contracts  required  to  be  in,  by  the  statute  of  frauds, 

{See  Frauds,  Statute  of.) 
instruments  partly  in,  and  partly  printed,   how   construed,  when   the 

written  and  printed  parts  conflict,  ii.  28,  29. 
of  two  contracts  in,  which  controls,  ii.  60. 

contemporaneous  writings,  when  deemed  part  of  contract,  ii.  66. 
contract  in,  when  made,  ii.  94. 
whether  part  payment  to  be  in,  to  take  a  case  out  of  the  statute   of 

limitations,  ii.  257. 
{See  Construction  of  Contracts  ;  Frauds,  Statute  of.) 


Y. 

YEAR, 

contract  of  service  not  to  be  performed  within,  must  be  in  writing,  i. 

529,  530. 
contracts  not  to  be  performed  within,  when  within  the  statute  of  frauds, 

ii.  316-319. 
"YEAR  AND  A  DAY,"  i.  242,  n.  («)• 

END   OF  VOL.  II. 


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